Laguna Beach to Buy 3 Lots Where Houses Slid Away : Litigation: The action, which will cost $660,000, will free the city from a tangle of lawsuits, city manager says. The hillside will be restabilized and the property resold.

To resolve a tangle of lawsuits stemming from a 1993 landslide that pitched three houses from their foundations, the city has agreed to spend $660,000 to buy the lots where the houses once stood.

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City Manager Kenneth C. Frank said the city will likely begin restabilizing the hillside next week so the lots can be resold.

In a report to the City Council this week, Frank outlined a web of lawsuits that “would brighten the eyes of any aspiring attorney,” stemming from the January, 1993, slide, including suits filed by two of the property owners against the city.

By purchasing the approximately 28,000 square feet of land, the city would be freed of those lawsuits and the possibility of future legal action by the third property owner, the report said. The city may be able to recoup the $660,000 once the land is stabilized and the lots are resold.

Because of the conflicting testimony that often arises over geology, hydrology, grading and construction, lawsuits involving landslides can become problematic, City Atty. Philip D. Kohn said Thursday.

“Landslide cases are just so expensive to litigate,” he said. “They become battles among experts.”

The city will also now repair a storm drain and sewer pipes that were damaged in the landslide, Frank said.

“The problem is, we want to be able to rebuild this hillside,” he said. “We will be doing work on property we own.”

The city still has one hurdle to clear, however, since a geological firm involved in a related lawsuit filed an objection to the property settlement Thursday, said Katherine Jenson, another attorney for the city.

Orange County Superior Court Judge Leonard Goldstein will be asked to review and approve the land sale today. Jenson said escrow will likely close by Monday.

The landslide, which followed several days of intense rainfall, caused one Mystic Lane home to plunge down the hillside and burst into flames, another to slip from its foundation and a third to careen forward and collapse like an accordion.

A report by a city-hired geologist said the rain had reactivated an ancient landslide.

Thomas and Gayla Hitzel, whose $750,000 home buckled in the slide, sued the city in November, claiming leaks in underground water and sewage pipes weakened the earth beneath their home. They said insurance did not cover the loss.

The city was also sued by property owner Marjean Hanson.

In addition to their lawsuits against the city, Jenson said Hanson and the Hitzels sued the Laguna Beach County Water District and Earth Research, a geotechnical firm; the city sued the geotechnical firm, and Hanson sued the Hitzels. There were also some “peripheral defendants,” Jenson said.

The city has denied fault in the landslide.

In his report to the council, Frank said there was “an excellent possibility” the city would have been cleared of any fault by the courts, but the legal defense would have been expensive. The land purchase seemed the most expeditious and inexpensive way to resolve the matter, Frank said.

The City Council voted unanimously to pay $200,000 to the Hitzels for their land, $300,000 to Hanson and $150,000 to Vida Kucenas, the third property owner.

Kucenas had filed a claim against the city but had not yet filed a lawsuit, Jenson said. Another $10,000 was allocated for other costs related to the purchase.

The property owners could not be reached for comment.