Laguna Beach : Landslide Dispute Settled for $400,000

A Laguna Beach family whose hillside home was destroyed in a landslide won a $400,000 settlement this month from two firms that inspected the property before construction.

Although the companies did not admit they were negligent, Petra Geotechnical Co. of Costa Mesa and now-defunct Earth Research Associates agreed to pay Thomas and Gayla Hitzel $400,000 on March 10, said the Hitzels’ attorney, John F. McGuire Jr. The homes were built in 1985 on land above an ancient landslide that went undetected, McGuire said.

“It was pretty clear that this was a preventable disaster,” McGuire said.

The latest agreement, coupled with previous settlements from three other parties including the city and Laguna Beach County Water District, makes a total of $652,500 the Hitzel family has received since the January, 1993, landslide destroyed their three-bedroom, split-level home at 554 Mystic Lane, McGuire said. The home, with panoramic ocean views, was valued at $650,000 before the landslide, McGuire said.

The water district, which had underground water and sewer lines along the hillside, added $22,500 to the Hitzels, and the builders paid $30,000.

Last October, the city agreed to buy the Hitzels’ property for $200,000, along with the lots owned by two neighboring families whose homes were destroyed in the slide. Using federal disaster funds, the city has dug out the entire landslide, restored the properties and plans to sell them at some future date, said City Manager Kenneth C. Frank.

McGuire called the agreement “a happy ending” on a story that began as a disaster for the Hitzel family, McGuire said.

The Hitzels, who now live in another Laguna Beach area, declined to comment.