Jury Awards Homeowners $17 Million

The city of Anaheim must pay $17 million to the owners of 14 homes that were destroyed after water leaking from a city reservoir triggered landslides in their Orange neighborhood, a jury decided Tuesday.

The award comes four years after water from the Olive Hills Reservoir began undermining the soil beneath homes in the upscale Vista Royale development. To prevent a landslide from swallowing the entire tract, 14 homes were demolished.

A separate jury last year found Anaheim liable for destabilizing the slope. As a result of that decision, a judge ordered Anaheim to pay the tract’s developer $10.3 million. A third jury will be impaneled this summer to decide whether the owners of homes that were damaged but not destroyed deserve compensation as well.

Tuesday’s verdict centered on the 14 homes that had to be demolished so that workers could stabilize the slope. The homeowners charged that the city was negligent in its maintenance of the reservoir and should have fixed the leaks before they caused problems for residents.

The homeowners also alleged that Anaheim failed to adequately compensate them for their property losses as well as emotional distress.

The jury appeared to take their complaints to heart, awarding the vast majority of plaintiffs with $300,000 each for emotional distress alone, in addition to other damages.

“I’m so happy, this is far beyond what any of us expected,” said Christine Salyer, who watched her home razed in 1999. “We were given just five days to move out of our house before it was taken.... Up to this point the city hasn’t given us a dime.”

Homeowners like Salyer said that even though they were forced from their homes, they still had to maintain mortgage and insurance payments. The settlements that displaced residents received from the developer were far less than the value of their homes, she added.

Lawyers for the city said they expect Orange County Superior Court Judge John C. Woolley to reduce the $17-million judgment.

“In some cases, people have received insurance payments or settlements already, and the award will be reduced by those amounts,” said Larry Newberry, Anaheim’s senior assistant city attorney.

Newberry decline to comment further, adding: “The city’s position is that we’re going to wait for the entire case to be over before we say anything.”

The Vista Royale neighborhood, developed in the late 1980s in the foothills east of the Costa Mesa Freeway, drew well-to-do young families to the hillside houses costing up to $300,000. Many of the homes commanded views of the sprawling reservoir, which appeared sound to the naked eye.

However, residents began to worry about 1997 when large fissures began creeping through lawns and driveways and sidewalks began to buckle.

Upon investigation, experts declared that the hillside could collapse at any moment. Homeowners were told to remove irreplaceable items from their houses and to be prepared to evacuate on short notice.

The reservoir has since been drained, and the land around Vista Royale has stabilized.

The damage to the slope has also affected the owners of homes not destroyed. In the nearby Peralta Pointe neighborhood, property owners argue that the softened earth has decreased their property values. This summer a jury will determine whether they deserve compensation from the city.