Aetna Life & Casualty Co. v. City of Los Angeles

• Decision Date: 31 July 1985
• Citation: 216 Cal.Rptr. 831,170 Cal.App.3d 865
• Court: California Court of Appeals Court of Appeals
• Parties: AETNA LIFE AND CASUALTY COMPANY, etc., et al., Plaintiffs, Respondents, and Cross-Appellants, v. CITY OF LOS ANGELES, et al., Defendants, Appellants, and Cross-Respondents. Civ. 69078. B002494.

Page 831

216 Cal.Rptr. 831

170 Cal.App.3d 865

AETNA LIFE AND CASUALTY COMPANY, etc., et al., Plaintiffs, Respondents, and Cross-Appellants, v. CITY OF LOS ANGELES, et al., Defendants, Appellants, and Cross-Respondents.

Civ. 69078.

B002494.

Court of Appeal, Second District, Division 2, California.

July 31, 1985.

Rehearing Denied Aug. 28, 1985.

Review Denied October 17, 1985.

Parkinson, Wolf, Lazar & Leo by Richard B. Wolf and Michael W. Connally, Los Angeles, for plaintiffs, respondents, and cross-appellants.

James K. Hahn, Ira Reiner, Gary R. Netzer, City Atty., Edward C. Farrell, Chief Asst. City Atty., for Water and Power.

Terso R. Rosales, Diana Mahmud, Deputy City Attys., for defendants, appellants and cross-respondents.

COMPTON, Acting Presiding Justice.

Thirty-eight homeowners, eight insurance companies, and the Great Western Council of the Boy Scouts of America brought the instant suit against the City of Los Angeles and its Department of Water and Power. They prayed for compensation for damages resulting from the Mandeville Canyon Fire of October 1978, which, they alleged, was caused by sparks from defendants' electrical power transmission lines along Mulholland Drive. Plaintiffs pleaded causes of action for negligent maintenance of a dangerous condition of public property and for inverse condemnation.

The trial was bifurcated to permit a determination of liability before introduction of evidence of damages. Pursuant to agreement of the parties the trial court sat as trier of fact on the inverse condemnation issue, while a jury heard the same evidence to determine the question of negligence. After five weeks of trial the trial court rendered judgment for plaintiffs on the inverse condemnation issue. The jury returned a verdict in favor of defendants on the negligence issue. Subsequently, when the defense failed to produce any evidence to contradict plaintiffs' case for damages, the trial court directed a verdict on damages, and dismissed the somewhat bewildered jury. Plaintiffs' motions for a judgment notwithstanding the verdict and for a new trial on the negligence cause of action were granted. The court fixed interest on the damages at the market rate and awarded attorneys fees to plaintiffs.

The total judgment was approximately $10.7 million. Defendants have appealed.

The evidence may be summarized as follows.

In 1973, crews employed by defendants strung several strands of aluminum-wrapped steel cable from poles along a stretch of Mulholland Drive in Los Angeles. After being fastened into position on the pole crossarms, the wires were energized with a current of 4800 volts. During high winds on October 23, 1978, two or three of the wires swung together, arced, and sent sparks of molten burning aluminum into the dry brush across Mulholland Drive. The brush ignited and the resulting fire spread rapidly until it had consumed thousands of acres and invaded residential areas. Heavy rains in the years following caused additional mudslide damage to residences near the denuded slopes.

The defense sought to show that the fire was of suspicious origin, possibly caused by arson, by introducing partially burned matchbooks recovered near the site of the fire's origin. The trial court, however, found that the fire was caused by the sparks from the arcing power lines constructed and maintained by defendants. The jury's general verdict in favor of defendants does not, however, reveal how the jury viewed these facts.

It appears to us that under the law as developed in property damage cases the doctrine of inverse condemnation has subsumed the principles of negligence and in effect rendered it unnecessary for a property owner who has suffered property damage at the hands of a government agency as a result of the construction or operation of a public improvement to proceed in tort.

Defendants only contention in this regard is that the extension of the remedy of inverse condemnation to fire damage is unprecedented and undesirable. They point out that most California inverse condemnation cases involve damage not normally covered by insurance, such as flooding, land subsidence, and aircraft overflight. Defendants argue that because fire insurance is readily available and frequently purchased by prudent property owners, such owners should not be permitted to recover in inverse condemnation and more specifically that insurance carriers should not be permitted to subrogate to a property owner's claim for inverse condemnation.

The California Constitution's eminent domain clause ¹ makes no exception for fire damage or any other claim covered by insurance. It expresses a deeply rooted public policy to limit the power of the government by requiring full compensation for the taking or damaging of private property.

The doctrine of inverse condemnation has its roots in the principles of tort and property law. (See Van Alstyne, Inverse Condemnation: Unintended Physical Damage (1969) 20 Hastings L.J. 431, 438; McMahan's of Santa Monica v. City of Santa Monica (1983) 146 Cal.App.3d 683, 692, 194 Cal.Rptr. 582.) Proximate causation is an element of both negligence and inverse condemnation. Unlike negligence, however, inverse condemnation does not require any breach of a standard of care, nor foreseeability of the harm. Thus any actual physical injury to real property proximately caused by a public improvement as deliberately designed and constructed is compensable under article I, section 19 of the California Constitution whether or not the injury was foreseeable. (Albers v. County of Los Angeles (1965) 62 Cal.2d 250, 263, 264, 42 Cal.Rptr. 89, 398 P.2d 129; McMahan's of Santa Monica v. City of Santa Monica, supra, 146 Cal.App.3d at p. 693, 194 Cal.Rptr. 582.) It is not necessary that government's liability be based on negligence as long as there is a causal relationship between government's act or omission and the loss. (Travelers Indem. Co. v. Ingebretsen (1974) 38 Cal.App.3d 858, 864, 113 Cal.Rptr. 679.) All that is required is a deliberate act by a public entity which has as its object the direct or indirect accomplishment of the purpose for which the improvement was constructed and which causes a taking or damaging of private property. (Bauer v. County of Ventura (1955) 45 Cal.2d 276, 285, 289 P.2d 1.)

In the present case the evidence established that the power lines in question were designed to sag 22 inches between poles. As deliberately spaced 26 inches apart on the crossarms, two of the wires sagging 22 inches could be blown into contact with each other by winds blowing at about 42 miles per hour. Clearly, by defendants' own design standards the construction of these power lines carried some risk of arcing in strong winds. Moreover, the sag of the power lines in question exceeded the defendants' 22-inch design guideline by approximately 30 inches. The risk that these lines, sagging 51 inches or more, could come into contact with each other in moderate to high winds is much greater than if they had been tightened to a sag of only 22 inches. The evidence showed that the lines were deliberately constructed at the greater sag and remained that way through routine semi-annual maintenance inspections. Thus the design, construction and maintenance of the sagging high voltage cables permitted inter-cable contact during windy conditions which resulted in a disastrous fire.

Defendants contend that the plaintiff insurance companies should not be permitted to subrogate to their insureds' causes of action for inverse condemnation because the policy behind article I, section 19 of the California Constitution is to save property owners from contributing more than their fair share to a public undertaking and not to compensate insurers who are obligated by commercial contracts to pay for damages incurred by their insureds. Because of the commercial and contractual nature of the insurer-insured relationship, they contend plaintiff insurers are not equitably entitled to subrogation in inverse condemnation.

Defendants' contention that their equities are equal to or greater than that of plaintiff insurers ignores the simple truth that defendants' acts, negligent or not, caused the fire. (Van Alstyne, Inverse Condemnation: Unintended Physical Damage, supra, at 438.)

Although as defendants point out, the insurers were paid premiums to assume liability, there is, in our opinion, no appeal to equity in requiring a third party, uninvolved in causing the damage, to bear the burden of compensating the injured parties, when the party that caused the damage is identifiable and available. Defendants' equities are inferior to those of plaintiff insurers because, whether negligent or not, defendants' actions caused the damage. Furthermore, defendants are at least equally capable of spreading the cost of the loss among the larger population by raising rates for delivery of electric power or by passing the cost along to their insurer. (See Helfend v. Southern Cal. Rapid Transit Dist. (1970) 2 Cal.3d 1, 14, 84 Cal.Rptr. 173, 465 P.2d 61.) Proximately causing damage, whether or not foreseeable, constitutes a kind of "fault," and thus a more logical basis for liability, than simply undertaking to indemnify against future hazards.

Defendants argue that because the right to compensation for inverse condemnation of property is constitutionally mandated, it is personal to the homeowners and is therefore not assignable to the insurance companies. The authority they cite in support of this contention is unpersuasive. Broadrick v. Oklahoma (1973) 413 U.S. 601, 93 S.Ct. 2908, 37 L.Ed.2d 830, states the general rule that constitutional rights are personal and may not be asserted vicariously (Id. at p. 610, 93 S.Ct. at p. 2915.) However, the thrust of Broadrick is simply that a litigant has no standing to engage the judicial system to strike down laws that violate the constitutional rights of persons not before the tribunal. In the case at...