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Stevens v. 396 Investment Co.5/17/2005
Testing showed that the reservoir was leaking 65 gallons per minute, even after the underdrain system had been abandoned. This was a dramatic increase in leakage from the "insignificant" seepage in 1964 and the 4 gallon per minute leakage estimated in 1971. As the trial court found, the 65 gallon per minute, or 34 million gallon per year, rate of leakage was inconsistent with the "extremely low" or "insignificant" rate of leakage anticipated with the reservoir liner design Anaheim had originally approved. The trial court correctly found that the increased leakage rate was evidence of changed physical conditions. Assuming, without deciding, that all three elements of the design immunity test were satisfied and the defense of design immunity was available to Anaheim with respect to the design of the five-foot liner, that immunity was lost due to changed physical conditions.
Anaheim disagrees with this analysis. First, Anaheim contends that there was no change in physical conditions, as necessary to satisfy the initial prong of the test for loss of immunity set forth in Cornette v. Department of Transportation, supra, 26 Cal.4th at page 66. Crandall's soils investigation report called for an "impermeable lining," with a seepage rate that would be "extremely low." Anaheim emphasizes the fact that geotechnical engineering expert witness Joseph Kulikowski testified that a seepage rate of 65 gallons per minute was a flow that would be expected with the type of reservoir liner at issue here. It also observes that Cooke even regarded the amount of seepage as being small.
In addition, Anaheim mentions the opinion of Kulikowski and CH2M Hill to the effect that the reservoir leaked at the same rate both before and after the underdrain system installation and abandonment. However, there is no indication that those two opinions were based on seepage data collected from 1962 forward. Rather, they had to do with whether the underdrain system installation caused an increase in leakage. The focus was on leakage around 1985, before the underdrain system was installed, as compared to the time period thereafter. The opinions did not address the amount of any leakage in 1962.
Most significantly, the 1964 Crandall report and the 1971 Barrett memorandum constitute substantial evidence that the reservoir did not leak 65 gallons per year in the first 9 years of operation. However, the June 1987 leakage test shows that the reservoir came to leak 65 gallons per minute at some point. Thus, there is substantial evidence of changed physical conditions.
Second, while Anaheim learned no later than 1987 that the reservoir was leaking 65 gallons per minute, it contends that this does not mean it was aware that the leakage created a dangerous condition. It pleads ignorance of this possibility on account of the fact that no consultant or agency ever indicated to it that the reservoir was unsafe for continued operation. Anaheim apparently forgets that Gordon Hoyt, its own Director of Public Utilities in 1965, prepared a memorandum in April 1965 in which he noted evidence of seepage on the north side of the reservoir and expressed concern that Anaheim could have "liability for saturating someone else's fill with reservoir water." However, it would appear that the effect on surrounding property was not a concern to anyone at Anaheim other than Hoyt. Anaheim focused only on itself - fixating solely on the effect of leakage on the structure it owned and the dollar value of lost water.
Anaheim's defense that no one told it that the leakage of 34 million gallons of water per year, year after year, could be dangerous to surrounding properties is unpersuasive. If a child turns on a hose that runs wate
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