By Glen Hansen

In Hauselt v. County of Butte (March 23, 2009) 172 Cal.App.4th 550, the California Court of Appeal for the Third District reaffirmed the rule established in Locklin v. City of Lafayette (1994) 7 Cal.4th 327, that the rule of reasonableness, and not the rule of strict liability, applies to an inverse condemnation action involving a flood control project. Hauselt applied the reasonableness rule despite the plaintiff’s argument that the government agency activities converted the watercourse into a public work.

In Hauselt, plaintiff purchased a 94-acre almond orchard about a mile north of Chico in 1988, eventually intending to develop the property as a residential subdivision, which has not yet happened. A natural watercourse called Keefer Slough, which is on plaintiff’s property and is privately owned, forms its northern boundary. North of Keefer Slough are two parcels that were developed into the subdivisions of Carriage Estates (“Carriage”) and Wildflower Estates (“Wildflower”). For many years, Keefer Slough received floodwater overflow from nearby Rock Creek via a natural stream bifurcation. Rock Creek is also are privately owned. Plaintiff’s property has had a history of periodic shallow flooding two to three times a decade. When the plaintiff purchased his property in 1988, drainage improvements consisting of a pipe and ditch from the Wildflower property to Keefer Slough were present.

Plaintiff contended that County, through a series of activities over several years, made Keefer Slough a major part of the County’s public drainage system. Plaintiff alleged that these activities increased the flow on Keefer Slough—causing plaintiff’s property to flood—and resulted in a taking of plaintiff’s property for public use. The County’s principal activities allegedly were:

  1. Approving drainage improvements for Carriage and Wildflower, including onsite detention ponds and a drainage ditch and pipes into Keefer Slough;
  2. Allowing the developers of Carriage and Wildflower in 1992 to raise the north bank of the slough above the south bank;
  3. Building a new bridge in the early 1990s over Keefer Slough upstream of plaintiff’s property, thereby increasing the flow in the slough;
  4. Adopting a specific plan that identified Keefer Slough as the area’s primary drainage channel notwithstanding its inadequate flood capacity; and
  5. Sponsoring a federally funded project in 1997 to restore storm-damaged stream bed levels in Rock Creek, which work was undone by a subsequent storm, but which work plaintiff alleged was a deliberate effort by the County to make permanent the changed Rock Creek-Keefer Slough flow regime. In 1998, plaintiff sued County for inverse condemnation and related torts.

The trial court concluded:

  1. County’s activities—in permitting the Carriage and Wildflower development north of Keefer Slough, in constructing the new bridge, and in sponsoring the bed restoration project on Rock Creek—were not individually, or in combination, unreasonable conduct that would impose inverse condemnation liability on County; 
  2. Keefer Slough is a private watercourse, and that County’s activities did not transform the slough into a public work or increase the flow of water in the slough or on plaintiff’s land;
  3. Plaintiff’s cause of action for inverse-based encroachment, founded on the Carriage and Wildflower drainage pipes and ditch into Keefer Slough, was time-barred; 
  4. Plaintiff’s tort claims were barred for failure to comply with the Tort Claims Act (plaintiff did not appeal this ruling); and
  5. Plaintiff was entitled to $ 1,034 as just compensation for a temporary taking because, prior to a storm in 1998, County placed material on plaintiff’s property at Keefer Slough to prevent flooding into a street in Wildflower. The Court of Appeal affirmed.

The Court of Appeal primarily focused on the legal standard of care that applies to inverse condemnation actions involving flood control projects. The court relied on Locklin, which held that, in the context of flood control projects, a public agency is liable if its conduct poses an unreasonable risk of harm to the plaintiff, the unreasonable conduct is a substantial cause of the damage to the plaintiff’s property, and the plaintiff has taken reasonable measures to protect his property.  The rule of strict liability generally followed in inverse condemnation does not apply in this context. (Locklin 7 Cal.4th at pp. 367, 337-338.) The Hauselt court explained that reasonableness in the flood control context aligns with the basis for inverse condemnation liability: When a public agency has acted unreasonably, the damaged property owner should be compensated because the owner has contributed more than his or her proper share to the public undertaking. 

The Hauselt court further explained the exception to the reasonableness rule, which exception did not apply in that case. The court distinguished Akins v. State of California (1998) 61 Cal.App.4th 1, where a public agency intentionally diverted water and flooded private property not historically subject to flooding in order to protect other property from flooding.   Strict liability applied in the Akins situation because the government in that case appropriated private property in order to protect other property, creating a risk which would not otherwise exist.

Plaintiff in Hauselt nevertheless argued that the liability standard in a watercourse flood control context turns upon whether the defendant government agency has incorporated the watercourse into a public drainage system or otherwise converted the watercourse itself into a public work. If the defendant has done so, plaintiff argued, the general rule of strict liability applies instead of the reasonableness rule. The Court of Appeal disagreed:

Locklin does not stand for the legal proposition that when a watercourse has been converted into a public work, and flood damage results, the rule of strict liability always applies.” 

The Court of Appeal held that the trial court not only properly applied the reasonableness rule to the context of this case, but that the evidence in the record supported the trial court’s findings that the County acted reasonably.

The Court of Appeals also upheld the trial court’s finding that the five-year statute of limitations of Code of Civil Procedure sections 318 and 319 applied to the plaintiff’s inverse condemnation claims based on the encroaching Carriage-Wildflower drainage pipes and ditch, and that such claims were time-barred under that statute.

Glen C. Hansen is a senior associate at Abbott & Kindermann, LLP.  For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.