Foley Investments v. Alisal Water Corp.

CourtCalifornia Court of Appeal
DecidedDecember 9, 2021
DocketD079045
StatusPublished

This text of Foley Investments v. Alisal Water Corp. (Foley Investments v. Alisal Water Corp.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Foley Investments v. Alisal Water Corp., (Cal. Ct. App. 2021).

Opinion

Filed 11/16/21; Certified for Publication 12/9/21 (order attached)

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

FOLEY INVESTMENTS, L.P., D079045

Plaintiff and Appellant,

v. (Super. Ct. No. 17CV002074) ALISAL WATER CORPORATION,

Defendant and Respondent.

APPEAL from a judgment of the Superior Court of Monterey County, Susan J. Matcham and Marla O. Anderson, Judges. Affirmed. Noland, Hamerly, Etienne & Hoss and Michael Masuda for Plaintiff and Appellant. Law Offices of John A. Biard, Steven R. Myers and William P. Schneider for Defendant and Respondent. Foley Investments, LP (Owner) asserted inverse condemnation and tort claims against Alisal Water Corporation dba Alco Water Service (Alco) after an Alco-owned water main that runs through a portion of Owner’s apartment complex repeatedly ruptured. In the first phase of a bifurcated bench trial, the court ruled against Owner on its inverse condemnation claim. The court found the water main did not serve a “public use” for inverse condemnation purposes because Alco installed the main under a private contract with Owner’s predecessor for the sole benefit of the subject property. In the second phase, the court found the tort claims were barred by “fire protection” immunity (Pub. Util. Code, § 774)1 because Alco constructed and maintained the main on the subject property in a particular way to meet the property’s particular fire protection needs. The court entered judgment in Alco’s favor. On appeal, Owner contends the trial court erred by finding the water main does not serve a public use for purposes of the inverse condemnation claim, and by finding fire protection immunity bars the tort claims. As we will explain, based on the historical facts as found by the trial court, we find no error and affirm the judgment. FACTUAL AND PROCEDURAL BACKGROUND The Santana Apartments are a residential apartment complex located at 1235 Garner Avenue (the Property) in Salinas. Alco provides water service to the Property via a 12-inch main (the Santana main). In 2017, Owner filed a lawsuit against Alco alleging the Santana main ruptured in 2015 and 2016, causing extensive damage to the Santana Apartments. Owner asserted claims for inverse condemnation, nuisance, trespass, and negligence. A few months after filing suit, Owner amended its complaint to allege the Santana main had since ruptured a third time. By stipulation, the trial court bifurcated the trial. In phase 1, the court would decide the “public use” element of Owner’s inverse condemnation

1 Public Utilities Code section 774 states in part: “No water corporation which has undertaken to provide fire protection service . . . shall be liable for any . . . damage to or loss of property resulting from a failure to . . . maintain . . . any equipment or other fire protection facility or service.” Further undesignated statutory references are to the Public Utilities Code. 2 claim. If the court found the Santana main served a public use, Owner would dismiss its remaining tort claims and phase 2 would consist of a jury trial solely on inverse condemnation damages. If, however, the court found the Santana main did not serve a public use, the court would dismiss the inverse condemnation claim and phase 2 would consist of a jury trial on Owner’s remaining tort claims. Phase 1 Trial Evidence During the phase 1 trial, Owner’s general partner and an engineering expert testified on Owner’s behalf, and Alco’s president and an engineering expert testified on Alco’s behalf. We set forth their testimony in the light most favorable to the judgment. (See Border Business Park, Inc. v. City of San Diego (2006) 142 Cal.App.4th 1538, 1554 [“we defer to the express or implied factual findings of the trial court”].) Alco is a privately owned water company regulated by the Public Utilities Commission (PUC). It serves about 9,000 metered service connections in the eastern portion of Salinas. Alco obtains its water from underground wells, and distributes it through a system of interconnected water mains located primarily under city streets. Alco’s usual practice for providing water service to a property is to run a service line from an Alco main to a meter at the property’s boundary, from which point the property owner is responsible for installing and maintaining service lines to the property. In 1986, before the Property was developed, Alco installed an underground well and pump within an exclusive easement toward the eastern boundary of the Property. Alco connected the well to a main beneath Cortez Street (the Cortez main), located east of the Property.

3 In late 1986, the Property’s prior owner (Developer) began developing the Santana Apartments on the Property. The fire marshal required that Developer install two fire hydrants on interior portions of the Property. Developer and Alco entered into a “main extension contract” under which Alco agreed to install the Santana main on the Property to meet the fire hydrants’ minimum flow requirements. Developer designed the Santana main, with input from Alco. Alco’s president testified that, but for Developer’s particular needs vis-à-vis the fire hydrants, Alco would not have installed the Santana main on the Property. Instead, Alco would have followed its usual practice of providing water service to the boundary line, as Alco had done for neighboring apartment complexes. Developer granted Alco easements for the Santana main over the Property; Alco did not take the land by eminent domain. The Santana main originates at an Alco main beneath Garner Avenue (the Garner main) to the west of the Property, and terminates at a “gate valve” within Alco’s well easement on the eastern end of the Property. The other side of the gate valve connects to Alco’s well and the Cortez main via a smaller 10-inch pipe. Alco’s president and engineering expert acknowledged that if the gate valve were opened, water would flow between the Garner main and Cortez main—and throughout Alco’s entire distribution system. And an Alco map of its distribution system appears to show the Garner main and Cortez main connecting via the Santana main and gate valve. This configuration led Owner’s expert to opine that Alco’s use of a valve (rather than a cap) rendered the Santana main an integral part of Alco’s overall distribution system, thus serving a public use.

4 But Alco’s president testified that Alco has never opened the valve. Indeed, for operational concerns involving sediment and disinfection, it is against Alco’s policy to open the valve. Alco’s engineering expert testified the closed valve was designed to function as a simpler and less expensive cap for the Santana main.2 Owner’s engineering expert conceded that “[i]f the gate valve has remained closed all these years, . . . in essence [it] has served as a cap,” and the Santana main “serves no customers other than those that are actually on the Santana Apartments parcel.” The Santana main directly feeds the two fire hydrants on the Property. Alco’s expert testified that because these hydrants are located in the interior portion of the gated Santana Apartments complex, firefighters would not use the hydrants when fighting fires at neighboring properties. Thus, the hydrants benefit only the Property. The Santana main also indirectly feeds the Santana Apartments’ individual buildings via nine 2-inch service laterals that branch off from the Santana main. All of the ruptures at issue in this case occurred in the 12- inch Santana main, not the 2-inch service laterals. The Santana Apartments consist of 81 units that house about 400 occupants. However, Alco has only a single customer at the Property: Owner. Alco does not bill the apartment’s individual tenants. Ruling The trial court found the Santana main does not serve a public use. The court made three key factual findings that brought the case more in line

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Foley Investments v. Alisal Water Corp., Counsel Stack Legal Research, https://law.counselstack.com/opinion/foley-investments-v-alisal-water-corp-calctapp-2021.