Valley Title Co. v. San Jose Water Co.

57 Cal. App. 4th 1490, 67 Cal. Rptr. 2d 636, 97 Daily Journal DAR 12335, 97 Cal. Daily Op. Serv. 7653, 1997 Cal. App. LEXIS 766
CourtCalifornia Court of Appeal
DecidedSeptember 25, 1997
DocketH014191
StatusPublished
Cited by5 cases

This text of 57 Cal. App. 4th 1490 (Valley Title Co. v. San Jose Water Co.) 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
Valley Title Co. v. San Jose Water Co., 57 Cal. App. 4th 1490, 67 Cal. Rptr. 2d 636, 97 Daily Journal DAR 12335, 97 Cal. Daily Op. Serv. 7653, 1997 Cal. App. LEXIS 766 (Cal. Ct. App. 1997).

Opinion

Opinion

COTTLE, P. J.

A fire service pipeline outside the building of Valley Title Company (Valley) ruptured in 1992, flooding the building. Valley and others sued San Jose Water Company (SJWC) and others for the property damage, alleging that SJWC had failed to inspect, repair, replace, and stabilize the line adequately. A jury found SJWC liable for negligence and trespass, awarding Valley approximately $3 million. SJWC appeals from the ensuing judgment. Because we conclude that SJWC is immune from Valley’s claims pursuant to section 774 of the Public Utilities Code, we reverse the judgment.

I. Factual and Procedural Background

A. The Parties

SJWC is an investor-owned utility governed by the Public Utilities Commission. SJWC has a service area of approximately 134 square miles, including portions of the City of San Jose and surrounding communities, and owns approximately 2,300 miles of water lines. Of these, over 500 miles are cast iron water lines. SJWC’s system includes distribution mains located under city streets, and lateral pipes (also called mains or service pipes) which run from the distribution mains to connect with customers’ pipes.

*1493 Valley is a title insurance company with its principal office at First and San Carlos Streets in San Jose, in a building constructed in 1931 as a department store. Valley has owned and occupied this building since 1970.

B. Valley’s Fire Protection System

Generally, when a fire service is installed for a building, lateral lines from street water mains connect with customers’ pipes extending horizontally from the building at a depth of approximately three feet underground. The lines linking the street water main to the Valley building’s fire protection system, installed when the building was constructed in 1931, were unusual. SJWC’s lateral pipe ran from the main underneath the street at the standard depth of three feet. At a point three and one-half feet from Valley’s basement wall, SJWC’s lateral line connected to a vertical pipe, which dropped, then connected with a horizontal pipe extending under the building’s basement, and later connected with another vertical pipe which went up into the basement.

C. The 1986 Change

In 1986, SJWC was required to move and lower its water lines under San Carlos Street to accommodate San Jose’s light rail system. On January 3, 1986, SJWC’s plumbing subcontractor connected a new lateral line to the Valley building. Upon excavating to the expected horizontal pipe, workers found that the lateral was connected with a 90-degree fitting to a vertical pipe. The workers exposed a portion of the vertical pipe, removed the existing 90-degree connection, attached the new lateral pipe with a 90-degree joint, and then backfilled the area with soil. When the water to this new service was released, however, water came out of the ground and also went into Valley’s basement. The water was turned off.

On January 6, 1986, workers exposed the 90-degree joint, and did additional work to reconnect the new lateral pipe with the vertical pipe.

On January 9, 1986, after SJWC had been informed that the leak on January 3, 1986, had occurred at the 90-degree connection, SJWC told Valley to send a bill for the cleanup of some water which had entered the basement. Valley submitted a bill for $470, which SJWC paid.

D. The 1992 Leak

On October 10, 1992, a leak occurred in the original vertical pipe. The leak flooded the street and Valley’s basement, destroyed the contents of the *1494 basement including Valley’s “ ‘back title files,’ ” and caused other damages not relevant to this appeal.

E. Procedural Background

On October 8, 1993, Valley and its insurer filed a complaint against SJWC, claiming damages based on the 1992 rupture of the fire service line which flooded the basement of Valley’s building. Valley’s insurer sued SJWC to recover payments it made to Valley. The case was eventually submitted to the jury on two causes of action, trespass to land and negligence. 1

Before trial, SJWC moved under Code of Civil Procedure section 592 for an order that pursuant to Public Utilities Code section 774, SJWC had immunity against all of plaintiffs’ claims. 2 This pretrial motion was denied. During trial, SJWC sought a directed verdict based on the 10-year and 4-year statutes of limitations of Code of Civil Procedure sections 337.15 and 337.1 for latent and patent defects in improvements to realty, and on the grounds that Valley had failed to meet its burden to prove the elements of negligence or trespass to land. This motion was also denied.

The case was tried to a jury beginning on January 9, 1995. The parties presented extensive evidence, including competing expert testimony regarding the cause of the leak and the valuation of Valley’s damages.

On or about April 10, 1995, the jury returned its special verdict, finding that the flooding constituted trespass by SJWC upon Valley’s property, that SJWC was negligent, and that SJWC’s trespass and negligence caused $3 million damage for uninsured loss to Valley’s back title files. Judgment was entered on April 10, 1995. 3

SJWC filed motions for new trial and judgment notwithstanding the verdict, which were denied on June 9, 1995. On June 10, 1995, SJWC filed a notice of appeal from the judgment and from the denial of its motion for judgment notwithstanding the verdict. On September 19,1995, the trial court *1495 awarded prejudgment interest to Valley. On October 26, 1995, SJWC filed a notice of appeal from that prejudgment interest order.

F. This Appeal

On appeal, SJWC argues essentially the following: (1) that SJWC is immune from liability for all of Valley’s claims pursuant to Public Utilities Code section 774; (2) that all of Valley’s claims are barred by the four-year and ten-year statutes of limitations for patent and latent defects of completed works of improvement to real property; (3) that the trial court erred in instructing the jury regarding res ipsa loquitur; (4) that Valley did not present sufficient evidence to support a negligence claim; (5) that the court erred in excluding, during trial, SJWC’s 1931 records regarding ownership of the vertical pipe; (6) that as a matter of law, SJWC was not liable for trespass to land; (7) that no competent evidence supported the jury’s determination of $3 million in damages; and (8) that the court exceeded its jurisdiction and erred in awarding prejudgment interest to Valley. We shall address the immunity issue first.

II. Discussion

Immunity Under Public Utilities Code Section 774

1. Standard of Review

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57 Cal. App. 4th 1490, 67 Cal. Rptr. 2d 636, 97 Daily Journal DAR 12335, 97 Cal. Daily Op. Serv. 7653, 1997 Cal. App. LEXIS 766, Counsel Stack Legal Research, https://law.counselstack.com/opinion/valley-title-co-v-san-jose-water-co-calctapp-1997.