Legal Aftershocks Will Keep Lots of Lawyers Busy

Henry Weinstein
Times Legal Affairs Writer
Los Angeles Times - January 30, 1994

Within a day of the Northridge earthquake, Santa Monica attorney Joel B. Castro's phone was ringing.

It appears that Castro, a "construction defects litigation specialist" who has won major verdicts for disgruntled homeowners, is going to be very busy.

Apparently, so will a lot of other attorneys. They range of Legal Aid lawyers advising poor people on their rights to corporate lawyers counseling insurance companies on which claims to pay.

In the last week, at least two law firms ran advertisements in local newspapers soliciting clients with earthquake damage. "In the wake of every disaster, lawyers appear; that's why they're not very popular," Loyola University law professor Gideon Kanner said.

Ultimately, there may be hundreds, perhaps thousands of lawsuits stemming from the quake that took at least 57 lives.

Not one has been filed yet. But the insurance experts say the volume of damage claims filed here is running three to five times higher than in Northern California after the 1989 Loma Prieta temblor--a strong indication that there will be more litigation. Still, legal experts say it is likely to be months before the full legal ramifications of the quake emerge.

"Most of the time it takes a couple of months before people realize that they're not going to get what they think they're going to get, and then they come to us," said William Shernoff, a Claremont lawyer who specializes in lawsuits against insurance companies.

Nonetheless, one former tenant of the Northridge Meadows complex, where 16 people were crushed, said he has talked to three attorneys.

And Herb Katz, a forensic architect who has examined a lot of quake damage, said he expects to see a lawsuit filed on behalf of the heirs of a woman who died when a 3-year-old house slid off a hill. "That shouldn't have happened," Katz said. "That kind of thing will start raising its ugly little head."

As a sign of the range of legal issues stemming from the quake, more than half a dozen attorneys, led by Century City real estate lawyer Ronald I. Silverman, are preparing a quake audiotape for members of the Los Angeles County Bar Assn. He expects it to be completed by midweek and the Bar will sell it for about $65, Silverman said.

Among the questions: Does the heir of a person who died in an apartment building that collapsed have a viable wrongful death suit? (Perhaps.) Can a tenant whose building has been damaged get out of his lease? (Probably.) If a home buyer was in escrow at the time the quake struck, can he walk away from the deal? (Maybe.)

One issue does appear clear at this point: The state of California seems far less vulnerable than it did after the Loma Prieta quake, when more than 40 people died on collapsed freeways in the Bay Area--spawning millions of dollars in settlements.

In this quake, only one person--a police officer--died on a damaged freeway and state officials say they have no idea whether his family will file a claim.

Castro is not sure he is going to file any lawsuits. But he has been vigorously examining one possible case since Jan. 18, when he got his first quake-related call.

That afternoon, he made his first trip to a damaged San Fernando Valley apartment complex. As he stood on a balcony taking his first look, the building "was still rocking and rolling," Castro said. Since then he has been back several times with structural engineers, architects, insurance adjusters and a lawyer representing the builder.

"We've been opening walls, taking out plywood, examining the nails. This will go on for another two weeks or so. We have our consultants. They have theirs. We have all the blueprints. In the next month, we'll sit down and piece together what happened."

If all goes amicably, the two sides will agree on the extent of damage, what the repairs will cost and who has to pay. If not, Castro will sue and extensive preparation for trial will begin. Scale models will be built, along with animated presentations of how sections of the building collapsed.

At this point, Castro likes his chances: The building was erected only three years ago and therefore is subject to the most stringent codes, making a case easier to win.

"When you look at a case legally, you always want to have a structure built after 1976," Castro said. "The city of Los Angeles instituted broad-based code changes after the 1971 Sylmar quake."

Castro and other lawyers point out one potential impediment to lawsuits: California has a 10-year statute of limitations on construction defects.

However, there is a way around the statute if a defect has been fraudulently concealed--for example, if plasterboard was covertly used when a set of blueprints called for plywood.

Another potential problem for those thinking of suing is the so-called act of God doctrine. Some defense lawyers may argue that as long as a structure complied with codes in effect when it was built, the owner is not liable for damage caused by a disaster such as an earthquake.

But a long line of California cases have held that "an act of God is not a separate defense," said UCLA law school professor Gary Schwartz, a specialist in tort law. Rather, an act of God is simply one factor that could be considered by a jury, he said. Another is whether reasonable precautions had been taken.

"A 6.6 earthquake in California in 1994 is by no means unforeseeable," meaning that the possibility of such a quake should have been taken into consideration by a builder, Schwartz said.

Castro got his client through a referral; other lawyers took out ads. One is David G. Epstein of Irvine, who said his firm is "one of the most aggressive and one of the most successful" in the field. His firm has been running an ad that proclaims:

"If your building was constructed within the last 10 years, you may be able to recover for damages even if your property was not insured for earthquake damage. As a prominent construction defect law firm, we've helped our clients recover millions of dollars in damages for faulty construction."

Since the ad appeared, Epstein said in an interview, he has responded to calls about damaged buildings in the San Fernando Valley, on the Westside and in Santa Clarita.

As quake suits make their way through the courts, some dirty little secrets will emerge, said Kelly G. Richardson, a Pasadena attorney who also specializes in construction defects. Richardson said his firm, too, has received numerous calls.

"You are now seeing in very graphic terms the terrible damage that occurs when buildings do not have the proper plywood backing or structural nailing," Richardson said. "We have been telling homeowners for years" that there has been insufficient enforcement of construction standards aimed at preventing seismic damage. He said that inspections had declined since the passage of Proposition 13 in 1978.

Sherman Oaks lawyer Howard S. Levine, whose firm ran an ad promising free initial consultation and that no fees would charged unless the client won, said he has received about a dozen calls. That's fewer than he expected--and some of the questions surprised him. "Most of the calls are from people wanting a referral to a contractor who might fix up their place," Levine said.

"We ran the ad to be of service primarily....We haven't charged anyone a penny," Levine said, acknowledging that some members of his profession take a dim view of such advertising.

Indeed, some attorneys said they thought ads under the circumstances were distasteful. But New York University law professor Stephen Gillers said that targeted advertising of this type was approved by the Supreme Court in 1985.

Levine said he planned to run the ad again, about a month from now.

Several lawyers said they anticipate that a significant percentage of lawsuits filed will stem from clashes over insurance coverage, as they did after the Loma Prieta quake.

One cause of the insurance disputes is that it is not always easy to determine how much of the damage to a house or other structure was caused by an earthquake. "When a house is burned to its foundation you know what happened," Los Gatos lawyer Gary Rose said.

On the other hand, because some damage done by a quake is subtle, insurance companies may contend that there should be no coverage because of a pre-existing condition, such as an uneven floor.

Even though he is in Northern California, Rose said he has received calls for help. "One man called and said some of his custom-cast, 50-year-old ceramic tile was damaged," Rose said.

"An insurance adjuster is telling him without seeing the damage that they are only going to repair the individual cracked pieces rather than replace the whole field of tile in the bathroom. There is no way you can match the 50-year old tile, so the new pieces would stick our." Rose said he informed his client that "there is a brand-new, obscure but important state administrative code section that says if you can't achieve a consistent finish, the insurer has to replace the whole field."

San Francisco attorney Clarke B. Holland, one of the leading lawyers for insurance companies, said most of the coverage cases will turn on the language of a particular contract.

He said it is much too early to tell how many cases the quake will generate. "We were surprised by how few cases were filed" after the Loma Prieta quake and most of those were settled out of court, he said.

Many Southern California lawyers who have been pressed into service since the quake are not even thinking about lawsuits.

Among them is Daniel M. Crowley, 33, who heads the disaster relief committee of the Barristers, the young lawyers' wing of the Los Angeles County Bar Assn. The Barristers provide free legal assistance to victims who come to the disaster assistance centers set up by the Federal Emergency Management Agency.

"The way I see our role, we do legal triage," Crowley said. "People come up to the legal assistance table with a problem." If the volunteers know the answer, they give advice; if not, they refer people to other lawyers, he said.

Thus far, Crowley said more than 225 lawyers have attended post-earthquake training centers so they can volunteer at the disaster centers.

Perhaps the busiest group of attorneys are the cadre of public interest lawyers who have been working on a variety of fronts since the quake. Prime among them are the Legal Aid Foundation of Los Angeles, Bet Tzedek Legal Services, Public Counsel, the Western Center on Law and Poverty and San Fernando Valley Neighborhood Legal Services, whose Pacoima offices were damaged in the quake.

"Our staff dropped everything to get programs in place for earthquake victims," said Neil Dudovitz, executive director of San Fernando Valley Neighborhood Legal Services.

He said that rather than waiting for clients to come in, the firm's 13 lawyers and 10 paralegals fanned out to parks, housing projects, apartment complexes and other places to assess need, answer questions and disseminate information, including flyers in English and Spanish explaining quake victims' rights to emergency housing assistance and food stamps. Another flyer, headlined "Homeowner Alert," provides a list of dos and don'ts in dealing with contractors offering home repairs.

Dudovitz and Melinda Bird of the Western Center also have held numerous meetings with FEMA officials in an attempt to ensure that that agency's operations were more efficient and more "user-friendly" than they were in the wake of the 1992 riots. In June, a coalition of public interest lawyers sued FEMA, contending that the agency exacerbated the problems of riot victims by illegally denying them relief after the disturbances.

That case is pending, but Dudovitz said poverty law groups are enjoying a better relationship with FEMA this time.

So far, lawyers for the Los Angeles city attorney's office do not seem overly concerned about legal ramifications of the quake. "Public entities are not going to be held liable in a disaster unless we did something wrong," said Thomas Hokinson, who heads the city attorney's liability section. "We don't see any potential liability to the city."

Although no one from the California attorney general's office is prepared to make a statement that sweeping, the state's exposure seems to be considerably less than it was after the 1989 Northern California quake, when there were 42 deaths stemming from the collapse of the Cypress section of the Interstate 880 and one person died when a section of the upper Bridge fell to the lower deck. About 150 people were injured in the collapse of the two structures.

Within 20 days, emergency legislation was enacted to compensate victims. Thus far, the state has paid $69 million and all but one of the cases has been settled. The suit of Ethel Lira, who was seriously injured while she was a passenger in a car that was crushed by the Cypress collapse, is scheduled for trial in May.

In contrast, the only person who died on a freeway during the recent quake was LAPD Officer Clarence W. Dean, whose motorcycle plunged 30 feet off a destroyed Antelope Valley Freeway bridge, shortly after the quake struck.