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Ridgewater Associates LLC v. Dublin San Ramon Services District

May 11, 2010

RIDGEWATER ASSOCIATES LLC, PLAINTIFF AND APPELLANT,
v.
DUBLIN SAN RAMON SERVICES DISTRICT, DEFENDANT AND RESPONDENT.



(Alameda County Super. Ct. No. VG07360267). Honorable Stephen Dombrink.

The opinion of the court was delivered by: Siggins, J.

CERTIFIED FOR PARTIAL PUBLICATION*fn1

Ridgewater Associates LLC (Ridgewater) appeals following a grant of summary adjudication in favor of the Dublin San Ramon Services District (District) on Ridgewater's claims for inverse condemnation and nuisance. The claims stem from water that Ridgewater contends seeps onto its property from a neighboring sewage treatment facility operated by the District. The superior court granted summary adjudication because Ridgewater lacked standing on its inverse condemnation claim and its nuisance claim was barred by statutory design immunity. In the published portion of this opinion, we hold that Ridgewater cannot prove damages on its inverse condemnation claim and in the unpublished portion of this opinion, we agree that its nuisance claim is barred by design immunity. Thus, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

In December 2006, Ridgewater purchased a warehouse on a one-acre property that is immediately adjacent to six facultative sludge lagoons (FSL's) that are owned and operated by the District. The warehouse was approximately six years old when the District built the first FSL in 1985. The last of the FSL's was built in 1999. The FSL's are used to treat sludge that emanates from the District's wastewater treatment plant. A constant level of water is maintained over the sludge as an odor control measure, while anaerobic bacteria break down the sludge until it is inert and suitable for disposal. The six FSL's have a total area of 26.2 acres, and the depth of the water in each of the FSL's is maintained at approximately 15 feet.

Inspections of the warehouse prior to Ridgewater's purchase revealed certain water table and water intrusion conditions that Ridgewater believed caused damage to the property that would require repair. As a result of the inspections, the price of the warehouse was reduced from $2.65 million to $2.5 million, and a modification to the purchase agreement states that Ridgewater acquired the property and all rights of the previous owner "as is." Ridgewater went through with the purchase, and escrow closed in February 2007.

Shortly after close of escrow, Ridgewater filed a claim with the District seeking compensation for damage to the warehouse allegedly caused by water seeping from the District's FSL's. When the claim was denied, Ridgewater sued the District for inverse condemnation and nuisance. Specifically, the complaint alleges that: "Late in 2006, there was standing water in the loading ramp adjacent to the warehouse, cracks and possible uplifting of a portion of the warehouse's slab foundation, concrete erosion, cracking and bulging in and outside the warehouse, water seepage into the truck ramp sump located near the loading ramp, and soil erosion in the parking area adjacent to the warehouse."

The District moved for summary judgment or summary adjudication. The District argued that Ridgewater did not have standing to pursue the inverse condemnation claim because any injury to the property occurred before Ridgewater purchased it. Thus, Ridgewater was not harmed by any possible taking. Alternatively, the District argued the inverse condemnation claim was barred by the statute of limitations, that there was no taking by the District or its activities were not the proximate cause of any taking. The District sought summary adjudication of the nuisance claim on the grounds that it was barred by statutory design immunity.

The trial court granted the motion. It determined that Ridgewater did not have standing to pursue the cause of action for inverse condemnation because when Ridgewater purchased the property it was aware of all the conditions that were alleged to interfere with its use and enjoyment. Ridgewater could not demonstrate there was any injury that occurred during its ownership of the property. The court also concluded that the nuisance claim was barred by design immunity. A judgment of dismissal was entered and Ridgewater timely appealed.

DISCUSSION

A. Standard of Review

We review the trial court's summary adjudication ruling de novo. (See Andrews v. Foster Wheeler LLC (2006) 138 Cal.App.4th 96, 100; Scheiding v. Dinwiddie Construction Co. (1999) 69 Cal.App.4th 64, 69.) Such a motion " 'must be granted if all of the papers submitted show "there is no triable issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law. In determining whether the papers show . . . there is no triable issue as to any material fact the court shall consider all of the evidence set forth in the papers, . . . and all inferences reasonably deducible from the evidence . . . ." ([Code Civ. Proc.,] § 437c, subd[s]. (c)[, (f)].) A defendant has met its burden of showing a cause of action has no merit if it "has shown that one or more elements of the cause of action . . . cannot be established, or that there is a complete defense to that cause of action. Once the defendant . . . has met that burden, the burden shifts to the plaintiff . . . to show . . . a triable issue of one or more material facts exists as to that cause of action or a defense thereto. The plaintiff . . . may not rely upon the mere allegations or denials of its pleadings to show . . . a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists. . . ." ' " (Andrews v. Foster Wheeler LLC, supra, 138 Cal.App.4th at p. 101.)

B. Inverse Condemnation

Article I, section 19, subdivision (a), of the California Constitution permits private property to be "taken or damaged for a public use . . . only when just compensation . . . has first been paid to, or into court for, the owner." "To state a cause of action for inverse condemnation, the plaintiff must allege the defendant substantially participated in the planning, approval, construction, or operation of a public project or improvement which proximately caused injury to plaintiff's property." (Wildensten v. East Bay Regional Park Dist. (1991) 231 Cal.App.3d 976, 979-980.) "[A]n action for inverse condemnation is generally available only where the taking ...


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