The Alternative to Resilient Design and Earthquake Retrofitting: Increased Legal Risk
No owner of older residential or commercial real estate, particularly in California, could reasonably deny that a major seismic event might potentially impact the buildings they own. Knowing that, owners nonetheless often key their retrofitting plans to deadlines set by local ordinances and state laws. In other words, they believe that because the legislators have defined the last date by which to complete mandated retrofitting work, an owner should not be liable for damage or injury from a seismic event until after that deadline has run.
Such was the unsuccessful contention made by the owner of an 111-year-old unreinforced masonry building in Paso Robles, California, known as the “Acorn Building,” that collapsed in the San Simeon earthquake, tragically killing two women. There are few California cases addressing liability for seismic damage. But in Myrick v. Mastagni (2010) 184 Cal. App.4th 1082, the appellate court settled the point of whether the owner has a complete defense if the deadline for retrofitting has not expired. Thinking about the extensive damage and injury that would have resulted if the 2019 Ridgecrest earthquake had been shifted a hundred miles south and slightly to the west, the case has renewed applicability.
When the San Simeon earthquake struck on December 22, 2003, the owner of the Acorn Building had been making slow progress towards retrofitting compliance. The deadline for completion was still 15 years away, extended in 1998 to 2018. As early as 1998, the owner hired a structural engineer to prepare a plan to bring the building into retrofitting compliance. But nearly five years later, on the day of the deadly earthquake, the construction to implement that plan had not yet begun. Other expenditures had been prioritized.
When the earthquake struck, two employees of the dress shop on the second floor fled the building. Jennifer Lynn Myrick was a 20-year-old who had recently become engaged; Marilyn Frost-Zafuto was a 50-year-old who, having just gotten her daughter situated at college, began working in the dress shop because she thought doing so would be the perfect way to re-acquaint herself with her community. Both women were killed by the collapsing building.
Assessing a jury award in favor of the women, the California Court of Appeal recognized that the basic rule of liability governing the case was that “an owner must use ordinary care in the management of his or her property to prevent injury to another.” (Myrick, 184 Cal. App.4th at 1087.) The test to be applied by a jury: whether the owner “acted as a reasonable person in view of the probability of injury.” (Id.) The owner argued that the Paso Robles City Council had already performed that balancing test and determined that the owner by law could not be “unreasonable” for not completing the retrofitting plan because the deadline set for 2018 was still far in the future.
The Court; however, rejected the owner’s argument. Instead, it ruled that “the overriding policy is public safety…. To hold that as a matter of law a building owner has no duty until after the compliance date of the ordinance would frustrate the very policy that the ordinance was designed to promote.” (Myrick, 184 Cal. App.4th at 1090.) In other words, the compliance deadline is no safe harbor. A jury is to assess “reasonableness” without being bound by the compliance deadline. The deadline can be considered. So can the progress of the owner towards retrofitting, along with factors such as the financial burden of completing the retrofitting project. But the jury can also consider how money has been spent on the building for other purposes – money that could have been spent on retrofitting.
The lesson to be learned from the case is that owners can no longer bury their heads in the sand any more than they can claim protection from liability based on the schedule set by their city or the county. In this post-Myrick era, no California owner could reasonably deny that an earthquake might at any time hit close enough to their locale to inflict severe damage on its building, risking safety to the public. So, building owners must not only prioritize planning, but actual progress in moving with reasonable speed to implement their retrofitting plans.
Spach, Capaldi & Waggaman, LLP is a business litigation and transactional law firm based in Newport Beach, California. The author, Mr. Spach, may be reached at (949) 852-0710. This article is for general information purposes only. Laws may have changed since this article was published. Before acting, be sure to seek legal advice.