Arreola v. County of Monterey (99 Cal. App. 4th 722, 2002)

Opinion

PREMO, Acting P. J.

Defendants, County of Santa Cruz, Santa Cruz County Flood Control and Water Conservation District (collectively Santa Cruz), Monterey County Water Resources Agency (MCWRA), and County of Monterey (Monterey), were found hable in tort and inverse condemnation for extensive damage caused when the Pajaro River Levee Project (the Project) failed during a heavy rainstorm in 1995. Defendant State of California (State) was also found liable in tort and inverse condemnation for damage caused when Highway 1 obstructed the path of the floodwater on its way to the sea. For reasons we shall explain, we affirm.

A. Introduction

This action commenced with the filing of six different complaints on behalf of approximately 300 plaintiffs. The essence of plaintiffs’ claims against Santa Cruz, MCWRA, and Monterey was that their failure to keep the Project channel clear diminished its capacity and ultimately caused a levee to fail during the storm. As against State, plaintiffs alleged that the drainage culverts under Highway 1 were too small to drain the flood and the resultant damming effect caused higher flood levels and destructive ponding of the floodwater.

The individual matters were consolidated, and the liability and damages phases were bifurcated for trial. The tort causes of action were tried to a jury. The inverse condemnation claims were simultaneously tried to the court. The jury found all defendants liable for dangerous condition of public property and nuisance. The counties and the water agencies were also found liable for negligence, and, with the exception of Monterey, for violation of mandatory duty. The trial court found all defendants liable on the inverse condemnation claims.

In order to obtain review of the liability issues prior to trial of the damages phase the parties selected Tony’s Auto Center as a representative plaintiff and stipulated to damages as to that plaintiff only. Judgment in favor of Tony’s Auto Center was filed January 6, 2000. The county and water agency defendants jointly moved for a new trial and that motion was denied. All defendants filed timely notice of appeal.

B. Facts

1. The Project

The Pajaro River is formed by the union of several smaller tributaries in the Counties of San Benito and Santa Clara. It flows through Chittenden Pass in the Santa Cruz Mountains and emerges into the Pajaro Valley, eventually emptying into Monterey Bay. The river forms the border between the Counties of Santa Cruz on the north and Monterey on the south. The Pajaro Valley is an historic floodplain. Today, most of the valley is devoted to agriculture. Its two population centers are the City of Watsonville on the Santa Cruz side of the river, and the small town of Pajaro just across the river from Watsonville on the Monterey side.

The federal Flood Control Act of 1944 (Pub.L. No. 78-534, ch. 665 (Dec. 22, 1944) 58 Stat. 887) authorized the United States Army Corps of Engineers (the Corps) to construct the Project upon receipt of assurances from the responsible local agencies that they would, among other things, operate and maintain the Project as the Corps required. The California Water Resources Act authorized the State’s portion of the project and directed the four affected counties (Santa Clara, San Benito, Santa Cruz, and Monterey) to give the required written assurances. (Stats. 1945, ch. 1514, p. 2827.) Before the counties took any action, the California Legislature created the Monterey County Flood Control and Water Conservation District, and the new district replaced Monterey for purposes of the Water Resources Act. (Stats. 1947, ch. 699, §§ 2, 4, p. 1739.) MCWRA succeeded to the responsibilities of the Monterey County Flood Control and Water Conservation District in 1990. (Stats. 1990, ch. 1159, p. 4831.)

In 1947, the three counties and Monterey County Flood Control and Water Conservation District signed a resolution giving the assurances required by the federal Flood Control Act. Shortly thereafter, Monterey joined the other three counties in executing an indemnity agreement under which each county accepted responsibility for the portion of the Project located within its borders, and guaranteed as to each other the assurances that had been given to the Corps.

2. Maintenance of the Project

The Project design consisted primarily of clearing the river channel and constructing earthen levees along both sides of the river, beginning near Murphy’s Crossing east of Watsonville and extending westward to the mouth of the river. The Corps completed the Project in 1949 and transferred responsibility for its maintenance to the local interests. The Corps provided an “Operation and Maintenance Manual” to guide maintenance efforts. One goal of maintenance was to maintain the Project’s capacity. Federal regulations, which were incorporated into the manual, specified that the channel be kept clear of shoals, weeds and wild growth. (See 33 C.F.R. § 208.10(g)(1) (2001).) Vegetation and shoals in the channel decrease its capacity. Therefore, it was important to keep the channel clear in order to maintain the capacity it was intended to have.

The Corps had designed the Project to have a capacity of 19,000 cubic feet per second (c.f.s.). The Corps’ 1946 “Definite Project Report” stated that the Project would be built to “contain a two-per-cent-chance flood within a 3-foot freeboard.” The “freeboard” to which the report refers is the distance from the top of the levee to the surface of the water at the level the project is designed to carry. Freeboard is included as a safety feature. It provides additional capacity to take care of unforeseen factors, although it is not intended to contain water for long periods of time. The Corps’ report explained: “The channel capacity will be 19,000 c.f.s. above the mouth of Corralitos Creek [the point at which the Project failed in 1995] . . . .” The Corps’ documents pointed out that by encroaching on the freeboard the Project would hold 23,000 c.f.s. at the pertinent location and still have one foot of freeboard remaining. That means that the Project was designed to contain 19,000 c.f.s. at the point at which the Project ultimately failed, and, if unaccounted factors had not diminished the channel’s capacity, there would still be room to safely carry, at least for a short period of time, an additional 4,000 c.f.s.

From 1949 until 1972, the vegetation and sandbars were removed with a tractor and a bulldozer. The effectiveness of these channel clearing efforts was demonstrated by the Project’s performance during two storms in the 1950’s. In a 1955 storm, the Chittenden gauge reported flows of 24,000 c.f.s. Even with such a high flow there remained over two feet of freeboard near the point where the levee failed in 1995. In 1958 the Project contained flows of 23,500 c.f.s., although with slightly less freeboard remaining.

The continuous mechanized clearing of the channel stopped around 1972. The California Department of Fish and Game (Fish and Game) had demanded a halt to mechanical clearing of the channel in order to protect the riparian habitat. In an apparent attempt to conform to both the demands of Fish and Game and the Corps’ Project maintenance requirements, Santa Cruz began using herbicides to kill the vegetation in the channel. Without regular mechanized clearing, however, vegetation and sandbars built up, impeding the flow of winter runoff. As the Project deteriorated, it reverted more and more to riparian habitat, which in turn encouraged the claim of Fish and Game to jurisdiction over the Project. Although Fish and Game had procedures by which the local agencies could appeal the department’s decisions, the local agencies never appealed.

In addition to Fish and Game, local environmental interests made thorough maintenance of the channel more challenging by actively supporting efforts to preserve the river’s habitat. In 1976, Supervisor Gary Patton wrote to the Legislature on behalf of the Santa Cruz County Board of Supervisors to support Fish and Game policies and to encourage strong legislation to protect river habitat and regulate streambed alteration. In 1977, Santa Cruz adopted an ordinance designed to “preserve, protect and restore riparian corridors.” In 1980, the county fish and game commission was given authority to restore fishery habitat in the Pajaro River, and to review public works projects that involved any alteration of the streambed or of streamside vegetation.

As the channel became more clogged, thorough clearing became more expensive. The passage of Proposition 13 in 1978 made funding more of a problem in general so that through the 1980’s the Santa Cruz County Department of Public Works did not have funds to remove trees and other vegetation in the channel. MCWRA had no significant funds to participate in channel clearing efforts, and since 1974 had concentrated almost exclusively on levee maintenance. Although Supervisor Marc Del Piero asked his colleagues several times to approve allocations to MCWRA from Monterey’s general fund, with one minor exception, he was never successful.

The presence of vegetation and sandbars within the channel proliferated and posed an acknowledged risk of flooding. By 1977 area farmers had become concerned about the lack of mechanized clearing and expressed their concerns to supervisors in both counties. Watsonville officials wrote to the Santa Cruz County Department of Public Works in 1985, 1987 and 1988, asking that something be done. The agencies responsible for Project maintenance were also worried about the condition of the channel. By 1988, Joseph Madruga, chief engineer for MCWRA, had come to the conclusion that vegetation and sandbars in the channel had reduced its capacity by at least 50 percent. John Fantham, director of the Santa Cruz County Department of Public Works, had recognized the risk of flooding as early as 1983. Later, both agencies acknowledged that the 1995 flood was due in substantial part to the failure to clear the channel.

Meanwhile, the Corps had been performing inspections of the Project about twice a year. Although the Corps issued only one notice that the Project was in an unacceptable condition, the majority of the semiannual evaluations expressed concern that dense vegetation in the channel posed a serious constriction on the flow. Many of the Corps’ evaluations included notice to both the MCWRA board and the Santa Cruz County Board of Supervisors that lack of maintenance could disqualify the Project for future federal assistance in the event of a flood. The Corps actually did temporarily disqualify the Project for that reason in 1992.

By 1988, the issue had come to the attention of Congressman Leon Panetta. Congressman Panetta convened the Pajaro River Task Force to determine what was to be done about the conflicting concerns of flood control and habitat restoration. The task force was made up of representatives from all the responsible and affected agencies, Fish and Game, and the Corps. Supervisor Del Piero and Mr. Madruga represented the Monterey interests. Mr. Fantham and Supervisor Robley Levy represented Santa Cruz. After over two years of work, the task force produced the “Pajaro River Corridor Management Plan,” which called for the hand clearing of vegetation. Both Mr. Fantham and Mr. Madmga felt that the plan was inadequate, and would do no more than maintain the status quo. Mr. Madruga voiced his objection at the task force meeting and in a letter to Mr. Fantham in which he advocated a program of thinning and removal of selected vegetation using heavy equipment. According to Mr. Madruga, this was the “only method that can accomplish the flood protection necessary to protect the citizens of the Pajaro Valley at a reasonable cost and in a reasonable time frame.” Notwithstanding these reservations, the task force unanimously approved the plan in October 1991, although there is no evidence it was ever formally adopted by the agencies charged with implementing it.

Finally, beginning in the early 1990’s, the agencies on both sides of the river began more aggressive efforts to clear the channel. In 1991, at the urging of Supervisor Del Piero, MCWRA applied for a permit to use a backhoe and bulldozer to clear the channel. Fish and Game issued the permit, but limited its permission to hand clearing and then later halted the work. In 1993, at the invitation of area farmers, then Director of Fish and Game, Boyd Gibbons toured the Project. Gibbons was sufficiently concerned with the condition of the channel that he instructed his staff to work with the counties to get the necessary work done as soon as possible. Thereafter, Santa Cruz obtained permits to do some mechanized clearing of the channel. However, the work that was done was not enough to entirely clear the vegetation and sediment that had been allowed to collect over the preceding 20 years.

3. Highway 1

Highway 1 runs north to south and crosses the Pajaro River at the lower end of the Pajaro Valley, west of Watsonville. State began planning the construction of the subject portion of the highway in the 1950’s. At the time, Highway 1 ran through Watsonville. The new section was to bypass the city. The bypass required the construction of a new bridge over the river and an earthen embankment elevating the highway at the south end of the bridge. Trafton Road today runs under Highway 1 on the southern side of the river. Before State built the bypass, water passed through this area along a path in the vicinity of Trafton Road. The planned embankment would obstruct the existing drainage in that area. To compensate, State needed to design a drainage system for the embankment.

Investigation, design and construction of the embankment continued through the late 1960’s. State’s design criteria required that drainage through embankments be able to discharge a 100-year flood without causing water to back up over adjacent private property. State’s engineers explained that this criterion did not require the drainage system in this case to accommodate flows escaping from the Project channel. According to State, the drainage needed only to pass rainwater runoff from a 700-acre area immediately adjacent to the highway. Using those guidelines, State engineers approved plans for two 48-inch culverts that could accommodate 98 c.f.s. The design documents showed that this design actually anticipated that “[sjhallow flooding on peak flow can be expected for some distance outside the [right of way].”

4. The Flood

The Project protected the valley for over 45 years until the storm of March 1995. On the night of March 10-11, 1995, the river overtopped the levee on the Monterey side, upriver from its junction with Corralitos (Salsipuedes) Creek. The resultant rush of water over the levee eroded the back side of the levee and it gave way, inundating the surrounding valley.

The vegetation and sediment that had been allowed to accumulate in the channel caused the river flow to be higher than it would have been had it been properly cleared. On the night of the storm, the maximum flow at the Chittenden gauge was estimated to have been 21,300 c.f.s. Plaintiffs’ expert, Dr. Robert Curry, testified that in his opinion the 21,300 c.f.s. overestimated the flow because it did not take into account a number of factors taking place within the channel or downriver from the gauge. According to Dr. Curry, these factors served to reduce the actual flow at the break site to 16,000 to 18,500 c.f.s., most likely around 17,500 c.f.s.

When the levee failed, the floodwaters ran onto the historically flooded valley floor until they reached the Highway 1 embankment. The Highway 1 culverts were quickly overwhelmed, so that the water backed up on the east side of the highway, flooding more acreage than it otherwise would have flooded, and standing in many places for an extended period of time. The standing water exacerbated the flood damage because it caused the deposition of vast amounts of destructive sediment, all of which had to be removed when the floodwaters finally receded.

C. Discussion

1. Summary of Issues and Scope of Review

The two counties and their related water agencies contend: (1) the trial court did not make the determination of unreasonableness that is necessary to support inverse condemnation liability, (2) inverse condemnation liability may not be based on shoddy maintenance of a public improvement, (3) the trial court used an erroneous definition of the Project’s “design capacity,” (4) there was insufficient evidence to support a finding that the Project did not perform within its capacity, and (5) the trial court erred in adopting the plaintiffs’ proposed statement of decision.

MCWRA separately contends that the trial court erred in failing to apportion among the defendants the damages of the single plaintiff, Tony’s Auto Center. Since MCWRA stipulated to the judgment in the form it was entered, MCWRA is estopped to complain of error, if any there was. (Hasson v. Ford Motor Co. (1982) 32 Cal.3d 388, 420 [185 Cal.Rptr. 654, 650 P.2d 1171].)

State contends: (1) the trial court applied an improper standard of unreasonableness in ruling on the inverse condemnation claim, (2) State could not be liable in tort because it had no duty to protect plaintiffs from failure of the Project, (3) State is immune from tort liability under Government Code section 830.6 (design immunity), and (4) the breach of the levee was a superseding cause.

Monterey argues separately that it is not liable because it did not have any responsibility for the Project.

Except where noted, defendants’ arguments relate to facts that are materially undisputed. We therefore apply our independent review. (Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 799 [35 Cal.Rptr.2d 418, 883 P.2d 960].)

2. Inverse Condemnation—Legal Background

“Private property may be taken or damaged for public use only when just compensation, ascertained by a jury unless waived, has first been paid to, or into court for, the owner.” (Cal. Const., art. I, § 19, hereafter article I, section 19.) When a public use results in damage to private property without having been preceded by just compensation, the property owner may proceed against the public entity to recover it. Such a cause of action is denominated “inverse condemnation.” (Breidert v. Southern Pac. Co. (1964) 61 Cal.2d 659, 663, fn. 1 [39 Cal.Rptr. 903, 394 P.2d 719].)

Early inverse condemnation cases presumed that article I, section 19 (then § 14) merely provided an exception to the general rule of governmental immunity and that a public entity could only be liable in inverse condemnation if a private party could be held liable for the same injury. (Archer v. City of Los Angeles (1941) 19 Cal.2d 19, 24 [119 P.2d 1] (Archer).) Albers v. County of Los Angeles (1965) 62 Cal.2d 250 [42 Cal.Rptr. 89, 398 P.2d 129] (Albers) explained that the constitutional provision actually provided a broader basis for governmental liability. Albers confirmed that the fundamental policy basis for the constitutional requirement of just compensation is a consideration of “ ‘whether the owner of the damaged property if uncompensated would contribute more than his proper share to the public undertaking.’ ” (Id. at p. 262.) According to Albers, “any actual physical injury to real property proximately caused by [a public] improvement as deliberately designed and constructed is compensable under [article I, section 19] of our Constitution whether foreseeable or not.” (Id. at pp. 263-264.) The only limits to the claim were that (1) the injuries must be physical injuries of real property, and (2) the injuries must have been proximately caused by the pubiic improvement as deliberately constructed and planned. (Holtz v. Superior Court (1970) 3 Cal.3d 296, 304 [90 Cal.Rptr. 345, 475 P.2d 441] (Holtz).)

Although Albers had held that the inverse condemnation plaintiff was entitled to compensation without regard to fault, Albers left open two exceptions to that rule—the Gray exception, which is not pertinent here, and the Archer exception. (Albers, supra, 62 Cal.2d at p. 263; and see Gray v. Reclamation District No. 1500 (1917) 174 Cal. 622 [163 P. 1024]; Archer, supra, 19 Cal.2d at p. 24.) In brief, the so-called Archer exception involved the circumstances, peculiar to water law, in which a landowner had a right to inflict damage upon the property of others for the purpose of protecting his or her own property. Such circumstances included the erection of flood control measures (the common enemy doctrine) and the discharge of surface water into a natural watercourse (the natural watercourse rule). Under private water law analysis, these rules immunized the landowner from liability for resulting damage to downstream property. (See Belair v. Riverside County Flood Control Dist. (1988) 47 Cal.3d 550, 563-564 [253 Cal.Rptr. 693, 764 P.2d 1070] (Belair); Archer, supra, 19 Cal.2d at pp. 24-26; Locklin v. City of Lafayette (1994) 7 Cal.4th 327, 350 [27 Cal.Rptr.2d 613, 867 P.2d 724] (Locklin).) Presumably, under the Archer exception, a public entity would be completely immune from liability if the entity’s conduct were of the type that would have been immune under these water law principles.

Like this case, Belair involved flood damage that occurred after a levee failed. Belair modified Albers and adopted a rule of reasonableness to be applied in the context of flood control litigation. Belair determined that application of the Albers rule of strict liability would discourage needed flood control projects by making the entity the insurer of the property the project was designed to protect. (Belair, supra, 47 Cal.3d at p. 565.) On the other hand, to apply the Archer exception would unfairly burden the private landowner by requiring the landowner to bear a disproportionate share of the damage caused by failure of the public project. To balance these conflicting concerns Belair held: “[Wjhere the public agency’s design, construction or maintenance of a flood control project is shown to have posed an unreasonable risk of harm to the plaintiffs, and such unreasonable design, construction or maintenance constituted a substantial cause of the damages, plaintiffs may recover regardless of the fact that the project’s purpose is to contain the ‘common enemy’ of floodwaters.” (|Ibid.) Under Belair, the public entity is not immune from suit, but neither is it strictly liable.

Belair left open the question of how to determine reasonableness in the inverse condemnation context. That question was answered in Locklin. The Locklin plaintiffs had alleged that increased runoff from creek side public works caused erosion damage to their property downstream. Locklin held that the privilege to discharge surface water into a natural watercourse (the natural watercourse rule) was a conditional privilege, subject to the Belair rule of reasonableness. Locklin explained that to determine reasonableness in such a case, the trial court must consider what are now commonly referred to as the “Locklin factors.” They are: “(1) [t]he overall public purpose being served by the improvement project; (2) the degree to which the plaintiff’s loss is offset by reciprocal benefits; (3) the availability to the public entity of feasible alternatives with lower risks; (4) the severity of the plaintiff’s damage in relation to risk-bearing capabilities; (5) the extent to which damage of the kind the plaintiff sustained is generally considered as a normal risk of land ownership; and (6) the degree to which similar damage is distributed at large over other beneficiaries of the project or is peculiar only to the plaintiff.” (Locklin, supra, 7 Cal.4th at pp. 368-369.)

Thus, in matters involving flood control projects, or in circumstances such as those before the court in Locklin, the public entity will be hable in inverse condemnation if its design, construction, or maintenance of a public improvement poses an unreasonable risk of harm to the plaintiff’s property, and the unreasonable aspect of the improvement is a substantial cause of damage. In those circumstances, unreasonableness is determined by balancing the factors set forth in Locklin.

3. Counties’ Issues

a. The Trial Court Properly Balanced the “Locklin Factors. ”

Counties contend that the trial court did not analyze the reasonableness of their actions according to the requirements of Locklin. The plaintiffs’ proposed statement of decision referred specifically to the six Locklin factors and the trial court’s consideration of each of them. The trial court acknowledged that the balancing analysis in the proposed statement of decisioh was correct, but felt that the discussion was not necessary for a statement of decision and had it stricken. The trial court instead stated, “The Court has balanced the public need for flood control against the gravity of the harm caused by the unnecessary damage to the plaintiffs’ property, and finds that the County defendants acted unreasonably. See Belair, [supra,] 47 Cal.3d at [at pp.] 566-67.”

Counties brought the absence of the Locklin factors to the trial court’s attention in connection with the hearing on the motion for new trial. Plaintiffs, therefore, moved to amend the statement of decision to include the previously stricken analysis. In response, the court ruled, “In fact, I did make those findings. And the reason for deleting them from the proposed statement was a disposition for brevity. I think they were there. I did consider them. I will grant the motion to insert them back into the statement of decision of the court for clarity.” As permitted by Code of Civil Procedure section 662, the trial court amended the statement of decision to include the Locklin analysis. We reproduce that portion in the margin.

Counties now argue that the trial court came to a final decision without the necessary balancing and then merely plugged the hole by inserting the previously stricken language into the statement of decision. We will not second-guess the trial court’s subjective reasoning. The trial court specifically stated that it had considered the factors and made the findings. The statement of decision that is before us includes the appropriate analysis and we have no reason to reject it.

Counties also contend that the reasonableness calculus must be made as of the time the public entity is making the decision to approve the project, and that the trial court incorrectly focused on conduct that took place after adoption of the federal maintenance regulations. This contention confuses the purpose of the balancing analysis. The balancing analysis required by Locklin applies to the public entities’ action that results in the injury. In Belair, supra, 47 Cal.3d 550, it was the design of the levee system that resulted in the injury so that the reasonableness of the design would have been the proper consideration. Here, the trial court applied the analysis to the Counties’ long-standing policy of allowing the Project channel to deteriorate. (See fn. 7, ante.) As we explain in more detail in the following section, it was that long-standing policy that caused the damage. We find that the trial court appropriately assessed the reasonableness of that policy according to the factors set forth in Locklin, supra, 1 Cal.4th at page 369. (See Bunch v. Coachella Valley Water Dist. (1997) 15 Cal.4th 432, 454 [63 Cal.Rptr.2d 89, 935 P.2d 796] (Bunch II).)

b. Inadequate Project Maintenance Supports Inverse Condemnation Liability.

Counties next contend that the trial court incorrectly based liability upon a finding of negligence, which is not the type of government action to which inverse condemnation applies. Counties also contend that the Corps’ prescribed maintenance was the only “plan” of maintenance Counties ever adopted and that there is insufficient evidence to support a contrary finding. We find no merit in either contention.

To be subject to liability in inverse condemnation, the governmental action at issue must relate to the “public use” element of article I, section 19. “Public use” is the threshold requirement. (Cal. Const., art. I, § 19.) “The destruction or damaging of property is sufficiently connected with ‘public use’ as required by the Constitution, if the injury is a result of dangers inherent in the construction of the public improvement as distinguished from dangers arising from the negligent operation of the improvement.” (House v. L. A. County Flood Control Dist. (1944) 25 Cal.2d 384, 396 [153 P.2d 950] (cone. opn. of Traynor, J.).) A public entity’s maintenance of a public improvement constitutes the constitutionally required public use so long as it is the entity’s deliberate act to undertake the particular plan or manner of maintenance. (Bauer v. County of Ventura (1955) 45 Cal.2d 276, 284-285 [289 P.2d 1] (Bauer).)

The necessary finding is that the wrongful act be part of the deliberate design, construction, or maintenance of the public improvement. “The fundamental justification for inverse liability is that the government, acting in furtherance of public objectives, is taking a calculated risk that private property may be damaged.” (Yee v. City of Sausalito (1983) 141 Cal.App.3d 917, 920 [190 Cal.Rptr. 595], disapproved on other grounds in Bunch II, supra, 15 Cal.4th at pp. 447-451.) That is why simple negligence cannot support the constitutional claim. For example, in Hayashi v. Alameda County Flood Control (1959) 167 Cal.App.2d 584 [334 P.2d 1048], the appellate court held that the plaintiffs had not stated a cause of action for inverse condemnation because, although the defendant’s failure to repair a levee within 10 to 21 days was negligence, it was not “a deliberate plan with regard to the construction of public works.” (Id. at pp. 590-592.) That is not to say that the later characterization of a public agency’s deliberate action as negligence automatically removes the action from the scope of the constitutional requirement for just compensation. So long as the entity has made the deliberate calculated decision to proceed with a course of conduct, in spite of a known risk, just compensation will be owed. (See Van Alstyne, Inverse Condemnation: Unintended Physical Damage (1969) 20 Hastings L.J. 431, 489-490 (Van Alstyne).)

The leading case on the issue is Bauer. In Bauer, a drainage ditch ran along the downhill border of the plaintiffs’ property. As originally constructed, any overflow from the ditch would have run downhill and away from the plaintiffs’ property. As time went on, the downhill side of the ditch was built up higher and higher with dirt and debris so that when the ditch later overflowed, it flooded the plaintiffs’ land. The county argued that the change in the ditch was a result of its maintenance and negligent maintenance was not the “public use” to which inverse condemnation liability would attach. The Supreme Court disagreed, explaining: “The rather obscure line between the concepts of ‘construction’ and ‘maintenance’ is disclosed by any attempt to define them in mutually exclusive terms and to characterize the raising of a bank of an existing ditch as one or the other. If the ‘maintenance’ consists of an alteration of the ditch by raising one of the banks, then in a material sense ‘maintenance’ becomes a species of ‘construction.’ Had the bank been raised during the original construction it would have been part of the over-all project and hence within the rule .... The defendants’ argument that damage from maintenance is beyond the purview of [article I,] section [19] invites an artificial distinction which would turn simply upon the passage of time between the original construction and the subsequent alteration and must therefore be rejected.” (Bauer, supra, 45 Cal.2d at p. 285.)

Other cases have also found that inadequate maintenance can support liability in inverse condemnation. Two such cases involved damage to property caused by broken water pipes that the public entities had failed to properly maintain. (McMahan’s of Santa Monica v. City of Santa Monica (1983) 146 Cal.App.3d 683, 696-698 [194 Cal.Rptr. 582] (McMahan’s), disapproved on other grounds, Bunch II, supra, 15 Cal.4th at pp. 447-451; Pacific Bell v. City of San Diego (2000) 81 Cal.App.4th 596 [96 Cal.Rptr.2d 897] (Pacific Bell).) In both McMahan’s and Pacific Bell the defendants argued that the city’s negligent maintenance of its water system was not the type of deliberate government action that could support liability in inverse condemnation. (McMahan’s, supra, 146 Cal.App.3d at p. 693; Pacific Bell, supra, 81 Cal.App.4th at p. 607.) In neither case had the city affirmatively passed a resolution or otherwise enacted a plan that was facially inadequate. But in both cases the city knew that the maintenance program being applied to its water system was inadequate and did not take action to remedy the inadequacy. In Pacific Bell, the city repeatedly denied requests for water rate increases to fund repair and replacement of the water system. (Pacific Bell, supra, 81 Cal.App.4th at p. 607.) In McMahan’s, the city did not accelerate its program of water main replacement in spite of a water rate study showing that such a program was necessary to prevent a continued deterioration of the system. (McMahan’s, supra, 146 Cal.App.3d at p. 695.)

The Pacific Bell court found that the deliberateness required for inverse condemnation liability was satisfied by a finding that the public improvement, as designed, constructed and maintained, presented an inherent risk of danger to private property and the inherent risk materialized and caused damage. (Pacific Bell, supra, 81 Cal.App.4th at p. 607; and see House v. LA. County Flood Control Dist., supra, 25 Cal.2d at p. 396.) The court pointed out that the damage to private property that resulted from such an inherent risk was a direct cost of the public improvement. In Pacific Bell, the city could have incurred the cost in advance by monitoring and replacing the system before a failure caused damage. When it chose not to do so, article I, section 19 required that the cost be absorbed by the taxpayers as a whole, and not by the individual landowner. (Pacific Bell, supra, 81 Cal.App.4th at pp. 607-608, citing Holtz, supra, 3 Cal.3d at pp. 310-311.)

The McMahan’s court used the same rationale to reject the defendant’s contention that its conduct could only be characterized as negligence. Relying on Bauer, supra, 45 Cal.2d 276, McMahan’s determined that “whether the City’s program of water main installation and replacement is characterized as ‘construction’ or ‘maintenance,’ the fact remains that it was inadequate and contributed to the break due to corrosion of the [broken] main. The City’s knowledge of the limited life of such mains and failure to adequately guard against such breaks caused by corrosion is as much a ‘deliberate’ act as existed in Albers, supra, 62 Cal.2d 250.” (McMahan’s, supra, 146 Cal.App.3d at p. 696.)

We conclude that in order to prove the type of governmental conduct that will support liability in inverse condemnation it is enough to show that the entity was aware of the risk posed by its public improvement and deliberately chose a course of action—or inaction—in the face of that known risk.

i. The Trial Court Found That Counties Adopted an Unreasonable Plan.

During trial, neither side raised the issue of deliberate action. The heart of plaintiffs’ case was that Counties had failed to maintain the project as required by the Corps, allowing silt and vegetation to build up and diminish the capacity of the Project. Counties defended by attempting to show, among other things, that their conduct was reasonable in light of regulatory and fiscal restrictions. The trial court’s statement of decision referred to the litany of maintenance deficiencies and concluded, “[T]he evidence is persuasive that the County defendants did not act reasonably with regard to their maintenance obligation. Moreover the trial record refuted the Counties’ arguments that they acted reasonably in light of regulatory impediments and funding limitations. The Counties’ maintenance duties required that certain necessary steps be taken to effectively keep the channel clear. If those ‘necessary steps’ required greater efforts in the face of funding and regulatory obstructions, then a reasonable course of conduct required a more aggressive approach to overcoming these claimed impediments.”

About three months after the statement of decision was filed, the Third District Court of Appeal filed Paterno v. State of California (1999) 74 Cal.App.4th 68 [87 Cal.Rptr.2d 754] (Paterno). Paterno, like this case, was an appeal from a judgment for the plaintiff on an inverse condemnation claim arising from a broken levee. The Paterno court held that the trial court’s statement of decision was deficient because it based liability “almost entirely on the violation of standards for levee maintenance, in other words, departures from the lawful plan, rather than on an unreasonable plan.” (Id. at p. 90.) The appellate court reversed and remanded the case for retrial, noting that Paterno would have to identify upon what plans he relied and then prove that the plan caused his injury. (Id. at p. 91.)

After judgment was entered in favor of the test plaintiff in this case, Counties filed a new trial motion. (Code Civ. Proc., § 657.) Relying upon Paterno, they argued that the trial court’s decision was against law because the court had based liability on negligent maintenance, not on adoption of an unreasonable plan of maintenance. The trial court denied the new trial motion, but amended the statement of decision to include the finding: “[T]he maintenance deficiencies which the Court’s Statement of Decision summarized all resulted from plans or policies which defendants adopted and implemented over a twenty-year period.” Thus, the trial court’s statement of decision, as amended, found that Counties had adopted and implemented unreasonable plans or policies by failing, over a 20-year period, to take a more aggressive approach to maintenance of the Project.

Paterno does not affect our conclusion. In Paterno, the appellate court determined that the trial court had adopted the view that unreasonable conduct, as required by Belair, meant ordinary negligence, and therefore, that the trial court had not made the necessary finding. (Paterno, supra, 74 Cal.App.4th at pp. 86, 88.) Unlike the trial court in Paterno, the trial court in this case expressly found that the manner in which the channel was maintained for over 20 years was a deliberate policy of the local public agencies responsible for the Project. Such a determination is a finding of the deliberate government action necessary for inverse condemnation liability.

ii. There Is Substantial Evidence of an Unreasonable Plan of Maintenance.

Counties insist that the only evidence of a “plan” of maintenance was the Corps’ maintenance requirements. In reviewing the sufficiency of the evidence to support the findings of the trial court, we apply the basic principle of appellate practice and consider the evidence in the light most favorable to the plaintiffs, giving them the benefit of every reasonable inference and resolving conflicts in support of the judgment. (In re Marriage ofArceneaux (1990) 51 Cal.3d 1130, 1133 [275 Cal.Rptr. 797, 800 P.2d 1227].)

The record is replete with evidence to support the finding that Counties’ maintenance of the Project was conducted pursuant to Counties’ deliberate policies. Counties were aware of the maintenance program being applied to the Project and knew that the buildup of vegetation and sand bars diminished the protection the Project was intended to provide. Area farmers, Watsonville officials, and the highest ranking people in both Counties’ water agencies alerted county officials to the risk of flooding and to that which needed to be done to remedy the problem. In spite of that knowledge, Counties did not take any action to correct the situation until 1991 or later. Instead, Counties allowed Fish and Game regulations and perceived funding limitations to drive the actual program of maintenance. Thus, Counties’ knowing failure to clear the Project channel, in the face of repeated warnings and complaints was not mere negligent execution of the Corps’ reasonable plan of maintenance. The “plan” was the long-term failure to mitigate a known danger. That failure persisted for 20 years.

MCWRA argues that it was only Santa Cruz that affirmatively supported the Fish and Game policies of habitat restoration and, therefore, any unreasonable plan or policy of maintenance should be attributable to Santa Cruz, alone. We disagree. It is not necessary to find that Counties expressly endorsed or enacted a contrary policy in order to find that the actual maintenance of the Project was conducted pursuant to deliberate governmental action. It is sufficient that Counties were aware of the risk of failing to adequately clear the channel and chose to tolerate that risk. The reason for the choice is irrelevant to the determination that the action was deliberate. MCWRA indisputably had the obligation, knew the risk, and did not act. Moreover, MCWRA made other, deliberate policy decisions relating to Project maintenance. Among other things, MCWRA’s Assistant General Manager and Chief Engineer testified that he had regularly been successful in preventing Fish and Game from interfering with his use of mechanized equipment to maintain other flood control projects in his jurisdiction, and that he chose not to challenge Fish and Game decisions in connection with the Project because he feared jeopardizing the department’s cooperation with future permit applications.

Counties also argue that the Corps’ semiannual evaluations, which, with one exception, never found Project maintenance to be categorically unacceptable, show that Counties’ actual maintenance program was reasonable. The Corps’ evaluations are not dispositive. Since the Corps’ declaration of unacceptability would have cut off Corps assistance in the event of an emergency, we may infer that such declarations were made only sparingly. Moreover, it is undisputed that the Corps regularly pointed out the problem of vegetation growing in the channel, and that the water agency personnel believed that the maintenance program did not conform to Corps requirements and that it compromised the Project’s capacity.

In sum, the record demonstrates that Counties’ policy makers made explicit and deliberate decisions with unfortunate but inevitable results. Knowing that failure to properly maintain the Project channel posed a significant risk of flooding, Counties nevertheless permitted the channel to deteriorate over a long period of years by failing to take effective action to overcome the fiscal, regulatory, and environmental impediments to keeping the Project channel clear. This is sufficient evidence to support the trial court’s finding of a deliberate and unreasonable plan of maintenance.

c. The Trial Court Did Not Err in Defining “Design Capacity. ”

Counties argued at trial that they could not be liable if the storm had generated more water than the Project had been designed to handle. Counties’ evidence was that the peak flow during the storm was 21,300 c.f.s. and the Project’s capacity was only 19,000 c.f.s. Plaintiffs’ evidence was that the peak flow was somewhere between 16,000 c.f.s. and 18,500 c.f.s., but in any event, less than 19,000 c.f.s. Plaintiffs also argued that by considering the freeboard built into the Project’s design, the Project’s functional capacity was something more than 19,000 c.f.s. At the close of trial, the court defined the Project’s capacity as “19,000 c.f.s. with 3 feet of freeboard.” Counties now argue that this definition was erroneous and affects both the inverse condemnation and tort results.

Counties insist that design capacity is a question of law to be determined from the design documents, and that the trial court was obligated to define capacity as 19,000 c.f.s. within, not with, three feet of freeboard. As we understand the argument, the Corps’ Definite Project Report uses “within” and that means that the capacity was 19,000 c.f.s. and no more. By changing “within” to “with,” the finder of fact was incorrectly allowed to add the freeboard to the design capacity, which in this case would increase the total capacity to 23,000 c.f.s. The definition was appropriate if it was correct in law and supported by the evidence. (Code Civ. Proc., §§ 607a, 609; and see LeMons v. Regents of University of California (1978) 21 Cal.3d 869, 875 [148 Cal.Rptr. 355, 582 P.2d 946], and Hyatt v. Sierra Boat Co. (1978) 79 Cal.App.3d 325, 335 [145 Cal.Rptr. 47].) We find that it was.

The concept of “design capacity” comes from the Belair case. The appellate court in Belair had decided that because the plaintiffs’ land had been historically subject to flooding, the levee failure could not be the proximate cause of the damage because it had not increased that historical risk. (Belair, supra, 47 Cal.3d at p. 558.) The Supreme Court disagreed. Belair determined that a flood control project serves the public good by preventing damage that would otherwise be expected to occur in the normal course of events. The flood control project could be a concurring cause of flood damage because adjoining landowners rely on the protection it was built to provide. However, as Belair acknowledged, the flood control project could only be a concurring cause if the flood was one the Project was designed to accommodate.

Specifically, Belair held: “Thus, in order to establish a causal connection between the public improvement and the plaintiff’s damages, there must be a showing of “a substantial cause-and-effect relationship excluding the probability that other forces alone produced the injury.” [Citations.]’. (Souza v. Silver Development Co. [(1985)] 164 Cal.App.3d [165,] 171 [210 Cal.Rptr. 146], fn. omitted.) Where independently generated forces not induced by the public flood control improvement—such as a rainstorm—contribute to the injury, proximate cause is established where the public improvement constitutes a substantial concurring cause of the injury, i.e., where the injury occurred in substantial part because the improvement failed to function as it was intended. The public improvement would cease to be a substantial contributing factor, however, where it could be shown that the damage would have occurred even if the project had operated perfectly, i.e., where the storm exceeded the project’s design capacity.” (Belair, supra, 47 Cal.3d at pp. 559-560.)

A project’s capacity, therefore, bears upon the element of causation. This is true whether we are considering the inverse condemnation claims or the tort causes of action. Counties understandably focus on the dictum in the latter half of Belair’s discussion quoted above, in which the court posits, by way of example, that if a storm exceeded the project’s “design capacity” the project would no longer be a substantial factor in causing the damage. By narrowing the focus to the phrase “design capacity,” Counties have constructed the argument that the relevant level of protection the Project was designed to provide is the single number linked to the term “design capacity” in the Corps’ Definite Project Report. According to Counties, freeboard does not count.

In our view, Belair did not intend the bright-line rule Counties seek to apply. Such a rule is inconsistent with traditional concepts of causation, and would not advance the just compensation requirement of the Constitution. That is especially true on the facts of this case. As the Belair court stated, the issue is whether there is a “ ‘ “substantial” cause-and-effect relationship [between the public project and the injury] which excludes the probability that other forces alone produced the injury.’ (Van Alstyne, supra, 20 Hastings LJ. at p. 436, italics added.)” (Belair, supra, 47 Cal.3d. at p. 559.) To the extent that the public project contributes to the injury, then it remains a concurring cause. Like any other determination of causation, it must be made on the facts of each case. (Ballard v. Uribe (1986) 41 Cal.3d 564, 572, fn. 6 [224 Cal.Rptr. 664, 715 P.2d 624].)

Keeping in mind that the issue is one of causation, we find that it would have been improper to cut off Counties’ liability, as a matter of law, at the Project’s design capacity of 19,000 c.f.s. because there was evidence to show that the Project was able to hold more than that. The Corps’ documents specified that the freeboard could be encroached to allow the Project to carry 23.000 c.f.s. at the point in the channel where the breach ultimately occurred. That means that, with 19,000 c.f.s. in the channel, unless something had occurred to diminish capacity, there would still be room for an additional 4,000 c.f.s. Of significance in this case is the evidence that the extra room the freeboard was intended to provide was eliminated by Counties’ ineffective maintenance. For these reasons, it was appropriate to permit the finder of fact to decide if the flood exceeded the protection the Project was intended to provide by permitting a finding that the freeboard was part of that protection. This is the definition the trial court gave. Accordingly, there was no error.

d. There Was Substantial Evidence to Support the Findings of Liability.

Counties next argue that there was insufficient evidence to support a finding that flows exceeded Project capacity. Applying the deferential standard of substantial evidence review, we find no merit to the argument. (In re Marriage of Arceneaux, supra, 51 Cal.3d at p. 1133.)

The trial court found that if properly maintained the Project would have “safely conveyed well over 21,000 c.f.s. without overtopping.” The jury was not asked to make a finding of capacity. The jury found only that peak flows did not exceed the design capacity of the Project. Even if we assume the jury chose 19,000 c.f.s. as the relevant capacity, there was sufficient evidence to support a finding that the flood did not exceed that. Plaintiffs’ expert, Dr. Robert Curry, is a geologist with a specialty in geomorphology. He estimated that the range of likely flows at the site of the Project failure was 16.000 c.f.s. to 18,500 c.f.s., most likely around 17,500 c.f.s. Counties argue that Dr. Curry’s scientific techniques were not proven reliable or generally accepted by others in his field, and his opinions should not have been admitted. Counties did not make a record of their objection below and, therefore, have not preserved the issue for appeal. (Doers v. Golden Gate Bridge etc. Dist. (1979) 23 Cal.3d 180, 184, fn. 1 [151 Cal.Rptr. 837, 588 P.2d 1261]; and see 9 Witkin, Cal. Procedure (4th ed. 1997) Appeal, § 394, pp. 444-44S.) Dr. Curry’s testimony provides substantial evidence to support a finding that the peak flows did not exceed 19,000 c.f.s.

e. The Parties Are Expected to Draft the Statement of Decision.

Counties finally challenge the trial court’s statement of decision on the ground it reflects plaintiffs’ reasoning, analysis and decision and not that of the trial court. Counties acknowledge there is no authority for their challenge, but argue that in this case the statement of decision was so plainly a rehashing of plaintiffs’ closing argument that it simply cannot reflect the trial court’s decision. According to Counties, it is hard to believe that the trial judge agreed so wholeheartedly with the other side.

The California Rules of Court provide that the tentative decision is not binding on the court and that the court may instruct a party to prepare a proposed statement of decision. (Cal. Rules of Court, rule 232(a) & (c).) The rules provide ample opportunity for all parties to make proposals as to the content of the statement of decision or to raise objections to a proposed statement. (Cal. Rules of Court, rule 232(b) & (d).) Those procedures were followed here, and we can find no basis in the record or in law to warrant further comment on the issue.

4. State’s Issues

a. State’s Liability for Inverse Condemnation Does Not Require a Showing of Unreasonableness.

The trial court’s statement of decision refers to State’s liability in a single paragraph: “The State of California, Department of Transportation, acted unreasonably in its design and construction of Highway 1 where it crosses the Pajaro River flood plain. [State] failed to follow its own manual’s design criteria for that section of highway. This failure resulted in a dangerous condition of public property. The raised highway embankment functioned as a dam that caused some properties to suffer flood damage and others to be damaged more severely than they would have if the highway design had allowed proper drainage.” State contends that the trial court did not use the proper measure of reasonableness in finding State liable, and that State’s actions were reasonable in any event. Plaintiffs argue, among other things, that the rule of reasonableness does not apply to State. According to plaintiffs, State is strictly liable and the trial court’s application of a reasonableness analysis was unnecessary. We agree with plaintiffs.

The rule of reasonableness was developed in a series of cases beginning with Belair. The general rule is that a public entity is liable for inverse condemnation regardless of the reasonableness of its conduct. (Albers, supra, 62 Cal.2d at pp. 263-264.) Belair modified the general rule when it decided that a rule of reasonableness, rather than the extremes of strict liability or immunity, was appropriate in cases involving flood control projects. (Belair, supra, 47 Cal.3d at p. 565.) Locklin applied Belair"s rule of reasonableness where the defendants were alleged to have drained surface water into a natural watercourse, increasing the volume and velocity of the watercourse, and causing erosion of plaintiffs’ downstream property. (Locklin, supra, 7 Cal.4th at p. 337.) Under the “natural watercourse” rule, a riparian landowner had a privilege to drain surface water into a natural watercourse, regardless of the effect of that drainage on downstream landowners. (Id. at pp. 346-347.) Like Belair, Locklin declined to impose strict liability, and held: “Because a public agency, like any riparian property owner, engages in a privileged activity when it drains surface water into a natural watercourse or makes alterations to the watercourse, article I, section 19 of the California Constitution mandates compensation only if the agency exceeds the privilege by acting unreasonably with regard to other riparian owners.” (Id. at p. 367.)

Both Belair and Locklin applied the reasonableness rule to conduct that was at one time privileged under traditional water law principles. Predictably, the plaintiffs in the next case argued that conduct that had not been so privileged was subject to the general rule of strict liability. (Bunch II, supra, 15 Cal.4th 432.) Bunch II, like Belair, involved the failure of a flood control project. However, in Bunch II the injury was caused by the defendants’ having diverted and rechanneled a natural watercourse. Diversion of a watercourse was not subject to a common law privilege like the common enemy doctrine or the natural watercourse rule. Bunch II confirmed that resolution of flood control cases involved a balancing of the public interest in encouraging flood control projects with the potential private harm they could cause. Bunch II held that the public agency would not be strictly liable for damage resulting from a failed flood control project, whether or not the offending conduct would have been privileged under traditional water law doctrine. Instead, a rule of reasonableness was to apply. (Id. at p. 451.)

Although these three cases suggest a trend toward incorporating reasonableness into the inverse condemnation analysis, that trend does not extend to State’s conduct in this case because of the public policy considerations to which the reasonableness requirement is tethered. The 1969 article by Professor Van Alstyne provides some insight. (Van Alstyne, supra, 20 Hastings L.J. 431.) Van Alstyne noted that the state of inverse condemnation law at the time was very unpredictable due to the courts’ application of a variety of conflicting legal principles. Van Alstyne encouraged the courts to abandon reliance upon private law principles and to apply principles of public policy to all inverse condemnation claims arising from unintended physical damage to private property. According to Van Alstyne, public policy does not necessarily require a reasonableness calculus in all contexts. For example, in cases of environmental pollution, a rule of strict liability might provide incentive for the development of antipollution programs. (Id. at p. 503.) On the other hand, in what Van Alstyne termed “water damage” cases, a rule that balanced the conflicting concerns of public benefit and private harm would better serve the public in the long run. (Id. at p. 502.)

Our Supreme Court adopted the balancing analysis suggested by Van Alstyne in the Belair, Bunch II, and Locklin cases. In Locklin, the offending conduct (discharge of surface water into a natural watercourse) would have been privileged under traditional water law principles. The corresponding burden of that privilege fell on the downstream landowners who had to take steps to protect their land from such upstream discharges or suffer the consequences. (Locklin, supra, 7 Cal.4th at pp. 351-352.) Therefore, since the watercourse naturally subjected the downstream property to flooding and erosion, it would have been unfair to apply a strict liability analysis to public entity landowners upstream. The decisive constitutional consideration of ensuring equitable allocation of the cost of the public undertaking was best advanced in such a case by requiring the downstream owner to show that the public agency had exceeded its privilege by acting unreasonably. (Id. at p. 367.)

Policy considerations also favored application of a reasonableness analysis in Belair and Bunch II, which were both flood control cases. In Belair and Bunch II, the public improvement had been erected to protect the land that was ultimately injured when the project failed. The project’s purpose, to protect private property from the flooding that it could otherwise expect to suffer periodically, was an important policy reason to apply the balancing analysis. Without requiring the plaintiff to make a showing of unreasonableness, the public agency that built or operated the project would become the guarantor of the land it had undertaken to protect.

An appellate opinion decided after Belair, Bunch II, and Locklin illustrates a situation where public policy favored strict liability rather than reasonableness. (Akins v. State of California (1998) 61 Cal.App.4th 1 [71 Cal.Rptr.2d 314].) In Akins the defendants had intentionally diverted floodwater onto the plaintiffs’ lands for the purpose of protecting other property from flooding. There was no evidence that the project was erected to protect the plaintiffs’ property or that the plaintiffs’ property had historically been subject to flooding. Since the public improvement involved flood control, Belair and Bunch II arguably mandated application of a reasonableness analysis. However, the appellate court found that the reasonableness standard did not apply, reasoning that regardless of the importance of flood control, “[u]sing private property not historically subject to flooding as a retention basin to provide flood protection to other property exacts from those owners whose properties are flooded a contribution in excess of their proper share to the public undertaking. We see no reas