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Liable Only in Theory?
by Ron Davis

Plans for a road that would link a California shopping center to a major neighboring mixed-use development have hit a snag.

The two neighboring properties, located in San Diego, now are isolated from each other except by circuitous roadways. The shortest route would obviously be a road that goes straight to and from the two properties. And a road does in fact lead from the mixed-use property, but it dead-ends at a major highway that runs perpendicular to it.

During construction of the mixed-use development, San Diego city officials required the developers to pay for construction of two lanes of a four-lane road that would lead to the shopping center. The city agreed to pay for the other two lanes. Then, when completed, the city would assume control of the road for public use.

The developers had problems with the agreement from the onset. First, they argued that the city had revised plans for the road and decided that it would have only two lanes instead of four. They also pointed out that such a road would be unsafe because of narrow pedestrian walkways, dangerous vertical curves, excessive traffic volume for a two-lane road, and a risk of flooding, among other problems.

The developers were also concerned that the city had insisted that they would be liable for all accidents arising from the unsafe nature of the road (except for accidents related to placement of sewer lines).

The developers therefore sued, seeking to determine “our rights and duties with respect to third-party legal claims arising from the unsafe location and design of the road.”

In response, the city argued that the developers’ complaint “does not state an actual or current controversy.” City officials noted that the road had not yet even received a construction permit, and the developers’ complaint was premature and unjustified. They added, “The basic question of who pays what in the event of an injury on the road property cannot be answered at present because a myriad of circumstantial facts related to type, scope, and conditions of injury would have to be known in order for the court to assess liability.”

Ruling in favor of the city, a California court explained, “An actual controversy does not currently exist with respect to the city’s obligation to protect the developers from third-party claims arising out of the design and placement of the road at issue.”

On appeal, a California appellate court upheld the lower court ruling. (Hazard Center Associates v. City of San Diego, 2006 WL 2329427 [Cal.App. 4 Dist.])

Decision: August 2006 Published: August 2006



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