Daily Development for
Wednesday, March 25, 1998

by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law

Note that there are two items in this report, both relating to the same case.

NUISANCE; LATERAL SUPPORT; STRICT LIABILITY: For the purposes of strict liability in lateral support cases, any alteration by a person of his land, whether a purposeful improvement added to the land or an unforeseen collateral consequence of such improvement, is an artificial condition on the land and will support a legal presumption against such strict liability.

Vikell Investors Pacific, Inc. v. Kip Hampden, Ltd., 946 P.2d 589 (Colo. App. 1997).

Vikell owned real property at the top of the hill, on which a large apartment complex was located ("Woodstone"). Hampden owned a car dealership at the bottom of the hill directly below Woodstone. In 1987, Hampden decided to improve its property by grading the base of the hill and expanding the parking lot used by the car dealership.

Vikell first contended that the trial court erred in instructing the jury on the appropriate standard of strict liability in lateral support cases. For strict liability to apply, a jury must find that the weight of the buildings, artificial additions, and fill on the plaintiff's land did not materially increase the lateral pressure and thus, that such added weight was not a proximate cause of the damage to the property. In fact, there is a legal presumption that buildings, artificial additions, and fill do contribute to subsidence in such cases, and the burden is on the plaintiff to overcome this presumption. The parties agreed that Vikell's land, improved by Woodstone, was not in its natural state. They further agreed that the weight of the Woodstone buildings did not significantly increase the lateral pressure on the land and thus was not a proximate cause of the hill's subsidence. On the other hand, there was agreement that that additional subsurface water and ground water in the hill contributed to the hill's subsidence. The jury found that the additional water in the hill was not a natural occurrence but was caused by Woodstone's construction and operation.

A landowner is absolutely entitled to the lateral support of his soil in its natural state by the soil of adjoining lands. When land is no longer on its natural estate, it has been filled or altered, the entitlement for lateral support from adjoining land is not forfeited, but the landlord is only entitled to the lateral support from adjoining property that the land would have needed in its natural state, before it was filled or altered. Also, land that is entitled to maintenance of lateral support from adjoining land is expected to provide its own lateral support. Strict liability does not apply in circumstances in which a subsidence of land is caused by the removal of additional lateral support required because alterations in the supported land had impaired its cohesiveness and stability. This limitation on strict liability is the fundamental notion that a landowner cannot, by placing improvements on its land, increase its neighbor's duty to support the land laterally. In light of these principles, the court concluded that for purposes of strict liability in lateral support cases, any alteration by a plaintiff of its land, whether a purposeful improvement added to the land or an unforeseen collateral consequence of such an improvement, is an artificial condition on the land.

No Colorado appellate court opinion had yet addressed the issue as to whether changes to the land appearing as collateral consequences of buildings or improvements also qualify as artificial conditions. On plaintiff's appeal in this case, the court determined that collateral consequences of artificial additions to the land--specifically, the additional water in the hill caused by the presence of the Woodstone complex--are relevant to the legal presumption against strict liability. Consequently, because of the applicability of strict liability in a lateral support case hinges on whether an artificial condition created on the plaintiff's land contributed to the injury, the court further concluded that the trial court's instruction probably included additional water in the legal presumption against strict liability.

Comment: In the modern world, it is difficult to find a perfect "natural condition" as to which strict liability would attach. And it should be difficult. When a person acquires real property, that person ought to have a duty to evaluate soil stability and the relationship to adjacent properties. It should be sufficient to impose upon the downhill landowner an ordinary duty of care. Obviously, the downhill landowner must take care to protect the uphill landowner from injury when the downhill landowner undertakes changes that may have an impact on the stability of the neighbor's property. If the uphill landowner has special problems - it can communicate those issues to the downhill landowner, and that will contribute to the reasonableness of the downhill landowner's conduct.

INSPECTORS AND ENGINEERS; FIDUCIARY RELATIONSHIP: Soils engineer has no fiduciary relationship with client when retained as part of an overall "team" to identify soils problems, and hence is not liable for failure to disclose information relating to other projects in which engineer participated that might contribute to current problems that engineer has been retained to address.

Vikell Investors Pacific, Inc. v. Kip Hampden, Ltd., 946 P.2d 589 (Colo. App. 1997).

The basic facts of this case are set forth generally under the heading: "Nuisance; Lateral Support; Strict Liability." The defendant, Hampden, originally had hired George Morris, an engineering consultant, to determine whether the excavation could be done safely and, if so, to plan the project. After Morris tested the slope's stability, which revealed water seepage in the hillside, he issued a report to Hampden indicating that the hillside was subject to movement and landslides. The report also included a detailed plan for grading the base of the hill and expanding the parking lot. Pursuant to Morris' plan, Hampden began the excavation and had thousands of cubic yards of soil removed from the base of the hill below Woodstone.

In 1989, when Vikell acquired the Woodstone property, Vikell hired a soils engineer to examine several of the Woodstone buildings, which were experiencing foundation cracking and other problems. That engineer advised that the buildings were moving, causing the foundation cracking. Pursuant to this engineer's recommendations, Vikell attempted to correct surface drainage problems and utility leaks to reduce the amount of water in the hillside and stop the building movement. After several repairs, all of the buildings stabilized with the exception of Buildings 410 and 420 which continued to move and crack.

In 1991, Vikell hired Morris as its new soils engineer to study and solve the remaining problems with building movement. Morris did not inform Vikell that Hampden had excavated the base of the hill in 1987 or that he had worked for Hampden on the project. Morris spent three years testing and trying to resolve the problem in the buildings. In 1994, Morris suggested that the entire hillside might be subsiding toward Hampden's property, causing Buildings 410 and 420 to slide down the hillside. He performed a slope failure analysis and confirmed that the stability of the hillside had decreased. In his report, Morris revealed that Hampden had cut away the base of the slope in 1987 but, did not indicate that he had worked on the project. Shortly thereafter, Vikell hired a new soils expert who determined that Hampden's removal of soil from the base of the hill contributed to the ongoing slope's subsidence. In 1995, major slope failures occurred and Vikell was forced to abandon and demolish Buildings 410 and 420. In a meeting between representatives of Vikell and Hampden, Morris revealed for the first time that he was the soils engineer who had assisted Hampden of its downhill excavation.

On appeal, Vikell contended that its relationship with Morris gave rise to a fiduciary relationship and that Morris breached such relationship. Vikell contended that Morris had superior knowledge of the Kip Hampden excavation causing Vikell to place a high degree of trust and confidence in Morris' advice and expertise. The court concluded that the undisputed facts of the case did not give rise to either a fiduciary relationship or a confidential relationship between Vikell and Morris. The court found that Morris was just one member of a team of people working for Vikell in the Woodstone project, and had little, if any, practical control over the Woodstone repair project.

In addition, there was no evidence presented that Vikell and Morris had a pre-existing relationship of trust which is required for a confidential relationship to exist. And, the court found no evidence that Morris undertook to advise Vikell in any capacity other than as an engineer. The relationship between Vikell and Morris did not extend beyond that of a professional engineer and his client.

Comment: Why shouldn't a professional engineer who has been retained to provide an objective opinion be required to reveal obvious conflicts of interest that might influence his objectivity? Of course there is a "relationshp of trust" between a layperson who has retained a professional consultant and that consultant. Is it necessary that such relationship involve confidentiality in order to impose upon the consultant the responsibility to volunteer information that might be relevant in evaluating his opinion?

Is it possible that the plaintiff asked the wrong question here when he asked the court to find a "fiduciary relationship." Maybe a relationship that was less than fiduciary would be a sufficient basis for a conclusion that a duty to provide to the client critical information reflecting possible bias.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 1-6, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Stacy Woodward at the ABA. (312) 988 5260 or woodwars@staff.abanet.org

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