54" Storm Drain Running Under House with No Easement

[Rogman]

Hi all-

We purchased a property several months ago in Folsom CA that we knew had some foundation problems (right side was sinking). I had several contractors and an engineer come take a look at the problem and they determined that it was a compaction issue and seemed to be a relatively simple fix. We went to the city asking for any grading plans or other documents that would possibly show why the house would be sinking. The city didn't provide us with the requested information. We were originally looking to see how much dirt was moved to that side of the property that would be causing the foundation to sink approximately 3" over the last 20 years. With no relevant information obtained from the city and nothing showing in the title report we closed on the property on March 18th. We started taking core samples on the property to determine how far down the loose soil went to devise how far down we would have to go to reach solid dirt. Before we started this process we had USA come out and mark all of the utilities on the property. No markings were done to indicate that there was a pipe running under the property. During the course of drilling one of the neighbors came by the property and said "That's where the big pipe runs under the house". We originally thought the neighbor was crazy and didn't know what he was talking about. Just for S&G we decided to go through the back fence, down the 15 foot embankment around the grove of trees and thorn bushes, through the creek and discovered that 20 feet behind the property there was a grate that lead to a 54" storm drain that runs directly under the footings of the house.

The next day I went down to the building department (where I had submitted the original information request) and told someone that we had discovered a 54" pipe running under our house. They directed me to an engineer that said "oh yeah, we know all about that". He then proceeded to show me the grading plan for the subdivision that shows the storm drain running under the property. When asked why I never received that information when I requested it, I was told it must have never been routed to them.

I've been trying to work with the city on fixing the problem but they are unwilling to do anything about it. The reason seems to be that the previous owner (was banked owned with I bought it) had signed a waiver that was attached to the previous deed that indemnified the City of Folsom and the engineering company that sold him the property from any future liability from the pipe. Apparently there was already a lawsuit on the property from the original owners that resulted in the engineering company having to buy the house back. They then sat on the house for seven years, resold it to the previous owner and had them sign this waiver that was attached to the previous grant deed. This waiver was not included in the title report we received when we purchased the property. I have already contacted the title company and they responded that they are not responsible for unrecorded easements. Of course, the document in question was recorded so they're still liable AFAIK.

So here I am with a house that I can not fix based on the location of the pipe under the footing of the house. The City of Folsom doesn't want to take responsibility for the pipe in any way, just want to continue using it as they are. A title company that denies any and all liability.

I'm thinking that filing a cease and desist order against the city might be the best way to start the process going with them. That would force them to at least claim a prescriptive easement on the property and then I would think that they would be responsible for any damage caused by improvements they installed within the easement. Does that make sense?

Thanks for any advice in advance. Sorry for the long post but there's a lot going on here.

[Deward Bowles]

Rogman ask...

"I'm thinking that filing a cease and desist order against the city might be the best way to start the process going with them. That would force them to at least claim a prescriptive easement on the property and then I would think that they would be responsible for any damage caused by improvements they installed within the easement. Does that make sense?"

My advice is to contact a good lawyer, right away.

A prescriptive easement is perfected through the legal process or by a grant by the fee owner to the dominant tenant which is filed for public record defining the easement. However this does not make the 54" storm drain any more or less real and in existence than it already is. Contact a lawyer first before you make any attempt to do what you are suggesting regarding that matter.

Several things come to mind from what you have said and this would be something to talk to your lawyer about.

1) The seller should have disclosed this during the sale and they could be held responsible depending on how your transaction on the property occurred. Give your lawyer copies of all the documents you were provided as part of the transaction on your home (title insurance policy, earnest money contract, etc.), including a copy of your deed.

2) The Title Insurance firm could be liable for this problem if there is a document recorded disclosing the existence of the pipe in question. I would obtain a copy of the recorded document you say mentions this pipe and give it your lawyer.

3) The real estate agent who sold you the home may have some liability as well regarding this pipe. If it can be proved that they knew or should have known about the pipe they could be held to have some responsibility for this. Any written material given to you by the real estate agent should be given to your lawyer along with their contact information.

4) If you had a survey performed when you purchased your property there is a remote chance the surveyor may have some liability as well, depending on how the survey was certified and performed. If you have a copy of the survey give it to your lawyer.

I do not know how to advise you other than to call a lawyer right away and turn over all the documents you have or can locate regarding this matter.

I have been involved in a similar case and the title insurance firm ultimately had to pay out on the policy because they failed to note the recorded document on the commitment that warned of the location of the pipe.

Good luck and let us know.

[Rogman]

Thanks for the info.

I have already contacted several attorneys regarding this and gotten varied responses. The first said that it seemed I had a case against the title company, which prompted me to write a letter to the title company stating my claim, of which they denied all responsibilty in the response letter. Would require suing them to proceed further.

The second lawyer that I spoke to just wants to sue everyone; the bank who owned the property, the listing agent, my agent, the city, the engineer who came out the look at the property, basically anyone involved in every way, no matter how tangentially with the purchase of the property. Of course the bank claims exemption from all reporting requirements, although they are not due to the "REO Advisory" that they signed specifically saying that they are responsible for disclosure of known defects on the property. On the physical inspection sheet from the listing agent they note "drainage culvert - water" in the "additional notes" section. However, the only way they would know that there is a pipe there is to go behind the property in the manner described above, which is doubtful that they did that. They more than likely knew additional information about the pipe from some other source.

A third lawyer is now looking at the information I gathered. Essentially every piece of paper related to the purchase of the property including all contracts and disclosures, written correspondence with the city regarding our information request before we purchased the property, notes on conversations I had with several people at the city, the rejection letter I received from the title company, etc. I have documented things very well and I believe covered all my bases.

Just seeing if anyone has any other bright ideas here given the wealth of good information that I've seen posted here on other subjects.

Thanks.

On an additional note. For a prescriptive easement wouldn't they have to meet the "openness" requirement? Seems to me that a pipe buried 10+ feet under the ground with no easement would not qualify as "open" for purposes of a prescriptive easement. The pipe certainly isn't obvious to anyone that looks at the land.

[Deward Bowles]

Sounds like you are on the right track.

In my case the pipe was discovered by me through a search of the public records as part of a survey I was performing. I was later able to locate it in the field. The owner of the property was having the survey performed for a completely different purpose. They were shocked when I informed them it ran underneath their house. It took several months of legal action but they were able to settle for an amount they were happy with. The title insurance firm at first denied liability just like in your case.

The Engineer at the City knew of the pipe, so did your neighbor, you say there is a document that is recorded mentioning the pipe. These facts seem to satisfy the elements necessary regarding "open" but I would talk to a lawyer. There is a good article here on the subject of prescriptive easements.

I would speak to a lawyer before you try anything regarding pressing the prescriptive easement issue.

[LandSurveyor]

He then proceeded to show me the grading plan for the subdivision that shows the storm drain running under the property.

I would say that your chances of fighting off some sort of existing easement are slim.

In addition, a subsidence of 3" over a twenty year period, particularly in California, is of little consequence as it will be up to you to provide expert witness testimony entirely at your own expense proving that it was solely and materially a result of a pre-existing storm sewer line which was somehow designed and/or constructed incorrectly. It will cost you thousands of dollars to get that testimony and that will be in addition to your lawyer's fees.

I agree with D.B. that the title company certainly has some exposure here. The situation was discoverable in the normal course of title work, I think.

I would also add as an encouragement, from personal experience, that engineering problems in residential construction are easily solvable at a reasonable cost once you find the right engineer.

That would be the course I would recommend, along with applying some heat to the title company.

[Rogman]

Thanks for the additional info.

You're correct that the recorded document would serve as public notice, however, I just checked and it was recorded in January of 2005, and thus does not yet fulfill the 5 year requirement. Seems to me that it would lack the "notorious" requirement also since it is buried underground.

I have a copy of the engineer's report that states that the damage to the slab foundation was due to insufficient compaction over the drainage pipe under the house. This report goes along with the core sampling that we took of the area to determine the compaction severity.

"In my case the pipe was discovered by me through a search of the public records as part of a survey I was performing." What public records told you there was a pipe running under there? I had requested grading plans from the city but was never provided with any. Nothing shows on the Assessor's Map and no easement was ever recorded.

Thanks for the link to the article. The author is with a local law firm and I will probably try giving them a call tomorrow and meet with them to get some additional advice.

Would appreciate any additional input anyone has in addition to the valuable input I've received so far.

Cheers

[Deward Bowles]

Rogman

In my case the document describing the easement for the pipe was filed in the deed records 70 years ago. The described location in the deed records for the pipe was vague but it placed it close enough to the area the property that I was surveying was in to make me go through the extra effort to try to locate the pipe in the field.

Abstracting for title insurance policies has steadily deteriorated over the last decade or so. Primarily because of the cost of performing a decent abstract job. Rather than actually do the abstract research the title insurance firms have moved toward the "insurance" side of the equation. They weigh the cost of performing the research against the cost of paying out on claims. They have simply decided to charge high enough premiums to cover the cost of a pay out in case of a mistake rather than pay for the actual abstract research.

Talk to your lawyer but you may want to hire a professional abstractor because there is a chance the pipe easement is in the public record....somewhere, it is just that nobody has bothered to expend the effort to actually locate it in the public record. Often these type of records are obscure.

Good Luck.

[Rogman]

In talking to the city, there never was an easement recorded for the property. Apparently there was supposed to be an easement at one time, but it never got translated onto the public map. Because there was not easement evident, they sited the house on the wrong side of the lot (for aesthetic purposes) since the easement wasn't there. So 20 years later here we are. Have a call in to another attorney. Someone that specializes in easements. Will see what they have to say.

Thanks