Trial Magazine

Urbana Tahoe, TC, LLC, owns the Beach Retreat Hotel and Resort and the 1,000-foot-long Timber Cover Marina pier located behind the hotel on Lake Tahoe. Urbana leases the pier to Action Watersports of Tahoe, Inc., which rents boats and charters tours from several locations, including the Urbana pier. In addition to renting boats, Action operates a skiff in which it transports people to and from the pier.

On Aug. 1, 2014, Maridee McFarlane, 21, spent the day boating, tubing, and swimming in Lake Tahoe with friends. The group had rented a boat from a company other than Action, but at the end of the day, they went to the Urbana pier to drop off McFarlane as a convenience to her. An Action employee took McFarlane back to the pier in the company’s skiff.

After the skiff arrived, the Action employee accompanied McFarlane up onto the pier. As they were walking about 300 to 400 feet from shore, ­McFarlane began pulling some money from her purse to tip the employee, but a wind gust blew the money into the water. Attempting to retrieve the bills, McFarlane dove headfirst into the water, not realizing that it was less than three feet deep. Her head struck the lake bottom. She was retrieved from the water with no feeling from the neck down and limited use of her arms.

McFarlane was life-flighted to a hospital in Reno, Nev., where imaging revealed fractures at C5-7 with neural compression at C7. She underwent a ­laminectomy and arthrodesis at C2-T2, followed by open reduction internal fixation and fusion. She developed an infection at the cervical site, requiring antibiotics, and remained hospitalized for about two weeks before being transferred to a second hospital closer to home. After another two weeks, she was transferred to an inpatient care facility, where she remained for about two months before being released to her mother’s care at home. Her past medical expenses totaled approximately $800,000.

McFarlane now lives with tetraplegia, resulting in limited hand and arm movement and complete paralysis below the waist. In addition to the care her mother provides, she requires round-the-clock assistance from a professional caregiver. She continues to suffer from headaches and significant back pain, and she endures periodic bouts of pneumonia and infections from her catheter.

Her future medical and life care costs are estimated at between $3 million and $6 million, based on when she loses her mother’s assistance and whether she enters a care facility or receives independent care.

McFarlane sued Urbana Tahoe and Action Watersports. The plaintiff alleged that both defendants were aware that the water level surrounding the pier, which was built over a sandbar, varied based on regional snowfall. Despite this, the ­plaintiff contended, the defendants failed to properly warn people of the shallow-water danger and take appropriate steps to prevent people from diving.

The plaintiff was prepared to show that when Urbana purchased the hotel and pier about two years before the incident, the company made a due ­diligence inspection that revealed that the water surrounding the pier was extremely low. Despite the fact that Urbana had notice of the danger, the plaintiff contended, it failed to install safety railings or other barriers around the pier and failed to provide adequate warnings of the danger. Other evidence would have shown that there were two signs posted on the pier prohibiting swimming or diving, but they were posted facing the shoreline, so that McFarlane could not see them. ­Moreover, she alleged, there were no signs specifically warning about the shallow water.

The plaintiff was also prepared to show that Action Watersports had operated a business from the pier since the 1990s, leasing it from prior hotel owners. As a result, she claimed, the company was well aware that the water levels surrounding the pier would vary and that people would frequently attempt to jump or dive from the pier.

In addition to other economic damages, the plaintiff clamed $1.2 million in lost future earning capacity, based on her plans to return to school and obtain a college degree.

Action and Urbana moved for summary judgment based on California’s recreational use statute. The plaintiff defeated the motion by arguing that the defendants’ actions rose to a willful and malicious act based on their notice of the condition and their failure to act despite knowing that diving, jumping, or falling from the pier could cause catastrophic injury. McFarlane also asserted that the statute did not apply because she was not engaged in a recreational activity when she was injured.

The defendants further argued that McFarlane was entirely at fault because she was intoxicated at the time and failed to notice the shallow depth of the water. Action’s employees testified that the bottom of the water was readily observable.

The plaintiff countered that she was not intoxicated and that windy conditions prevented her from seeing that the water was less than three feet deep.

The parties settled during jury selection for $9.05 million.

Citation: McFarlane v. Urbana Tahoe, TC, LLC, No. SC20150085 (Cal. Super. Ct. El Dorado Cnty. May 1, 2017).

Plaintiff counsel: AAJ members Roger A. Dreyer and Joseph R. Yates, both of Sacramento, Calif.

Plaintiff experts: William Kitzes, human factors/warnings, Boca Raton, Fla.; Kenneth Nemire, human factors, Campbell, Calif.; Alison Osinski, aquatic safety, Avalon, Calif.; Kurt Reinkens, architecture/construction, Truckee, Calif.; Jeffrey L. Zehnder, forensic toxicology, Sacramento; Alex Barchuk, vocational rehabilitation, Kentfield, Calif.; Carol Hyland, life care planning, Lafayette, Calif.; and Richard Barnes, economics, Sacramento.

Defense experts: Michael Goeringer, architecture/construction, and Scott Kush, life expectancy, both of Menlo Park, Calif.; Darrell Clardy, analytical and forensic toxicology, Brea, Calif.; David Krauss, human factors, Los Angeles; Tom Griffiths, aquatic safety, State College, Pa.; Thomas G. Daly, hospitality/security, Reno, Nev.; Diana Bubanja, vocational rehabilitation, Maria Brady, vocational rehabilitation, and Mark Cohen, economics, all of Walnut Creek, Calif.; Moshe Lewis, pain management, San Francisco; and Katherine Corona, medical billing, Santa Barbara, Calif.