Days after the fatal Kaloko Reservoir dam breach, residents of Kaua'i's north shore pressed Gov. Linda Lingle on who would be held responsible.

"Under Hawai'i state law, it is very clear that (for) dams and reservoirs on private property, maintenance is the responsibility of the landowner," she told a crowd of 250.

But the task of assigning blame for disasters such as the breach of the Kaloko dam can be as murky as the waters that ripped through the community.

An Advertiser review of property records, regulatory filings and case histories shows that the responsibility for maintaining Hawai'i's dams — and the liability if one fails — can be subject to a complex series of ownership agreements, water-rights contracts and other covenants.

To be sure, state and federal engineers and investigators may find that they can't determine the cause of the Kaloko dam's breach, making it difficult to pin blame. They also might find that the breach was an act of God, and no legal liability could be assigned.

But a key part of the investigation is whether the dam, particularly its spillway, was tampered with, contributing to the structure's demise. Such a finding could result in a criminal investigation by the state attorney general's office, which is heading the state's preliminary, fact-finding efforts.

The Kaloko dam catastrophe killed seven people, damaged homes and flooded a section of Kaua'i's main highway.

Within days of the breach, attention turned to the condition of the spillway, a key safety feature that allows excess water to run off before a breach occurs.

Maj. Gen. Robert Lee said his crew could not find evidence of a spillway and several eyewitnesses had come forward to say that the spillway was covered up over the years. Landowner Jimmy Pflueger's attorney immediately denied that his client had filled in the spillway and said it remains intact at the side of the dam.

The land on which the Kaloko Reservoir and dam sit is owned by Pflueger, a retired automobile dealer, and the Mary N. Lucas Trust.

ALL IN THE FINE PRINT

The 116-year-old earthen dam was built to irrigate sugar cane. On the day of the break, Pflueger issued a statement that included condolences to the victims' families along with the following statement: "We are in shock and sadness over the loss of life from the torrent of water that escaped from the century-old reservoir partially on property we own."

With attention on the owners arising from Hawai'i law that the owner or operator is responsible for maintaining and inspecting a dam, the state attorney general's office opened its investigation, issuing subpoenaes to Pflueger, the trust and a number of other parties.

But the issue of who is responsible in the Kaloko case is complicated by the fact that Pflueger's deed is subject to a 19-year-old private contract that assigns all responsibility for maintenance and inspection of the Kaloko dam to a private irrigation company.

Under the so-called water-rights agreement, the company, Kilauea Irrigation Co., is required to maintain and operate the Kaloko dam or embankments, as well as manage the Kaloko Reservoir's ditches, tunnels and intake valves used to supply and store water in the 400 million-gallon reservoir, Advertiser research shows.

Kilauea Irrigation is in essence a water utility company that provides 23 farmers in the North Shore Kaua'i community with fresh water.

The company was set up 25 years ago by C. Brewer & Co., but most of its work was outsourced to Kaua'i contractor Tom Hitch, according to filings with the state Public Utilities Commission, which regulates water utilities.

The company has never been profitable and in 2004, it lost $52,000, records show.

C. Brewer sold all of its stock in Kilauea to Hitch last November for $10 as part of its effort to liquidate assets.

The deal, which was approved by the PUC, gave Hitch the company's sole asset, the Kaloko water system as well as the company's liabilities, including its requirement to maintain and operate the dam.

Hitch, whose company is not insured for losses caused by the dam break, said he only became aware of his potential liability several days ago after he read the 1987 water-rights agreement.

During the 15 years that he provided contract work for Kilauea, he never worked on the dam portion of the reservoir, he said. Kilauea often didn't have access to the dam and its work on the reservoir was limited to ditches, tunnels and the intake system that feed the reservoir, he said.

"The dam is a monolithic mountain," said Hitch, who was one of the first to call 911 to report the dam's failure. "Nobody in their wildest dreams would think that it would go."

LIABILITY FOR DAM

Pflueger's attorney, William McCorriston, believes the water-rights agreement places the burden of the dam's liability on the irrigation company and former owner C. Brewer.

McCorriston noted that the document states in plain English that Kilauea is solely responsible for the maintenance and day-to-day operations of the dam and the Kaloko water system and that the company is charged with maintaining the water system in good and safe condition at all times.

The state, which under law is responsible for conducting routine inspections of both public and private dams, has no record of inspections at Kaloko. To what degree maintenance had been taking place on the dam has also emerged as a key question for investigators.

McCorriston said he faults C. Brewer for selling Hitch an irrigation system without providing the necessary resources to bring the system up to standard.

Alan Kugle, trustee in charge of the dissolution of C. Brewer, said he doesn't believe that the company is liable because it sold Kilauea in November and, in doing so, transferred its responsibilities to maintain the structure.

Kugle said he was aware of the requirements in the water-rights agreement to maintain the dam but said that Kilauea never worked on the dam and did nothing to harm it.

"The attorney general is studying what caused a dam that never had a problem in over 100 years to break and they are going to come up with their findings and that will answer a lot questions," Kugle said.

In addition to his comments on C. Brewer, McCorriston also criticized the PUC for what he said was lax review of the irrigation company's sale.

"If they didn't impose any financial requirements on the operator, financial responsibilities such as insurance, they were irresponsible," McCorriston said.

NO LEGAL PRECEDENCE

In Hawai'i, there is no appellate case that sets guidelines on how a judge should determine who is responsible for a disaster, a fact that further complicates the legal landscape.

The nearest parallel might be the 1987 New Year's flood in which a levee breach at the Kawai Nui marsh sent a torrent of water through neighborhoods in Kailua. The flooding did not result in any deaths but caused damage to hundreds of homes in the Windward O'ahu community.

The homeowners sued the city, which later settled the case by agreeing to pay at least $5 million to the homeowners.

Ronald Albu, who represented about 200 Kailua residents, said the city agreed to settle after the homeowners were able to show that the levees weren't properly maintained.

Denis Binder, a dam safety expert and law professor at Chapman University in Orange, Calif., said a look at similar lawsuits on the Mainland also can provide some guidance on how courts are likely to determine responsibility.

He cited a landmark 1971 Florida case in which a phosphate mining company was held liable for millions of dollars in damages after a dam used to hold a phosphate settling pond breached, sending nearly a billion gallons of toxic slime into streams.

The spill did not injure anyone but killed fish and wreaked havoc on the area's ecosystem. The Florida appeals court ruled that the mining company was liable, but not because they were negligent in their maintenance of the dam. They were found liable because the settling ponds were abnormally dangerous and posed a risk to the nearby environment, Binder said.

Under this scenario, Pflueger and the Mary N. Lucas Trust are potentially liable simply because the dam posed an inherent hazard to neighbors.

The water-rights agreement doesn't exempt the landowners from liability since they can't delegate their responsibilities, Binder said.

Binder believes the state and other parties face potential liability for negligence because the state failed to inspect the dam, even though it's required to do so every five years.

Binder pointed to a 1978 case in which the Kansas Supreme Court upheld a $710,000 verdict against the state in favor of the family of a man killed while trying to avoid a 5-foot-wide hole on a turnpike bridge.

Testimony during the trial revealed that Kansas authorities had outsourced its bridge inspection duties to a private engineering firm that conducted a visual inspection of the bridge but failed to note that the bridge required severe repairs, Binder said.

YEARS OF LITIGATION

Local attorney Rick Fried supported Binder's analysis, saying proper inspections would have alerted people that the reservoir wasn't very stable.

Fried believes that the state could be liable because it didn't comply with its own requirements to inspect the dam.

"If I were filing suit tomorrow on behalf of someone who was injured, just as a matter of precaution, I would name the state based on the information presented," said Roy Bell, a local attorney who has handled several flood-related lawsuits.

"Any potential liable party is going to be sucked into this. People are going to be searching for any source to help pay for the damages."

Attorney General Mark Bennett said that Hawai'i law clearly says that the state is not liable in such circumstances.

In particular, the law says that inaction by state officials does not absolve a landowner of their liability to maintain their dams nor does it transfer the responsibility to the state.

Peter Young, the director of the state Department of Land and Natural Resources that is in charge of inspecting private dams in Hawai'i, reiterated Bennett's comments, saying state law makes the landowner ultimately responsible for the upkeep of their dams.

Still, legal experts like Binder are convinced that the liability issues are not so clear cut. For them, the issue of who is to blame for the Kaloko dam disaster will only be settled after years of litigation.

"The lesson from Hurricane Katrina and other disasters is that you are going to see lawsuits against the owner of the dam, against the state of Hawai'i, against the irrigation company and against anyone involved in the modification and maintenance of the dam," Binder said.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.