Inverse condemnation is a legal theory that is not common in the subrogation industry. However, when dealing with a loss where property damage is the result of action by a public entity, it is a claim that may be available. While there are distinct considerations with raising an inverse condemnation claim, pleading it can also have advantages over common negligence causes of action. Understanding when inverse condemnation is an available claim is the first step in such an analysis.

Although it is not a subrogation case, the Court of Appeal of California (Court of Appeal) recently examined the basis for inverse condemnation claims, in general, in Shehyn vs. Ventura County Public Works Agency, 108 Cal.App.5th 1254. In Shehyn, the plaintiff brought an action against the defendants, Ventura County Public Works Agency and Ventura County Waterworks District No. 1 (collectively, the District). The Court of Appeal reviewed an appeal after the trial court sustained the District’s demurrer without leave to amend the cause of action for inverse condemnation. The Court of Appeal reversed the judgment, remanding the case with the instruction to enter a new order overruling the demurrer.