In Red Mountain, LLC v. Fallbrook Public Utility Dist. (2006) 143 Cal.App.4th 333, the plaintiff developers (the developers) owned land adjacent to a drinking water reservoir owed by the defendant public utilities district (the district). The district had acquired the land on which the reservoir was built from the developers' predecessors-in-interest (the sellers) pursuant to a contract that granted the district, among other things, a nonexclusive easement (the sanitary easement) over 127 acres of the sellers' adjacent land to enable the district to keep the reservoir water free of contamination. (Id. at pp. 337-338.) In 1978, the district purchased an additional 18 acres of land from the sellers, granting them in exchange a 60-foot easement (the access easement) over "the existing road" on one side of the parcel being conveyed. (Id. at p. 339.) Several years later, the district expanded the reservoir, obliterating the existing road. (Ibid.) The district then built a new road (the new road) to replace the road that had been destroyed. The district installed a locked gate across the new road, but provided keys to the sellers. (Ibid.) More than 20 years later, the sellers transferred their interest in land adjacent to the reservoir to the developers. The developers' subdivision design anticipated access to the subdivision along the new road. The developers thus notified the district that, pursuant to the 1978 agreement, it would provide the documents necessary for the district to grant the developers a 60-foot access easement over the new road. The district responded that it would not grant the access easement, explaining that "the existing road" referred to in the 1978 agreement no longer existed. (Red Mountain, supra, 143 Cal.App.4th at p. 341.) The developers filed a complaint against the district for breach of contract, specific performance, and inverse condemnation, based on the district's refusal to grant the access easement. The district cross-claimed to quiet title and for declaratory and injunctive relief. In its cross-complaint, the district asked the court to rule that its sanitary easement was valid and that it precluded the developers' proposed subdivision. Subsequently, the district filed an eminent domain complaint, condemning the property that included the 127 acres of the sanitary easement and any rights that the developers had to the access easement. (Red Mountain, supra, 143 Cal.App.4th at p. 341.) After the liability phase of the trial, the trial court issued a statement of decision in which it ruled that: (1) the access easement referenced in the 1978 agreement entitled the developers to a 60-foot easement over the new road, and; (2) there had been an inverse condemnation of the developers' land by the district. (Red Mountain, supra, 143 Cal.App.4th at p. 342.) Subsequently, a jury returned a special verdict, awarding the developers $ 1.4 million on the inverse condemnation and breach of contract causes of action, and $ 872,000 as the fair market value of the property directly condemned. (Ibid.) The district appealed. The Court of Appeal concluded that the trial court's interpretation of the access easement granted by the 1978 agreement was overbroad because any ambiguity in a grant by a public entity to a private party must be construed in favor of the public grantor. (Red Mountain, supra, 143 Cal.App.4th at pp. 346-347.) It thus reversed the judgment as to the inverse condemnation and breach of contract claims because it found a "reasonable probability" that the trial court's erroneous view of the scope of the access easement had affected the resolution of those claims. It explained: "We conclude that if the trial court had construed the access easement as limited to the developer's predecessor-in-interest's personal ingress and egress, there is a reasonable probability that it would not have ruled that district's refusal to grant the easement resulted in an inverse condemnation of the developer's property. We further conclude that the trial court's failure to construe the access easement in the district's favor prejudicially affected the jury's verdict on the developer's inverse condemnation/breach of contract claim. If the court had construed the access easement as limited to the developer's predecessor-in-interest's personal ingress and egress and instructed the jury accordingly, it is reasonably probable that the jury would have found the district's refusal to grant the easement was not a breach of the 1978 agreement because the easement the developer requested was much broader in scope than the personal easement the district had agreed to convey. Accordingly, the matter must be remanded for both a redetermination of the district's liability for inverse condemnation and a retrial to determine whether the district's refusal to grant the access easement constituted a breach of the 1978 agreement and, if so, the amount of damages the developer suffered as a result." (Id. at p. 348.) The court then considered whether its reversal of the judgment as to the inverse condemnation and breach of contract claims required that the issue of just compensation for the district's direct condemnation of the developer's property also be retried. The court concluded--notwithstanding the developers' failure to cross-appeal from the judgment--that a complete retrial was necessary because the trial court's overbroad interpretation of the access easement "may have" prejudicially affected the jury's determination of just compensation on the district's direct compensation claim. The court explained: "Under a correct interpretation of the scope of the access easement . . . , the trial court could conclude that the district's refusal to grant the easement did not result in an inverse condemnation of the developer's property. In that case, there would be no award of damages for inverse condemnation/breach of contract. However, the developer would be entitled to seek severance damages on the direct condemnation claim, as well as damages for the district's precondemnation conduct in refusing to grant the access easement and for the direct condemnation of the developer's contractual right to the easement. The award of $ 872,560 for direct condemnation reflects the jury's determination of fair market value of the condemned land as of February 1, 2004, as mitigation land with no access. If there was no inverse condemnation/breach of contract, the developer would have had a contractual right to an access easement until the district directly condemned that right. Under that scenario, a jury on retrial could find that the value of the property that was directly condemned was higher than the value the jury awarded for direct condemnation in the first trial." (Red Mountain, supra, 143 Cal.App.4th at pp. 350-351.) The court concluded: "The trial court's erroneous interpretation of the access easement and its misdirection of the jury on that point prejudicially affected the outcome of the trial with respect to the developer's claims for inverse condemnation and breach of contract. These errors, in turn, may have prejudicially affected the jury's determination of just compensation on the district's direct condemnation claim. Because resolution of the inverse condemnation/breach of contract claims could have affected the determination of just compensation for the direct condemnation, the judgment is not severable." (Red Mountain, supra, 143 Cal.App.4th at p. 351.) The court therefore reversed the entire judgment.