Alright, guys, here's the skinny on this case:
Dana Point was notified a number of years prior that the bike lane was not in compliance. The city had faced an earlier claim from a cyclist who was killed, and at that time they were notified that the lane was too wide. The lane was 12 feet wide, about the same size as a regular traffic lane. It was not the normal 4-5 feet for a bike lane. Second, the city failed to post the required sign notifying drivers of the presence of a bike lane, nor did they paint the required "bike lane" inside of the lane itself.
The city has paid out a couple of claims for deceased cyclists, but since they are dead, and don't require a lifetime of medical attention, their settlements have been significantly lower. Also, their are a few more cases pending, and the city has already voted to place a concrete barrier between the traffic lane and the bike lane. But they haven't done it yet.
I agree that the taxpayers of Dana Point should not have to be burdened because of the actions of a hit and run driver with three prior DUI convictions. However, Dana Point did have the opportunity a few years back to remedy the situation and release themselves from future liabilities. Guess what? They didn't. I'm no lawyer, so someone else can chime in regarding a parties responsibility when they do not rectify a dangerous situations after notification. This is exactly the same approach that the McDonald's hot coffee lady took. McDonald's knew the danger of serving their coffee at temperatures deemed too hot, but failed to make corrections, opting to play the numbers game with their customers.