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Condemnation Practice in California

Get all the procedures, new developments, and practice tips you need to represent government agencies or property owners, from a leading eminent domain expert.

Get all the procedures, new developments, and practice tips you need to represent government agencies or property owners, from a leading eminent domain expert.

  • Valuation of condemned property
  • Just compensation and severance damages
  • Public use and necessity defenses
  • Trial preparation, procedure, and strategies
  • Challenging government’s right to take
  • Inverse condemnation and regulatory takings
  • Relocation assistance
  • Income tax consequences of condemnation awards
  • Federal condemnation practice
  • Dozens of pleading forms and practice tips
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Get all the procedures, new developments, and practice tips you need to represent government agencies or property owners, from a leading eminent domain expert.

  • Valuation of condemned property
  • Just compensation and severance damages
  • Public use and necessity defenses
  • Trial preparation, procedure, and strategies
  • Challenging government’s right to take
  • Inverse condemnation and regulatory takings
  • Relocation assistance
  • Income tax consequences of condemnation awards
  • Federal condemnation practice
  • Dozens of pleading forms and practice tips

1

Attorney’s Initial Contact With Condemnation Action

Norman E. Matteoni

  • I.  INTRODUCTION
    • A.  Roles of Counsel  1.1
    • B.  Initial Considerations  1.2
  • II.  ASSESSING POTENTIAL LAWSUIT
    • A.  Property Owner’s Background  1.3
    • B.  Should Condemnee Retain an Attorney?  1.4
      • 1.  Precondemnation Offer  1.5
      • 2.  Negotiations After Deposit of Probable Compensation  1.6
    • C.  Preliminary Investigation of Value
      • 1.  Precedent Knowledge of Client and Attorney  1.7
      • 2.  Obtaining Preliminary Appraisal  1.8
  • III.  COSTS AND DELAY OF LITIGATION
    • A.  Court Costs  1.9
    • B.  Attorney and Appraiser Fees  1.10
    • C.  Other Expenses  1.11
    • D.  Delay  1.12
  • IV.  ACCEPTING CASE
    • A.  Advising Client
      • 1.  Avoiding Overoptimism  1.13
      • 2.  Prudence  1.14
      • 3.  Collecting Factual Data  1.15
    • B.  Attorney Fee Agreements
      • 1.  Express Fee Contracts
        • a.  Possible Fee Arrangements  1.16
        • b.  Contingency Fee Contracts  1.16A
          • (1)  Possible Court Review of Fee Arrangements  1.16B
          • (2)  Lodestar Multiplier Approach  1.16C
          • (3)  Conscionability Standard  1.16D
        • c.  Minimum Fees; Liens  1.16E
        • d.  When Written Contract Is Required  1.16F
      • 2.  Fees in Event of Abandonment  1.17
        • a.  Need for Accurate Records  1.17A
        • b.  Court Determination of Fees  1.17B
      • 3.  Form: Letter Agreement  1.18
      • 4.  Form: Attorney-Client Agreement for Inverse Condemnation  1.19
    • C.  Notifying Condemnor of Attorney’s Representation  1.20
  • V.  ETHICAL CONSIDERATIONS AND CLIENT COMMUNICATIONS  1.21
    • A.  Examples of Potential Misconduct  1.21A
    • B.  Decision-Maker  1.22
    • C.  Fee Arrangements  1.23
    • D.  Communications  1.24
    • E.  Contact With Officials  1.25
    • F.  Avoiding Representation of Adverse Interests  1.26
    • G.  Fee Collection  1.27

2

Attorney’s Role in Determining Facts

Norman E. Matteoni

  • I.  INTRODUCTION
    • A.  General Considerations  2.1
    • B.  Scope; Need to Gather Facts  2.2
  • II.  OBTAINING INFORMATION FROM CLIENT
    • A.  Need for Complete Disclosure  2.3
    • B.  Basic Documents  2.4
    • C.  Information to Obtain  2.5
      • 1.  Pleadings Served  2.6
      • 2.  Prior Appraisals, Legal Consultations, and Development Applications  2.7
      • 3.  Conversations With Condemnor’s Agents  2.8
      • 4.  Property Description and Photographs  2.9
      • 5.  Title  2.10
      • 6.  Mortgages; Deeds of Trust  2.11
      • 7.  Other Encumbrances  2.12
      • 8.  Leases  2.13
      • 9.  Options  2.14
      • 10.  General Plan and Zoning  2.15
      • 11.  Improvements; Proximity to Services  2.16
      • 12.  Property Taxes  2.17
      • 13.  Relocation of Home or Business  2.18
      • 14.  Partial Take: Severance Damages  2.19
      • 15.  View: Esthetic Appeal  2.20
      • 16.  Utilities and Water  2.21
      • 17.  Vegetation, Soil, Mineral Deposit, and Geologic Considerations  2.22
      • 18.  Environmental Reports  2.23
      • 19.  Client’s Opinions  2.24
  • III.  OTHER MEANS OF OBTAINING FACTS
    • A.  Attorney’s Personal Visit of Property  2.25
    • B.  Photo Library and Maps  2.26
    • C.  Public Records  2.27
    • D.  Condemnor  2.28
    • E.  Discovery Procedures  2.29

3

Selection of Valuation Experts

Norman E. Matteoni

  • I.  NEED FOR EXPERT TESTIMONY  3.1
  • II.  FACTORS TO CONSIDER IN SELECTING PROFESSIONAL APPRAISER  3.2
    • A.  Qualifications and Experience  3.3
    • B.  Ability to Work With Attorney  3.4
    • C.  Conservative Versus Optimistic Appraiser; Bias and Interest  3.5
    • D.  Professional Appraisal Societies  3.6
  • III.  HIRING APPRAISER  3.7
    • A.  Fee Arrangements  3.8
    • B.  Form: Appraisal Agreement  3.9
    • C.  Court-Appointed Appraisers  3.10
    • D.  Initial Consultation Between Appraiser and Attorney  3.11
  • IV.  APPRAISAL REPORT  3.12
  • V.  USING OTHER VALUATION AND FOUNDATIONAL WITNESSES
    • A.  Other Experts  3.13
    • B.  Nonexpert Witnesses
      • 1.  Lay Witnesses  3.14
      • 2.  Owner  3.15

4

Just Compensation

Norman E. Matteoni

  • I.  BASIC CONSIDERATIONS AND APPROACHES TO VALUATION
    • A.  Just Compensation Standard: Fair Market Value  4.1
    • B.  The Prospective Purchaser  4.1A
    • C.  Determination of Fair Market Value and Highest and Best Use  4.2
      • 1.  Enhancement and Blight Due to Project Impact  4.3
        • a.  Direct and Indirect Enhancement  4.4
        • b.  “Probability of Inclusion” Test for Enhancement  4.5
        • c.  Separate Public Project  4.6
        • d.  Effect of Blight on Value  4.7
        • e.  Precondemnation Damages  4.8
      • 2.  Highest and Best Use
        • a.  Physical Nature of Parcel  4.9
        • b.  Future Adaptability  4.10
          • (1)  Feasibility Studies  4.11
          • (2)  Probability of Zoning Change or Land Use Approval  4.12
            • (a)  Sources of Zoning Information  4.13
            • (b)  Rezoning or Development Due to Project  4.14
            • (c)  Evidence of Improper Zoning  4.15
            • (d)  Witness Qualifications  4.16
            • (e)  Other Land Development Controls  4.17
        • c.  Interim Value  4.18
        • d.  Evaluating Existing Zones of Value  4.19
          • (1)  Partial Taking  4.20
          • (2)  Combining Parcels; “Assemblage” Theory  4.21
    • D.  Date of Valuation  4.22
      • 1.  Commencement of Action, Trial Date, or Date of Deposit  4.23
      • 2.  Fixtures and Improvements  4.24
      • 3.  Bifurcated Trials  4.25
      • 4.  Valuation Date on Retrial  4.26
    • E.  Basic Approaches to Valuation  4.27
      • 1.  Market Data Approach; Comparable Sales
        • a.  Trial Court’s Discretion
          • (1)  Authority  4.28
          • (2)  Weighing Aspects of Comparability  4.29
        • b.  Effect of Public Improvement on Comparability  4.30
        • c.  Good Faith Sale Required  4.31
        • d.  Comparability of Sale
          • (1)  Time and Location of Sale  4.32
          • (2)  Nature of Land and Improvements  4.33
        • e.  Assemblage and Comparable Sales  4.34
        • f.  Sale for “Money” or Equivalent  4.35
        • g.  Unit of Comparison  4.36
        • h.  Preparing Comparable Sales Data
          • (1)  Search of Records  4.37
          • (2)  Confirmation of Information  4.38
        • i.  Form: Information Worksheet  4.39
      • 2.  Cost Approach
        • a.  Definition  4.40
        • b.  Appraiser’s Role
          • (1)  Estimating Land Value and Cost of Improvements  4.41
            • (a)  Determining Unit Cost  4.42
            • (b)  Unit-in-Place Method  4.43
          • (2)  Depreciation  4.44
          • (3)  Replacement and Reproduction  4.45
          • (4)   Illegal Structures and Code Violations  4.45A
      • 3.  Income Approach  4.46
        • a.  Appraiser’s Alternative Applications  4.47
          • (1)  Building Residual Approach  4.48
          • (2)  Land Residual and Overall Capitalization Processes  4.49
          • (3)  Gross Rent Multiplier  4.50
        • b.  Legal Tests of Income Approach  4.51
        • c.  Form: Capitalization Summary Worksheet  4.52
      • 4.  Economic or Developer’s Approach; Unimproved Lands  4.53
      • 5.  Special Purpose Property  4.54
  • II.  SPECIFIC VALUATION PROBLEMS
    • A.  Fixtures, Equipment, and Improvements  4.55
    • B.  Inventory; Personal Property  4.56
    • C.  Leaseholds  4.57
      • 1.  Theories of Valuation  4.58
      • 2.  Elements of Valuation  4.59
      • 3.  Apportionment of Award Between Lessor and Lessee  4.60
        • a.  Total Take  4.61
        • b.  Partial Take  4.62
        • c.  Improvements, Fixtures, and Equipment  4.63
    • D.  Goodwill
      • 1.  Historical Development of Goodwill Compensation  4.64
      • 2.  Goodwill Valuation in Indirect Condemnation  4.65
      • 3.  Requirements for Compensation  4.66
      • 4.  Notice of Right to Claim Loss of Goodwill  4.67
      • 5.  Claiming Goodwill  4.68
      • 6.  Entitlement Issue and Burden of Proof  4.69
        • a.  Loss Must Be Caused by Taking  4.70
        • b.  Loss Cannot Reasonably Be Prevented  4.71
      • 7.  No Compensation Benefits Available Under Relocation Assistance  4.72
      • 8.  Loss of Goodwill Is Not Compensated From Other Source  4.73
      • 9.  Valuation Methods  4.74
        • a.  Excess Earnings Approach  4.75
        • b.  Gross and Net Income Multipliers  4.76
        • c.  Seller’s Discretionary Cash Method  4.77
        • d.  Cost to Create  4.77A
      • 10.  Date of Valuation  4.78
    • E.  Easements
      • 1.  Valuation When Condemned Property Already Burdened With Easement  4.79
      • 2.  Valuation When Condemned Property Served by Easement  4.79A
      • 3.  Valuation of Abutter’s Rights  4.79B
      • 4.  Valuation When Public Agency Imposes Easement  4.80
      • 5.  Temporary Construction Easement  4.81
    • F.  Dedication Problems
      • 1.  Power to Dedicate  4.82
      • 2.  Effect on Valuation of Property Subject to Dedication  4.83
      • 3.  Implied Dedication of Public Recreational Easements: Gion Doctrine  4.84
    • G.  Trees and Shrubs  4.85
    • H.  Harvesting Crops  4.86
    • I.  Mineral and Natural Resources  4.87
    • J.  Environmental Liability for Contamination  4.88
      • 1.  The California Land Reuse and Revitalization Act of 2004  4.89
      • 2.  School Districts (CCP §§1263.710–1263.770)  4.90
      • 3.  Practical Considerations; Effect on Valuation  4.91
      • 4.  Insurance  4.92
    • K.  Creek Land  4.93

5

Severance Damages

Norman E. Matteoni

  • I.  INTRODUCTION  5.1
    • A.  Nature and Theory of Severance Damage  5.2
    • B.  Roles of Court and Jury in Assessing Severance Damage  5.3
  • II.  REQUIREMENTS OF SEVERANCE DAMAGES
    • A.  The Public Project  5.3A
    • B.  Existence of Larger Parcel  5.4
      • 1.  Unity of Use  5.5
      • 2.  Unity of Ownership  5.6
      • 3.  Physical Contiguity  5.7
    • C.  Causation  5.8
    • D.  Improvement Need Not Be Located on Property Taken; Symons Rule Abrogated  5.9
    • E.  Damages Available Only From Appropriate Condemning Agency  5.10
  • III.  MEASURING SEVERANCE DAMAGES  5.11
    • A.  Diminution in Value
      • 1.  Comparison of Before and After Values  5.12
      • 2.  Form: Attorney’s Worksheet: Computation of Diminution of Remainder’s Value  5.13
    • B.  Cost to Cure  5.14
    • C.  Development Potential of Property in Before Condition and Feasibility Studies  5.15
    • D.  Increased Development Costs and Other Development Impacts  5.16
    • E.  Measurement When Project Not Completed  5.17
    • F.  Improvements Straddling Take Line  5.18
    • G.  Condemnee’s Duty to Mitigate Damages  5.19
  • IV.  EXAMPLES OF COMPENSABLE SEVERANCE DAMAGES
    • A.  Interference With Access
      • 1.  Nature of Right  5.20
      • 2.  Types of Access Problems  5.21
        • a.  Immediate Access to Adjacent Street  5.22
        • b.  Diversion of Traffic on Streets  5.23
        • c.  Reasonable Access to Next Intersecting Street in Either Direction  5.24
      • 3.  Determination and Measurement  5.25
    • B.  Loss of Use
      • 1.  Interference With Remainder During Construction Period  5.26
      • 2.  Temporary Construction Easement  5.27
    • C.  Recovering Nuisance- or Noxious-Type Damages
      • 1.  Noise, Dust, Fumes, and Vibrations  5.28
      • 2.  Fear of Hazards and Risk From Project  5.29
    • D.  Agricultural Land  5.30
    • E.  Special Purpose Property  5.31
    • F.  Other Types of Severance Damages  5.32
  • V.  BENEFITS
    • A.  Nature of Benefits  5.33
    • B.  Distinction in Admissibility Between Special Benefits and General Benefits Eliminated; Beveridge Rule Abrogated  5.34
      • 1.  Historical Examples of Special Benefits  5.35
      • 2.  Historical Examples of General Benefits  5.36
    • C.  Measurement of Benefits  5.37
    • D.  Other Benefits Problems
      • 1.  Benefits From Concurrent But Separate Public Project  5.38
      • 2.  Special Assessment Proceedings  5.39
    • E.  Special Verdict to Ascertain Specific Amounts on Claims of Severance Damage  5.40

6

Public Use and Necessity Defenses

Norman E. Matteoni

  • I.  INTRODUCTION
    • A.  Constitutional and Statutory Limitations on Eminent Domain  6.1
    • B.  Significance of Public Use and Necessity  6.2
    • C.  Public Use and Necessity Distinguished  6.3
  • II.  PUBLIC USE
    • A.  Definition  6.4
      • 1.  Kelo v City of New London Decision  6.5
      • 2.  Redevelopment  6.6
    • B.  Determination of Public Use  6.7
    • C.  Negotiated Acquisition in Lieu of Condemnation Action  6.8
    • D.  Defenses
      • 1.  Lack of Authority to Condemn  6.9
        • a.  Public Utilities  6.10
        • b.  Authority of Private Persons  6.11
      • 2.  Erroneous Determination of Public Use  6.12
      • 3.  No Intent to Put Property to Designated Use  6.13
      • 4.  No Intent to Use Property Within Reasonable Time  6.14
      • 5.  Excess Property Taken  6.15
      • 6.  Condemnation for Exchange Purposes  6.16
  • III.  DEFENSE THAT LAND IS ALREADY APPROPRIATED TO PUBLIC USE; MORE NECESSARY PUBLIC USE  6.17
    • A.  Prior Public Use  6.18
    • B.  Multiple Use  6.19
    • C.  More Necessary Public Use
      • 1.  Determination of More Necessary Public Use  6.20
      • 2.  Statutory Provisions  6.21
    • D.  Restriction on Location of Highway Projects  6.22
    • E.  Restrictions on Acquisition of State Park Land  6.23
    • F.  Primary Powers of Certain Agencies  6.24
  • IV.  NECESSITY
    • A.  Introduction  6.25
      • 1.  Sample Form: Notice of Adopting Resolution of Necessity  6.26
      • 2.  Sample Form: Resolution of Necessity to Condemn Real Property  6.27
    • B.  Conclusive Evidence Statutes  6.28
    • C.  Chevalier Rule Superseded by CCP §1245.255  6.29
    • D.  Rebuttable Presumption  6.30
    • E.  Challenges  6.31
      • 1.  Constitutional and Procedural Challenges  6.32
      • 2.  CEQA Challenges  6.33
      • 3.  Project Impact on Agricultural Preserve Land  6.34
  • V.  PROCEDURE IN ALLEGING AND CHALLENGING PUBLIC USE AND NECESSITY
    • A.  Complaint  6.35
    • B.  Answer or Demurrer  6.36
    • C.  Waiver of Challenge to the Right to Take  6.36A
    • D.  Raising Objection at Hearing on Resolution  6.37
    • E.  Burden of Proof  6.38
    • F.  Trial  6.39
    • G.  Remedy on Successful Right to Take Challenge  6.39A
  • VI.  CHECKLIST: PUBLIC USE AND NECESSITY DEFENSES  6.40

7

Negotiation and Relocation Assistance

Norman E. Matteoni

  • I.  INTRODUCTION  7.1
  • II.  DISPARATE POSITIONS OF PARTIES  7.2
    • A.  Condemnor’s Dual Responsibilities  7.3
    • B.  Guidelines to Encourage Acquisition by Negotiation  7.4
    • C.  Condemnor’s Staff Expertise; Cost of Preparation  7.5
    • D.  Pressures on Condemnee  7.6
    • E.  Limited Authority of Condemnor’s Negotiator  7.7
  • III.  MULTIPLE INTEREST HOLDERS  7.8
  • IV.  SUBJECTS FOR NEGOTIATION  7.9
  • V.  PREPARATION FOR NEGOTIATION  7.10
    • A.  Interview Client  7.10A
    • B.  Ascertain Market Conditions  7.10B
    • C.  Review Pleadings  7.10C
    • D.  Identify Legal Issues  7.10D
    • E.  Consider Obtaining an Appraisal  7.10E
    • F.  Consider Retaining Other Experts  7.10F
    • G.  Research the Condemnor  7.10G
  • VI.  NEGOTIATION TECHNIQUES
    • A.  Approach to Negotiation  7.11
    • B.  Basic Rules  7.12
    • C.  Pretrial Offer and Demand  7.13
    • D.  Exchange of Appraisals  7.14
  • VII.  ROLE OF COURT IN NEGOTIATION  7.15
  • VIII.  FORM: SETTLEMENT AGREEMENT  7.16
  • IX.  RELOCATION ASSISTANCE
    • A.  California Law  7.17
    • B.  Federally Funded Projects  7.18
    • C.  Relocation Benefits Not Part of Condemnation Trial  7.19
    • D.  Case Law on Allowable Benefits  7.20

8

Pleadings

Norman E. Matteoni

  • I.  PRACTICE GUIDE TO INITIATING CONDEMNATION ACTION  8.1
    • A.  Environmental Review  8.2
    • B.  Review of Title and Physical Conditions Affecting Property  8.3
    • C.  Appraisal  8.4
    • D.  Summary Statement of Value  8.5
    • E.  Negotiations  8.6
    • F.  Relocation Assistance  8.7
    • G.  Statutory Offer  8.8
    • H.  Notice of Intent to Condemn  8.9
    • I.  Hearing on Adoption of Resolution  8.10
    • J.  Update and Review of Appraisal Report  8.11
    • K.  Project Plan  8.12
    • L.  Physical Inspection Report  8.13
    • M.  Hazardous Materials Study  8.14
    • N.  Re-review of Preliminary Title Report  8.15
    • O.  Maps and Property Description  8.16
    • P.  Preparation of Summons and Complaint  8.17
    • Q.  Deposit of Probable Compensation  8.18
    • R.  Motion for Order of Possession  8.19
  • II.  COMPLAINT
    • A.  Statutory Requirements  8.20
    • B.  Form: Complaint  8.21
    • C.  Amendment to Complaint  8.21A
  • III.  JURISDICTION AND PROCESS
    • A.  Jurisdiction  8.22
    • B.  Venue  8.23
    • C.  Summons; Service of Process  8.24
    • D.  Lis Pendens
      • 1.  Statutory Requirements  8.25
      • 2.  Form: Lis Pendens  8.26
    • E.  Entry for Preliminary Surveys and Studies
      • 1.  Statutory Scheme  8.27
      • 2.  Scope of Precondemnation Entry; Property Reserve  8.27A
  • IV.  CONDEMNOR’S RIGHT TO POSSESSION BEFORE JUDGMENT
    • A.  Statutory Authority  8.28
    • B.  Form: Notice of Deposit  8.29
    • C.  Form: Summary Appraisal Statement  8.30
    • D.  Procedure  8.31
      • 1.  Order for Possession Before Judgment  8.32
      • 2.  Objection to Possession of Grounds of Hardship  8.32A
      • 3.  Form: Notice of Motion and Motion for Order of Possession  8.33
      • 4.  Form: Memorandum in Support of Order for Possession  8.34
      • 5.  Form: Declaration in Support of an Order for Possession  8.35
      • 6.  Form: Order for Possession  8.36
    • E.  Service  8.37
    • F.  Stay of Order Until Ruling on Objections to Take  8.38
    • G.  Injunction in Lieu of Order of Possession  8.39
    • H.  Effect of Order for Early Possession  8.40
    • I.  Deposit of Probable Compensation and Withdrawal  8.41
    • J.  Increase of Deposit  8.42
      • 1.  Form: Application for Withdrawal of Deposit of Probable Compensation  8.43
      • 2.  Form: Objection to Withdrawal of Deposit of Probable Compensation  8.44
      • 3.  Form: Report of Service of Objections to Withdrawal  8.45
      • 4.  Form: Order for Withdrawal of Deposit  8.46
      • 5.  Investment of Deposit  8.47
  • V.  CONDEMNEE’S PLEADINGS
    • A.  Disclaimer
      • 1.  Use  8.48
      • 2.  Form: Disclaimer  8.49
    • B.  Answer
      • 1.  Statutory Requirements  8.50
      • 2.  Contents  8.51
      • 3.  Pleading Precondemnation Damages by Answer or Cross-Complaint  8.52
      • 4.  Affirmative Defenses  8.53
      • 5.  Form: Answer  8.54
      • 6.  Service  8.55
      • 7.  Amendment of Answer  8.56
    • C.  Demurrer  8.57
    • D.  Cross-Complaint  8.58
  • VI.  CONSOLIDATION AND SEPARATION
    • A.  Discretion of Court  8.59
    • B.  Procedure for Consolidation or Separation  8.60
      • 1.  Notice of Motion for Order of Consolidation  8.61
      • 2.  Supporting Memorandum  8.62
      • 3.  Motion for Order of Separation  8.63
    • C.  Tactical Precautions  8.64
  • VII.  CONDEMNOR’S RIGHT TO ABANDON TAKING
    • A.  Basis  8.65
    • B.  Implied Abandonment  8.66
    • C.  Compensation of Condemnee
      • 1.  Litigation Expenses  8.67
      • 2.  Damages Related to Abandonment  8.68
      • 3.  Cost Bill  8.69
      • 4.  Condemnor’s Recovery of Deposit of Probable Compensation  8.70
    • D.  Benefit of Hazardous Material Cleanup on Abandonment  8.71

9

Trial Preparation and Trial

Norman E. Matteoni

  • I.  OVERVIEW OF CONDEMNATION PROCEDURE: PRACTICE GUIDE FOR HANDLING A CONDEMNATION ACTION  9.1
    • A.  Eminent Domain Is a Special Proceeding  9.2
    • B.  Initiating the Action; Resolution of Necessity  9.3
    • C.  Order of Possession; Deposit of Probable Compensation  9.4
    • D.  Withdrawal of Deposit  9.5
    • E.  Right-to-Take Challenges  9.6
    • F.  Discovery Rules  9.7
    • G.  60-Day and 20-Day Rules  9.8
    • H.  Assignment of Judge for All Purposes  9.9
    • I.  Collateral Issues  9.10
    • J.  Preference for Trial  9.11
    • K.  Date of Value  9.12
    • L.  Plaintiff and Defendant Roles Are Reversed  9.13
    • M.  No Burden of Proof  9.14
    • N.  Selection of Jury  9.15
    • O.  Prima Facie Case  9.16
    • P.  Special Rules of Evidence  9.17
    • Q.  View of Condemned Property  9.18
    • R.  Closing  9.19
    • S.  Jury Instructions and Verdict  9.20
    • T.  Apportionment Hearing  9.21
    • U.  Costs  9.22
    • V.  Litigation Expenses  9.23
    • W.  Judgment and Final Order  9.24
  • II.  TRIAL PREPARATION AND DISCOVERY
    • A.  Initial Trial Preparation
      • 1.  Factual and Legal Preparation  9.25
      • 2.  Valuation Issue  9.26
      • 3.  Public Use and Necessity Issues  9.27
      • 4.  Property Interest as an Issue  9.28
    • B.  Discovery
      • 1.  Conventional Techniques  9.29
        • a.  Local Agency Witnesses  9.29A
        • b.  Request for Public Records  9.29B
      • 2.  Statutory Exchange of Appraisal Data  9.30
        • a.  Limitations on Testimony at Trial  9.31
        • b.  Form: Demand or Cross-Demand for Exchange of Information  9.32
        • c.  Form: Responsive List of Expert Witnesses  9.33
      • 3.  Form: Statement of Valuation Data  9.34
      • 4.  Case Management Process
        • a.  At-Issue Memorandum and Case Management Conference  9.35
        • b.  Pretrial Conference  9.36
        • c.  Checklist: Pretrial in Los Angeles County  9.37
        • d.  Shortcomings of Pretrial Exchange of Valuation Data Procedure  9.38
        • e.  Pretrial Offer and Demand  9.39
        • f.  The 20-Day Period  9.40
    • C.  Final Preparation
      • 1.  Attorney’s Independent Investigation  9.41
      • 2.  Final Conferences  9.42
      • 3.  Preparation of Trial Brief  9.43
  • III.  TRIAL
    • A.  Preliminary Trial Considerations
      • 1.  Introduction to Trial Tactics  9.44
      • 2.  Burden of Proof  9.45
      • 3.  Burden of Going Forward  9.46
      • 4.  Functions of Court and Jury  9.47
      • 5.  In Limine Motions  9.48
        • a.  Sixty Days Before Trial  9.49
        • b.  At Trial  9.50
      • 6.  Bifurcation and Separate Trials  9.51
      • 7.  Time for Trial  9.52
      • 8.  Continuance of Trial  9.52A
    • B.  Jury Selection
      • 1.  General Considerations  9.53
      • 2.  Voir Dire  9.54
      • 3.  Condemnor’s Juror  9.55
      • 4.  Condemnee’s Juror  9.56
      • 5.  Other Considerations  9.57
    • C.  Prima Facie Phase  9.58
      • 1.  Public Use and Necessity  9.59
      • 2.  Condemnor’s Engineering Witness  9.60
    • D.  Opening Statement in Valuation Phase  9.61
    • E.  Witnesses
      • 1.  Lay Witnesses
        • a.  Owner  9.62
        • b.  Other Nonprofessional Witnesses  9.63
      • 2.  Expert Witnesses and Hearsay Evidence  9.64
    • F.  Presentation of Direct Examination
      • 1.  General Tactics  9.65
      • 2.  Direct Examination of Appraisal Witness
        • a.  Checklist: Topics of Examination  9.66
        • b.  Foundational Examination
          • (1)  Checklist: Qualifications of Appraisal Witness  9.67
          • (2)  Checklist: Investigation by Appraiser  9.68
          • (3)  Checklist: Description of Property  9.69
          • (4)  Checklist: Date of Evaluation  9.70
        • c.  Opinions of Value  9.71
          • (1)  Approaches to Valuation  9.72
          • (2)  Checklist: Examination for Opinion Matters  9.73
          • (3)  Subjects of Examination
            • (a)  Highest and Best Use  9.74
            • (b)  Comparable Sales  9.75
            • (c)  Reproduction/Replacement Cost Study  9.76
            • (d)  Income/Productivity Study  9.77
            • (e)  Severance Damages  9.78
            • (f)  Benefits  9.79
      • 3.  Objections
        • a.  Matters on Which Opinion of Value Cannot Be Based  9.80
          • (1)  Sales to Condemning Agencies  9.80A
          • (2)  Offers and Options  9.80B
          • (3)  Assessed Value  9.80C
          • (4)  Speculative Value  9.80D
          • (5)  Opinion of Value of Other Property  9.80E
          • (6)  Capitalized Value of Income on Other Property  9.80F
          • (7)  Offers of Settlement  9.80G
          • (8)  Sale of Subject Property After Lis Pendens  9.80H
          • (9)  Amount of Deposit or Withdrawal  9.80I
          • (10)  Property Owner’s Appraisals for Other Purposes  9.80J
          • (11)  Noncompensable Items  9.80K
          • (12)  Unsanctioned Valuation Methodology  9.80L
        • b.  Voir Dire of Witness on Alleged Comparable Sales and Foundational Matter  9.81
        • c.  “Backdooring” Sales  9.82
        • d.  Motion to Strike  9.83
    • G.  Cross-Examination
      • 1.  General Points of Exploration  9.84
      • 2.  Cross-Examination on Value
        • a.  Market Data/Comparable Sales Approach  9.85
        • b.  Cost Approach  9.86
        • c.  Income Approach  9.87
        • d.  Developer’s Approach versus Price per Buildable Foot  9.88
      • 3.  Failure to Present Evidence of Initial Appraisal  9.89
      • 4.  Revised Appraisal  9.90
      • 5.  Check on Arithmetic  9.91
      • 6.  Controlling Opposing Appraiser’s Testimony  9.92
    • H.  Rebuttal Evidence  9.93
    • I.  Demonstrative Evidence (e.g., Maps, Photographs, Videotapes, Models, and Computer Simulations)  9.94
    • J.  View of Premises  9.95
    • K.  Final Argument  9.96
    • L.  Counsel Misconduct  9.97
    • M.  Jury Instructions  9.98
    • N.  Verdict
      • 1.  Statutory Requirements  9.99
      • 2.  Form: Verdict  9.100
      • 3.  Special Verdict to Ascertain Specific Amounts on Different Claims  9.101
      • 4.  Basis of Award  9.102
    • O.  Juror Misconduct  9.103
    • P.  Expedited Jury Trial  9.104
    • Q.  Alternative Dispute Resolution
      • 1.  Statutory Processes  9.105
      • 2.  Utility of Arbitration  9.106
      • 3.  Scope of Judicial Review  9.107
    • R.  Practicing Before Public Utilities Commission
      • 1.  Function as Court of Eminent Domain  9.108
      • 2.  Disposition of Operating Utility Property  9.109

10

Apportionment, Judgment, and Posttrial

Norman E. Matteoni

  • I.  APPORTIONMENT OF AWARD AND TAXES
    • A.  Introduction  10.1
    • B.  Apportionment Procedure  10.2
    • C.  Leaseholds
      • 1.  Value of Lessee’s Right to Possession and Use  10.3
      • 2.  Fixtures  10.4
      • 3.  Machinery and Equipment Used in Place  10.5
      • 4.  Value of Lessor’s Ownership Interest  10.6
      • 5.  Condemnation Provisions in Leases
        • a.  Use  10.7
        • b.  Considerations for Drafting  10.8
        • c.  Form: Condemnation Award Clause Favorable to Lessor  10.9
        • d.  Form: Condemnation Award Clause Favorable to Lessee  10.10
    • D.  Easements  10.11
    • E.  Contractors, Managers, and Suppliers  10.12
    • F.  Grantor-Grantee
      • 1.  Title Transfer During Pendency of Condemnation  10.13
      • 2.  Option to Purchase  10.14
      • 3.  Reversionary Interests  10.15
    • G.  Encumbrances; Liens  10.16
    • H.  Property Taxes
      • 1.  Generally  10.17
      • 2.  Purchase of “Comparable Property” to Replace Condemned Property (Rev & T C §68)  10.17A
      • 3.  Form: Application for Refund of Tax  10.18
  • II.  JUDGMENT AND POSTTRIAL
    • A.  Statement of Decision  10.19
    • B.  Judgment  10.20
      • 1.  Form: Judgment  10.21
      • 2.  Possession After Judgment  10.22
      • 3.  Postjudgment Procedure for Increase of Deposit for Ongoing Prejudgment Possession  10.23
      • 4.  Finality of Judgment  10.24
      • 5.  Time of Payment  10.25
      • 6.  Installment Payments  10.26
    • C.  Final Order of Condemnation
      • 1.  Contents and Effect  10.27
      • 2.  Form: Final Order of Condemnation  10.28
      • 3.  Assessment of Costs and Litigation Expenses  10.29
      • 4.  Award of Litigation Expenses  10.30
        • a.  Entitlement  10.30A
        • b.  Guidelines  10.30B
        • c.  Substantial Evidence  10.30C
        • d.  Settlement  10.30D
        • e.  Property Owner’s Expenses  10.30E
        • f.  Making and Attacking Claim  10.30F
        • g.  Discovery  10.30G
        • h.  Evidentiary Hearing  10.30H
        • i.  Award of Attorney Fees  10.30I
    • D.  Interest on Award  10.31
      • 1.  When Interest Begins to Accrue  10.32
      • 2.  When Interest Ceases to Accrue  10.33
      • 3.  Withdrawal of Deposit  10.34
      • 4.  Offset of Interest  10.35
    • E.  Appeal and New Trial
      • 1.  Application of General Civil Rules  10.36
      • 2.  Basis of Appeal or New Trial  10.37
      • 3.  Appeal of Judgment and Orders  10.38
      • 4.  Costs on Appeal  10.39

11

Federal Condemnation Practice

Norman E. Matteoni

  • I.  INTRODUCTION  11.1
  • II.  SPECIAL FEATURES OF FEDERAL SUBSTANTIVE LAW  11.2
  • III.  FEDERAL POLICY ON REAL PROPERTY ACQUISITION  11.3
  • IV.  RELOCATION ASSISTANCE; MOVING COSTS  11.4
  • V.  BASIC PROCEDURAL PROVISIONS; JURISDICTION AND VENUE  11.5
  • VI.  PUBLIC USE AND NECESSITY  11.6
    • A.  Environmental Protection  11.6A
    • B.  Delegation of Eminent Domain Power to Nonfederal Agencies  11.6B
  • VII.  PLEADING
    • A.  Institution of Action; Notice of Filing Complaint  11.7
    • B.  Joinder and Separation  11.8
    • C.  Answer  11.9
    • D.  Form: Notice of Appearance  11.10
    • E.  Amendment of Pleadings  11.11
  • VIII.  POSSESSION AND TITLE  11.12
    • A.  Declaration of Taking  11.13
    • B.  Deposit  11.14
  • IX.  DISCOVERY  11.15
    • A.  Master Scheduling Order  11.15A
    • B.  Expert’s Report  11.15B
  • X.  VALUATION
    • A.  Just Compensation: Fair Market Value  11.16
    • B.  Determination of Value  11.17
    • C.  Enhancement and Blight  11.18
    • D.  Other Direct Losses  11.19
    • E.  Severance Damages and Special Benefits  11.20
    • F.  Goodwill  11.21
    • G.  Special Purpose Property  11.21A
  • XI.  ABANDONMENT AND DISMISSAL  11.22
  • XII.  TRIAL  11.23
  • XIII.  COSTS AND FEES  11.24
  • XIV.  INTEREST  11.25
  • XV.  LOCAL PRETRIAL RULES  11.25A
    • A.  Northern District  11.26
    • B.  Eastern District  11.27
    • C.  Central District  11.28
    • D.  Southern District  11.29
  • XVI.  SOVEREIGN IMMUNITY  11.30
  • XVII.  TUCKER ACT  11.31
  • XVIII.  TAKING UNDER STATE’S POWER OF EMINENT DOMAIN  11.32

12

Income Tax Consequences of Condemnation Awards

Henry Veit

  • I.  INTRODUCTION
    • A.  Importance of Early Study of Tax Consequences  12.1
    • B.  Taking Is a Sale  12.2
  • II.  CONDEMNATION GAIN RECOGNIZED; NO REPLACEMENT PROPERTY ACQUIRED
    • A.  Normal Rules  12.3
    • B.  IRC §1231 Rules  12.4
  • III.  CONDEMNATION GAIN DEFERRED; QUALIFIED REPLACEMENT PROPERTY ACQUIRED
    • A.  Tax-Free Replacement Under IRC §1033
      • 1.  Basic Operation  12.5
      • 2.  Depreciation Recapture  12.6
      • 3.  Replacement Property Costing Less Than Condemnation Award  12.7
      • 4.  Replacement Property Costing More Than Condemnation Award  12.8
      • 5.  No Requirement for Tracing Proceeds  12.9
      • 6.  Holding Period of Replacement Property  12.10
      • 7.  Acquisition of More Than One Replacement Parcel  12.11
      • 8.  Involuntary Exchange of Property for Property  12.12
    • B.  Involuntary Conversions Qualifying for Tax-Free Replacement Treatment
      • 1.  Introduction  12.13
      • 2.  Sale Under Threat or Imminence of Condemnation  12.14
      • 3.  Irrigation and Reclamation Districts  12.15
    • C.  Qualified Replacement Property  12.16
      • 1.  “Like-Kind” Test  12.17
      • 2.  “Similar or Related in Service or Use” Test; Functional Use  12.18
      • 3.  Investment in Improvements to Other Property  12.19
      • 4.  Acquisition From Related Person  12.20
    • D.  Special Problems of Tax-Free Replacement
      • 1.  Tenant’s Interest in Lease  12.21
      • 2.  Short-Term Condemnation  12.22
      • 3.  Effect of Mortgage and Other Liens Against Condemned Property  12.23
      • 4.  Single Economic Unit Rule  12.24
      • 5.  Depreciation on Replacement Property  12.25
      • 6.  Successor to Owner of Condemned Property  12.26
      • 7.  Replacement by Investment in Corporate, Partnership, or Commonly Owned Property  12.27
    • E.  Replacement Period  12.28
    • F.  Elections on Tax Return  12.29
    • G.  Statute of Limitations on Deficiency Assessments  12.30
  • IV.  CONDEMNATION OF HOME  12.31
  • V.  EASEMENTS  12.32
  • VI.  SEVERANCE DAMAGES  12.33
    • A.  Importance of Specific Allocation  12.34
    • B.  Tax Treatment  12.35
    • C.  Allowable Deductions and Offsets  12.36
  • VII.  INVERSE CONDEMNATION  12.37
    • A.  Casualty Loss Deduction Not Taken  12.38
    • B.  Casualty Loss Deduction Taken  12.39
    • C.  Tax-Free Replacement  12.40
    • D.  Lost Profits  12.41
  • VIII.  RELOCATION ASSISTANCE PAYMENTS  12.42
  • IX.  CALIFORNIA PROPERTY TAX EXEMPTION AND DOCUMENTARY TRANSFER TAX EXEMPTION  12.43

13

General Background on Inverse Condemnation

Norman E. Matteoni

  • I.  INTRODUCTION
    • A.  Direct Condemnation Contrasted With Inverse Condemnation  13.1
      • 1.  Damage by Public Entity  13.1A
      • 2.  Regulatory Takings  13.1B
    • B.  Failure to Use Direct Condemnation May Result in Inverse Condemnation Action  13.2
  • II.  ELEMENTS OF INVERSE CONDEMNATION ACTION  13.3
    • A.  Ownership  13.3A
    • B.  Public Project  13.3B
    • C.  Taking or Damaging  13.3C
    • D.  Causation  13.3D
  • III.  COMPENSABLE DAMAGES
    • A.  Types of Compensable Damages  13.4
    • B.  Measure of Compensation  13.5
    • C.  Multiple Defendants  13.6
  • IV.  INVERSE CONDEMNATION AND TORT LAW
    • A.  Confusion Between Theories of Recovery  13.7
      • 1.  Proximate Cause  13.7A
      • 2.  Acceptance of Work Performed by Private Party for Public Purpose  13.7B
      • 3.  Negligent Maintenance  13.7C
      • 4.  Property Damage During Police Action  13.7D
    • B.  Choice of Action  13.8
      • 1.  Pleading Tort Theories  13.8A
      • 2.  Pleading Inverse Condemnation  13.8B
      • 3.  Pleading in the Alternative  13.8C
      • 4.  Joining Causes of Action  13.8D
      • 5.  Remedies  13.8E
    • C.  Combining Inverse With Direct Condemnation Action  13.9

14

Causes of Action for Physical Taking or Damage

Norman E. Matteoni

  • I.  INTRODUCTION  14.1
  • II.  LAND STABILITY  14.2
  • III.  WATER DAMAGE  14.3
    • A.  Surface Water  14.4
    • B.  Stream Water; Alteration by Public Project  14.5
    • C.  Flood Damage  14.6
    • D.  Rights in Water  14.7
    • E.  Regulation of Waters  14.8
    • F.  Sovereign Rights in Navigable Waters  14.9
  • IV.  OVERFLYING AIRCRAFT  14.10
  • V.  INTERFERENCE WITH OR LOSS OF ACCESS  14.11
  • VI.  LOSS OF USE DURING CONSTRUCTION  14.12
  • VII.  NOISE, DUST, FUMES, AND VIBRATIONS  14.13
  • VIII.  FIRE, WIND, AND OTHER DAMAGE  14.13A
  • IX.  HEALTH HAZARDS FROM PROJECT  14.14
  • X.  IMPACT OF IMPENDING PROJECT—UNREASONABLE PRECONDEMNATION ACTIVITY  14.15
  • XI.  GOOD FAITH MITIGATION DAMAGES  14.16

15

Causes of Action for Regulatory Taking

Norman E. Matteoni

  • I.  INTRODUCTION
    • A.  Unreasonable Exercise of Police Power  15.1
    • B.  Jurisdiction: State or Federal  15.1A
    • C.  Types of Challenges to Land Use Regulation  15.2
      • 1.  Facial and Applied Challenges  15.3
      • 2.  Distinguishing Takings and Substantive Due Process  15.4
    • D.  Key United States Supreme Court Cases  15.5
  • II.  TAKING BY LAND USE ENACTMENT
    • A.  Introduction  15.6
    • B.  Regulatory Taking Generally  15.7
    • C.  Agins Decision and Its Impact  15.8
    • D.  First English Decision  15.9
    • E.  Loss of Substantially All Economically Viable Use  15.10
    • F.  Reasonable Expectations  15.11
    • G.  Lucas Decision  15.12
    • H.  Lingle Decision  15.13
  • III.  DOWNZONING AND OPEN SPACE ZONING  15.14
  • IV.  PROTECTIVE ZONING IN HAZARDOUS AREAS  15.15
  • V.  AESTHETIC ZONING  15.16
  • VI.  PLANNING  15.17
  • VII.  CONTROLLED GROWTH  15.18
  • VIII.  RENT CONTROL AND AFFORDABLE HOUSING  15.19
  • IX.  REGULATIONS FOR PROTECTION OF NATURAL RESOURCES  15.20
  • X.  TEMPORARY REGULATIONS  15.21
  • XI.  EMERGENCY REGULATIONS  15.22
  • XII.  ABATEMENT OF NUISANCE  15.23
  • XIII.  DEVELOPMENT DEDICATIONS, CONDITIONS, AND FEES  15.24
    • A.  Determination of Amount of Fees  15.25
    • B.  Nollan Decision  15.26
    • C.  Dolan Decision  15.27
    • D.  Earlier California Case Law  15.28
  • XIV.  BUSINESS REGULATIONS  15.29
  • XV.  CONTROL OF HAZARDOUS WASTE  15.30

16

Defenses to Inverse Condemnation Actions

Norman E. Matteoni

  • I.  DEFENSES GENERALLY APPLICABLE TO BOTH PHYSICAL AND REGULATORY TAKINGS
    • A.  Introduction  16.1
    • B.  Police Power  16.2
    • C.  Eleventh Amendment  16.3
    • D.  Statute of Limitations  16.4
  • II.  DEFENSES PRIMARILY APPLICABLE TO PHYSICAL TAKINGS
    • A.  Estoppel by Judgment or Deed  16.5
    • B.  Dedication and Adverse Possession  16.6
    • C.  Public Use as Defense to Injunctive Relief  16.7
    • D.  Equitable Indemnity  16.8
    • E.  Collateral Source Rule  16.9
  • III.  DEFENSES PRIMARILY APPLICABLE TO REGULATORY TAKINGS
    • A.  Exhaustion of Administrative Remedies and Claims  16.10
    • B.  Waiver  16.10A
    • C.  Ripeness
      • 1.  Final Determination  16.11
      • 2.  Availability of State Court Remedy  16.12
    • D.  Availability of Less Drastic Remedy: Invalidation Versus Taking  16.13
    • E.  Legislative Immunity for Permit Activities  16.14
    • F.  Federal Abstention  16.15
  • IV.  ANSWERS TO POLICE POWER DEFENSE IN REGULATORY TAKINGS CASES
    • A.  Zoning in Bad Faith  16.16
    • B.  Vested Rights  16.17

17

Trial and Posttrial Considerations

Norman E. Matteoni

  • I.  INITIATING ACTION
    • A.  Initial Interview and Preparation  17.1
    • B.  Claim Is Not Prerequisite to Litigation  17.2
    • C.  Period During Which Suit Must Be Instituted  17.3
    • D.  Accrual of Cause of Action  17.4
    • E.  Date of Valuation  17.5
  • II.  FORM: COMPLAINT FOR PHYSICAL TAKING OR DAMAGE  17.6
  • III.  BASIC ALLEGATIONS AND CHECKLISTS: COMPLAINT FOR REGULATORY TAKING  17.7
  • IV.  TWO-PHASE TRIAL  17.8
  • V.  BURDEN OF PROOF  17.9
  • VI.  TRIAL CONSIDERATIONS  17.10
    • A.  Physical Taking Trial  17.11
    • B.  Regulatory Taking Trial  17.12
  • VII.  JUDGMENT  17.13
  • VIII.  COSTS, FEES, AND INTEREST
    • A.  Recovery of Costs and Expenses  17.14
    • B.  Attorney Fees  17.15
    • C.  Interest  17.16
    • D.  Attorney Fees on Appeal  17.17
  • IX.  JURY INSTRUCTIONS FOR INVERSE CONDEMNATION ACTIONS  17.18

 

CONDEMNATION PRACTICE IN CALIFORNIA

(3d Edition)

October 2016

TABLE OF CONTENTS

 

  

File Name

Book Section

Title

CH01

Chapter 1

Attorney’s Initial Contact With Condemnation Action

01-018

§1.18

Letter Agreement

01-019

§1.19

Attorney-Client Agreement for Inverse Condemnation

CH03

Chapter 3

Selection of Valuation Experts

03-009

§3.9

Appraisal Agreement

CH04

Chapter 4

Just Compensation

04-039

§4.39

Information Worksheet

04-052

§4.52

Capitalization Summary Worksheet

04-067

§4.67

Notice of Right to Claim Loss of Goodwill

CH05

Chapter 5

Severance Damages

05-013

§5.13

Attorney’s Worksheet: Computation of Diminution of Remainder’s Value

CH06

Chapter 6

Public Use and Necessity Defenses

06-026

§6.26

Sample Form: Notice of Adopting Resolution of Necessity

06-027

§6.27

Sample Form: Resolution of Necessity to Condemn Real Property

06-040

§6.40

Checklist: Public Use and Necessity Defenses

CH07

Chapter 7

Negotiation and Relocation Assistance

07-016

§7.16

Form: Settlement Agreement

CH08

Chapter 8

Pleadings

08-021

§8.21

Complaint

08-026

§8.26

Lis Pendens

08-029

§8.29

Notice of Deposit

08-030

§8.30

Summary Appraisal Statement

08-033

§8.33

Notice of Motion and Motion for Order of Possession

08-034

§8.34

Memorandum in Support of Order for Possession

08-035

§8.35

Declaration in Support of an Order for Possession

08-036

§8.36

Order for Possession

08-043

§8.43

Application for Withdrawal of Deposit of Probable Compensation

08-044

§8.44

Objection to Withdrawal of Deposit of Probable Compensation

08-045

§8.45

Report of Service of Objections to Withdrawal

08-046

§8.46

Order for Withdrawal of Deposit

08-049

§8.49

Disclaimer

08-054

§8.54

Answer

08-061

§8.61

Notice of Motion for Order of Consolidation

CH09

Chapter 9

Trial Preparation and Trial

09-032

§9.32

Demand or Cross-Demand for Exchange of Information

09-033

§9.33

Responsive List of Expert Witnesses

09-034

§9.34

Statement of Valuation Data

09-037

§9.37

Checklist: Pretrial in Los Angeles County

09-066

§9.66

Checklist: Topics of Examination

09-067

§9.67

Checklist: Qualifications of Appraisal Witness

09-068

§9.68

Checklist: Investigation by Appraiser

09-069

§9.69

Checklist: Description of Property

09-070

§9.70

Checklist: Date of Evaluation

09-073

§9.73

Checklist: Examination for Opinion Matters

09-100

§9.100

Verdict

CH10

Chapter 10

Apportionment, Judgment, and Posttrial

10-009

§10.9

Condemnation Award Clause Favorable to Lessor

10-010

§10.10

Condemnation Award Clause Favorable to Lessee

10-018

§10.18

Application for Refund of Tax

10-021

§10.21

Judgment

10-028

§10.28

Final Order of Condemnation

CH11

Chapter 11

Federal Condemnation Practice

11-010

§11.10

Notice of Appearance

CH17

Chapter 17

Trial and Posttrial Considerations

17-006

§17.6

Form: Complaint for Physical Taking or Damage

17-007

§17.7

Basic Allegations and Checklists: Complaint for Regulatory Taking

17-018

§17.18

Jury Instructions for Inverse Condemnation Actions

 

Selected Developments

September 2018 Update

This update addresses the most significant cases and statutory changes since the previous update was published. Among the most significant recent developments are the following:

The California Supreme Court approved comprehensive revisions, including renumbering, of the California Rules of Professional Conduct, which will take effect November 1, 2018. The cites to those Rules have been updated to refer to both the existing and the new numbering. See §§1.2, 1.16D, 1.18, 1.24–1.27, 9.64,

In Glaviano v Sacramento City Unified Sch. Dist. (2018) 22 CA5th 744, a noncondemnation case interpreting Educ C §44944 (providing recovery for “reasonable attorney’s fees incurred”), the court ruled that in the absence of the modifier “actually” the trial court is not limited to fees actually charged; instead, it should use the lodestar method to calculate the fee award (reasonable hours spent multiplied by reasonable hourly rate). See §1.18.

In Scher v Burke (2017) 3 C5th 136, the California Supreme Court refused to limit CC §1009(b)’s restriction on implied dedication to coastal lands when a private party sought use of a roadway for nonrecreational vehicle access through a neighbor’s inland property. Moreover, the court ruled that the statute bars all public use, not just recreational use, from ripening into implied public dedication. See §§2.10, 4.84.

In Dryden Oaks, LLC v San Diego Reg’l Airport Auth. (2017) 16 CA5th 383, a lawsuit against a county regional airport authority regarding adoption of an airport land use plan restricting use of certain land, but not naming the city that held the final decision authority over any development of the land, was properly dismissed on a summary judgment motion. The court found that the airport authority simply adopted compatibility plans for lands adjacent to the airport, and the city retained the power to allow development of affected properties. See §§4.8, 13.3D, 15.17, 16.11, 17.8.

Effective May 2017, CACI 3511B provides a jury instruction on temporary severance damages. The instruction calls for a specification of reasons alleged for the damage due to the condemnor’s construction activities, and it provides as an example “reduced business because construction made access to owner’s business more difficult.” See §5.26.

In Medical Acquisition Co. v Superior Court (2018) 19 CA5th 313, the court ruled that an undertaking may be required when a deposit, pending appeal, is increased postjudgment based on the verdict, because the condemnor has an interest in the deposit. See §§8.41, 10.23.

In Weiss v People ex rel Dep’t of Transp. (review granted June 13, 2018, S248141; superseded opinion at 20 CA5th 1156) the court ruled that a CCP §1260.040 motion does not authorize a pretrial determination of liability; such a determination is beyond the scope of the statute, which is limited to resolving issues arising out of exchange of valuation data. See §§9.49, §17.8.

Chapter 12 (Income Tax Consequences of Condemnation Awards) has been updated to reflect the Tax Cuts and Jobs Act (Pub L 115–97), enacted in 2017, and it includes other updating revisions.

In Sierra Palms Homeowners Ass’n v Metro Gold Line Foothill Extension Constr. Auth. (2018) 19 CA5th 1127, the court ruled that CC §5980 provides homeowner associations the standing to sue for property damage to common areas or to a qualifying separate interest that the association is required to maintain; the association has standing in a representative capacity to the owners. See §§13.3A, .

The inverse condemnation case of Mercury Cas. Co. v City of Pasadena (2017) 14 CA5th 917 involved a large tree, planted in a city-owned parkway along a street and adjacent to a private residence, that fell across the house in a severe wind storm. The city was not liable, because there was no evidence showing the tree was planted as part of a public improvement “deliberately designed and constructed” to serve a public purpose. There was no evidence as to who planted the tree, or why, although it was on public property and the city provided periodic inspection and maintenance. See §§13.3B, 14.13A.

In Citizens for Odor Nuisance Abatement v City of San Diego (2017) 8 CA5th 350, the city was not liable on a claim of public nuisance for noxious odors from sea lion waste, because the evidence presented showed the construction of a fence surrounding a cove had not caused the sea lions to congregate in the area and the city did not neglect to take action, although the method selected had not remedied the problem. See §§13.3C–13.3D, 13.7C.

In another nuisance and inverse action, Williams v Moulton Niguel Water Dist. (2018) 22 CA5th 1198, the court ruled that the introduction of a disinfectant chemical into the water supply, alleged to create pinholes in copper pipes of residential customers, was an action immune from liability under CC §3482 because it was authorized by statute. See §§13.3C, 13.7C–13.7D.

In Surfrider Found. v Martins Beach 1, LLC (2017) 14 CA5th 238, the court observed that an injunction, issued to maintain public access pending a final decision by the California Coastal Commission, intrudes on the owner’s rights to exclude others, but held the injunction was not a per se taking, because of its temporary nature. See §§13.3C, 15.20–15.21. NOTE: The California Supreme Court denied review in Surfrider (S244410, Oct. 25, 2017), but a petition for certiorari was filed with the U.S. Supreme Court on Feb. 22, 2018.

Proposed legislation (AB 33 (Quirk, 2018)) would provide for recovery bonds to finance costs, in excess of insurance proceeds, incurred (or expected to be incurred) by Pacific Gas & Electric Company (PG&E), excluding fines and penalties, arising from the wildfires that occurred in northern California in 2017. The recovery bonds would compensate northern California wildfire victims of 2017 and allocate costs for strict liability inverse condemnation and other wildfire-related claims and costs, so as to maintain the financial health of PG&E. For more details, see §14.13A.

In a takings challenge to a state land use commission’s reversion order effectively downzoning the plaintiff’s 1060-acre property from urban use to agricultural use, the Hawaii District Court upheld the jury’s finding of a temporary regulatory taking under both Penn Central and Lucas analyses, and denied the state’s request for a new trial. See Bridge Aina Le'a, LLC v Hawaii Land Use Comm’n (D HI, June 27, 2018, No. CV 11-00414 SOM-KJM) 2018 US Dist Lexis 107583, 2018 WL 3149489, discussed in §15.14.

In the most recent ruling in the ongoing Colony Cove Properties litigation, the Ninth Circuit denied relief after applying the Penn Central factors of economic impact (no evidence was presented on postdeprivation value), distinct investment-backed expectations (the facts did not support an expectation of consideration of debt service), and the character of the government action (this was not a physical invasion but a public program to adjust benefits and burdens of economic life to promote the common good). See Colony Cove Props., LLC v City of Carson (2018) 888 F3d 445, discussed in §15.19.

In Coyne v City & County of San Francisco (2017) 9 CA5th 1215 , the court ruled that San Francisco’s ordinance imposing a prohibitive price for relocation assistance on landlords exiting the residential rental market was preempted by the Ellis Act. See §15.19.

In Sierra Medical Servs. Alliance v Kent (9th Cir 2018) 883 F3d 1216, 1225, the Ninth Circuit noted that a state health care mandate to ambulance companies to provide services regardless of the patient’s ability to pay, when the reimbursement was 20 percent of the cost, combined with the companies’ property interest in their equipment, presented a “constitutionally protected property right upon which California law intrudes.” However, the court denied relief because the plaintiffs failed to produce sufficient evidence in support of their constitutional claims. See §15.29.

In case you missed last year’s update, here are the most significant developments addressed in the 2017 update:

In the long-awaited decision in City of Perris v Stamper (2016) 1 C5th 576, the California Supreme Court applied the project effect rule to determine the applicability of a dedication requirement to the valuation of property condemned. The supreme court also held in Stamper that the constitutionality of a dedication requirement under Nollan and Dolan is for the court to decide. See discussion in §§4.5, 4.12, 4.83, 5.16.

For a case on the valuation of underground natural gas storage, and distinguishing the decision in PG&E v Zuckerman (1987) 189 CA3d 1113 on that topic, see Central Valley Gas Storage LLC v Southam (2017) 11 CA5th 686, discussed in §4.87.

A new section has been added with detailed discussion of how to define the “public project” for purposes of determining severance damages. See §5.3A.

In City of San Jose v Superior Court (2017) 2 C5th 608, the California Supreme Court addressed the extent of the reach of a public records request to include disclosure of e-mails in the personal accounts of public employees and officials conducting public business. See §9.29B.

For new discussion and practice tips on how to conduct cross-examination to draw out details of the project from the project construction plans that affect the property, especially in the case of design build projects, see §9.60.

For new discussion of the use of Google Earth® aerial (overhead and oblique) images, drone videos, PowerPoint® presentations, and similar tools in condemnation litigation, see §§9.94–9.95.

In its much-anticipated decision in Murr v Wisconsin (2017) ___ US ___, 137 S Ct 1933, the U.S. Supreme Court ruled that a local regulation that effectively merged an undeveloped lot with an adjacent developed lot in the same ownership was not a taking, after analyzing three factors: (1) how title is treated under state and local law, (2) the physical characteristics of the undeveloped parcel, and (3) the economic impact on the combined lots. See §§15.5, 15.10, 15.20.

Landlord-tenant lawyers may recall that in Levin v City & County of San Francisco (ND Cal 2014) 71 F Supp 3d 1072, a federal district court held unconstitutional an ordinance requiring landlords who sought to withdraw their rent-controlled property from the rental market to pay an extraordinary lump-sum payout to regain possession. (The formula for the payout was the monthly rental rate at the time of the notice of withdrawal, multiplied by 24.) After the city amended its ordinance in light of that decision, the Ninth Circuit dismissed the city’s appeal as moot, in Levin v City & County of San Francisco (9th Cir 2017) 680 Fed Appx 610. See §15.19.

In Lynch v California Coastal Comm’n (2017) 3 C5th 470, the supreme court reinforced the rule that acceptance of the benefits of a permit bars the owner from challenging the conditions of that permit. In Lynch, the property owners accepted a Coastal Commission permit to restore a seawall that protected their residential properties, but in order to proceed, they had to accept conditions that the permit will expire in 20 years and that the owners had to record a deed restriction stating that the condition restricted the properties. See §16.10A.

About the Third Edition Authors

NORMAN E. MATTEONI, author of chapters 1–11 and 13–17, is a partner with Matteoni, O’Laughlin & Hechtman, and practices in San Jose. Mr. Matteoni earned his A.B. degree in 1960 and his J.D. degree in 1963 from the University of Notre Dame. He was an attorney in the office of the Santa Clara County Counsel, where he tried condemnation cases for various condemning agencies and served as an attorney to the planning commission and board of supervisors on zoning and planning matters. After entering private practice in 1974, he has represented primarily property owners in condemnation cases, but also represents public agencies from time to time. He has written extensively on condemnation law and was a consultant to the California Law Revision Commission on Eminent Domain. He has served on the former State Bar Committee on Condemnation, and was its chairperson for 2 years. He also lectures on condemnation topics at Santa Clara University School of Law and various continuing education programs.

HENRY VEIT, author of chapter 12, is a shareholder and officer of Lerner & Veit, a Professional Corporation, and practices in San Francisco. He received his B.S. degree in Economics from the Wharton School of Finance and Commerce in 1957, and his J.D. degree from the University of Wisconsin Law School in 1961. He is a member of the State Bar of both California and Wisconsin, and is also a member of the Wisconsin Foundation. From 1961 until 1966, he was employed by the Internal Revenue Service. He has been in the private practice of law since 1967, specializing in tax and related matters, and has served on the planning committee for CEB’s Institutes for Advanced Tax Planning for Real Property Transactions.

RICHARD G. OPPER, author of former Appendix A (on the use of the Polanco Redevelopment Act in eminent domain actions), is a principal of Opper & Varco LLP in San Diego. He attended the University of California, Los Angeles, School of Law, where he received his J.D. degree in 1976, and the Kennedy School, Harvard, where he received an M.P.A. degree in 1987. He gratefully acknowledges the substantial assistance of his associate, Ryan D. Moroney (Lewis and Clark School of Law, J.D. 2001), and his partner, Linda C. Beresford (University of California, Berkeley, School of Law, J.D. 1998), in researching and writing former Appendix A. Mr. Opper maintains a website at http://www.Envirolawyer.com.

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