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self-study / Constitutional Law

Eminent domain process: Precondemnation to prejudgment possession

Palma neli web

Neli N. Palma

Deputy Attorney General, Office of the Attorney General

1300 I St 12th Fl
Sacramento , CA 95814

Phone: (916) 445-2482

Fax: (916) 324-5397

Email: Neli.Palma@doj.ca.gov

The views expressed here are solely those of the author in her private capacity and do not in any way represent the views of the Department of Justice.

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Eminent domain differs from other civil litigation in that it is constitutionally based. Case law and the Eminent Domain Code (the procedural rules for condemning private property) reflect the constitutional mandate of payment of just compensation for property taken. "The ultimate goal in any eminent domain proceeding is of course to determine constitutionally required 'just compensation.'" Redevelopment Agency v. First Christian Church, 140 Cal. App. 3d 690 (1983). However, the "only constitutional limitations on the right of eminent domain are that the taking be for a public use, and that just compensation be paid." Mt. San Jacinto Community College Dist. v. Superior Court, 40 Cal. 4th 648 (2007).

The court in Sacramento S. R.R. Co. v. Heilbron, 156 Cal. 408 (1909), established the fundamental California rule for measuring the value of property taken by eminent domain. This measure is defined as the highest price estimated that the property would bring if it were exposed for sale in the open market for a reasonable period of time, and if the buyer had knowledge of all uses and purposes to which it is adaptable. The definition is codified in Code of Civil Procedure Section 1263.320, subdivision (a). The basic elements of compensation are the fair market value of the take and, in the event of a partial take, severance damages and benefits that are a result of the project.

Article I, Section 19 of the California Constitution is the just compensation clause, and it provides, "Private property may be taken or damaged for a public use and only when just compensation, ascertained by a jury unless waived, has first been paid to, or into court for, the owner. The Legislature may provide for possession by the condemnor following commencement of eminent domain proceedings upon deposit in court and prompt release to the owner of money determined by the court to be the probable amount of just compensation."

Precondemnation

The process begins with a petition for order of entry. This is authorized by Code of Civil Procedure Section 1245.010, which provides, "any person authorized to acquire property for a particular use by eminent domain may enter upon property to make photographs, studies, surveys, examinations, tests, soundings, borings, samplings, or appraisals or to engage in similar activities reasonably related to acquisition or use of the property for that use."

In Property Reserve, Inc. v. Superior Court, 1 Cal. 5th 151 (2016), the California Supreme Court held that it did not need to determine whether the state's feasibility activities constituted a taking or damaging of property because, even assuming that they did, the procedure established by the entry statutes would satisfy the requirements of Article I, Section 19 subdivision (a) of the California Constitution if the entry petition procedure was reformed to comply with the jury trial requirement imposed by that clause. The Supreme Court in Property Reserve then judicially "reformed" the entry statutes "to afford the property owner the option of obtaining a jury trial on damages" in an action or proceeding to determine if the entry and activities on the property caused actual damage to or substantial interference with the possession or use of the property. See Code of Civ. Proc., Section 1245.060(c). On remand, the Court of Appeal addressed additional issues raised by the landowners on appeal, including the availability of discovery in a precondemnation proceeding (proceedings not exempt from discovery) and the right of lessees or easement holders to participate in such a proceeding (issue found moot). Property Reserve, Inc. v. Superior Court, 6 Cal. App. 5th 1007 (2016).

Entries generally relate to feasibility studies, appraisal purposes, and environmental review. The general rule is that a public entity must comply with the California Environmental Quality Act (Pub. Resources Code, Sections 21000 et seq.) before acquiring property by eminent domain. Burbank-Glendale-Pasadena Airport Authority v. Hensler, 233 Cal. App. 3d 577 (1991). Failure to comply will result in dismissal of the eminent domain action regardless of whether the CEQA challenge is presented as a right to take objection in the eminent domain action or in a cross-complaint. City of Stockton v. Marina Towers LLC, 171 Cal. App. 4th 93 (2009). In Golden Gate Land Holdings LLC v. East Bay Regional Park Dist., 215 Cal. App. 4th 353 (2013), the Court of Appeal provided some authority for public entities to begin an eminent domain proceeding prior to CEQA completion under limited circumstances.

Government Code Section 7267.1, subdivision (b) requires property being considered for acquisition to be appraised and the owner given a chance to accompany the appraiser during the site visit. Government Code Section 7267.2 requires the agency make an offer for the full amount of the property's appraised value.

The agency must give a notice of hearing to "each person whose property is to be acquired by eminent domain and whose name and address appears on the last equalized county assessment roll." Code Civ. Proc., Section 1245.235(a). The recipient of the notice must file a written request to be heard within 15 days after the notice was mailed. Code Civ. Proc., Section 1245.235(b)(3).

Resolution of Necessity

"A public entity may exercise the power of eminent domain only if it has adopted a resolution of necessity" that, among other requirements, includes findings that: (a) The public interest and necessity require the project. (b) The project is planned or located in the manner that will be most compatible with the greatest public good and the least private injury. (c) The property sought to be acquired is necessary for the project. Code Civ. Proc., Sections 1240.030, 1240.040, 1245.220, 1245.230.

Code of Civil Procedure Section 1245.230 sets forth the required contents of the resolution of necessity, including, among others, a general statement of the public use for which the property is to be taken and the statute authorizing the public entity to acquire property by eminent domain. In City of Stockton v. Marina Towers LLC, the landowner challenged the facial validity of the resolution of necessity due to its vague and uncertain project description. The right to take challenge was upheld.

"Except as otherwise provided by statute, a resolution of necessity adopted by the governing body of the public entity pursuant to this article conclusively establishes the matters referred to in Section 1240.030." Code Civ. Proc., Section 1245.250(a). "A gross abuse of discretion may be shown by a lack of substantial evidence supporting the resolution of necessity. It may also be shown where at the time of the agency hearing, the condemnor had irrevocably committed itself to the taking of the property regardless of the evidence presented." Santa Cruz County Redevelopment Agency v. Izant, 37 Cal. App. 4th 141 (1995).

"[T]he statutory requirement that a public entity adopt a Resolution of Necessity before initiating a condemnation action is designed to ensure that public entities will verify and confirm the validity of their intended use of the power of eminent domain prior to the application of that power in any one particular instance." San Bernardino County Flood Control Dist. v. Grabowski, 205 Cal. App. 3d 885 (1988).

"Code of Civil Procedure section 1245.255, subdivision (a) ... permits a 'person having an interest in the property described in a resolution of necessity' to collaterally attack its conclusive effect '[b]efore the commencement of the eminent domain proceeding, by petition for a writ of mandate pursuant to [Code of Civil Procedure] Section 1085 .... [or] .... [a]fter the commencement of the eminent domain proceeding, by objection to the right to take pursuant to this title.'" Huntington Park Redevelopment Agency v. Duncan, 142 Cal. App. 3d 17 (1983).

Eminent Domain Action

A "classic condemnation action" is commenced by the filing of a complaint in eminent domain. Code Civ. Proc., Section 1250.110; see Property Reserve. Section 1250.310 specifies the required content of the complaint. Section 1250.220 requires the agency name all persons who appear of record or are known by plaintiff to have an interest in the property.

Under Code of Civil Procedure Section 1250.230, any person who claims a legal or equitable interest in the property may appear in the proceeding even if not named. That is because condemnation proceedings are actions in rem for all persons claiming an interest in the property described in the complaint. Harrington v. Superior Court, 194 Cal. 185 (1924). Section 1250.320 also specifies the required content of an answer, including the nature and extent of the interest claimed by the party, and whether a loss of business goodwill is being claimed in the action.

Code of Civil Procedure Section 1250.325, subdivision (a) allows a defendant to disclaim any interest in the property to be acquired and in the compensation to be awarded. A disclaimer can be filed by the party at any time and it supersedes any answer previously. The disclaimer ends the disclaiming party's participation in the case.

Prejudgment Possession

In order to obtain an order for prejudgment possession from the court, an agency must deposit the amount of the property's appraised value with the state Treasury. Code Civ. Proc., Section 1255.410(a). Although not otherwise required, such deposit sets the "date of valuation" to be used in the litigation. Code Civ. Proc., Section 1263.110(a).

Under Sections 1255.210 and 1255.260, any defendant may apply to withdraw some or all of the deposit, but by doing so waives all rights to dispute the taking other than the right to challenge the amount of compensation. This waiver provision was upheld in Mt. San Jacinto. In Los Angeles County Metropolitan Transportation Authority v. Alameda Produce Market, LLC, 52 Cal.4th 1100 (2011), the Supreme Court clarified the waiver attaches only to the party receiving the funds.

A noticed motion for prejudgment possession must be filed with the court. Code Civ. Proc., Section 1255.410(a). The length of notice is not "less than 60 days after service of the notice of motion on the record owner" for an "unoccupied" property. Code Civ. Proc., Section 1255.410(b). If the property is "lawfully occupied by a person dwelling thereon or by a farm or business operation," the length of notice "cannot be less than 90 days" following service of the motion. Ibid.

If the motion is not opposed within 30 days of service of the motion, the court shall grant the request if the court finds the agency is entitled to take the property by eminent domain and has deposited the probable compensation. Code Civ. Proc., Section 1255.410(d)(1). If the request is opposed, the following additional findings are required: (1) "There is an overriding need for the plaintiff to possess the property prior to the issuance of the final judgment in the case, and the plaintiff will suffer substantial hardship if the application for possession is denied or limited," and (2) "The hardship that the plaintiff will suffer if possession is denied or limited outweighs any hardship on the defendant or the occupant that would be caused by the granting of the order of possession." Code Civ. Proc., Section 1255.410(d)(2).

In practice, grounds for seeking early possession are often tied to the project's funding and other scheduling issues that may impair the ability of the project to move forward. Are right to take challenges litigated as part of motion? "'While the need for public improvements of all kinds has become increasingly clear, the construction of these improvements has often been delayed for excessive periods of time, largely because of the inability of the condemnor to expedite the taking of possession.'" Mt. San Jacinto.

Prejudgment possession ("quick take") orders are reviewable by writ only. See City of Morgan Hill v. Alberti, 211 Cal. App. 3d 1435 (1989) (dismissing appeal from quick take order and noting that the appellant had already unsuccessfully sought appellate review by way of writ of mandate.).

#446

Ben Armistead


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