MT. SAN JACINTO COMMUNITY
COLLEGE DISTRICT v. SUPERIOR COURT OF
RIVERSIDECOUNTY
Filed 2/22/07
IN THE SUPREME COURT OF CALIFORNIA
COLLEGE DISTRICT, )
)
v. )
RIVERSIDE COUNTY, )
Respondent; ) Super. Ct. No. RIC349900
)
AZUSA PACIFIC UNIVERSITY, )
)
Real Party in Interest. )
__________________________________ )
STORY CONTINUED FROM PART I..
Procedural safeguards under current eminent domain laws ensure the deposit closely approximates the amount that a jury would actually award, and the owner is guaranteed a jury trial on the award amount if requested. (Cal. Const., art. I, 19.) The owners constitutional right to receive just compensation for the property cannot be made to depend upon state statutory provisions. (Gilmore, supra, 38 Cal.3d at p. 797, citing Seaboard, supra, 261 U.S. at p. 306; see also Kirby Forest Industries Inc. v. United States (1984) 467 U.S. 1, 17 (Kirby).) The Legislature does have the power to place additional restrictions on the exercise of eminent domain. (Saratoga Fire Protection Dist. v. Hackett (2002) 97 Cal.App.4th 895, 905-906 (Saratoga); see also Kelo v. City of New London (2005) 544 U.S. 469, 489 [ Once the question of the public purpose has been decided, the amount and character of land to be taken for the project and the need for a particular tract to complete the integrated plan rests in the discretion of the legislative branch ].) The Legislature has incorporated a number of these restrictions into its statutory scheme. (See City of Oakland v. Oakland Raiders (1982) 32 Cal.3d 60, pp. 64-65, 69.) Butstate and federal statutory provisions have been invalidated when necessary to ensure just compensation to the owner. (See, e.g., Kirby, supra, 467 U.S. 1; Gilmore, supra, 38 Cal.3d 790; Saratoga, supra, 97 Cal.App.4th at pp. 905-906.)
The statutory procedural safeguards in place today include a property appraisal requirement. ( 1255.010) A recent statute requires the condemner to offer to pay the reasonable costs (up to $5,000) of an independent appraisal that the property owner orders at the time the condemner offers to take the property. ( 1263.025, subd. (a).) Once the deposit is made, the owner may petition the court to determine or redetermine whether it equals the probable compensation that will be awarded. ( 1255.030, subd. (a).) If the deposit does not meet the amount of probable compensation and is not increased within the time allowed, the deposit is void and will not be used to determine the date of valuation. ( 1263.110, subd. (b).)
B. Universitys Contentions
As discussed ante, at page 2, section 1263.110 would require that the Universitys property be valued on the date of deposit, or December 15, 2000. The University asserts that due to fluctuations in the real estate market, using the deposit date as the valuation date would deny its constitutional right to just compensation. The Universitys point is that if a property owner chooses to challenge the condemners right to take the property, the condemner can set an early valuation date by depositing funds, and then reap the benefit of a large rise in property values when the valuation trial does not occur for several years (while retaining the option to abandon the action if values fall). The University claims the date of valuation should be the date trial on the just compensation issue commenced, even though the District deposited the probable compensation on December 15, 2000. The Universitys contention is based on the fact that the parties agree that the property has increased in value since the date of the deposit.
The University relies on Saratogato assert that the statutory date of valuation must be invalidated in this case. (Saratoga, supra, 97 Cal.App.4th at pp. 905-906.) Saratoga involved a straight condemnation proceeding where the Court of Appeal held that section 1263.120 was unconstitutional as applied. (Saratoga, supra, 97 Cal.App.4th at pp. 905-906.) In Saratoga,trial on the compensation issue began 11 months after the date the proceeding commenced, during which time the fair market value of the property increased from $2 million to $3.2 million. (Id.at pp. 897-898.) Even though section 1263.120 required the property be valued as of the date the proceeding commenced, Saratoga held the principal of just compensation required it be valued on the date of trial. (Ibid.)
As the Court of Appeal here stated, it is of critical importance that Saratoga was a straight condemnation proceeding where there was no deposit of probable compensation before trial. In order to provide just compensation, the court in Saratoga had to value the property closer to when payment would finally be made available to the owner. Section 1263.120 had to be disregarded to ensure the owner received just compensation at the time payment was tendered and the property was actually taken.
In contrast to the condemner in Saratoga, the District here deposited the probable amount of compensation well before the start of trial. As noted, the University had the option to withdraw the funds at that time. ( 1255.210.) The deposit was supported by an appraisal, as required under section 1255.010. Indeed, when the University made a motion under section 1255.030 to increase the amount of the deposit, the trial court found that the amount deposited was sufficient. When recommending the law, the 1960 Commission wanted to ensure that the owner had the right to withdraw compensation when the condemner actually takes possession of the property. (Commission Report, supra, at p. B-12.) The University had this right but did not exercise it.
The Universitys comparisons to Kirby, another straight condemnation proceeding, are similarly misplaced. (Kirby, supra, 467 U.S. at pp. 16-17.) In Kirby,the condemned property was valued at trial in 1979, yet the deposit was not made until 1982. (Id. at p. 16.) The owner retained the rights to sell the land or profit from it during that three-year period. (Id. at pp. 14-15.) The court held that a condemnation award must be modified when there is a substantial delay between the date of valuation and the date the judgment is paid, during which time the value of the land changes materially. (Id. at p. 18.)
No credible reason exists to invalidate the statutory date of valuation here, when a deposit was made before trial and the owner had access to the money at that time.
The fact that the 1974 Commission specifically rejected using the date of trial as the date of valuation in quick-take proceedings is significant. Although it considered the possibility of the issue before us today (see 1974Commission Report, supra, at p. 1645 [in a rapidly rising market, property values may have increased so much that the property owner cannot purchase equivalent property when he eventually receives the award]), the Commission emphasized the public need for certainty when valuing land for condemnation proceedings. A date of valuation based on a variable date of trial would not provide this certainty. In addition, the Commission observed that a rule valuing property on the date trial commenced might provide an undesirable incentive to condemnees to delay the proceedings to obtain the latest possible date of valuation. (Id. at pp. 1645-1646.) We agree with the Commissions observation. If the date of valuation could be delayed until the date of trial, owners in a rising market would have a considerable incentive to delay proceedings for as long as possible to ensure a greater return on their property.[1]
C. The Waiver of Claims and Defenses
Section 1255.260 provides: If any portion of the money deposited pursuant to this chapter is withdrawn, the receipt of any such money shall constitute a waiver by operation of law of all claims and defenses in favor of the persons receiving such payment except a claim for greater compensation. This waiver includes the right to contest the condemners right to take the property. (Clayton v. Superior Court (1998) 67 Cal.App.4th 28, 33.)
The University contends that even though the District made a deposit here, and the University did not withdraw the money, the deposited amount was effectively rendered unavailable because the University could not withdraw it without waiving its right to fully and finally litigate the condemners right to take the property. Thus, the University claims it is left without either the property or the deposit, an unconstitutional choice. The University contends that this aspect of the Legislatures quick-take process violates article I, section 19, and allows the government to take possession of the property while withholding the deposit from the property owner, thus violating the governing principle of eminent domain proceedings: financial equivalency. The University asserts that in order to avoid this Catch-22 situation, we should value the property on the date of trial, not the date of the deposit. We disagree.
The University initially looks to Steinhart for support. Specifically, it relies on the courts observation that in an immediate possession proceeding, the money must be deposited into court for the owner, and that this has not happened until the owner can actually take it. (Steinhart, supra, 137 Cal. at p. 579.)
When Steinhart was decided, the California Constitution stated that [p]rivate property shall not be taken or damaged for public use without just compensation having been first made . . . . (Cal. Const., art. I, former 14, repealed Nov. 5, 1974.) The parties in that case were governed by former article I, section 14, which did not authorize a condemner to take immediate possession before trial or to deposit the likely amount of just compensation. In Steinhart, a statute allowed a condemner to take possession before trial if it had made a deposit, but did not allow the owner to withdraw the funds. (Steinhart, supra, 137 Cal. at p. 576.) The court declared that statute unconstitutional under former article I, section 14, as just compensation had not first [been] made if the owner could not withdraw the deposit. (Steinhart, supra, 137 Cal. at pp. 578-579.)
Steinhart is inapposite. As previously discussed, the 1974 enactment of article I, section 19 of the state Constitution authorizes the Legislature to provide for prejudgment possession by the condemner upon deposit in court and prompt release to the owner of its probable compensation. (Cal. Const. art. I, 19.) In addition, unlike the applicable statute in Steinhart, an owner under the present statutory scheme has the ability towithdraw the deposit soon after it is made. ( 1255.210-1255.240.)
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. (City of Oakland v. Oakland Raiders, supra, 32 Cal.3d at p. 64; People v. Chevalier (1959) 52 Cal.2d 299, 304.) A litigant can be heard to question the validity of a statute only when and in so far as it is applied to his disadvantage. (Rindge Co. v. Los Angeles County (1923) 262 U.S. 700, 709-710.) The University does not claim that the condemnation is not for a public use. In addition, section 1255.260 does not require waiving a claim for greater compensation with withdrawal of the deposit. Thus, the University is not being forced to waive a constitutional right.
As the Court of Appeal recognized, the Universitys argument has been advanced and rejected in several cases. In Pacific Gas & Electric Co. v. Superior Court (1973) 33 Cal.App.3d 321 (PG&E), the condemner made a deposit after trial on the compensation issue. The owner appealed, and the condemner sought an order for possession pending the appeal. (Id. at p. 324.) The owner argued that allowing the condemner to take possession pending the appeal would deprive it of just compensation, since it could not withdraw the deposited funds without waiving its right to a final adjudication on appeal of the condemners right to take the property. (Id. at pp. 324-329.)
The court disagreed. The deposit of funds satisfied the owners right to just compensation at the time of the taking, that is, at the time the condemner had a right to take possession following judgment. (PG&E, supra, 33 Cal.App.3d at p. 327.) The fact that statutory limitations or conditions are imposed upon a property owners ability to withdraw [deposited] funds in relation to his exercise of his solely statutory right to appeal, does not operate so as to constitute a denial of just compensation. (Ibid.) The same reasoning applies here. The condemner had a right to immediate possession of the property, and made a deposit of probable compensation. The owner had the right immediately to withdraw that deposit. The existence of conditions on withdrawal on the owners solely statutory right to further litigate the legality of the taking does not deny the owner just compensation.
PG&E also rejected the related argument that the owner was placed in a position which required it to give up one constitutional right, the right to just compensation, in order to protect another, the right to take a meaningful appeal. (PG&E, supra, 33 Cal.App.3d at p. 328.) The University makes a similar claim here, asserting that in order to receive the constitutionally required prompt release of the deposit, it must give up its statutory right to fully litigate the Districts right to take.
Here, no constitutional right to an appeal exists, only a statutory one. (PG&E, supra, 33 Cal.App.3d at pp. 328-329.) This statutory right to appeal may be made subject to reasonable conditions. (Id. at p. 329; see also Redevelopment Agency v. Goodman (1975) 53 Cal.App.3d 424, 431-432.) In addition, as the Court of Appeal observed in this case, having to leave funds on deposit is a reasonable condition to place on a condemnees statutory right to further litigate the right to take issue, or pursue a final adjudication of the issue on appeal. In enacting section 1255.260, the Legislature could have reasonably concluded that a condemnee who denies the condemners right to take should not be able to withdraw the probable amount of its just compensation. . . . [] Indeed, it would be inconsistent for [the University] to insist on adjudicating the [Districts] right to take its property, while it enjoys the use and benefit of the probable amount of its just compensation. A condemnee who denies the condemners right to take cannot have it both ways. He cannot withdraw the deposit and challenge the right to take. It is reasonable to require him to choose one or the other.
In addition, the statutory scheme does provide for prompt resolution of whether the condemner has the right to take the property in question. The owner may request the issue be heard in a bifurcated proceeding, and the matter is entitled to priority on the civil trial calendar. ( 1260.010, 1260.110.) The owner may seek review of the issue by extraordinary writ. ( 598, 904.1; Plaza Tulare v. Tradewell Stores, Inc. (1989) 207 Cal.App.3d 522, 523-524.) The federal and state Constitutions also require that if the amount of compensation finally determined in the proceeding exceeds the amount of the deposit of probable just compensation, the property owner will be compensated for the delay in payment by prejudgment interest on the balance owed. (U.S. Const., 5th Amend.; Cal. Const., art. I, 19.) The condemner must also pay prejudgment interest on both the balance owed and any portion of the deposit that the property owner chose not to withdraw, running from the date the condemner was authorized to enter into possession of the property. ( 1268.310-1268.360.)
Thus, whatever the owner chooses to do, in view of the procedural due process safeguards in place, the waiver rule of section 1255.260 in no way impairs the owners constitutional right to a prompt release of the deposited funds or imposes an unconstitutional choice on the owner. (Cal. Const., art. I, 19; 1255.210, et seq.; see Perry v. Sindermann (1972) 408 U.S. 593, 597 [right of access to government benefit may not be conditioned on relinquishing Constitutional right.].)
In sum, the Legislature reasonably could have found that it would be inconsistent for an owner to deny the condemners right to take with one hand while it withdraws and uses the condemners deposit with the other. An owner cannot have it both ways. It is reasonable to require the owner to choose one or the other: either to deny the condemners right to take the property and litigate, or to take the deposit.
CONCLUSION
Where, as here, a deposit of probable compensation is made, and the trial court determines that the deposit equals or exceeds the probable amount of the owner's just compensation, the property must be valued on the date of the deposit. ( 1263.110.) The value of the property on the date of the deposit is a fair amount to award the owner for the taking of its property. A greater award would be unjust to the condemner. The just compensation required by the Constitution to be made to the owner is to be measured by the loss caused to him by the appropriation. He is entitled to receive the value of what he has been deprived of, and no more. To award him less would be unjust to him; to award him more would be unjust to the public. (Los Angeles County Metropolitan Transportation Authority v. Continental Development Corp. (1997) 16 Cal.4th 694, 715, quoting Bauman v. Ross (1897) 167 U.S. 548, 574.)
In addition, as long as a probable compensation deposit based on such valuation remains available to the property owner for prompt release, the further imposition of a waiver of the right to challenge the validity of the taking if the owner elects to withdraw the deposit does not undermine the constitutionality of the statutory scheme nor the legislatures chosen method of valuation.
Based on the foregoing analysis, we affirm the Court of Appeals judgment and remand the matter for further proceedings consistent with this conclusion.
CHIN, J.
WE CONCUR:
GEORGE, C.J.
KENNARD, J.
BAXTER, J.
WERDEGAR, J.
MORENO, J.
CORRIGAN, J.
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion Mt. San Jacinto Community College District v. Superior Court
__________________________________________________________________________________
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 126 Cal.App.4th 619
Rehearing Granted
__________________________________________________________________________________
Opinion No. S132251
Date Filed: February 22, 2007
__________________________________________________________________________________
Court: Superior
County: Riverside
Judge: Robert George Spitzer
__________________________________________________________________________________
Attorneys for Appellant:
Redwine and Sherrill, Justin M. McCarthy, David F. Hubbard, Steven B. Abbott, Scott R. Heil; Atkinson, Andelson, Loya, Rudd & Romo and John W. Dietrich for Petitioner.
Myers, Widders, Gibson, Jones & Schneider and Katherine E. Stone for League of California Cities, California State Association of Counties and Metropolitan Water District of Southern California as Amici Curiae on behalf of Petitioner.
Bruce A. Behrens, Thomas C. Fellenz and Richard B. Williams for The People of the State of California, acting by and through the Department of Transportation, as Amicus Curiae on behalf of Petitioner.
California Eminent Domain Law Group and Arthur J. Hazarabedian for Los Angeles Unified School District and The Education Alliance of the California School Board Association as Amici Curiae on behalf of Petitioner.
__________________________________________________________________________________
Attorneys for Respondent:
No appearance for Respondent.
Manatt, Phelps & Phillips, George M. Soneff and Michael M. Berger for Real Party in Interest.
Sedgwick, Detert, Moran & Arnold, Gregory H. Halliday, Geoffrey K. Willis and Gregory E. Woodward for Transcan Riverside LLC as Amicus Curiae on behalf of Real Party in Interest.
James S. Burling for Pacific Legal Foundation as Amicus Curiae on behalf of Real Party in Interest.
Counsel who argued in Supreme Court (not intended for publication with opinion):
Steven B. Abbott
Redwine and Sherrill
1950 Market Street
Riverside, CA 92501-1720
(951) 684-2520
Richard B. Williams
Department of Transportation
1120 N Street
Sacramento, CA 95812-1438
(916) 654-2630
Michael M. Berger
Manatt, Phelps & Phillips
11355 West Olympic Boulevard
Los Angeles, CA 90064-1614
(310) 312-4000
Publication Courtesy of California attorney referral.
Analysis and review provided by Vista Property line Lawyers.
[1]The Universitys contention that the Court of Appeal ignored Saratoga, supra, 97 Cal.App.4th 895, and its determination that an owner must be allowed to prove that the statutory scheme does not provide adequate compensation under the facts of a particular case is without merit. The court did not establish an inflexible rule requiring that the issue of the proper valuation be resolved as a matter of law, and clearly considered the facts in determining the date of valuation here.
