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. )
__________________________________ )
When the government exercises its power of eminent domain, and condemns or damages private property for public use, it must pay just compensation to the owner. (Cal. Const., art. I, 19.)[1] The just compensation is aimed at making the landowner whole for a governmental taking or damage to the owners property. (Redevelopment Agency v. Gilmore (1985) 38 Cal.3d 790, 797 (Gilmore); see Escondido Union School Dist. v. Casa Suenos De Oro, Inc. (2005) 129 Cal.App.4th 944, 958 (Escondido).) In other words, the owner is entitled [to] the full and perfect equivalent of the property taken. (Gilmore, supra, 38 Cal.3d at p. 797, quoting Seaboard Air Line Ry. v. U.S. (1923) 261 U.S. 299, 304 (Seaboard).)
Californias statutory Eminent Domain Law (Code Civ. Proc., 1230.010 et seq.)[2]provides that if the compensation issue is brought to trial within one year after commencement of the proceeding, the date of [property] valuation is the date of commencement of the proceeding. ( 1263.120.) The condemner may, however, take early possession of the property before litigation is concluded upon deposit in court and prompt release to the owner of money determined by the court to be the probable amount of just compensation. (Cal. Const., art. I, 19; see 1255.410.) The immediate possession procedure is also known as a quick-take eminent domain action. (Escondido, supra, 129 Cal.App.4th at p. 960.) Because compensation is immediately available to the property owner in a quick-take action, the date of valuation of the property is statutorily required to be no later than the date the condemner deposits probable compensation for the owner. ( 1263.110 et. seq.) The deposit earns statutory interest until it is withdrawn. ( 1268.310.) The property owner can immediately withdraw the funds, but by doing so waives all rights to dispute the taking other than the right to challenge the amount of just compensation. ( 1255.260.)
This case involves a quick-take eminent domain action. We address two constitutional issues. First, does a statutory property valuation date that occurs at the time the condemner deposits the probable compensation in court under section 1263.110, et seq. deny the property owner just compensation under the California Constitution when litigation in the eminent domain action is not expected to end until several years after the deposit is made? Second, is the owners statutory waiver of rights after withdrawing the funds an unconstitutional condition on the statutorily required prompt release of the deposit?
We conclude that the statutory date of valuation at the time the probable compensation is deposited is constitutional, and that the requirement of a waiver of claims and defenses for receipt of deposited probable compensation is constitutional. We therefore affirm the Court of Appeals judgment.
FACTS AND PROCEDURAL HISTORY
The facts are summarized from the Court of Appeal opinion and the record. In October 2000, Mt. San Jacinto Community College District (the District) commenced an eminent domain action against Azusa Pacific University (the University), seeking to condemn approximately 30 acres of vacant land in Riverside County. On December 15, 2000, the District deposited $1.789 million into court as probable compensation for the property. In October 2001, the District applied for a prejudgment order for possession. The trial court granted the application effective upon the Universitys completion of improvements to the property.[3] The District took possession of the property in January 2002. The University did not move to stay the order for possession on hardship grounds or pending the trial courts adjudication of the Districts right to take the property. In addition, the University did not withdraw any portion of the deposited funds.
In February 2002, the University petitioned the court to increase the deposit of probable compensation from $1.789 million to $4.2 million. The University argued that the property was worth $4.2 million when the deposit was made in December 2000. The trial court determined that the amount of probable compensation on December 15, 2000 was $1.789 million, and denied the Universitys petition.
The trial court bifurcated the issues of the Districts right to take possession of the property and the amount of just compensation. The court ruled in June 2002 that the District had the right to take the property.
The parties filed cross-motions in limine to determine the date of valuation before trial. The trial court recommended they seek a ruling from the appellate court, as there was a controlling question of law as to which there are substantial grounds for difference of opinion. The University petitioned the Court of Appeal for a writ of mandate requesting the court resolve the issue. The Court of Appeal denied the petition without prejudice, stating that the question of whether the statutory date of valuation should be disregarded was dependent on the facts of the case, and that the record was not sufficiently developed to allow the court to rule. Following further briefing by the parties, the trial court ruled that the property should be valued as of the date trial commencedDecember 6, 2004. The District then petitioned the Court of Appeal for a writ of mandate directing the trial court to vacate its order and enter a new order setting the valuation date on December 15, 2000.
The Court of Appeal initially observed that [u]pon further consideration of [the] issues, we conclude that the issues raised in [the Universitys] prior petition, and in [the Districts] present petition, are questions of law which did not, as we previously stated, require further development of the record. The court then compared the valuation principles that apply in a quick-take proceeding with those in a straight condemnation action, in which no deposit of probable compensation is made and immediate possession is not sought. The court observed that the statutory valuation rules reflect the principle that a taking occurs when the property owner is paid. Applying this principle to a quick-take proceeding, the court reasoned that the property should be valued on the date the plaintiff makes the probable compensation available to the owner by depositing it with the court.
The Court of Appeal acknowledged, however, that the valuation must satisfy constitutional requirements. The court considered the Universitys contention that the principle of just compensation entitled it to the propertys value as of the date of the compensation trial, not the date of the deposit. The University argued that because section 1255.260 required it to waive its right to litigate the legality of the taking if it availed itself of the deposited funds, the University was effectively precluded from withdrawing the deposited funds. Therefore, the University argued, the property should be valued at the time of the commencement of trial. The Court of Appeal found that the University received just compensation on the date of deposit, despite the requirement that it waive its statutory defenses if it withdrew the funds. The court issued an alternative writ, granting the Districts petition, and directing the trial court to set the date of valuation as of December 15, 2000. The University now challenges the date of valuation ( 1263.110) and the waiver of claims and defenses ( 1255.260) as unconstitutional.
DISCUSSION
There is a strong presumption in favor of the Legislatures interpretation of a provision of the Constitution. (Methodist Hospital of Sacramento v. Saylor (1971) 5 Cal.3d 685, 692.) When the Constitution has a doubtful or obscure meaning or is capable of various interpretations, the construction placed thereon by the Legislature is of very persuasive significance. (Methodist Hospital, supra, 5 Cal.3d at p. 693.) For the purpose of determining constitutionality, we cannot construe a section of the Constitution as if it were a statute, and adopt our own interpretation without regard to the legislative construction. (Ibid., quoting Pacific Indemnity Co. v. Indus. Acc. Com. (1932) 215 Cal. 461, 464.) We therefore must consider the Legislatures construction of the pertinent constitutional provisions.
A. Development of Quick-take Procedure
As adopted in 1879, the California Constitution provided only 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.) No constitutional provision allowed prejudgment possession. Instead, it was statutorily provided under former section 1254 that a condemner could take possession of the land as the condemnation proceeding was pending if it deposited probable compensation into court. Under the statute, the defendant was allowed to apply to the court for the money, but the condemner could take possession even without the court approving the payment. (Steinhart v. Superior Court (1902) 137 Cal. 575, 576, 577 (Steinhart).)
Steinhart considered the constitutionality of this early possession provision. As the Constitution at the time required that just compensation must have first [been] made, the court held that a preliminary possession cannot be authorized until the damage . . . has been judicially determined and the amount has been paid or tendered to the owner. (Steinhart, supra, 137 Cal. at p. 578.) As the owner could not immediately withdraw the funds, nor had the amount of compensation yet been decided by a jury, the deposit statute was declared unconstitutional. (Id. at pp. 578-579.)
In response to the Steinhart decision, California voters amended the Constitution to authorize certain public agencies to take immediate possession of the condemned property without first making payment to the owner. (See Taking Possession and Passage of Title in Eminent Domain Proceedings (Oct. 1960) 3 Cal. Law Revision Com. Rep. (1961) p. B-10 (Commission Report).) Owners had no right to withdraw the money,[4]and were left to vacate the property, locate new property to replace that taken and move to the new location at a time when there [was] little or no money available from the condemnation. (Id. at p. B-7.)
In 1956, the California Law Revision Commission (Commission) was authorized to study whether condemnation law should be revised to better safeguard private property rights. (Commission Report, supra, at p. B-1.) Its findings were incorporated into Proposition 7, which was passed by the voters in 1974. (Gates v. Superior Court (1995) 32 Cal.App.4th 481, 522-523.) Proposition 7 repealed and replaced the former just compensation clause in article I, section 14 of the California Constitution with the current clause in article I, section 19.
The Commission concurrently recommended revision of a number of statutory measures relating to eminent domain and the right to immediate possession. (Commission Report, supra, at pp. B-12 to B-25.) The Legislature enacted many of these recommendations into law. (See People ex rel. Department of Transportation v. Southern California Edison (2000) 22 Cal.4th 791, 799-800; Miro v. Superior Court (1970) 5 Cal.App.3d 87, 99-100.)
The Commission concluded that a constitutional amendment was necessary, as the policy underlying the Steinhart decision and the original provisions of the 1879 Constitution is sound and the contrary policy of the present provisions of the Constitution [under article I, former section 14] is undesirable. (Commission Report, supra, at p. B-10.) Under former article I, section 14, an owner had no assurance he or she would actually receive compensation at the time the property taking occurred. A persons property should not be taken from him unless he has the right to be paid concurrently for the property, for it is at the time of the taking that he must meet the expenses of locating and purchasing property to replace that taken and of moving to the new location. (Commission Report, supra, at p. B-10.) The Commission recommended that the condemnee be allowed to withdraw the entire deposit when the condemner takes actual possession of the property. (Id. at p. B-7.)
The Commission reasoned that immediate possession proceedings were more beneficial to both condemners and owners than straight condemnations. The public interest would be promoted by shortening the delay between the beginning of the condemnation proceeding and the actual taking of possession. 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. (Commission Report, supra, at p. B-29.) These delays resulted in an increase in the cost of the development, which in turn led to increased taxes. (Ibid.) Because bond issues finance many developments, the inability to take immediate possession may cause inability to meet the bonding requirements and, consequently, may not only retard but completely prevent the construction of the improvement. (Ibid., fn. omitted.)
The Commission also observed that, Upon commencement of condemnation proceedings, a landowner is deprived of many of the valuable incidents of ownership. He can no longer place improvements upon the property for which he may be compensated. He is practically precluded from selling or renting the property for few persons want to purchase a law suit. (Commission Report, supra, at p. B-12.) In ordinary condemnation proceedings, the owner received no compensation until the end of litigation. (Ibid.) The Commission proposed that in quick-take or immediate possession proceedings, the owner should have the right to withdraw compensation when the condemner actually takes possession of the property, and therefore have the money available immediately to use when planning for the future.[5] (Id. at p. B-12.)
The Commission suggested few alterations to the waiver provision when it proposed the aforementioned constitutional and statutory changes,recommending only that former section 1254.7 be amended and renumbered as (former) section 1243.7, and that the waiver of claims and defenses in subdivision (g) be retained.[6] (Commission Report, supra, at pp. B-15 to B-16.) The Legislature followed this recommendation and retained the waiver provision when it enacted section 1243.7. (Stats. 1961, ch. 1613, 4, pp. 3444, 3446.)
The Commission later discussed the proper date of valuation. Before 1974, the rule had been to value the property as of the date the summons was issued. (Recommendation: Eminent Domain Law (Oct. 1974) 12 Cal. Law Revision Com. Rep. (1974) pp. 1605, 1645-1646 (1974Commission Report).) The Commission again noted the condemning agencys need for certainty: In acquiring property for public use, it is frequently essential that there be a definite future date as of which all property needed for the public improvement will be available. An undue delay in acquiring even one essential parcel can prevent construction of a vitally needed public improvement and can complicate financial and contractual arrangements for the entire project. . . . In general, the need of the condemnor is not for haste but for certainty in the date of acquisition. The variable conditions of court calendars and the unpredictable period required for the trial of the issue of compensation preclude any certainty in the date of acquisition if that date is determined solely by entry of judgment in the proceeding. (Id. at p. 1658.)
The Commission considered the oft-made proposal that the date of valuation should be the date trial commences in all cases. (1974Commission Report, supra, at p. 1645.) It would seem more appropriate to ascertain the level of the general market and the value of the particular property in that market at the time the exchange of the property for just compensation actually takes place. Also, 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. . . . Nonetheless, the existing California rules appear to have worked equitably in most cases. The alternative rule might provide an undesirable incentive to condemnees to delay the proceedings to obtain the latest possible date of valuation. And, as a matter of convenience, there is merit in fixing the date of valuation as of a date certain, rather than by reference to the uncertain date that the trial may begin. (Id. at pp. 1645-1646, fn. omitted.) The Commission recommended retention of the existing rule. In addition to providing a needed incentive to condemnors to deposit approximate compensation, the rule would accord with the view that the property should be valued as of the time payment is made. . . . A date of valuation thus established should not be subject to change by any subsequent development in the proceeding. (Id. at p. 1646.)
TO BE CONTINUED AS PART II.
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[1]Article I, section 19 of the California Constitution provides that Private property may be taken or damaged for public use 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. (See also, U.S. Const., 5th Amend. [private property shall not be taken for public use without just compensation].)
[2]All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
[3]The University began constructing the improvements (educational facilities) in May 2001, after summons was served in this eminent domain action. Section 1263.240 provides that improvements made after the date the summons is served shall not be taken into account in determining compensation unless, for example, the improvements are made with the plaintiffs written consent or are authorized by court order. ( 1263.240, subds. (b) & (c).) The University did not obtain the Districts written consent and did not seek advance court approval before constructing the improvements as required under the statute. Therefore, the trial court found that the University could not recover the value of the improvements. The University filed a separate inverse condemnation action seeking the value of the improvements, but the Court of Appeal issued a writ directing the trial court to enter summary judgment in the Districts favor. (Mt. San Jacinto Community College Dist. v. Superior Court (2004) 117 Cal.App.4th 98, 110.) The court reasoned that the University could not recover on the improvements because it failed to seek advance court approval for them in the present eminent domain action, as required under section 1263.240. (117 Cal.App.4th at p. 110.)
[4]If the property was taken for highway purposes, it was provided that the owner could withdraw 75 percent of the deposit. (See Commission Report, supra, at p. B-7.)
[5]The Commission also examined the effect these changes would have on an owners right to challenge the taking. It reasoned that [t]he right of the condemner to take the property is rarely disputed and the only question for judicial decision in virtually all condemnation actions is the value of the property. (Commission Report, supra,at p. B-11.) Under the former law, many vitally needed public improvements [were] delayed even though there [was] no real issue in the case of the publics right to take the property. (Id. at p. B-12.) If the property owner can be insured just compensation, there is little, if any, justification for delaying public improvements and, thereby, increasing the tax burden on the public. (Id. at p. B-29.)
[6]California owners wishing to withdraw compensation have been required to waive claims and defenses, with the exception of a claim for greater compensation, since 1897. When the Legislature amended former section 1254 to authorize prejudgment possession after a deposit was made, this section contained a provision that a withdrawal waived all claims and defenses except a claim for greater compensation. (Stats. 1897, ch. 127. 1, p. 187.) While that statute was struck down in Steinhart, it was not due to the waiver provision, but because compensation was neither determined by a jury nor available for immediate withdrawal by the owner. (Steinhart, supra, 137 Cal. at pp. 578-79.)
