Filed 10/11/17 Southern California Edison Company v. Antelope Valley Water Storage CA5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

APPEAL from a judgment of the Superior Court of Kern County. Lorna H. Brumfield, Judge.

Hill, Farrer & Burrill, Michael K. Collins and Steven J. Tomasulo for Defendant and Appellant.

AlvaradoSmith, W. Michael Hensley, Keith E. McCullough, Kevin A. Day and Jacob C. Clark for Plaintiff and Respondent.

-ooOoo-

Defendant and appellant, Antelope Valley Water Storage, LLC (Antelope Valley), challenges the trial court’s denial of its motion to dismiss the eminent domain complaint filed by plaintiff and respondent, Southern California Edison Company (SCE). According to Antelope Valley, SCE failed to bring the action to trial within five years as required by Code of Civil Procedure[1] section 583.310. Antelope Valley further contends the trial court erred when it interpreted SCE’s easements over Antelope Valley’s property as being exclusive and giving SCE the right to restrict Antelope Valley’s use of the easement property.

The trial court did not err as claimed. Although not complete, a partial trial occurred before the statutory period expired and thus the trial commenced within the meaning of the statute. Further, the trial court correctly interpreted the easements to give SCE the power to limit or exclude Antelope Valley’s proposed use of the easements. Accordingly, the judgment will be affirmed.

BACKGROUND

SCE is a public utility that has the power of eminent domain to condemn property necessary to carry out its business of selling and delivering electricity. Between 1971 and 1973, SCE acquired easements for electrical transmission rights-of-way over property that Antelope Valley currently owns. This property is part of the acreage Antelope Valley assembled to use as a water bank. The water bank is a means to store water for later use by diverting excess water from the California Aqueduct onto the land where it percolates into the ground and is stored in a natural underground aquifer.

SCE filed the underlying eminent domain complaint on February 26, 2010, to condemn and acquire additional easements to expand the width of these original electrical transmission rights-of-way. The new easements SCE seeks are identical in scope and language to the original easements acquired in the early 1970’s.

At the parties’ request, the trial court continued the original November 2011 trial date to April 2012. However, in February 2012, the parties submitted a stipulation requesting the trial court to vacate the April 2012 trial date and set a date for a legal issues trial. According to the parties, the trial court needed to determine certain legal issues before a jury could determine compensation. The trial court vacated the trial date as requested and set a “hearing on the motions for legal determination/legal issues trial” for December 2012. The trial court later vacated this “legal issues trial” date and reset it for May 2013.

In April 2013, the parties filed an amended stipulation defining the scope of the legal issues trial. The parties agreed that the trial court would interpret the original easements to determine their breadth and the parties’ respective legal rights and interests and apply that ruling to the new easements. Accordingly, if the trial court concluded that the original easements gave SCE the right to limit or completely preclude Antelope Valley from using the easement property for water banking, SCE would have the same right with respect to the new easements.

On May 3, 2013, consistent with the amended stipulation, SCE filed a motion “for determination of factual and legal issues in advance of valuation trial” pursuant to section 1260.040. SCE requested the court “to determine the foundational issue affecting the determination of the value of the property interests” of Antelope Valley. This motion was to be heard on May 28, 2013, at the legal issues trial.

The trial court continued the motion and the trial several times, either at the request of the parties or on its own motion.

The trial court heard SCE’s motion for determination on December 23, 2013. On January 23, 2014, the trial court ruled that SCE “has the exclusive rights to use the property within the easement” and that Antelope Valley can use the servient tenement in only the four reserved ways. Thus, the court concluded that the “express language of the easement gives [SCE] the right to prohibit water banking.”

The trial court set the valuation trial for December 8, 2014.

In August 2014, Antelope Valley’s counsel sent a letter to the trial court to request a conference call with the court. The trial court held a case management conference on September 11, 2014. The minute order states “counsel make an oral motion to continue the trial and all related dates.” The court vacated all dates and set trial for May 4, 2015.

The parties participated in a mediation on February 25, 2015.

February 26, 2015, was the five-year anniversary of the filing of SCE’s complaint.

In March and April, the parties filed the required trial documents and participated in the mandatory settlement conference. On April 23, 2015, the trial court continued the trial on its own motion to June 8, 2015. The trial was thereafter trailed to June 22, 2015.

On May 14, 2015, Antelope Valley filed a motion to dismiss the complaint for failure to bring the case to trial within five years as required by section 583.310.

The trial court heard Antelope Valley’s motion on June 11, 2015. The trial court denied the motion. The court concluded that the hearing and ruling on SCE’s motion for legal determination “could be considered a trial,” Antelope Valley was estopped from asserting the five-year rule, and SCE’s claim that it was “impossible, impracticable, or futile” to bring the case to trial within five years was supported by substantial evidence.

Thereafter, Antelope Valley and SCE stipulated to a judgment awarding Antelope Valley $390,000 as total just compensation for the new easements. The parties agreed they were entering into the stipulation and judgment to avoid “the further costs and expenses of a trial, and to allow the trial court to enter a Final Judgment, from which [Antelope Valley] can file an appeal challenging the trial court’s order granting SCE’s Motion for Legal Determination … and the trial court’s ruling … denying [Antelope Valley’s] Motion to Dismiss the Eminent Domain Action.”

DISCUSSION

1. The trial court correctly denied the motion to dismiss.

A plaintiff must bring an action to trial within five years of commencing it. (§ 583.310.) If the plaintiff does not meet this deadline, dismissal is mandatory unless one of the two statutory exceptions applies. (§ 583.360.) The parties may extend the five-year deadline by either a written stipulation or an oral agreement made in open court and entered in the court minutes. (§ 583.330.) Additionally, the five years excludes any time during which the court’s jurisdiction was suspended, the action was stayed or enjoined, or it was impossible, impracticable, or futile to bring the action to trial. (§ 583.340.)

As noted above, the trial court concluded that trial commenced when it heard and ruled on SCE’s motion for legal determination. Alternatively, the court found that Antelope Valley was estopped from asserting the five-year rule and that substantial evidence supported SCE’s claim that it was impossible, impracticable or futile to bring the case to trial within five years.

a. Standard of review.

If the trial court bases its ruling on a motion to dismiss for failure to bring the action to trial within the section 583.310 five-year period on the construction and application of the statute, we independently review that ruling. (Munoz v. City of Tracy (2015) 238 Cal.App.4th 354, 358.) However, if the trial court concludes that it was impossible, impracticable, or futile to bring the action to trial, we review that ruling for an abuse of discretion. (Gaines v. Fidelity National Title Ins. Co. (2016) 62 Cal.4th 1081, 1100.)

b. The trial commenced before the five-year period expired.

Section 583.310 only requires that the action “be brought to trial within the five‑year period,” not that the trial be completed within that period. (In re Marriage of Macfarlane & Lang (1992) 8 Cal.App.4th 247, 253 (Macfarlane & Lang).) “Thus, once trial commences, the statute no longer applies, ‘even though the proceedings amount only to a partial hearing.’” (Id. at p. 254.)

An action is “brought to trial” for purposes of the five-year statute when there has been an “‘examination before a competent tribunal, according to the law of the land, of questions of fact or of law put in issue by the pleadings, for the purpose of determining the rights of the parties.’” (Macfarlane & Lang, supra, 8 Cal.App.4th at p. 254.) Thus, when a court determines a contested issue of law or fact that resolves a critical component of the litigation, it has partially tried the case. (Ibid.) The case is at a stage where it can be finally determined. (Id. at p. 255.)

Before the five-year period expired, the trial court heard and ruled on the motion for legal determination filed by SCE under section 1260.040. This section provides that, in an eminent domain action, a party may move the court for a ruling on a legal issue that affects the determination of compensation. The party must bring this motion no later than 60 days before “commencement of trial on the issue of compensation.” (§ 1260.040, subd. (a).) The trial court concluded that this hearing and ruling “could be considered a trial.”

Antelope Valley notes that the Law Revision Commission comments state that “[s]ection 1260.040 is intended to provide a mechanism by which a party may obtain early resolution of an in limine motion or other dispute affecting valuation.” Citing Hendrix v. Hendrix (1985) 171 Cal.App.3d 859, 862-863 (Hendrix), Antelope Valley argues that, because a ruling on a motion in limine is not commencement of trial, trial did not commence here.

In Hendrix, the motion in limine concerned evidence that was outside the pleadings. (Hendrix, supra, 171 Cal.App.3d at p. 862.) Here, the motion for legal determination requested a ruling on the legal interpretation of the easements, a ruling the parties stipulated would resolve “the question of whether under the language of the written easements, [SCE] can preclude use of the surface of the property under its transmission lines for water banking.” Unlike the pretrial evidentiary matter in Hendrix, this issue is pivotal to the case.

Antelope Valley further asserts that a section 1260.040 motion may operate like a motion for summary adjudication of issues and a summary adjudication motion, even if granted, is not commencement of trial. Therefore, Antelope Valley reasons, trial did not commence.

However, a section 1260.040 motion applies to more than preliminary matters preceding a trial. (Dina v. People ex rel. Dept. of Transportation (2007) 151 Cal.App.4th 1029, 1043 (Dina).) For example, section 1260.040 permits the court to determine the legal issue of liability in a condemnation action even if that ruling terminates the action. (Dina, at pp. 1043-1044.) “The procedural mechanism implemented by section 1260.040 expressly ‘supplements, and does not replace any other pretrial or trial procedure otherwise available to resolve an evidentiary or other legal issue affecting the determination of compensation.’ (§ 1260.040, subd. (c).)” (Id. at p. 1046.) Accordingly, the procedural impact of a section 1260.040 motion will vary depending on the circumstances and may be tantamount to a trial or a partial trial.

Here, the parties stipulated to bifurcating the case into a legal issues trial and a valuation trial. They agreed that a ruling on the legal issue, i.e., the parties’ respective rights under the easements, was required before compensation could be determined. SCE filed the section 1260.040 motion to obtain this foundational ruling on the legal issue.

When an action is bifurcated to try liability before damages, the trial of the first phase constitutes commencement of trial for purposes of the five-year statute because a finding on liability is a predicate to assessing damages. (Sagi Plumbing v. Chartered Construction Corp. (2004) 123 Cal.App.4th 443, 449-550.) Here, the determination of the parties’ rights under the easement was a predicate to assessing Antelope Valley’s just compensation. In other words, the amount awarded to Antelope Valley as just compensation was dependent on the court’s interpretation of the easements. This is analogous to trying liability before damages. Thus, the trial commenced when the trial court heard and ruled on the section 1260.040 motion and the case was taken out of the operation of the five-year statute.

In light of this conclusion, it is not necessary to decide whether the trial court correctly found that Antelope Valley was estopped from asserting the five-year rule or that SCE’s claim that it was impossible, impracticable or futile to bring the case to trial within five years was supported by substantial evidence.

2. The trial court correctly interpreted the original easements to give SCE the power to limit or preclude water banking.

As noted above, the parties agreed that the trial court’s interpretation of the original easements would determine their respective rights and interests under the new easements.

An easement is a restricted right to specific, limited, and definable uses or activities upon another’s property, which right must be less than the right of ownership. (Scruby v. Vintage Grapevine, Inc. (1995) 37 Cal.App.4th 697, 702 (Scruby).)

When tasked with interpreting an easement, the court applies the rules applicable to the construction of deeds. (Scruby, supra, 37 Cal.App.4th at p. 702.) Thus, the court looks to the terms of the grant to determine the easement’s scope. (Schmidt v. Bank of America, N.A. (2014) 223 Cal.App.4th 1489, 1499 (Schmidt).) If the language is clear and explicit, the interpretation is a question of law. However, if the language is ambiguous, the court may use extrinsic evidence to aid in interpretation unless such evidence imparts a meaning to which the instrument creating the easement is not reasonably susceptible. (Scruby, supra, 37 Cal.App.4th at p. 702.)

“Where the easement is founded upon a grant, … only those interests expressed in the grant and those necessarily incident thereto pass from the owner of the fee.” (Pasadena v. California-Michigan etc. Co. (1941) 17 Cal.2d 576, 579.) In general, despite granting an easement, the property owner may make any use of the land that does not interfere unreasonably with that easement. Further, it is not necessary for the property owner to make any reservation to protect his or her interests because the owner retains whatever he or she does not convey. (Ibid.) However, if the grant does contain an express reservation of rights to the property owner, the language of the grant and not of the reservation controls. Hence, the property owner retains all rights that are not inconsistent with the easement. (City of Los Angeles v. Ingersoll-Rand Co. (1976) 57 Cal.App.3d 889, 894 (Ingersoll-Rand).)

Nevertheless, it is possible to draft an easement that grants the easement holder the right to exclude everyone, including the property owner, from using the land within the easement boundaries. (Rye v. Tahoe Truckee Sierra Disposal Co., Inc. (2013) 222 Cal.App.4th 84, 92-93.) However, such an easement is an unusual interest in land in that it almost amounts to a conveyance of the fee. (Gray v. McCormick (2008) 167 Cal.App.4th 1019, 1025.) Accordingly, a court will not impute the intent to convey such a complete interest to the property owner. Rather, the easement must clearly indicate this intent. (Ibid.)

In the original easements, the then current property owners granted to SCE “all those certain permanent and exclusive easements and rights of way to construct, operate, use, maintain, inspect, repair, renew, replace, reconstruct, enlarge, alter, add to, improve, relocate and/or remove” electric transmission facilities. These facilities included “electric lines, consisting of one or more lines of metal towers, poles and/or other structures, wires, cables, including ground wires and communications circuits, both overhead and underground, with necessary and convenient foundations, conduits, pullboxes, guy wires and anchors.”

In addition to the rights necessary to construct and maintain the transmission facilities, the easements granted SCE certain rights to prevent various uses or occupations of the easement areas. These rights included “the right to clear and to keep clear the easements and rights of way and the real property affected thereby.” Specifically, SCE had the right to keep the easements “free from explosives, buildings, structures, equipment, brush, combustible materials and any and all other obstructions of any kind.” (Italics added.) Such obstructions included, but were not limited to “swimming pools and appurtenances, fences (other than farm, grazing or pasture fences), and the parking of automobiles, trucks or other mechanical equipment.” This right to clear and keep the easements clear also applied to “protection from fire and other hazards and from interference with ingress and egress and with the unobstructed use of said easements and rights of way and every part thereof, and for any and all purposes herein mentioned .…” (Italics added.)

The easements both reserved certain rights to the property owners and prohibited the property owners from engaging in various activities. The easements reserved rights across, but not longitudinally along, the right-of-way strip for (1) underground water pipes; (2) farm, grazing or pasture fences; and (3) roads “provided, however, that the exercise of such rights does not interfere with or endanger, in the opinion of [SCE], the operation or maintenance of the electric lines .…” The easements also reserved the right to cultivate the surface of the land with crops or for grazing, provided the uses not interfere with the rights granted to SCE.

However, the easements also included restrictions on the rights retained by the property owners. The property owners were not to “deposit or permit or allow to be deposited, earth, rubbish, debris or any other substance or material, whether combustible or noncombustible, on said right of way strip, or so near thereto as to constitute, in the opinion of [SCE], … a menace or danger to said electric lines and communication circuits or which may, in the opinion of [SCE], interfere with [SCE’s] ready access to said electric lines and communication circuits.” (Italics added.)

Finally, the parties agreed that the property owners could not grant any other easement over the right-of-way strip without SCE’s prior written consent.

The trial court ruled that the express language of the original easements gave SCE the right to prohibit Antelope Valley from water banking. Specifically, the court concluded that the easements: (1) were exclusive and provided SCE with the exclusive right to use the easement property; (2) expressly reserved only four rights to the property owners; and (3) provided SCE with the legal right and authority to limit or preclude any uses or conditions that, in SCE’s sole and exclusive opinion, would or could cause harm to, or in any way impair or interfere with, the operation and maintenance of SCE’s facilities. Since the trial court ruled as a matter of law, the trial court’s construction is not binding on appeal. (Schmidt, supra, 223 Cal.App.4th at p. 1500.)

Antelope Valley argues the trial court erred in interpreting the easement. According to Antelope Valley, the court misconstrued the use of the word “exclusive” in the easement grant. Antelope Valley asserts that the exclusiveness of the easement only refers to Antelope Valley’s inability to grant any other easement over the property without SCE’s written consent. Antelope Valley further contends that the trial court incorrectly concluded that Antelope Valley’s reservation of four specific rights to the property limited Antelope Valley to those four uses.

To support its position, Antelope Valley relies on City of Los Angeles v. Igna (1962) 208 Cal.App.2d 338 (Igna) and Ingersoll-Rand, supra. In both cases, the City of Los Angeles acquired an easement for electrical transmission lines.

In Igna, the property owner, Eugenia Igna, acquired the property subject to the easement and used it for a trailer park. The City of Los Angeles sued to compel Igna to remove certain obstructions including a parking lot, portions of mobile homes and trailers, fences, and miscellaneous items in the easement area. (Igna, supra, 208 Cal.App.2d at p. 339.)

The easement in Igna conveyed “‘permanent and exclusive easements and rights of way.’” (Igna, supra, 208 Cal.App.2d at p. 340.) A separate clause of the easement reserved to the grantor “‘only such grazing, agricultural and mineral rights and the right to maintain, cultivate, use, plant and replant said real property … and erect non-inflammable fences upon said real property, as will not interfere with or prohibit the free and complete use and enjoyment … of the rights or easements hereby granted, provided however, that no building, inflammable fence, other structure, material or explosive of whatever nature or kind shall be placed, maintained or erected upon any portion of the above described real property by grantor .…’” (Ibid.)

The trial court ruled that the City of Los Angeles was the owner of an exclusive easement and that Igna only retained the rights over the easement-bound portion of the property as expressed in the reservation clause. Accordingly, the trial court enjoined Igna from using the property for any purposes other than those reserved in the deed. (Igna, supra, 208 Cal.App.2d at pp. 340-341.)

The court of appeal disagreed and held that Igna, the servient owner, had “the right to use the land in any way not inconsistent with the rights granted under the easement or in any way as to not encroach upon or interfere with the means and facilities which the owner of the easement may lawfully use.” (Igna, supra, 208 Cal.App.2d at p. 341.)

In Ingersoll-Rand, supra, the granting words and reservation clause in the easement were nearly identical to those construed in Igna. (Ingersoll-Rand, supra, 57 Cal.App.3d at pp. 891-892.) When Ingersoll-Rand acquired the property subject to the easement, it erected a chain link fence across the easement. Ingersoll-Rand also used the surface of the property as an employee parking lot housing about 15 cars during working hours and for storage of air compressors. (Id. at p. 892.)

The trial court ruled that the fences and compressors constituted obstructions to the City of Los Angeles’s use of the easement. The trial court further concluded that, although the limited parking arrangement would not be an unreasonable interference with the easement rights, the City of Los Angeles had the right to exclude all parking of vehicles, whether reasonable or unreasonable, within the easement. (Ingersoll-Rand, supra, 57 Cal.App.3d at p. 893.)

On an appeal limited to the ruling on the parking of vehicles, the court of appeal reversed. The court first noted that it is the language of the grant and not the reservation of rights that controls and the grant was only for electrical transmission lines. Therefore, because the trial court found limited temporary parking did not unreasonably interfere with the easement, such use was allowed. (Ingersoll-Rand, supra, 57 Cal.App.3d at p. 894.)

Relying on the above cases, Antelope Valley argues this court should remand the matter to the trial court for a determination of whether Antelope Valley’s proposed water banking activities would unreasonably interfere with SCE’s easement.

Here, however, the easement grants additional rights to SCE and places other restrictions on Antelope Valley’s use of the easement property. Unlike in Igna and Ingersoll-Rand, the easements granted SCE the right to keep the easements free from “obstructions of any kind” and the right to the “unobstructed use of said easements.” Consistent with SCE’s right to clear the easements of any kind of obstruction, the easements prohibit Antelope Valley from depositing any “substance or material” on or near the easement property so “as to constitute, in the opinion of [SCE], … a menace or danger to” the transmission lines “or which may in the opinion of [SCE], interfere with [SCE’s] ready access to” the transmission lines.

Thus, the easements specifically grant SCE the power to unilaterally decide what uses or conditions would or could cause harm to, or impair or interfere with, the operation of its facilities. Further, Antelope Valley cannot deposit any substance or material that, in SCE’s opinion, would endanger or interfere with its transmission lines. Water is a substance. Moreover, SCE has the broad power to keep the easements free from any kind of obstruction. Water would also qualify as an obstruction.

In the trial court, SCE presented its opinion that water banking would substantively interfere with SCE’s full use and enjoyment of the easements and would endanger SCE’s employees. Through a declaration, a long-term SCE management employee explained that Antelope Valley’s “intention to flood the transmission corridor would cause the inundation and saturation of SCE’s easements with water which would cause the rights-of-way to be inaccessible to SCE’s maintenance and operations vehicles.” Consequently, SCE would not have ready access to conduct maintenance or repairs. Further, “in cases of a collapsed tower or downed power line, the risk of a 500 kilovolt transmission line falling into a ponded body of water” would cause extreme danger to the public in general and both Antelope Valley and SCE employees. Moreover, SCE could not make any needed repairs until Antelope Valley drained the ponds and the ground dried out.

In sum, under the clear and explicit language of the easements, SCE has the right to limit or preclude Antelope Valley from using the property subject to the easements for water banking.

DISPOSITION

The judgment is affirmed. SCE is awarded its costs on appeal.

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LEVY, Acting P.J.

WE CONCUR:

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DETJEN, J.

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MEEHAN, J.