Procedures governing eminent domain actions differ in some respects from other areas of law. Notably, all issues, except the sole issue of compensation, are adjudicated by the court. This requires the court to decide issues of law before the jury can determine compensation, complicating timing issues even where civil code sections on the matter seem straightforward.
Pursuant to California Code of Civil Procedure § 583.310, “An action shall be brought to trial within five years after the action is commenced against the defendant.” Absent a written stipulation, oral agreement made in open court, or other statutory exception extending the five-year period, the defendant may file a motion for mandatory dismissal for the delay in prosecution.
In the recent case of E. Bay Reg’l Park Dist. v. Golden Gate Land Holdings LLC (2023 Cal. App. Unpub. LEXIS 6949 (Cal. 1st Dist, Ct. App.)), a pivotal issue on appeal turned on when the action was “brought to trial.” The property owners argued the evidentiary hearing did not constitute commencement of the trial for purposes of the five-year statute and therefore, their motion to dismiss should have been granted. The appellate court disagreed and held that an action is brought to trial in a non-jury case by the swearing of a single witness.
The property owners raised an additional issue on appeal, arguing that the valuation testimony given by the Park District’s appraiser should have been stricken because it was based on an erroneous appraisal methodology. The appellate court disagreed again and found the appraiser’s decision to assign the same average per-acre value to the condemned parcel as he assigned to the property as a whole was proper. The parties’ differing views on the condemned parcel’s value was an issue to be resolved by the jury.
An Issue of Timing
On July 22, 2011, the Park District filed its complaint in eminent domain to acquire a few acres on the eastern shore of the San Francisco Bay from the property owners. After nearly five years of settlement discussions, the parties entered into an agreement on April 5, 2016, to stay litigation pending completion of non-binding mediation and waive enforcement of the five-year period. Over the next 18 months, the parties entered into numerous stipulations to extend commencement of the trial.
On January 17, 2018, the trial court heard the Park District’s in limine motion regarding a dedication issue. Opening statements were delivered, and two witnesses testified over a three-day period. Acknowledging the looming five-year statute, the court declared on record that the trial had "begun and commenced."
On May 4, 2018, the trial court denied the Park District’s motion in limine. In the order, the court stated that “The [January 17, 2018] hearing was not, and this order is not, the first stage of a bifurcated trial in which the court is making findings on the merits.” The court’s contradictory statement formed the basis of the owners’ motion to dismiss for failing to bring the action to trial within 5 years. The trial court denied the motion to dismiss, finding that the trial commenced during the in limine motion.
The appellate court swiftly affirmed the lower court’s decision, holding that an action is brought to trial in a non-jury case by the swearing of a single witness, and in a jury case by the empaneling of the jury. The appellate court found both the trial court and the parties understood the January 17, 2018 proceedings to be a partial trial which addressed an essential issue that needed to be resolved before a jury could determine the value of the condemned property.
An Issue of Valuation Methodology
As the trial ensued, both parties presented expert testimony concerning the value of the condemned parcel. The Park District’s appraiser determined the parcel’s value by applying the same average per-acre value he had found for the entire property to the condemned parcel. The property owners contested this appraisal methodology, citing a legal principle[1] stating if the condemned parcel differs in quality from the rest of the land, then it should be assigned a different value. With support from their appraiser’s valuation, the property owners argued the parcel taken was more valuable than other portions of the property. Further, considering the parcel’s unique and independent value, the Park District’s attempt to apply the same average per-acre value to the part taken was improper. The trial court denied the motion to exclude the agency’s appraisal, and the property owners appealed.
The appellate court emphasized that the trial court holds considerable discretion in determining the admissibility of valuation evidence and may exclude an expert’s opinion of value if it is calculated using a methodology not sanctioned by California law. The appellate court noted that the admissibility of certain appraisal methodologies and the situational application of each method is intended to protect the condemnee and assure a just award.
Judicial review of an appraisal methodology is more concerned with how and why the condemned parcel is valued in relation to the larger property than when a certain methodology is employed. For example, when the condemned parcel is "separate and distinct," it must be valued independently to prevent the devaluation of the most valuable parts. Conversely, when the parcel taken is undesirable on its own, it must be valued as a part of the whole to prevent the appraisal and valuation from rendering the parcel useless and valueless. To use either method under the wrong circumstances would lead to inequitable results for the condemnee.
The Court concluded by acknowledging that the differing analyses and valuations of the parties' experts did not inherently mean that one of the appraisals was improper. Instead, the different values presented a good question for the jury to resolve.
Moving Forward
This case serves as a reminder to eminent domain practitioners that an eminent domain action must also be brought to trial within the five-year period even though there is no limitation as to when a trial must be completed, subject of course to any stays or stipulations for extension. Furthermore, while in eminent domain cases many issues will surface for the court to decide, issues of compensation are likely to be left for the jury.
[1] People ex rel. Dept. of Public Works v. Silveira (1965) 236 Cal.App.2d 604, 617.
