Court Erred In Excluding All Evidence Regarding Severance Damages In Eminent Domain Action

A trial court erred when it excluded all evidence offered in an eminent domain action by a property owner regarding permanent and temporary severance damages because the owner offered sufficient evidence for the matter to be presented to the jury, and in general, the court questioned whether a trial judge should enter an order excluding all of the owner’s evidence in a condemnation action.  (City of Livermore v. Baca, (--- Cal.Rptr.3d ----, Cal.App. 6 Dist., May 16, 2012).

Facts

The City of Livermore (“City”) sought to take portions of commercial property owned by Dennis Baca (“Baca”).  Baca owns the Airport Executive Center which consists of four parcels that each contains a commercial building.  City wanted to raise the intersection of two roads and sought to acquire property along the front of two of the parcels including a fee simple taking of 300 square feet, a 15,000 square foot slope and drainage easement, and a five-year temporary construction easement.  The slope easement will result from the raising of the intersection at issue, and the new slope will travel inward toward the buildings on Baca’s properties. 

City filed an eminent domain complaint to acquire the desired interests in Baca’s properties.  Baca did not challenge the taking but did request additional compensation for permanent severance damages in the amount of $1,317,016, and temporary severance damages in the amount of $501,286.  When, as in this case, property acquired by eminent domain is part of a larger parcel, the owner can seek compensation not only for the part taken, but also for any injury to the remaining property.  Severance damages are measured by subtracting the fair market value of the remainder property after the taking from its value before the taking.

City filed in limine motions and asked the trial court to exclude evidence offered by Baca to support his severance damages.  The court held evidentiary hearings, granted City’s motions, and excluded all of Baca’s evidence in support of both his temporary and permanent severance damages. The effect of the exclusion of the evidence was tantamount to granting a nonsuit in favor of City.  City and Baca entered into a stipulated judgment with the understanding that Baca would appeal the trial court’s evidentiary rulings. 

Decision

“In limine motions are designed to facilitate the management of a case, generally by deciding difficult evidentiary issues in advance of trial.”  However, there is case law that recognizes motions in limine can also “function as ‘an objection to any and all evidence on the grounds [the] pleadings [are] fatally defective’ for failure ‘to state a cause of action.’”  The court of appeal noted that it knew of no eminent domain actions that had been disposed of by in limine motions.  Here, the trial court ruled all evidence Baca sought to introduce was inadmissible, which resulted in a nonsuit in favor of city.  The court of appeal held that the trial court erred by excluding Baca’s evidence.  The court noted that it was “wary of the practice of disposing of a claim through the use of in limine motions, particularly in an eminent domain action, where a trial on the issue of damages is mandated by the Constitution.”

Baca sought permanent severance damages for the loss in value to his property that would result from the changes in view and curb appeal, changes to the depth of utility lines, and increased traffic hazards.  The trial court found Baca’s evidence was conjectural and speculative.  The court of appeal reversed the trial court’s decision finding that Baca did not have to show a substantial impairment to the access to his property.  “A showing of substantial impairment is only required when the taking interferes with access to the property from a public street, such as when a construction project causes traffic to be diverted around the affected property.”  Since Baca’s claims were not based upon interference with access from a public street, “the trial court was not required to find the takings substantially impaired Baca’s property before determining if the proffered evidence was admissible.”

A decrease in aesthetically pleasing views from a property can be a basis for permanent severance damages.  Here, the project will raise the roadway and reverse the slope downward toward the buildings from the road.  After the project, there will be a decreased view of the landscaping which will result in changes to the view and curb appeal.  The court found that Baca’s evidence on changes in view and curb appeal should have been submitted to a jury so it could determine if the value of the property has been adversely affected.

Baca sought to introduce evidence that the change of slope will cause inferior drainage and increase the risk of flooding.  The court found that there is no question that changed drainage conditions could affect a property’s market value.  The trial court erred in failing to present this issue to the jury.  Also, the change in depth of the utility lines may increase the difficulty and cost to service the lines.  An informed buyer could consider this extra cost when valuing the property.  The issue should have been submitted to a jury to determine if the change in the depth of the utility lines decreased the value of the property. 

Baca’s evidence regarding permanent severance damages due to traffic hazards showed an increased risk of traffic accidents due to the project.  The trial court erred in excluding this evidence.  Also, the trial court erred in excluding Baca’s expert’s testimony regarding the value of Baca’s remaining property because such testimony was necessary for the jury’s determination of damages.

Baca sought temporary severance damages for impairment to his properties caused by the project’s construction activities including removal of all landscaping for one year and closure of two of his four driveways for four months.  The closure of the driveways will leave only one driveway for three of Baca’s commercial properties.  Tenants of one property will have to drive over one mile extra to access a driveway.  The court determined that evidence regarding damages due to closure of the driveways and removal of the landscaping should have been submitted to the jury.  Additionally, evidence regarding temporary severance damages due to a ten-month 1.4 mile detour on the public roads surrounding the property should have been submitted to the jury.  The court found the detour was a significant distance and would last a significant period of time and therefore would impair access to Baca’s properties.

The court of appeal further held that trial court erred in defining the project as including three separate contracts, two of which do not affect Baca’s property.

Thus, the court of appeal reversed the judgment of the trial court which excluded all of Baca’s evidence regarding permanent and temporary severance damages.

Questions

If you have any questions concerning the content of this Legal Alert, please contact the following from our office, or the attorney with whom you normally consult.

Jeffrey L. Massey or William T. Chisum | 916.321.4500

Jon E. Goetz | 805.786.4302

Published In: Civil Procedure Updates, Civil Remedies Updates, Commercial Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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