Public Entity Did Not Have To Condemn Additional Private Property To Provide Substitute Access Road Where Affected Property Would Not Be Landlocked

A public entity that sought to condemn property that would result in elimination of a roadway easement to another property was not required to condemn additional private property to replace the road because the affected property would not be landlocked as a result of the condemnation.  (Council of San Benito County Governments v. Hollister Inn, Inc. (--- Cal.Rptr.3d ----, Cal.App. 6 Dist., September 19, 2012).

Facts

The Council of San Benito County Governments (“COG”) is a joint powers authority created to acquire property for the Highway 25 Bypass Project.  COG sought to condemn real property belonging to Janet P. Roberts (“Roberts”).  Hollister Inn, Inc., had an easement over Roberts’ property that provided the Inn access to Highway 25.  COG gave Hollister Inn notice that it was considering adopting a resolution of necessity to condemn property that would result in the closing of access from Hollister Inn’s property onto the existing Highway 25.  At a hearing, the representative of Hollister Inn stated the right of way that COG sought to close was the main entrance and exit to the hotel.  The project manager stated that the driveway was not in a safe location.  The manager acknowledged that the possibility of relocating the driveway had been considered, but that idea had been “rejected because Hollister Inn was not the owner of the property that would have been condemned and the project could not condemn someone else’s property . . .  for the benefit of an adjacent property owner.” 

COG adopted a Resolution of Necessity to acquire Roberts’ property and the easement.  The resolution stated that the project “is planned or located in the manner that will be most compatible with the general public good and the least private injury.”  COG filed a complaint in eminent domain against Roberts as the fee owner and Hollister Inn as the easement holder.  COG filed an additional complaint against Hollister Inn to acquire its access rights at Highway 25, and both actions were ultimately consolidated.

At trial, Hollister Inn asserted that COG committed a gross abuse of discretion when it failed to consider the condemnation of additional property to replace its lost access to Highway 25.  COG presented testimony that although the project plans previously contained a plan for an alternative driveway, the alternative driveway was dropped from the plans because of “the understanding that property cannot be condemned on behalf of another private entity.” 

The trial court found that COG committed a gross abuse of discretion because it failed to consider the possibility of taking the property of an adjoining landowner to provide Hollister Inn access to Highway 25.  The trial court recognized that Hollister Inn’s property was not landlocked because it had access to San Felipe Road.  However, the court determined that Code of Civil Procedure section 1240.350, which governs condemnation of “substitute property”, does not apply only to landlocked properties.  The trial court issued an order of conditional dismissal requiring immediate dismissal unless COG conducts a public hearing to reconsider the issue of alternative access to Hollister Inn’s property.  COG satisfied the requirements imposed on it by the trial court and Hollister Inn, COG and Roberts entered into a stipulated judgment.

Decision

On appeal, COG challenged the trial court’s finding that it had committed a gross abuse of discretion.  COG asserted that the trial court had misconstrued Code of Civil Procedure section 1240.350.  The Court of Appeal agreed with COG.

Code of Civil Procedure section 1240.350, subdivision (a), provides condemnation authority for the acquisition of additional property by a government entity where the acquisition “appears reasonably necessary and appropriate (after taking into account any hardship to the owner of the additional property) to provide utility service to, or access to a public road from, any property that is not acquired for such public use but which is cut off from utility service or access to a public road as a result of the acquisition by the public entity.”  (Emphasis added.)  The court held that the statute “does not authorize the exercise of eminent domain power to provide access to the public road” to which access is lost but rather “to provide . . . access to a public road.” 

Both the United States and California Constitutions provide that the eminent domain power should be exercised only for a “public use.”  The government cannot take the property of a property owner for the sole purpose of transferring the property to another private party, even if the government pays just compensation to the owner of the property that was taken.  After review of the legislative history of section 1240.350 and application of the rules of statutory construction, the Court of Appeal concluded that the authority provided by section 1240.350 “may be invoked to provide access to a public road only where a public entity’s acquisition leaves unacquired property without public road access.”  In other words, section 1240.350 only applies if the unacquired property is left landlocked.

The Court noted that its interpretation of section 1240.350 avoids the constitutional problems associated with condemning property for non-public use.  However, its interpretation “does not preclude the proper exercise of the power of eminent domain for highway purposes, including the provision of local service roads, which is a recognized public use.” 

The Court of Appeal concluded that the trial court erred in finding that COG committed a gross abuse of discretion.  The COG did not abuse its discretion by failing to consider additional condemnation under section 1240.350 in order to provide Hollister Inn a substitute access easement.  COG was not required to consider a substitute easement prior to adopting the resolutions of necessity.  Accordingly, the Court of Appeal vacated the order of conditional dismissal and the award of litigation expenses to Hollister Inn.    

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