BILL ANALYSIS AB 1770 Page 1 ASSEMBLY THIRD READING AB 1770 (Papan) As Introduced January 9, 2002 Majority vote JUDICIARY 11-0 ----------------------------------------------------------------- |Ayes:|Corbett, Harman, Bates, | | | | |Dutra, Jackson, | | | | |Longville, Robert | | | | |Pacheco, Rod Pacheco, | | | | |Steinberg, Vargas, Wayne | | | |-----+--------------------------+-----+--------------------------| | | | | | ----------------------------------------------------------------- SUMMARY : Seeks to revise the statutes relating to evidence of the condemnor's prejudgment deposit appraisal. Specifically, this bill : 1)Codifies case law holding that evidence of the prejudgment deposit appraisal may be used for purposes of impeaching a witness who prepared the appraisal. 2)Provides that evidence of the prejudgment deposit may be considered by the court in determining the amount of litigation expenses awarded to a defendant (property owner) when the court finds that the offer of the plaintiff (public entity) was unreasonable and the demand of the defendant was reasonable. FISCAL EFFECT : None COMMENTS : 1)This bill, sponsored by the California Law Revision Commission (CLRC), is intended to address issues that have arisen with respect to existing law governing evidence of the condemnor's prejudgment deposit appraisal. In March of 2001, CLRC published a preprint recommendation entitled, "Evidence of Prejudgment Deposit Appraisal in Eminent Domain," suggesting statutory improvements which seek to: a) Codify case law that evidence of the prejudgment deposit appraisal may be used for purposes of impeaching a witness AB 1770 Page 2 who prepared the appraisal; b) Emphasize that the protections against use of prejudgment deposit appraisal evidence apply equally to the property owner and the condemnor; and, c) Make clear that evidence of the prejudgment deposit may be used in determining the amount of litigation expenses for which a condemnor may be assessed. 2)In its recommendation, CLRC states the following by way of background: The California Constitution enables the condemnor in an eminent domain proceeding to take immediate possession of the property, even though valuation issues are yet to be tried and just compensation yet to be awarded. ? The Legislature has implemented the constitutional authority by enactment of a detailed procedure governing deposit and withdrawal of probable compensation. As a practical matter, it is routine for the condemnor to use the prejudgment procedure. The condemnor in the ordinary case makes a prejudgment deposit of probable compensation. The deposit is based on the condemnor's appraisal of the property. The deposit enables the condemnor to take immediate possession of the property. ? The law protects the condemnor from use of the prejudgment deposit appraisal against it at trial. The intent of the law is to encourage the condemnor to make a fully adequate prejudgment deposit, without fear of prejudicing its position at trial. 3)CLRC states that certain issues have arisen concerning several aspects of existing law that make this bill necessary, among them: a) Are the evidentiary rules effective in ensuring adequacy of the deposit, and can they be improved? b) Does protection of a valuation witness from impeachment by a prejudgment deposit appraisal unduly impair the property owner's ability to prove fair market value? 4)A key issue in this bill relates to the impeachment of a prejudgment deposit appraisal witness. Under existing law, an AB 1770 Page 3 appraisal witness may not be impeached at trial by the witness' own previously-made prejudgment deposit appraisal. According to the sponsor, the intent of this provision was to encourage a condemnor to make a fully adequate prejudgment deposit without fear that this might be held against it later at trial. This bill would codify the case of County of Contra Costa v. Pinole Point Properties, Inc. , (1994) 27 Cal.App. 4th 1105, in which the court held that evidence of the prejudgment deposit appraisal may be used for purposes of impeaching a witness who prepared the appraisal. In explaining the need for this change, CLRC states: The court in Pinole Point Properties was concerned that a literal interpretation of the statute might violate the constitutional guarantee of just compensation. The essence of a condemnation action is to determine the fair market value of condemned property, and a rule that prohibits a landowner from questioning a witness about a prior inconsistent opinion interferes with the constitutional right to compensation in a fundamental way. ? [T]he statute should be revised to allow expressly for impeachment of an appraiser who later testifies as to a different value. An appraiser who testifies under oath at an eminent domain trial should be held to explain why that valuation differs from the valuation of the same property made by the same appraiser earlier in the proceeding. Analysis Prepared by : Saskia Kim / JUD. / (916) 319-2334 FN: 0004274