BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1770
                                                                  Page  1

          ASSEMBLY THIRD READING
          AB 1770 (Papan)
          As Introduced January 9, 2002
          Majority vote 

           JUDICIARY           11-0                                        
           
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          |Ayes:|Corbett, Harman, Bates,   |     |                          |
          |     |Dutra, Jackson,           |     |                          |
          |     |Longville, Robert         |     |                          |
          |     |Pacheco, Rod Pacheco,     |     |                          |
          |     |Steinberg, Vargas, Wayne  |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |     |                          |
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           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
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               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
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            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 


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