BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1770|
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THIRD READING
Bill No: AB 1770
Author: Papan (D)
Amended: As introduced
Vote: 21
SENATE JUDICIARY COMMITTEE : 6-0, 6/4/02
AYES: Escutia, Ackerman, Haynes, Kuehl, Peace, Sher
ASSEMBLY FLOOR : 74-0, 4/4/02 - See last page for vote
SUBJECT : Eminent domain proceedings
SOURCE : Author
DIGEST : This bill provides that, in determining
litigation expenses to be awarded to the defendant as costs
in an eminent domain proceeding, the court shall consider
the reasonableness of any prejudgment deposit made by the
plaintiff to cover probable compensation to the defendant.
The bill also provides that, if an appraiser places one
value on the property for prejudgment deposit purposes and
swears to a different amount at trial, the appraiser may be
questioned about the discrepancy.
ANALYSIS : Existing law provides that, after a trial
establishing the fair market value of property condemned
through eminent domain, the court, on motion of the
defendant, shall consider the final pre-trial compensation
offer and demand of the parties to determine the
defendant's entitlement, if any, to litigation expenses.
CONTINUED
AB 1770
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Existing law further provides that, if the court finds the
offer of the plaintiff was unreasonable and that the demand
of the defendant was reasonable viewed in light of the
evidence admitted and the compensation awarded at trial,
the court shall award litigation expenses (including
reasonable attorney's fees) to the defendant.
Existing law further provides that, prior to trial, a
plaintiff may (and in order to take pre-trial possession of
the condemned property, must) make a prejudgment deposit of
the amount of probable compensation to be awarded to the
defendant at trial.
This bill provides that, in determining the amount of
litigation expenses to be awarded, the court shall
consider, in addition to the amount of the plaintiff's
final pre-trial offer, the amount of any prejudgment
deposit of probable compensation made by the plaintiff.
Existing law provides that, in a trial on the issue of
property valuation, a witness may not be impeached by
reference to any appraisal report or other statement made
in connection with a prejudgment deposit of probable
compensation.
Existing case law provides that, when the person who
prepared the appraisal on which the prejudgment deposit was
based is called as a witness to give an opinion as to
property valuation at trial, that witness may be questioned
about any discrepancies between the prejudgment deposit
appraisal and the witness' appraisal opinion at trial.
(County of Contra Costa v. Pinole Point Properties (1994)
27 Cal. App. 4th 1105)
This bill codifies the holding in the Pinole Point
Properties case, excepting from the general rule that a
trial witness may not be impeached by a prejudgment deposit
appraisal those circumstances where the witness is the same
person who prepared that earlier appraisal.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
AB 1770
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SUPPORT : (Verified 6/5/02)
California Law Revision Commission
OPPOSITION : (Verified 6/5/02)
California Association of Sanitation Agencies
ARGUMENTS IN SUPPORT : The California Law Revision
Commission (CLRC), sponsor of this bill, recently issued a
publication entitled "Evidence of Prejudgment Deposit
Appraisal in Eminent Domain" that provides the basis for
this proposed legislation.
The CLRC notes first, that under existing law, a condemning
authority that takes possession of the property prior to
trial must make a sort of "security deposit" of a sum
determined by expert assessment to be the probable amount
of compensation to be awarded at trial. In order to ensure
that an adequate amount is deposited without prejudicing
the condemnor's position on the issue of valuation at
trial, the law provides that evidence as to the amount of
the security deposit is inadmissible at trial.
The CLRC states it is unclear whether the inadmissibility
of the deposit amount at trial actually provides much of an
incentive for condemnors to make adequate deposits. A
better incentive, it argues, would be to allow the amount
of the security deposit to be taken into consideration --
like the condemnor's final offer of compensation -- in
post-trial motions for litigation expenses. Since an
unduly low deposit, like a low final offer, would be
evidence of "unreasonableness" that could result in an
award of litigation expenses to a defendant, a condemnor
presumably would have a more direct incentive to make an
adequate prejudgment deposit.
The amendment provides that "any deposit" made by the
plaintiff for prejudgment security would be considered in
assessing reasonableness, assuring that supplemental
deposits wold be added to any original deposit for purposes
of the assessment. CLRC asserts this proposed amendment
would not prejudice condemnors, since the amount of the
security deposit would remain inadmissible at trial.
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Further, the CLRC notes that, as a practical matter, many
condemning authorities already base their prejudgment
security deposits on the amount of their final pre-trial
offers of compensation.
ARGUMENTS IN OPPOSITION : The California Association of
Sanitation Agencies opposes the bill unless it is amended
to delete the provision that would codify the Pinole
ruling. The association argues:
"AB 1770 would essentially give property owners
additional tools to negotiate property
acquisition prices that are above fair market
value. . . . [P]ublic agencies may have no
recourse but to hire a new appraiser and contract
for a new appraisal report, resulting in
substantial costs to ratepayers and taxpayers,
rather than face a loss on the issue of
compensation in court due to the impeached
credibility of the appraiser."
ASSEMBLY FLOOR :
AYES: Aanestad, Alquist, Aroner, Ashburn, Bates, Bogh,
Calderon, Bill Campbell, John Campbell, Canciamilla,
Cardenas, Cardoza, Chan, Chavez, Chu, Cogdill, Cohn,
Corbett, Correa, Cox, Daucher, Diaz, Dickerson, Dutra,
Firebaugh, Florez, Frommer, Goldberg, Harman, Havice,
Hollingsworth, Horton, Jackson, Keeley, Kehoe, Kelley,
Koretz, La Suer, Leach, Leslie, Liu, Longville,
Lowenthal, Maddox, Maldonado, Matthews, Mountjoy, Nakano,
Nation, Negrete McLeod, Oropeza, Robert Pacheco, Rod
Pacheco, Papan, Pavley, Pescetti, Reyes, Richman, Runner,
Salinas, Shelley, Simitian, Steinberg, Strickland,
Strom-Martin, Thomson, Vargas, Wayne, Wiggins, Wright,
Wyland, Wyman, Zettel, Wesson
RJG:kb 6/6/02 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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