BILL ANALYSIS �
AB 436
Page 1
ASSEMBLY THIRD READING
AB 436 (Jones-Sawyer)
As Amended May 13, 2013
Majority vote
JUDICIARY 7-1
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|Ayes:|Wieckowski, Alejo, Chau, | | |
| |Dickinson, Garcia, | | |
| |Muratsuchi, Stone | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Maienschein | | |
| | | | |
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SUMMARY : Applies two existing rules for calculating a
plaintiff's damages to actions brought in inverse condemnation.
Specifically, this bill :
1)Applies the doctrine of comparative fault to actions in
inverse condemnation and would require a court or arbitrator
to reduce compensation paid to a plaintiff in an inverse
condemnation proceeding in direct proportion to his or her
percentage of comparative fault, if any, in the damaging of
property that constitutes a taking. However actions taken by
the plaintiff in applying for a land use permit or entitlement
shall not be construed to as causing damage to the property.
2)Provides that if a defendant in an inverse condemnation
action, on or after January 1, 2014, makes an offer that the
plaintiff does not accept, and the plaintiff fails to obtain a
judgment or award, the plaintiff shall not recover his or her
post-offer costs and shall pay the defendant's post-offer
costs, which may include the costs for expert witnesses.
3)Provides that if a defendant in an inverse condemnation
action, on or after January 1, 2014, makes an offer that the
plaintiff does not accept, and the plaintiff fails to obtain a
more favorable judgment or award, the plaintiff shall not
recover his or her post-offer costs, but the plaintiff shall
not be required to pay the defendant's post-offer costs.
FISCAL EFFECT : None
AB 436
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COMMENTS : Article I, Section 19 of the California Constitution
provides that when a public entity takes or damages property, it
must pay the owner just compensation. Unlike the 5th Amendment
to the United States (U.S.) Constitution, which only refers to
the "taking" of property for a "public use," the California
Constitution guarantees "just compensation" whether the public
entity "takes" or "damages" property. The "taking" of property
by eminent domain occurs when the public entity initiates a
"condemnation" proceeding against the property owner. However,
when a project of a public entity unintentionally "damages"
property - e.g., where a publicly maintained flood control
project fails and destroys and thereby virtually takes property
- the property owner may bring an action in "inverse"
condemnation against the public entity. One key difference
therefore, in a conventional eminent domain "condemnation"
action the government is the plaintiff and the property owner is
the defendant. Any questions concern whether the taking is for
a "public use" or the appropriate amount of "just compensation."
In an inverse condemnation action, however, the property owner
is the plaintiff and the government is the defendant. Also,
unlike an eminent domain action, where there is unquestionably a
"taking," in the inverse condemnation action the plaintiff must
establish that the damage constitutes a taking as a threshold
matter before proceeding to the question of just compensation.
This bill seeks to apply two legal principles commonly applied
in civil suits to actions in inverse condemnation. First, this
bill would apply the doctrine of comparative fault to actions in
inverse condemnation. According to the author, "the
long-standing rationale behind the rule of comparative fault is
to allocate responsibility and liability for damage by the
actual proportion of the fault of the persons whose negligence
caused the injury. To do otherwise results in a situation that
creates unjust enrichment for one side over the other." Second,
the bill would expressly apply the post-settlement-offer cost
rules of Code of Civil Procedure Section (CCP) 998 to inverse
condemnation actions. Under that section, if a plaintiff
rejects a settlement offer that turns out to be more than the
final judgment awarded, then the plaintiff cannot recover
post-offer costs and may be required to pay the defendant's
post-offer costs. This bill would apply a modified version of
that rule to inverse condemnation actions by drawing a
distinction between a plaintiff that receives a final judgment
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award that is less than the settlement offer and a plaintiff
that receives no award at all. Under existing CCP Section 998,
a plaintiff that rejects a settlement offer that exceeds the
final award may not recover post-offer costs and may be liable
for the defendant's post-offer costs. Under this bill, in an
inverse condemnation action, the plaintiff that rejects a
settlement offer that exceeds the final award is not entitled to
post-offer costs, but that plaintiff is not liable for the
defendant's post-offer costs. Only if the plaintiff does not
prevail and receives no award at all is the plaintiff barred
from recovering his or her own post-offer costs and liable for
the defendant's post-offer costs.
According to the sponsor, the Los Angeles City Attorney's
Office, both the comparative fault doctrine and the statute
governing post-offer costs serve important public purposes that
should be extended to inverse condemnation cases. According to
the sponsor, the comparative fault doctrine properly allocates
liability according to the degree of fault, so that "if the
plaintiff's negligence contributed to his or her own personal
injury or property damages, the jury or fact finder must
apportion the damages between the parties based on their
respective fault." Under existing law, the sponsor argues, a
government agency would be liable for 100% of the damages even
if the plaintiff had caused 99% of the damage. Similarly, the
sponsor argues that applying CCP Section 998 to inverse
condemnation actions "is consistent with over 40 years of case
law set forth by the California Supreme Court and is good public
policy that will encourage settlements and alleviate unnecessary
burdens upon our court system." "In this time of economic
challenge," the sponsor concludes, "it is particularly important
for the Legislature to clarify these two issues so that
government agencies and the taxpayers they represent are only
held responsible for their proportionate share of the costs and
damages awarded in inverse condemnation cases." The bill is
supported by other cities, counties, and local government
associations for substantially the same reasons.
A number of law firms oppose this bill for two fundamental
reasons. First, they contend that this bill inappropriately
confuses common law tort principles with constitutional
analysis. Second, they argue that because "just compensation"
for damages to property is guaranteed by the state constitution,
any legislative reduction in that compensation - whether by
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imposing comparative fault or by applying CCP Section 998 rules
to diminish just compensation - is unconstitutional. Opponents
contend that while the courts have reduced public entity
liability in a narrow range of flood cases, this should not be
confused with incorporating tort principles of comparative
fault. When the courts speak of "reasonableness," the opponents
contend, they do not mean "reasonableness" in the same sense
that the term is used in tort law. Instead, they argue that
"reasonableness in the flood control context requires a
balancing of public need for the project against the gravity of
harm suffered by the damaged landowner. It is not an
application of traditional tort concepts of fault."
As for the application of CCP Section 998 to inverse
condemnation, the opposition argues that just compensation for
an inverse condemnation plaintiff includes cost reimbursement.
As such, they believe that reducing "or eliminating a cost
award, or imposing the burden of payment of a government
agency's costs or other expenses, would violate Article I,
Section 19," citing the Goebel case and, among others, Heimann
v. City of Los Angeles (1947) 30 Cal. 2d 746; City of Los
Angeles v. Richards (1973) 10 Cal.3d 385; and San Francisco v.
Collins (1893) 98 Cal. 259. In short, the opposition insists
that any reduction of the plaintiff's award, including any
recoverable costs and expenses, "would impermissibly deny owners
the just compensation to which they are [constitutionally]
entitled."
Analysis Prepared by : Thomas Clark / JUD. / (916) 319-2334
FN: 0000512