BILL NUMBER: AB 237 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Papan
FEBRUARY 13, 2001
An act to amend the heading of Article 6 (commencing with Section
1250.410) of Chapter 5 of Title 7 of Part 3 of, to amend Sections
1250.410, 1255.010, 1258.220, and 1258.260 of, and to add Sections
1250.420, 1250.430, and 1260.040 to, the Code of Civil Procedure, and
to amend Sections 7267.1 and 7267.2 of the Government Code, relating
to eminent domain procedure.
LEGISLATIVE COUNSEL'S DIGEST
AB 237, as introduced, Papan. Eminent domain.
Existing law, the Eminent Domain Law, provides a procedure to
exercise the power of eminent domain to acquire property for a public
use. It details the rules for the commencement of such a proceeding
and for compensation of the owner of the property. Existing law
requires, at least 20 days prior to the date of the trial on the
issues relating to compensation, for the plaintiff to file with the
court and serve on the defendant its final offer of compensation in
the proceeding and the defendant to file and serve on the plaintiff
its final demand for compensation in the proceeding.
This bill would require the final offer and demand to include all
elements of required compensation, including compensation for loss of
goodwill, and to indicate whether or not interest and costs are
included.
The bill also would provide that the parties may by agreement
refer a dispute that is the subject of an eminent domain proceeding
for resolution by mediation or binding or nonbinding arbitration, as
specified.
The bill would provide that, upon motion of a party, the court may
postpone the date of trial in an eminent domain proceeding for a
period that appears adequate to enable resolution of a dispute
pursuant to alternative resolution procedures provided that the court
is satisfied that certain conditions are met, as specified.
Existing law provides that at any time before entry of the
judgment, the plaintiff may deposit with the State Treasury the
probable amount of compensation, based on an appraisal, that will be
awarded in the proceeding. Existing law requires the plaintiff,
prior to making the deposit, to have an expert qualified to express
an opinion as to the value of the property make an appraisal of the
property and prepare a written statement of, or summary of, the basis
for the appraisal.
This bill would require the statement or summary to contain detail
sufficient to clearly indicate the basis for the appraisal,
including the highest and best use on which the appraisal of the
property is based, and if the appraisal is based on market data, the
principal transactions supporting the appraisal, and if the appraisal
includes compensation for damages to the remainder, the calculations
and a narrative explanation supporting the compensation, including
any offsetting benefits.
Existing law defines the "date of exchange" for the purposes of
the provisions relating to exchange of valuation data in eminent
domain proceedings, as the date agreed to by the parties for the
exchange of their lists of expert witnesses and statements of
valuation data by the party who served a demand and the party on whom
the demand was served, or, failing agreement, a date 60 days prior
to commencement of the trial on the issue of compensation, or the
date set by the court on noticed motion of either party establishing
good cause therefor.
This bill would provide that failing agreement, the date of
exchange is a date 90, rather than 60, days prior to the above
specified events, and would provide that unless otherwise agreed to
by the parties, the date of exchange shall not be earlier than 9
months after the date of commencement of the proceeding.
Existing law requires the statement of valuation data to provide
the name and business or residence address of the witness and to
include a statement whether the witness will testify to an opinion,
as specified.
This bill would require the method used to determine a loss of
good will and a summary of the data supporting the opinion to be
included in the exchange of valuation data. Moreover, the bill would
provide that either party may move the court for a ruling on a
evidentiary or other legal issue affecting the determination of
compensation, and would require the motion to be made 60 days before
commencement of trial on the issue of compensation. The bill would
authorize the court to postpone the date of final offers and demands
of the parties and the date of trial for a period sufficient to
enable the parties to engage in further proceedings before trial in
response to the court's ruling on the motion.
Existing law requires a public entity that is attempting to
acquire real property by negotiation to have the property appraised
before the initiation of the negotiations, as specified.
This bill would provide that the public entity's appraisal, and
any other valuation opinion expressed by or on behalf of a party
prepared for the purpose of negotiation, is inadmissible in the trial
of the issue of just compensation, as specified.
Existing law requires a public entity to establish an amount which
it believes to be just compensation for the acquisition of real
property and to provide the owner of real property with a written
statement of, and summary of the basis for, the amount it established
as just compensation. Existing law provides that where the property
is owner occupied residential property and contains no more than 4
residential units, the homeowner shall, upon request, be allowed to
review a copy of the appraisal upon which the offer is based.
This bill would delete the latter provision and would require the
public entity to provide a copy of the appraisal on which the offer
is based to the owner of real property.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The heading of Article 6 (commencing with Section
1250.410) of Chapter 5 of Title 7 of Part 3 of the Code of Civil
Procedure is amended to read:
Article 6. Settlement Offers and Alternative Dispute
Resolution
SEC. 2. Section 1250.410 of the Code of Civil Procedure is amended
to read:
1250.410. (a) At least 20 days prior to the date of the trial on
issues relating to compensation, the plaintiff shall file with the
court and serve on the defendant its final offer of compensation in
the proceeding and the defendant shall file and serve on the
plaintiff its final demand for compensation in the proceeding.
The offer and the demand shall include all compensation required
pursuant to this title, including compensation for loss of goodwill,
if any, and shall state whether interest and costs are included.
Such offers and demands shall be the only offers and demands
considered by the court in determining the entitlement, if any, to
litigation expenses. Service shall be in the manner prescribed by
Chapter 5 (commencing with Section 1010) of Title 14 of Part 2.
(b) If the court, on motion of the defendant made within 30 days
after entry of judgment, finds that the offer of the plaintiff was
unreasonable and that the demand of the defendant was reasonable
viewed in the light of the evidence admitted and the compensation
awarded in the proceeding, the costs allowed pursuant to Section
1268.710 shall include the defendant's litigation expenses.
In determining the amount of such litigation expenses, the court
shall consider the offer required to be made by the plaintiff
pursuant to Section 7267.2 of the Government Code and any other
written offers and demands filed and served prior to or during the
trial.
(c) If timely made, the offers and demands as provided in
subdivision (a) shall be considered by the court on the issue of
determining an entitlement to litigation expenses.
SEC. 3. Section 1250.420 is added to the Code of Civil Procedure,
to read:
1250.420. The parties may by agreement refer a dispute that is
the subject of an eminent domain proceeding for resolution by any of
the following means:
(a) Mediation by a neutral mediator.
(b) Binding arbitration by a neutral arbitrator. The arbitration
is subject to Chapter 12 (commencing with Section 1273.010).
(c) Nonbinding arbitration by a neutral arbitrator. The arbitrator'
s decision in a nonbinding arbitration is final unless within 30 days
after the arbitrator's decision a party moves the court for a trial
of the eminent domain proceeding. If the judgment in the eminent
domain proceeding is not more favorable to the moving party, the
moving party shall, notwithstanding any other statute, pay the costs
and litigation expenses of the parties in the eminent domain
proceeding.
SEC. 4. Section 1250.430 is added to the Code of Civil Procedure,
to read:
1250.430. Notwithstanding any other statute or rule of court
governing the date of trial of an eminent domain proceeding, on
motion of a party the court may postpone the date of trial for a
period that appears adequate to enable resolution of a dispute
pursuant to alternative resolution procedures, if it is demonstrated
to the satisfaction of the court that all of the following conditions
are satisfied:
(a) The parties are actively engaged in alternative resolution of
the dispute pursuant to Section 1250.420.
(b) The parties appear to be making progress toward resolution of
the dispute without the need for a trial of the matter.
(c) The parties agree that additional time for the purpose of
alternative dispute resolution is desirable.
SEC. 5. Section 1255.010 of the Code of Civil Procedure is amended
to read:
1255.010. (a) At any time before entry of judgment, the plaintiff
may deposit with the State Treasury the probable amount of
compensation, based on an appraisal, that will be awarded in the
proceeding. The appraisal upon which the deposit is based shall be
one that satisfies the requirements of subdivision (b). The deposit
may be made whether or not the plaintiff applies for an order for
possession or intends to do so.
(b) Before making a deposit under this section, the plaintiff
shall have an expert qualified to express an opinion as to the value
of the property (1) make an appraisal of the property and (2) prepare
a written statement of, or summary of the basis for, the appraisal.
The statement or summary shall contain detail sufficient to
indicate clearly the basis for the appraisal, including, but not
limited to, all of the following information:
(1) The highest and best use on which the appraisal of the
property is based.
(2) If the appraisal is based on market data, the principal
transactions supporting the appraisal.
(3) If the appraisal includes compensation for damages to the
remainder, the calculations and a narrative explanation supporting
the compensation, including any offsetting benefits.
(c) On noticed motion, or upon ex parte application in an
emergency, the court may permit the plaintiff to make a deposit
without prior compliance with subdivision (b) if the plaintiff
presents facts by affidavit showing that (1) good cause exists for
permitting an immediate deposit to be made, (2) an adequate appraisal
has not been completed and cannot reasonably be prepared before
making the deposit, and (3) the amount of the deposit to be made is
not less than the probable amount of compensation that the plaintiff,
in good faith, estimates will be awarded in the proceeding. In its
order, the court shall require that the plaintiff comply with
subdivision (b) within a reasonable time, to be specified in the
order, and also that any additional amount of compensation shown by
the appraisal required by subdivision (b) be deposited within that
time.
SEC. 6. Section 1258.220 of the Code of Civil Procedure is amended
to read:
1258.220. (a) For the purposes of this article, the
"date of exchange" is the date agreed to for the exchange of their
lists of expert witnesses and statements of valuation data by the
party who served a demand and the party on whom the demand was served
or, failing such agreement, a date 60
90 days prior to commencement of the trial on
the issue of compensation or the date set by the court on noticed
motion of either party establishing good cause therefor.
(b) Unless otherwise agreed to by the parties, the date of
exchange shall not be earlier than nine months after the date of
commencement of the proceeding.
SEC. 7. Section 1258.260 of the Code of Civil Procedure is amended
to read:
1258.260. (a) The statement of valuation data shall give the name
and business or residence address of the witness and shall include a
statement whether the witness will testify to an opinion as to any
of the matters listed in Section 1258.250 and, as to each
such matter upon which he the
witness will give an opinion, what that opinion is and the
following items to the extent that the opinion on such
matter is based thereon on them
:
(1) The interest being valued.
(2) The date of valuation used by the witness.
(3) The highest and best use of the property.
(4) The applicable zoning and the opinion of the witness as to the
probability of any change in such zoning.
(5) The sales, contracts to sell and purchase, and leases
supporting the opinion.
(6) The cost of reproduction or replacement of the existing
improvements on the property, the depreciation or obsolescence the
improvements have suffered, and the method of calculation used to
determine depreciation.
(7) The gross income from the property, the deductions from gross
income, and the resulting net income; the reasonable net rental value
attributable to the land and existing improvements thereon
, and the estimated gross rental income and deductions
therefrom upon which such
the reasonable net rental value is computed; the rate of
capitalization used; and the value indicated by such
the capitalization.
(8) If the property is a portion of a larger parcel, a description
of the larger parcel and its value.
(9) If the opinion concerns loss of goodwill, the method used to
determine the loss, and a summary of the data supporting the opinion.
(b) With respect to each sale, contract, or lease listed under
paragraph (5) of subdivision (a), the statement of valuation data
shall give:
(1) The names and business or residence addresses, if known, of
the parties to the transaction.
(2) The location of the property subject to the transaction.
(3) The date of the transaction.
(4) If recorded, the date of recording and the volume and page or
other identification of the record of the transaction.
(5) The price and other terms and circumstances of the
transaction. In lieu of stating the terms contained in any contract,
lease, or other document, the statement may, if the document is
available for inspection by the adverse party, state the place where
and the times when it is available for inspection.
(6) The total area and shape of the property subject to the
transaction.
(c) If any opinion referred to in Section 1258.250 is based in
whole or in substantial part upon the opinion of another person, the
statement of valuation data shall include the name and business or
residence address of such other person, his business, occupation, or
profession, and a statement as to the subject matter to which his
opinion relates.
(d) Except when an appraisal report is used as a statement of
valuation data as permitted by subdivision (e), the statement of
valuation data shall include a statement, signed by the witness, that
the witness has read the statement of valuation data and that it
fairly and correctly states his opinions and knowledge as to the
matters therein stated.
(e) An appraisal report that has been prepared by the witness
which includes the information required to be included in a statement
of valuation data may be used as a statement of valuation data under
this article.
SEC. 8. Section 1260.040 is added to the Code of Civil Procedure,
to read:
1260.040. (a) If there is a dispute between plaintiff and
defendant over an evidentiary or other legal issue affecting the
determination of compensation, either party may move the court for a
ruling on the issue. The motion shall be made not later than 60 days
before commencement of trial on the issue of compensation. The
motion shall be heard by the judge assigned for trial of the case.
(b) Notwithstanding any other statute or rule of court governing
the date of final offers and demands of the parties and the date of
trial of an eminent domain proceeding, the court may postpone those
dates for a period sufficient to enable the parties to engage in
further proceedings before trial in response to its ruling on the
motion.
SEC. 9. Section 7267.1 of the Government Code is amended to read:
7267.1. (a) The public entity shall make every reasonable effort
to acquire expeditiously real property by negotiation.
(b) Real property shall be appraised before the initiation of
negotiations, and the owner, or the owner's designated
representative, shall be given an opportunity to accompany the
appraiser during his or her inspection of the property. However, the
public entity may prescribe a procedure to waive the appraisal in
cases involving the acquisition by sale or donation of property with
a low fair market value.
(c) The public entity's appraisal, and any other valuation opinion
expressed by or on behalf of a party prepared for the purpose of
negotiation pursuant to this chapter, is inadmissible in evidence in
the trial of the issue of just compensation to the following extent:
(1) The appraisal or other opinion may not be given in evidence or
referred to, nor shall the appraisal or other opinion be considered
to be an admission of a party.
(2) On objection of a party, the person who prepared the appraisal
or expressed the opinion on behalf of that party may not be called
at trial by an adverse party to give an opinion as to compensation.
If the person who prepared the appraisal or expressed the opinion is
called at trial to give an opinion as to compensation, the appraisal
or other opinion may be used for impeachment of the witness.
SEC. 10. Section 7267.2 of the Government Code is amended to read:
7267.2. (a) Prior to adopting a resolution of necessity pursuant
to Section 1245.230 of the Code of Civil Procedure and
initiating negotiations for the acquisition of real property, the
public entity shall establish an amount which it believes to be just
compensation therefor, and shall make an offer to the owner or owners
of record to acquire the property for the full amount so
established, unless the owner cannot be located with reasonable
diligence. The offer may be conditioned upon the legislative body's
ratification of the offer by execution of a contract of acquisition
or adoption of a resolution of necessity or both. In no event shall
the amount be less than the public entity's approved appraisal of the
fair market value of the property. Any decrease or increase in the
fair market value of real property to be acquired prior to the date
of valuation caused by the public improvement for which the property
is acquired, or by the likelihood that the property would be acquired
for the improvement, other than that due to physical deterioration
within the reasonable control of the owner or occupant, shall be
disregarded in determining the compensation for the property.
The
(b) The public entity shall provide the owner of real
property to be acquired with a copy of the appraisal on which
the offer is based. The appraisal shall also include a written
statement of, and summary of the basis for, the amount it
established as just compensation. Where the property
involved is owner occupied residential property and contains no more
than four residential units, the homeowner shall, upon request, be
allowed to review a copy of the appraisal upon which the offer is
based. Where appropriate, the just compensation for the
real property acquired and for damages to remaining real property
shall be separately stated.
(b)
(c) Notwithstanding subdivision (a), a public entity may
make an offer to the owner or owners of record to acquire real
property for less than an amount which it believes to be just
compensation therefor if (1) the real property is offered for sale by
the owner at a specified price less than the amount the public
entity believes to be just compensation therefor, (2) the public
entity offers a price which is equal to the specified price for which
the property is being offered by the landowner, and (3) no federal
funds are involved in the acquisition, construction, or project
development.
(c)
(d) As used in subdivision (b) (c)
, "offered for sale" means any of the following:
(1) Directly offered by the landowner to the public entity for a
specified price in advance of negotiations by the public entity.
(2) Offered for sale to the general public at an advertised or
published, specified price set no more than six months prior to and
still available at the time the public entity initiates contact with
the landowner regarding the public entity's possible acquisition of
the property.