BILL NUMBER: AB 237 ENROLLED
BILL TEXT
PASSED THE ASSEMBLY SEPTEMBER 6, 2001
PASSED THE SENATE SEPTEMBER 4, 2001
AMENDED IN SENATE AUGUST 28, 2001
AMENDED IN SENATE MAY 31, 2001
AMENDED IN ASSEMBLY MAY 7, 2001
AMENDED IN ASSEMBLY APRIL 2, 2001
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, 1255.030, 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 Section 7267.2 of the Government Code,
relating to eminent domain procedure.
LEGISLATIVE COUNSEL'S DIGEST
AB 237, 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; and, if a judgment in eminent domain is not more favorable
to the moving party following nonbinding arbitration, would require
the court to order that party to pay to the other parties, specified
nonrefundable costs and fees unless the court finds in writing and on
motion that the imposition of costs and fees would create such a
substantial economic hardship as not to be in the interest of
justice.
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 and applicable zoning of the
property, the principal transactions, reproduction or replacement
cost analysis, or capitalization analysis, supporting the appraisal,
and if the appraisal includes compensation for damages to the
remainder, the compensation for the property and for damages to the
remainder stated separately, and the calculations and a narrative
explanation supporting the compensation, including any offsetting
benefits.
Existing law requires the court, upon motion, to determine or
redetermine whether the amount deposited is the probable amount of
compensation that will be awarded.
This bill would specify the information necessary to support that
motion.
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 an
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 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 specify the necessary detail required of the
written statement and summary, and would provide that the public
entity may meet the written statement, summary, and review
requirements by providing the property owner with a copy of the
appraisal.
The provisions of the bill would apply to any proceeding commenced
on or after January 1, 2002.
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 those 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 service of 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 court shall order that party to pay to the
other parties the following nonrefundable costs and fees, unless the
court finds in writing and on motion that the imposition of costs and
fees would create such a substantial economic hardship as not to be
in the interest of justice:
(1) All costs specified in Section 1033.5, limited to those
incurred from the time of election of the trial de novo. Nothing in
this subdivision affects the right of a defendant to recover costs
otherwise allowable pursuant to Section 1268.710, incurred before
election of a trial de novo, except that a defendant may recover the
costs of determining the apportionment of the award made pursuant to
subdivision (b) of Section 1260.220 whenever incurred.
(2) The reasonable costs of the services of expert witnesses who
are not regular employees of any party, actually incurred and
reasonably necessary in the preparation or trial of the case, limited
to those incurred from the time of election of the trial de novo.
(3) The compensation paid by the parties to the arbitrator.
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:
(A) The date of valuation, highest and best use, and applicable
zoning of the property.
(B) The principal transactions, reproduction or replacement cost
analysis, or capitalization analysis, supporting the appraisal.
(C) If the appraisal includes compensation for damages to the
remainder, the compensation for the property and for damages to the
remainder separately stated, and 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 1255.030 of the Code of Civil Procedure is amended
to read:
1255.030. (a) At any time after a deposit has been made pursuant
to this article, the court shall, upon motion of the plaintiff or of
any party having an interest in the property for which the deposit
was made, determine or redetermine whether the amount deposited is
the probable amount of compensation that will be awarded in the
proceeding. The motion shall be supported with detail sufficient to
indicate clearly the basis for the motion, including, but not limited
to, the following information to the extent relevant to the motion:
(1) The date of valuation, highest and best use, and applicable
zoning of the property.
(2) The principal transactions, reproduction or replacement cost
analysis, or capitalization analysis, supporting the motion.
(3) The compensation for the property and for damages to the
remainder separately stated, and the calculations and a narrative
explanation supporting the compensation, including any offsetting
benefits.
(b) If the plaintiff has not taken possession of the property and
the court determines that the probable amount of compensation exceeds
the amount deposited, the court may order the plaintiff to increase
the deposit or may deny the plaintiff possession of the property
until the amount deposited has been increased to the amount specified
in the order.
(c) If the plaintiff has taken possession of the property and the
court determines that the probable amount of compensation exceeds the
amount deposited, the court shall order the amount deposited to be
increased to the amount determined to be the probable amount of
compensation. If the amount on deposit is not increased accordingly
within 30 days from the date of the court's order, or any longer time
as the court may have allowed at the time of making the order, the
defendant may serve on the plaintiff a notice of election to treat
that failure as an abandonment of the proceeding. If the plaintiff
does not cure its failure within 10 days after receipt of such
notice, the court shall, upon motion of the defendant, enter judgment
dismissing the proceeding and awarding the defendant his or her
litigation expenses and damages as provided in Sections 1268.610 and
1268.620.
(d) After any amount deposited pursuant to this article has been
withdrawn by a defendant, the court may not determine or redetermine
the probable amount of compensation to be less than the total amount
already withdrawn. Nothing in this subdivision precludes the court
from making a determination or redetermination that probable
compensation is greater than the amount withdrawn.
(e) If the court determines that the amount deposited exceeds the
probable amount of compensation, it may permit the plaintiff to
withdraw the excess not already withdrawn by the defendant.
(f) The plaintiff may at any time increase the amount deposited
without making a motion under this section. In that case, notice of
the increase shall be served as provided in subdivision (a) of
Section 1255.020.
SEC. 7. 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 agreement, a date 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) Notwithstanding subdivision (a), 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. 8. 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 matter upon
which the witness will give an opinion, what that opinion is and the
following items to the extent that the opinion is based 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 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, and the
estimated gross rental income and deductions upon which the
reasonable net rental value is computed; the rate of capitalization
used; and the value indicated by 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 that other person, his business, occupation, or
profession, and a statement as to the subject matter to which his or
her 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 or her 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. 9. 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.
(c) This section supplements, and does not replace any other
pretrial or trial procedure otherwise available to resolve an
evidentiary or other legal issue affecting the determination of
compensation.
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.
(b) The public entity shall provide the owner of real property to
be acquired with a written statement of, and summary of the basis
for, the amount it established as just compensation. The written
statement and summary shall contain detail sufficient to indicate
clearly the basis for the offer, including, but not limited to, all
of the following information:
(1) The date of valuation, highest and best use, and applicable
zoning of property.
(2) The principal transactions, reproduction or replacement cost
analysis, or capitalization analysis, supporting the determination of
value.
(3) Where appropriate, the just compensation for the real property
acquired and for damages to remaining real property shall be
separately stated and shall include the calculations and narrative
explanation supporting the compensation, including any offsetting
benefits.
(c) 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. The public entity may, but
is not required to, satisfy the written statement, summary, and
review requirements of this section by providing the owner a copy of
the appraisal on which the offer is based.
(d) 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.
(e) As used in subdivision (d), "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.
SEC. 11. This act applies to any proceeding commenced on or after
January 1, 2002.