AB 2023, as introduced, Wagner. Eminent domain: compensation: loss of goodwill.
Existing law provides that an owner of property taken by eminent domain is entitled to compensation for loss of goodwill if the owner proves certain specified elements.
This bill would require than an owner additionally prove that goodwill existed before the taking. If the court determines that it is more likely than not that goodwill did exist, evidence of the other elements would be presented to the trier of fact.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 1263.510 of the Code of Civil Procedure
2 is amended to read:
(a) begin insert(1)end insertbegin insert end insert The owner of a business conducted on the
4property taken, or on the remainder if the property is part of a
5larger parcel, shall be compensated for loss of goodwill if the
6owner proves all of the following:
P2 1(A) Goodwill existed in the business before the owner’s property
2was taken.
3(1)
end delete
4begin insert(B)end insert The loss is caused by the taking of the property or the injury
5to the remainder.
6(2)
end delete
7begin insert(C)end insert The loss cannot reasonably be prevented by a relocation of
8the business or by taking steps and adopting procedures that a
9reasonably prudent person would take and adopt in preserving the
10goodwill.
11(3)
end delete
12begin insert(D)end insert Compensation for the loss will not be included in payments
13under Section 7262 of the Government Code.
14(4)
end delete
15begin insert(E)end insert Compensation for the loss will not be duplicated in the
16compensation otherwise awarded to the owner.
17(2) The court shall first determine whether the owner has
18presented evidence sufficient to establish the matter described in
19subparagraph (A). If the court determines that it is more likely
20than not that goodwill existed before the taking, evidence of the
21matters described in subparagraphs (B) through (F),
inclusive,
22shall be presented to the trier of fact.
23(b) Within the meaning of this article, “goodwill” consists of
24the benefits that accrue to a business as a result of its location,
25reputation for dependability, skill or quality, and any other
26circumstances resulting in probable retention of old or acquisition
27of new patronage.
28(c) If the public entity and the owner enter into a leaseback
29agreement pursuant to Section 1263.615, the following shall apply:
30(1) No additional goodwill shall accrue during the lease.
31(2) The entering of a leaseback agreement shall not be a factor
32in determining goodwill. Any liability for goodwill shall be
33established and paid at the time of acquisition of the property by
34eminent domain or subsequent
to notice that the property may be
35taken by eminent domain.
It is the intent of the Legislature, in amending
37subdivision (a) of Section 1263.510 of the Code of Civil Procedure,
38to overrule People ex rel. Dept. of Transp. v. Dry Canyon
39Enterprises, LLC. (2012) 211 Cal.App.4th 486 to the extent that
P3 1decision requires that an owner establish preexisting goodwill by
2more than a preponderance of the evidence.
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