AB 2023, as amended, 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.begin delete If the court determines that it is more likely than notend deletebegin insert The bill would provideend insert thatbegin delete goodwill did exist,end delete evidence of the other elements would be presented to the trier of factbegin insert only if there is credible evidence that goodwill ex istedend insert.
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) (1) The owner of a business conducted on the
4property taken, or on the remainder if the property is part of a
P2 1larger parcel, shall be compensated for loss of goodwill if the
2owner proves all of the following:
3(A) Goodwill existed in the business before the owner’s property
4was taken.
5(B) The loss is caused by the taking of the property or the injury
6to the remainder.
7(C) 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(D) Compensation for the loss will not be included in payments
12under Section 7262 of the Government Code.
13(E) Compensation for the loss will not be duplicated in the
14compensation otherwise awarded to the owner.
15(2) begin deleteThe court shall first determine whether the owner has begin insertIf there is credible evidence end insertthat goodwill existed before
16presented evidence sufficient to establish the matter described in
17subparagraph (A). If the court determines that it is more likely
18than not end delete
19the taking, evidence of the matters described in subparagraphs (B)
20throughbegin delete (F)end deletebegin insert
(E)end insert, inclusive,begin insert of paragraph (1)end insert shall be presented to
21the trier of fact.
22(b) Within the meaning of this article, “goodwill” consists of
23the benefits that accrue to a business as a result of its location,
24reputation for dependability, skill or quality, and any other
25circumstances resulting in probable retention of old or acquisition
26of new patronage.
27(c) If the public entity and the owner enter into a leaseback
28agreement pursuant to Section 1263.615, the following shall apply:
29(1) No additional goodwill shall accrue during the lease.
30(2) The entering of a leaseback agreement shall not be a factor
31in determining goodwill.
Any liability for goodwill shall be
32established and paid at the time of acquisition of the property by
33eminent domain or subsequent to notice that the property may be
34taken by eminent domain.
It is the intent of the Legislature, in amending
36subdivision (a) of Section 1263.510 of the Code of Civil Procedure,
37to overrule People ex rel. Dept. of Transp. v. Dry Canyon
38Enterprises, 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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