Amended in Senate June 15, 2014

Amended in Assembly April 21, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2023

Introduced by Assembly Member Wagner

February 20, 2014

An act to amend Section 1263.510 of the Code of Civil Procedure, relating to eminent domain.

LEGISLATIVE COUNSEL’S DIGEST

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. The bill would provide that evidence of the other elements would be presented to the trier of fact only if begin delete there is credible evidence that goodwill ex isted. end delete begin insert the owner produces evidence tending to show that goodwill existed before the taking. end 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 1.  

Section 1263.510 of the Code of Civil Procedure
is amended to read:

1263.510.  

(a) (1) The owner of a business conducted on the
property taken, or on the remainder if the property is part of a
larger parcel, shall be compensated for loss of goodwill if the
owner proves all of the following:

(A) Goodwill existed in the business before the owner’s property
was taken.

(B) The loss is caused by the taking of the property or the injury
to the remainder.

(C) The loss cannot reasonably be prevented by a relocation of
the business or by taking steps and adopting procedures that a
reasonably prudent person would take and adopt in preserving the
goodwill.

(D) Compensation for the loss will not be included in payments
under Section 7262 of the Government Code.

(E) Compensation for the loss will not be duplicated in the
compensation otherwise awarded to the owner.

(2)  begin delete If there is credible evidence that goodwill existed before the
taking, end delete begin insert If the owner produces evidence tending to show that
goodwill existed before the taking, end insert evidence of the matters
described in subparagraphs (B) through (E), inclusive, of paragraph
(1) shall be presented to the trier of fact.

(b) Within the meaning of this article, “goodwill” consists of
the benefits that accrue to a business as a result of its location,
reputation for dependability, skill or quality, and any other
circumstances resulting in probable retention of old or acquisition
of new patronage.

(c) If the public entity and the owner enter into a leaseback
agreement pursuant to Section 1263.615, the following shall apply:

(1) No additional goodwill shall accrue during the lease.

(2) The entering of a leaseback agreement shall not be a factor
in determining goodwill. Any liability for goodwill shall be
established and paid at the time of acquisition of the property by
eminent domain or subsequent to notice that the property may be
taken by eminent domain.

begin delete

SEC. 2.  

It is the intent of the Legislature, in amending
subdivision (a) of Section 1263.510 of the Code of Civil Procedure,
to overrule People ex rel. Dept. of Transp. v. Dry Canyon
Enterprises, LLC. (2012) 211 Cal.App.4th 486 to the extent that
decision requires that an owner establish preexisting goodwill by
more than a preponderance of the evidence.

end delete