Eminent Domain: Condemnee Winning $8 Million Jury Verdict Award Was Entitled To Litigation Expenses (Inclusive Of Fees) Erroneously Denied By Trial Judge

 

Condemnor’s Final Settlement Offer Was $954,000; Condemnee’s Final Demand Was $4.5 Million—Condemnor’s Offer Was Not Done With Good Faith Accuracy.

     California’s eminent domain statutory scheme has a very specific fee shifting statute, allowing successful condemnees to obtain recovery of litigation expenses (including attorney’s fees) as measured by the final offers from condemnors versus the final demands by condemnees. (CCP § 1250.410.)

     The trial judge in San Diego Gas & Electric Co. v. Schmidt, Case No. D062671 (4^th Dist., Div. 1 July 21, 2014) (unpublished) denied condemnees’ litigation expenses even though they won a $8,034,000 jury verdict based on finding the “highest and best use” of their property was open-pit mining.

     This refusal to allow litigation expenses was reversed on appeal.

     The facts were that condemnor (SDG&E) made a final offer of $829,000, later increased to $954,000, while condemnees made a final demand of $5.5 million, later decreased to $4.4 million, with the SDG&E offer being $7.1 million less than the eventual jury award and only 11% of the jury verdict.

     The factors to consider whether section 1250.410 litigation expenses should be awarded are: (1) the delta between the final demand/offer and actual compensation awarded; (2) the percentage of the delta at issue; and (3) the good faith, care and accuracy of the demand versus offer. (L.A. County Metropolitan Transp. Auth. V. Continental Develop. Corp., 16 Cal.4^th 694, 720 (1997).)

     Pure math alone pointed in favor of granting condemnees an award of litigation expenses. However, the appellate court focused on the good faith, care and accuracy factor in connection with the final offer, concluding SDG&E failed under this element—after all, they had no mining valuation expert and condemnor pooh-poohed condemnees’ appraiser from the outset (although that appraiser was credited highly by the jury). Reversed and remanded, keeping in mind condemnees sought $656,839 in expert/attorney’s fees and $19,504 in costs. They will get a chance to recover these, plus some costs on appeal, on remand.