Handling The Eminent Handling The Eminent Domain ProcessDomain Process

Bergman Dacey Goldsmith, APLCBergman Dacey Goldsmith, APLCGreg M. BergmanGreg M. BergmanBrian J. BergmanBrian J. Bergman

10880 Wilshire Boulevard, Suite 90010880 Wilshire Boulevard, Suite 900Los Angeles, California 90024Los Angeles, California 90024

(310) 470-6110 (w); (310) 474-0931 (f)(310) 470-6110 (w); (310) 474-0931 (f)www.bdgfirm.comwww.bdgfirm.com

gbergman@bdgfirm.comgbergman@bdgfirm.com bbergman@bdgfirm.combbergman@bdgfirm.com

How is eminent domain defined under California law?How is eminent domain defined under California law?

Eminent domain is the power of government to take Eminent domain is the power of government to take private property for public use. While it is an inherent private property for public use. While it is an inherent power of the state, its exercise is restricted in both the power of the state, its exercise is restricted in both the California and United States Constitutions. California and United States Constitutions. The restrictionsThe restrictions– Private property may be taken or damaged for public use only Private property may be taken or damaged for public use only

when just compensation . . . has first been paid . . . ." (Cal. when just compensation . . . has first been paid . . . ." (Cal. Const., art. 1, § 19.) Const., art. 1, § 19.)

– Similarly, the Fourteenth Amendment to the United States Similarly, the Fourteenth Amendment to the United States Constitution mandates that the state shall not take property Constitution mandates that the state shall not take property without due process of law, including the requirement the state without due process of law, including the requirement the state make just compensation to the owner of property taken. make just compensation to the owner of property taken. County of San Diego v. Miller, 13 Cal. 3d 684, 687 (Cal. 1975)County of San Diego v. Miller, 13 Cal. 3d 684, 687 (Cal. 1975)

BDG’s 4 Step Approach to BDG’s 4 Step Approach to Handling Eminent Domain CasesHandling Eminent Domain Cases

Initial StepsInitial Steps

Pre-Condemnation Negotiation & OfferPre-Condemnation Negotiation & Offer

Resolution of NecessityResolution of Necessity

Court ProceedingsCourt Proceedings

Initial StepsInitial Steps

Assemble a teamAssemble a team

In-Depth ReviewIn-Depth Review

Perform title investigation Perform title investigation

Identify goalsIdentify goals

Initiate contactInitiate contact

The TeamThe Team

Include all relevant playersInclude all relevant players– Client Client – AttorneysAttorneys

Who else?Who else?– AppraiserAppraiser– Environmental consultantsEnvironmental consultants– Technical consultantsTechnical consultants

In-Depth ReviewIn-Depth Review

What actions have been taken to date?What actions have been taken to date?

Environmental Impact ReportEnvironmental Impact Report

Minutes of prior negotiationsMinutes of prior negotiations

AppraisalsAppraisals

Prior public findings?Prior public findings?

Title InvestigationTitle Investigation

What encumbrances are there on the What encumbrances are there on the property to be taken, if any?property to be taken, if any?

Get a preliminary title report as early as Get a preliminary title report as early as possible.possible.– Things to look out for:Things to look out for:

LiensLiens

EasementsEasements

Client GoalsClient Goals

What are the client’s goals for taking?What are the client’s goals for taking?– Time Time

California law provides a specific process for California law provides a specific process for taking property. What is MTA’s timeline for taking property. What is MTA’s timeline for acquiring possession of property, and how does acquiring possession of property, and how does that fit with the legal requirements?that fit with the legal requirements?

– MoneyMoneyCalifornia law mandates that the condemnee be California law mandates that the condemnee be provided “just compensation.” What is the MTA (or provided “just compensation.” What is the MTA (or the client) willing to pay?the client) willing to pay?

Making the Initial ContactMaking the Initial Contact

First impression is a lasting impressionFirst impression is a lasting impression– Sets toneSets tone– Posture/StrategyPosture/Strategy

Keeping in mind informal resolution v. litigationKeeping in mind informal resolution v. litigation

Express interest in the propertyExpress interest in the propertyDiscussion items:Discussion items:– ScheduleSchedule– Appraisal dateAppraisal date– Assessment dateAssessment date

Pre-Condemnation AppraisalPre-Condemnation Appraisal

Appraise the property, including all Appraise the property, including all improvementsimprovements– Effective January 1, 2007, the public entity Effective January 1, 2007, the public entity

must also pay for the property owner’s must also pay for the property owner’s appraiser, up to $5,000.appraiser, up to $5,000.

Conduct applicable environmental Conduct applicable environmental assessments.assessments.– Can get Court order for access to property if Can get Court order for access to property if

landowner will not provide access voluntarily.landowner will not provide access voluntarily.

Negotiations & Offer to PurchaseNegotiations & Offer to Purchase

Offer to purchase is made to the OwnerOffer to purchase is made to the Owner

Buyer is required to make a full price offer Buyer is required to make a full price offer at the amount stated based on the pre-at the amount stated based on the pre-condemnation appraisal.condemnation appraisal.

Offer cannot be less than the Buyer’s Offer cannot be less than the Buyer’s appraisal amount of the fair market value appraisal amount of the fair market value – Note: reductions may apply (environmental Note: reductions may apply (environmental

impact/contamination, etc…)impact/contamination, etc…)

Negotiations & Offer to Purchase (cont’d)Negotiations & Offer to Purchase (cont’d)

Written Offer for purchase must include the Written Offer for purchase must include the following: following: – Complete appraisal; or Complete appraisal; or – A summary statement that includes the following:A summary statement that includes the following:

Date of valuation; Date of valuation; The highest and best use of the property;The highest and best use of the property;Applicable zoning;Applicable zoning;Sales or analyses supporting the value determination; and Sales or analyses supporting the value determination; and the statement must separate the compensation for the the statement must separate the compensation for the property being acquired from the compensation offered for property being acquired from the compensation offered for any damagesany damages

– Must also include calculations and narratives supporting the Must also include calculations and narratives supporting the components of compensation. components of compensation.

Negotiations & Offer to Purchase (cont’d)Negotiations & Offer to Purchase (cont’d)

Also…Also…– Along with the written offer, Buyer must Along with the written offer, Buyer must

provide seller with:provide seller with:Information packet, which outlines the process of Information packet, which outlines the process of eminent domain; and eminent domain; and

Owner’s rights under the eminent domain laws. Owner’s rights under the eminent domain laws.

Resolution of NecessityResolution of Necessity

To take the property, the public entity must make To take the property, the public entity must make findings based on “substantial evidence,” that:findings based on “substantial evidence,” that:– The public interest and necessity require the project; The public interest and necessity require the project; – The project is planned or located in a manner that will The project is planned or located in a manner that will

be most compatible with the greatest public good be most compatible with the greatest public good andand the least private injury; and the least private injury; and

– The property sought to be acquired is necessary for The property sought to be acquired is necessary for the project.the project.

These findings are made in a “Resolution of These findings are made in a “Resolution of Necessity” that is adopted by the public entity.Necessity” that is adopted by the public entity.

Resolution of Necessity (cont’d)Resolution of Necessity (cont’d)

Resolution must contain:Resolution must contain:– A general statement of the public use for which the property is to A general statement of the public use for which the property is to

be taken and references to the applicable statutes that authorize be taken and references to the applicable statutes that authorize the public entity to acquire the property by eminent domain;the public entity to acquire the property by eminent domain;

– A description of the general location and extent of the property to A description of the general location and extent of the property to be taken; andbe taken; and

Must contain “sufficient detail for reasonable identification”Must contain “sufficient detail for reasonable identification”– A declaration that the governing body of the public entity has A declaration that the governing body of the public entity has

found and determined that:found and determined that:The public interest and necessity require the proposed project; The public interest and necessity require the proposed project; The proposed project is planned or located in a manner that will be The proposed project is planned or located in a manner that will be most compatible with the greatest public good and the least private most compatible with the greatest public good and the least private injury; injury; The property is necessary for the proposed public project; andThe property is necessary for the proposed public project; andThe offer of compensation has been made to the OwnerThe offer of compensation has been made to the Owner

Resolution of Necessity (cont’d)Resolution of Necessity (cont’d)

More requirements…More requirements…– The public entity may adopt the resolution of The public entity may adopt the resolution of

necessity only if the following condition is met:necessity only if the following condition is met:All persons whose property is to be acquired is provided with All persons whose property is to be acquired is provided with notice (via first class mail); and notice (via first class mail); and

A reasonable opportunity to be heardA reasonable opportunity to be heard

Environmental Concerns (CEQA)Environmental Concerns (CEQA)– The public entity must comply with its obligations The public entity must comply with its obligations

under environmental review lawsunder environmental review laws– Compliance must be confirmed prior to the takingCompliance must be confirmed prior to the taking

Relocation AssistanceRelocation Assistance

Pre-condition to initiation of eminent domain Pre-condition to initiation of eminent domain action in Court:action in Court:– The public entity must create a relocation assistance The public entity must create a relocation assistance

program for those affected by the proposed taking.program for those affected by the proposed taking.Reimbursement of reasonable moving expensesReimbursement of reasonable moving expenses

Reimbursement of reasonable expenses necessary to Reimbursement of reasonable expenses necessary to reestablish a displaced…small business, where substantial reestablish a displaced…small business, where substantial loss of patronage will occur, up to $10,000.00loss of patronage will occur, up to $10,000.00

Each reimbursement situation is different, and must be Each reimbursement situation is different, and must be carefully analyzed under the applicable law to determine carefully analyzed under the applicable law to determine allowable compensation.allowable compensation.

Court ProceedingsCourt Proceedings

The last resort…The last resort…

Court Proceedings (cont’d)Court Proceedings (cont’d)

Not all attempts to resolve informally will Not all attempts to resolve informally will achieve the desired resultsachieve the desired results

BDG and its team of experienced BDG and its team of experienced attorneys prepares the Eminent Domain attorneys prepares the Eminent Domain Complaint and serves it on all relevant Complaint and serves it on all relevant parties (in accordance with California’s parties (in accordance with California’s Eminent Domain laws).Eminent Domain laws).

Court Proceedings (cont’d)Court Proceedings (cont’d)

Options:Options:– Motion for Pre-Judgment PossessionMotion for Pre-Judgment Possession

Note: public entity must deposit the probable Note: public entity must deposit the probable amount of “just compensation.”amount of “just compensation.”

Options for Other SideOptions for Other Side– Anticipate legal attacks (i.e. Demurrer)Anticipate legal attacks (i.e. Demurrer)– AnswerAnswer– Cross-ComplaintCross-Complaint

Court Proceedings (cont’d)Court Proceedings (cont’d)

During the litigation:During the litigation:– Expert Discovery will be key:Expert Discovery will be key:

Common disputes:Common disputes:– Environmental ImpactEnvironmental Impact– Fair market value of the propertyFair market value of the property

Other side will hire their own expertsOther side will hire their own experts

Mutual exchange of appraisal reportsMutual exchange of appraisal reports

Court Proceedings (cont’d)Court Proceedings (cont’d)

Last resort settlement attempts:Last resort settlement attempts:– Final settlement demandsFinal settlement demands– Final settlement offersFinal settlement offers– California Civ. Proc. Section 998California Civ. Proc. Section 998

If no settlement reached, litigation will If no settlement reached, litigation will proceed to jury trial.proceed to jury trial.

TrialTrial

Jury trial will take place to determine the fair Jury trial will take place to determine the fair market value of the property.market value of the property.““Highest and best use”Highest and best use”– Is the equivalent of the fair market value, which takes Is the equivalent of the fair market value, which takes

into consideration the most valuable use to which the into consideration the most valuable use to which the property can be put in the reasonably foreseeable property can be put in the reasonably foreseeable future; and future; and

– That which it is geographically and economically That which it is geographically and economically suitable.suitable.

Other significant issue:Other significant issue:– What is the “larger parcel” issue regarding severance What is the “larger parcel” issue regarding severance

damages, if any?damages, if any?

TrialTrial

Pre-trial motions:Pre-trial motions:– Motions in LimineMotions in Limine

TrialTrialPost-trial considerations:Post-trial considerations:– Payment of the Eminent Domain award must be made within 30 Payment of the Eminent Domain award must be made within 30

days after issuance of the Final Judgment.days after issuance of the Final Judgment.– If possession not taken previously, the public entity can take If possession not taken previously, the public entity can take

possession after a 30 day notice if there are persons dwelling on possession after a 30 day notice if there are persons dwelling on the property, or a 10 day notice in all other situations.the property, or a 10 day notice in all other situations.

Fees and Costs:Fees and Costs:– Parties may obtain attorney fees and costs at end of trial if court Parties may obtain attorney fees and costs at end of trial if court

determines that the public entity condemnation offer was not determines that the public entity condemnation offer was not reasonable.reasonable.

The EndThe End

Thank youThank you