City of Los Angeles v. Hensler, B199045 (Cal. App. 3/7/2008), B199045

• Decision Date: 07 March 2008
• Docket Number: B199045
• Court: California Court of Appeals
• Parties: CITY OF LOS ANGELES, Plaintiff and Respondent, v. ROBERT R. HENSLER, Defendant and Appellant.

Page 1

CITY OF LOS ANGELES, Plaintiff and Respondent, v. ROBERT R. HENSLER, Defendant and Appellant.

B199045

Court of Appeals of California, Second Appellate District, Division Five

March 7, 2008

NOT TO BE PUBLISHED

Appeal from a judgment of the Superior Court of Los Angeles County, No. BC330791, Bruce E. Mitchell, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Affirmed.

Schadrack & Chapman and Mark A. Schadrack for Defendant and Appellant.

Rockard J. Delgadillo, City Attorney (Los Angeles), Susan D. Pfann, Assistant City Attorney and Peter E. Langsfeld, Deputy City Attorney for Plaintiff and Respondent.

TURNER, P. J.

I. INTRODUCTION

This is an eminent domain action brought by plaintiff, the City of Los Angeles, to condemn an underground sewer easement. The property owner, defendant, Robert R. Hensler, appeals from a judgment awarding him only $3,330.43 in compensation for the taking, and $1,066 for a temporary construction easement. Defendant raises two contentions. First, defendant argues the trial court erroneously ruled the easement would result in only a 10 percent decrease in land value. Second, defendant argues it was inappropriate and unrealistic to assess the temporary construction easement based on a typical rent. We conclude substantial evidence supported the trial court's valuation conclusion and the temporary construction easement argument is not properly raised. Accordingly, we affirm the judgment.

II. BACKGROUND

Defendant owns commercial property adjacent to the Bob Hope Burbank-Glendale-Pasadena Airport. Plaintiff sought to acquire an underground sewer easement running along the northwest property line and consisting of a strip 10 feet wide and 100 feet long. Defendant waived his right to a jury. Just compensation was determined in a February 6 and 7, 2007 court trial. (Cal. Const., art. I, § 19; Metropolitan Water Dist. of So. California v. Campus Crusade for Christ, Inc. (2007) 41 Cal.4th 954, 965.) There was substantial evidence, and the trial court found, the proposed sewer location was already encumbered by a 30-foot wide private roadway easement as well as a gas pipeline easement.

Conflicting easement valuation evidence was presented at trial. Okey W. Njoku, a real estate appraiser employed by defendant's public works department, had appraised the easement's value as of June 4, 2004, and found a 40 percent diminution in land value. Mr. Njoku noted the sewer easement area was part of a private street, accessible by the general public, which had been used as such for many years. With respect to the land's best use, Mr. Njoku concluded: "[T]he nature of the remainder of the subject property is such that to use the easement area for anything other than a de facto private street would limit the overall site utility. The reasonable probability is that the utility of the easement area which will best serve the value of the property as a whole would be its current use as a de facto private street." At trial, plaintiff relied on an appraisal by Norman Eichel of Eichel Inc., a real estate analysis firm. Mr. Eichel concluded defendant's property value was "relatively unaffected" by the proposed easement, particularly given existing utility and access easements in the same location. He valued the easement as 10 percent of the fee value.

Defendant testified the sewer easement would reduce his land value by 70 percent. Defendant presented evidence he planned to build a heliport on his property. In defendant's opinion, a heliport would be the most feasible use of the property. The heliport building would occupy the area encumbered by the: roadway easement; the gas pipeline easement; and the proposed sewer easement. Defendant understood he needed a zoning variance to build a heliport, but he had not applied for one. He had not conducted any inquiry to determine what he needed from the Department of Airports in order to build a heliport. Defendant had hired an "expert" to do that. He had not applied to the Federal Aviation Administration for permission to operate a heliport. Defendant did not know whether he could get permission. Defendant had not made any effort to determine what kind of permit would be needed to store helicopter fuel on the property. It was his expert's opinion, however, that defendant could build a heliport on his property.

The trial court awarded defendant compensation based on a 10 percent diminution in land value. The trial court calculated the easement consumed 1,152 square feet valued at $28.91 per square foot for a total of $33,304.32. Defendant was awarded 10 percent of that amount as just compensation for the taking.

III. DISCUSSION

A. Just Compensation

Defendant contends the trial court erroneously concluded the taking would result in only a 10 percent impairment to the property. Defendant argues the trial court's decision rests on unsupported and erroneous assumptions. We find substantial evidence supported the trial court's conclusion.

A property owner is entitled to compensation when an easement is taken for public use. (Pacific Gas & Elec. Co. v. Hufford (1957) 49 Cal.2d 545, 552-553; County Sanitation Dist. v. Watson Land Co. (1993) 17 Cal.App.4th 1268, 1278-1279.) Under article I, section 19 of the California Constitution, "Private property may be taken or damaged for public use only when just compensation . . . has first been paid to . . . the owner." (Mt. San Jacinto Community College Dist. v. Superior Court (2007) 40 Cal.4th 648, 653 & fn. 1.) Just compensation is defined as "the fair market value of the property" that is taken by the public entity. (§ 1263.310; Metropolitan Water Dist. of So. California v. Campus Crusade for Christ, Inc., supra, 41 Cal.4th at p. 965.) "Fair market value" is defined in section 1263.320, "(a) The fair market value of the property taken is the highest price on the date of valuation that would be agreed to by a seller, being willing to sell but under no particular or urgent necessity for so doing, nor obliged to sell, and a buyer, being ready, willing, and able to buy but under no particular necessity for so doing, each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available." The Supreme Court has held: "`As section 1263.320 indicates, the fair market value of property taken has not been limited to the value of the property as used at the time of the taking, but has long taken into account the "highest and most profitable use to which the property might be put in the reasonably near future, to the extent that the probability of such a prospective use affects the market value."' (City of San Diego v. Neumann (1993) 6 Cal.4th 738, 744.) This prospective use `is to be considered, not necessarily as the measure of value, but to the full extent that the prospect of demand for such use affects the market value while the property is privately held.' (Olson v. United States (1934) 292 U.S. 246, 255.)" (Metropolitan Water Dist. of So. California v. Campus Crusade for Christ, Inc., supra, 41 Cal.4th at p. 965.)

A property owner may present evidence of a possible use of the land as affecting market value—that is, as an example of the highest and best use to which the property might be put—provided there is a probability of such use in the reasonably near future. (Metropolitan Water Dist. of So. California v. Campus Crusade for Christ, Inc., supra, 41 Cal.4th at pp. 966-968; People v. La Macchia (1953) 41 Cal.2d 738, 751, disapproved on another point in County of Los Angeles v. Faus (1957) 48 Cal.2d 672, 679.) As the Court of Appeal explained in San Diego Metropolitan Transit Development Bd. v. RV Communities (2007) 158 Cal.App.4th 313, 343: `As a general rule, "a property owner may not value his property based upon its use for a projected special purpose or for a hypothetical business. [Citations.]' (County of San Diego v. Rancho Vista Del Mar, Inc., [(1993)] 16 Cal.App.4th [1046,] 1059.) However, `[w]hile a property owner may not generally present evidence of the value of his property "`in terms of money'" that the property would bring for a special purpose [citation], evidence of a particular use may be relevant to establishing the highest and best use since such evidence may tend to establish the property's adaptability for that kind of use [citations].' (Id. at pp. 1059-1060.) [¶] Thus, if construction plans are `introduced to show a specific land use they are inadmissible because fair market value is based on all reasonable available uses. [Citation.] Conversely, they are admissible when offered merely as an illustration of one of the uses to which the property is adapted and the evidence is expressly limited by the court to such object. [Citations.]' (People ex rel. Dept. of Transportation v. Tanczos (1996) 42 Cal.App.4th 1215, 1218-1219 ( Tanczos ).) Generally, evidence that condemned property is suitable for a particular purpose may properly be admitted when the highest and best use of the property is disputed or there is a dispute as to the feasibility of a particular use. (Emeryville Redevelopment Agency v. Harcros Pigments, Inc. (2002) 101 Cal.App.4th 1083, 1104-1105; Tanczos, supra, 42 Cal.App.4th 1215, 1219.)"

But in People v. La Macchia, supra, 41 Cal.2d at page 751, our Supreme Court held: "[E]vidence as to what the owner intended to do with the land cannot be considered. (People v. Marblehead Land Co. [(1927)] 82 Cal.App. 289, 301; Los Angeles v. Kerckhoff-Cuzner Mill. & Lbr. Co. [(1911)] 15 Cal.App. 676, 677.) For there can be no allowance for enhanced damage which an owner `would suffer by reason of being prevented from carrying out a particular scheme of improvement, existing only in contemplation at the time of the trial.' (Los Angeles v. Kerckhoff-Cuzner Mil. & Lbr. Co., supra, [15 Cal.App.] at p. 688.) However, under certain circumstances, evidence that a proposed use would result in a profit is admissible, `not for...