Jones v. People ex rel. Dept. of Transportation

• Decision Date: 15 September 1978
• Docket Number: S.F. 23606
• Court: California Supreme Court
• Parties: , 583 P.2d 165 Arthur E. JONES et al., Plaintiffs and Respondents, v. The PEOPLE ex rel. DEPARTMENT OF TRANSPORTATION, Defendant and Appellant.

Page 640

148 Cal.Rptr. 640

22 Cal.3d 144, 583 P.2d 165

Arthur E. JONES et al., Plaintiffs and Respondents, v. The PEOPLE ex rel. DEPARTMENT OF TRANSPORTATION, Defendant and Appellant.

S.F. 23606.

Supreme Court of California, In Bank.

Sept. 15, 1978.

Harry S. Fenton, Robert F. Carlson, Gordon S. Baca and Richard B. Williams, Sacramento, for defendant and appellant.

Evelle J. Younger, Atty. Gen., E. Clement Shute, Jr., R. H. Connett, Asst. Attys. Gen., Richard C. Jacobs, Deputy Atty. Gen., John H. Larson, County Counsel, and Marie C. Stephens, Deputy County Counsel, Los Angeles, as amici curiae on behalf of defendant and appellant.

Desmond, Miller, Desmond & Bartholomew, Stephen James Wagner and Richard F. Desmond, Sacramento, for plaintiffs and respondents.

Gideon Kanner, Los Angeles, Fadem, Berger, McIntire & Norton, Michael M. Berger, Santa Monica, Goldstein, Barceloux & Goldstein, Burton J. Goldstein, Rogers, Vizzard & Tallett, John D. Rogers, San Francisco, Hahn, Cazier, Hoegh & Leff, Ernest Leff, and Andrew E. Katz, Los Angeles, as amici curiae on behalf of plaintiffs and respondents.

MOSK, Justice.

Plaintiffs, Arthur and Susan Jones, are the owners of nine and one-half acres of Sacramento County land, fronting on Fair Oaks Boulevard. They purchased the property in 1963, and thereafter the Department of Public Works (now the Department of Transportation) announced plans to construct a freeway which would cross the northern portion of the property, requiring the acquisition of approximately two and one-half acres of plaintiffs' land. The proposed freeway would have cut off access from Fair Oaks Boulevard, and without such access plaintiffs were unable to subdivide the property.

Plaintiffs were unsuccessful in attempts to sell the land, and in 1973 they filed an action in inverse condemnation, alleging that the state had acted unreasonably and oppressively, depreciating the value of their property, and preventing its sale or development as a subdivision. After a trial by jury, plaintiffs were awarded $75,000 for diminution in the fair market value of their land and $25,000 in attorneys' fees and costs. ¹ The trial court denied the state's motions for a new trial and for judgment notwithstanding the verdict; this appeal followed.

Several months after judgment was rendered, the Legislature deleted the proposed freeway from the highway system. (Stats. 1975, ch. 244.)

The northern boundary of plaintiffs' land has frontage on Fair Oaks Boulevard. It is bounded on the south by Cheryl Lane, which is not a county road, and in which plaintiffs own only a one-third undivided interest. On the eastern border other persons own lots which are served by Bannister Avenue, running in a north-south direction, and providing access to both Fair Oaks Boulevard and Cheryl Lane. The property is unimproved except for two old houses in poor condition which are rented for small sums, and which plaintiffs intended to demolish when they developed the property.

Plaintiffs were residents of Sacramento when they bought the property in 1963 for $55,500 as an investment; they anticipated developing the land as a subdivision. They had no knowledge of a freeway affecting the land being under consideration at the time they made the purchase. Mrs. Jones testified that a major inducement for buying the property was the frontage on Fair Oaks Boulevard. In 1964, plaintiffs moved from Sacramento, and then decided to sell the property.

They first became aware that their property would be affected by the freeway in 1964. However, at that time and for several years thereafter the design of the freeway and its effect on plaintiffs' land had not been determined by state officials.

Under section 100.2 of the Streets and Highways Code, when the department proposes to construct a freeway, it may enter into an agreement (freeway agreement) with the local legislative body to close or reroute streets which intersect with the freeway, and no street may be opened or connected with a freeway without the permission of the California Highway Commission. ² In 1964, the department and the County of Sacramento entered into such an agreement for the portion of the freeway affecting plaintiffs' land. The map attached to the agreement indicated that there would be an overpass over Fair Oaks Boulevard and that Bannister Avenue would be closed. In 1966, plaintiffs submitted a subdivision map to the county for 23 single family lots, showing access from Fair Oaks Boulevard into the subdivision. The map was tentatively approved by the planning commission because the location of the freeway and its date of construction were so indefinite that the commission "did not feel that they had grounds to deny approval." The approval lapsed after one year, and when plaintiffs applied for a renewal in 1967, the county refused to approve the map on the ground that under section 100.2 of the Streets and Highways Code and the freeway agreement "no roadway can be approved on this subdivision entering the interchange area" without compliance with the section.

This action effectively deprived plaintiffs of access from Fair Oaks Boulevard, and such access was necessary in order to subdivide the property. As noted above, Cheryl Lane is not a county road, and plaintiffs had only a one-third interest in it. In order to obtain approval of a subdivision with access from Cheryl Lane, plaintiffs were required to secure the consent of the owners of the remaining interests in the street to dedicate it for public use. They were unsuccessful in this effort.

In 1969, the state revised its freeway plans and entered into a new freeway agreement with the county. According to the new plan, Bannister Avenue was rerouted so as to create a frontage road, providing access to the north end of plaintiffs' land. Thus, if and when the freeway and the frontage road were built, according to the 1969 plan, plaintiffs would have access from the freeway to the northern part of their land. There was no indication, however, when the frontage road would be built, or who would pay for its construction.

Plaintiffs sought repeatedly to ascertain from state officials the dimensions of the property which would be taken for the freeway and the date acquisition could be expected. It was not until 1968 that the design plans were formulated to indicate the exact amount of land required. The acquisition date for the property was postponed a number of times at the time of the trial in 1974 and was still scheduled for some years in the future.

The state has a program allowing for purchase of a limited number of properties needed for highways on a hardship basis prior to the normal acquisition date. It acquired several parcels along the freeway route under this program, including the land surrounding the portion of plaintiffs' property which the state planned to purchase. Plaintiffs applied for purchase of the property by the state on grounds of hardship, and in 1969 the state made an offer of $15,847 for the two and one-half acres required, but plaintiffs refused the offer because it contained no severance damages attributable to the lost access from Fair Oaks Boulevard.

State officials were aware that the county had refused to approve a subdivision map for plaintiffs' land showing access directly from Fair Oaks Boulevard because of the state's requirements for the freeway. They also knew that plaintiffs owned only a partial interest in Cheryl Lane, and that their property was essentially landlocked for subdivision purposes.

From 1964 onward, plaintiffs listed the property for sale with a number of real estate brokers, and formulated several alternative plans for its development in order to render the property saleable. Despite vigorous efforts by plaintiffs and their agents, developers were not interested in buying the property because there was no access which would allow subdivision, and it was not clear when or whether access would ultimately be provided by construction of the frontage road. There was testimony that the value of the land was diminished by $75,000 if it could not be used for a subdivision.

The cause was submitted to the jury on the theory enunciated in Klopping v. City of Whittier (1972) 8 Cal.3d 39, 104 Cal.Rptr. 1, 500 P.2d 1345. The jury was instructed that it should find in plaintiffs' favor if the state unreasonably delayed the filing of an action in eminent domain following an announcement of intent to condemn, or diminished the value of plaintiffs' property by other unreasonable conduct prior to condemnation.

In Klopping, we reversed a judgment for defendant city in an action for inverse condemnation. The city first initiated condemnation proceedings against plaintiffs' properties; subsequently it dismissed the action but announced its intention to take the precise property in the future. Plaintiffs alleged that they had lost rental income as a result of the precondemnation announcements. We held that a cause of action for inverse condemnation was stated by allegations that a diminution in market value resulted from "unreasonably delaying eminent domain action following an announcement of intent to condemn or by other unreasonable conduct prior to condemnation . . .." (8 Cal.3d 39 at p. 52, 104 Cal.Rptr. at p. 11, 500 P.2d 1345 at p. 1355.)

The state contends that an announcement of intent to condemn is essential for the application of the Klopping rationale, and since there was no formal resolution to condemn plaintiffs' property, they have not stated a cause of action for inverse condemnation.

We need not decide the merits of this argument, for we are of the view that plaintiffs are entitled to recover damages as a matter of law because they were denied access to their land from Fair Oaks Boulevard, and this denial prevented development of the land as a subdivision. The evidence establishes that plaintiffs purchased the property because of its value as a subdivision,...