Klopping v. City of Whittier

Decision Date22 September 1972
CourtCalifornia Supreme Court
Parties, 500 P.2d 1345 Frank KLOPPING, Jr., et al., Plaintiffs and Appellants, v. CITY OF WHITTIER, Defendant and Respondent. Clifford E. SARFF et al., Plaintiffs and Appellants, v. CITY OF WHITTIER, Defendant and Respondent. L.A. 29994, 29995. In Bank

Thomas G. Baggot, Herbert S. Gall, John U. Gall, Los Angeles, Fadem & Kanner and Gideon Kanner, Beverly Hills, for plaintiffs and appellants.

Robert Flandrick, City Atty., Martin & Flandrick and Stephen H. Galton, San Marino, for defendant and respondent.

John D. Maharg, County Counsel (Los Angeles), William F. Stewart, Deputy County Counsel, Adrian Kuyper, County Counsel (Orange), Robert F. Nuttman, Asst. County Counsel, Harry S. Fenton, Sacramento, Joseph A. Montoya, Robert L. Meyer, Hugh R. Williams and Jack M. Miller, Los Angeles, as amici curiae on behalf of defendant and respondent.

MOSK, Justice.

Plaintiffs Klopping and Sarff (plaintiffs) instituted separate actions in inverse condemnation for damages alleged to have been caused by activities of the City of Whittier (city) prior to the eventual condemnation of the property then owned by plaintiffs. After the trial court sustained the city's demurrers, judgments of dismissal were entered. Plaintiffs appeal.

On May 11, 1965, the city adopted a resolution to initiate proceedings designed to culminate in the formation of a parking district. Included among the properties to be condemned as part of those proceedings were parcels owned by plaintiffs. On November 10, 1965, the city initiated condemnation proceedings against the subject properties and parcels owned by third persons. Subsequently, the city directed that assessments be levied against certain individuals in order to pay costs involved in the establishment of the district. On February 23, 1966, one of the property owners to be assessed, Alpha Beta Acme Markets, Inc., filed a suit to enjoin the assessment. Judgment was against Alpha Beta in the trial court and on May 7, 1968, the Court of Appeal affirmed. (Alpha Beta Acme Markets, Inc. v. City of Whittier (1968) 262 Cal.App.2d 16, 68 Cal.Rptr. 327.)

On July 7, 1966, during the pendency of the Alpha Beta challenge, the city adopted a second resolution, reciting that: (1) because of the Alpha Beta suit, it was impossible to sell the bonds designed to finance the proposed parking facility; (2) by reason of the lack of funds from that source, the proposed acquisition of property could not proceed; (3) it was not 'fair and equitable' to continue the restraining effect of the pending condemnation suit on the use of the properties sought to be condemned. The resolution then authorized the dismissal of the pending condemnation suits but declared the city's firm intention to reinstitute proceedings when and if the Alpha Beta matter was terminated in the city's favor.

On November 16, 1966, the condemnation suits against the properties owned by plaintiffs and others were dismissed. Contra to the contention of the city that the termination was a voluntary dismissal under Code of Civil Procedure section 581, the Court of Appeal ruled that it was, in law, an 'abandonment' under Code of Civil Procedure section 1255a. (City of Whittier v. Aramian (1968) 264 Cal.App.2d 683, 70 Cal.Rptr. 805.) Accordingly, the court allowed plaintiffs and other individuals to recover the costs they incurred as a result of the commencement of the condemnation proceedings and the subsequent abandonment, as provided under subdivision (c) of section 1255a.

On July 6, 1967, while both the Alpha Beta and Aramian suits were pending, plaintiffs Klopping and Sarff submitted to the city a claim for damages based on the original resolution of intent to condemn and on the resolution abandoning the condemnation proceeding but simultaneously announcing the city's intention to resume eminent domain action in the future. This claim was rejected and the present actions followed. Demurrers by the city were sustained without leave to amend as to any matters occurring prior to the dismissal of the original condemnation action but with leave to amend as to matters occurring thereafter. Plaintiffs chose not to amend, and judgments of dismissal were entered. Plaintiffs in both actions appeal and we have consolidated the proceedings for decision.

Plaintiffs seek to recover under inverse condemnation, one of two basic procedural devices for insuring that the constitutional proscription that '(p) rivate property shall not be taken or damaged for public use without just compensation having first been made to . . . the owner . . .' is not violated. (Cal.Const. art. I, § 14.) The other procedure is eminent domain, the significant difference being that in the latter the public authority takes the initiative whereas in the former it is the property owner who commences litigation. (3 Witkin, Summary of Cal. Law (7th ed. 1960) Constitutional Law, § 223, at p. 2033.) The constitutional guarantee of compensation extends to both types of cases and not merely where the taking is cheap or easy; indeed the need for compensation is greatest where the loss is greatest. (Stoebuck, Condemnee's Rights (1970) 56 Iowa L.Rev. 293, 307.)

In either action the constitutional standard of 'just compensation' remains the guide. In general that standard 'is to be measured by the market value of the property . . .' at the time of the taking. (Rose v. State of California (1942) 19 Cal.2d 713, 737, 123 P.2d 505, 519, see Code Civ.Proc. § 1249.) 'Market value,' in turn, traditionally has been defined as 'the highest price estimated in terms of money which the land would bring if exposed for sale in the open market, with reasonable time allowed in which to find a purchaser, buying with knowledge of all of the uses and purposes to which it was adapted and for which it was capable.' (Sacramento etc. R.R. Co. v. Heilbron (1909) 156 Cal. 408, 409, 104 P. 979, 980.)

While expert witnesses testifying on behalf of the public authority and those on behalf of the property owner may differ widely on their opinion as to the value of the property taken, this difference usually reflects the elusive nature of the fair market value concept and not the appropriate date on which valuation should be based. However, a variety of circumstances may actually becloud the proper valuation date. While in California this date is set by statute at the time the summons is issued (Code Civ.Proc. § 1249), depending on the nature of those activities occurring prior to the issuance of summons a different date may be required in order to effectuate the constitutional requirement of just compensation. (Peacock v. County of Sacramento (1969) 271 Cal.App.2d 845, 856, 77 Cal.Rptr. 391; Foster v. City of Detroit, Mich. (E.D.Mich.1966) 254 F.Supp. 655, 661--666, affirmed (6th Cir. 1968) 405 F.2d 138; cf. People ex rel. Dept. of Public Works v. Lillard (1963) 219 Cal.App.2d 368, 377, 33 Cal.Rptr. 189.)

In analyzing the complexities inherent in a determination of the factors occurring prior to the statutory valuation date to be considered in the final award, the parties have concentrated on whether the precondemnation activities of defendant city were a 'blight' on the subject properties or a 'de facto taking' of those properties. (4 Nichols, The Law of Eminent Domain (3d ed. rev. 1971) § 12.315(5); City of Buffalo v. J. W. Clement Co. (1971) 28 N.Y.2d 241, 321 N.Y.S.2d 345, 356, 269 N.E.2d 895.)

At the onset we note that the actions of defendant did not constitute 'condemnation blight' in the sense that blight describes the converse of the situation with which we were faced in Merced Irrigation Dist. v. Woolstenhulme (1971) 4 Cal.3d 478, 93 Cal.Rptr. 833, 483 P.2d 1. In Merced we held that the value by which property was Enhanced due to a public project, before it was reasonably expected that the parcel in question would in fact be taken by the project, should be included in the measure of just compensation. There the condemnation suit was filed in 1967 but plans for a massive redevelopment of the Lake McClure region had been announced as early as the late 1950s. 'By 1962 the district had begun a quest for federal funds to assist in the financing of the project, and early in 1963 several newspaper articles informed the public that the completed Lake McClure project would include recreational facilities, such as camping, boating and fishing. The trial court found that about January 1, 1963 the public, while unaware of 'exactly what area, what spots were to be recreation,' did know of general recreation plans, and that, as a result, property values in the area began to increase within a short time thereafter.' (4 Cal.3d at p. 485, 93 Cal.Rptr. at p. 836, 483 P.2d at p. 47.)

Because of this precondemnation activity concerning a project which would have a beneficial impact on a General area, property values in that area tended to rise. We deemed that increase 'project enhancement' and held that under appropriate circumstances the condemnee was entitled to include such enhancement in his measure of recovery. The converse of the situation in Merced is project, or condemnation, blight. Thus, under some circumstances an announcement that an undesignated parcel or parcels of land may be appropriated at some future time for a generally unappealing project may tend to decrease land values in the vicinity. (See Comment, Condemnation Blight: 'Uncompensated Losses in Eminent Domain Proceedings--Is Inverse Condemnation the Answer? (1972) 3 Pacific L.J. 571, 573.) For example, publicity that a refuse dump will be located somewhere within a 10-square-mile area may tend to depress the value of all land within that area because of the adverse impact a dump might have on other property in close proximity.

In the case at bar, however, the precondemnation publicity complained of consisted of announcements directly...

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