People Acting By and Through Dept. of Public Works v. Arthofer

• Decision Date: 07 October 1966
• Citation: 245 Cal.App.2d 454,54 Cal.Rptr. 878
• Court: California Court of Appeals Court of Appeals
• Parties: PEOPLE of the State of California, Acting By and Through the DEPARTMENT OF PUBLIC WORKS, Plaintiff and Respondent, v. Carl ARTHOFER et al., Defendants and Appellants, Maxwell WRIGHT et al., Defendants and Respondents. Civ. 8038.

Page 878

54 Cal.Rptr. 878

245 Cal.App.2d 454

PEOPLE of the State of California, Acting By and Through the DEPARTMENT OF PUBLIC WORKS, Plaintiff and Respondent, v. Carl ARTHOFER et al., Defendants and Appellants Maxwell WRIGHT et al., Defendants and Respondents.

Civ. 8038.

District Court of Appeal, Fourth District, Division 2, California.

Oct. 7, 1966.

As Modified Nov. 4, 1966.

[245 Cal.App.2d 457] Robert F. Waldron and Kenneth A. Bryant, Santa Ana, for defendants and appellants, Carl Arthofer and Doris Arthofer.

Harry S. Fenton, Chief Counsel, R. B. Pegram, Deputy Chief Counsel, Richard L. Franck, Hugh R. Williams and Robert W. Vidor, Los Angeles, for plaintiff and respondent.

OPINION

KERRIGAN, Justice.

This is an action in eminent domain initiated by the State of California to condemn, for freeway purposes, an unimproved parcel or real property owned by the defendants, Carl Arthofer and Doris Arthofer. Maxwell Wright is not a real party in interest, having sold the subject parcel to the defendants Arthofer prior to the filing of the complaint, and is therefore not involved in this appeal. Defendants appeal from a judgment entered upon a jury verdict awarding them the sum of $35,000 as the fair market value for the taking of the entire parcel.

In October 1961 the aforesaid Maxwell Wright and his spouse executed a written option agreement in favor of the Arthofers pursuant to which the Arthofers acquired fee title to the land involved on April 30, 1962, for a purchase price in the sum of $52,500. The land was zoned R--1 at the time of the acquisition of title by defendants and retained the R--1 classification on the date eminent domain proceedings were commenced on August 8, 1962, a period slightly in excess of three months after defendant-owners acquired title. The date of valuation was therefore fixed by the court as August 8, 1962.

Basically, under the ordinance involved herein, R--1 permits construction of single-family residential dwellings. The defendant, Carl Arthofer, testified upon behalf of himself and his spouse to the effect that the owners purchased the subject property for R--3 use. An R--3 zone classification authorizes uses permitted by an R--1 zone together with the construction of apartments, day-care nurseries, private clubs, rest homes, and private schools.

The real property involved was a vacant level, rectangular-shaped parcel of land located on the north side of Trask Avenue approximately 300 feet east of Harbor Boulevard in the City of Garden Grove, County of Orange, State of California, and comprised of 1.72 acres. Habor Boulevard on the date of valuation was a major thoroughfare consisting primarily of commercial uses at the intersection involved. Trask Avenue could be generally described as a secondary highway. On the northeast corner of Harbor and Trask was situated an imposing single-family two-story residence. Proceeding in an easterly direction from said point on the north side of Trask was a vacant lot with 90-foot frontage, the westerly 30 feet of which lot was zoned commercial and the balance R--1; next to said parcel was the subject property; then two unimproved lots; then two parcels improved with single-family residential units. On the southeast corner of Harbor and Trask there was situated a Shell station; then proceeding easterly on the south side of Trask was a convalescent home, a trailer sales yard, a fire station, a high school, and beyond the high school, multiple single-family residential units. Contiguous to the subject property and immediately to the north of it was a 29-acre parcel, a portion of which fronted on Harbor Boulevard and was zoned commercial. This property was substantially vacant, but was partially improved with a nursery building, which building was located to the north and west of the subject property.

The owner testified to the effect that he is a licensed general contractor and real estate broker and engages in the business of real estate investment and specializes in residential income properties. He purchased the subject property for R--3 uses, but during the period that he held the option to purchase the subject property, he made no investigation as to a reasonable probability of securing a change of zone. However, when the escrow closed, he did file an application for change of zone from R--1 to R--3, which application for zone change was denied. The owner's opinion as to fair market value was in the sum of $80,000.

The owners' valuation witness was qualified as an expert appraiser and described the neighborhood and the procedures he followed in conducting his investigation for the purpose of forming an opinion of the fair market value. The owners' valuation expert further testified he made an investigation for the purpose of determining whether there was a reasonable probability of a zone change of the subject property as of the date of valuation from R--1 to R--3. In conducting his investigation relating to the zoning issue, he visited the subject property, considered the dimensions and location of the property, considered surrounding uses in the general area, read the Garden Grove zoning ordinances, studied the official zone map of the city, and interviewed certain planning officials. However, he never obtained an expression of opinion from any of the zoning officials interviewed as to the reasonable probability of a zone change on the subject property. He ascertained that the single zone change allowed in the immediate area from R--1 to R--3 was the result of the proposed freeway construction, and in investigating the background of the trailer sales yard on the south side of Trask Avenue, he did not ascertain when the change of zone was granted or whether the construction of the proposed freeway influenced the zone change. The trial court conducted an extensive hearing outside of the presence of the jury for the purpose of determining whether the owners' valuation expert was qualified on the basis of the investigation made by him to express an opinion as to the reasonable probability of a zoning change. At the conclusion of the foundation hearing, the trial court sustained the state's objection to a query as to the owners' valuation expert's opinion as to reasonable probability of zone change and all of the foundational testimony was then entered into the record as an offer of proof, which offer was declined. However, the offer of proof did not embrace the expert's opinion as to the fair market value of the land involved, and no evidence as to the witness's opinion as to fair market value was ever entered in the record. Thus, the jury never heard any testimony reflecting the owners' valuation expert's opinion as to the fair market value of the subject property.

The owners next called an expert planning witness for the purpose of gaining an expression of opinion as to whether there was a reasonable probability of zone change of the subject property as of the date of valuation. The planning expert was a retired planning director of the County of Orange and had only been retained by the owners two days prior to testifying, and foundational and voir dire testimony indicated that he arrived at his opinion as to the issue of a zone change on the morning that he was called to testify. His testimony established that he was familiar with the neighborhood in which the subject property was located and described a few of the surrounding uses of property in the immediate area of Harbor Boulevard and Trask Avenue. When an objection was made to the expression of an opinion by the expert planner, relative to the issue of reasonable probability of zone change, the court excused the jury in order to permit the owners' counsel to lay a further foundation as to the expert's qualifications with reference to the specific issue. The owners' planning expert indicated that he had not conferred with any of the city's planning or other governmental authorities relative to the reasonable probability of a zone change, and that because he had not actually conferred with said planning or councilmanic authorities, he would not be in a position to express an opinion as to the 'reasonable probability' of a zone change from R-1 to R-3, but would have to confine his opinion to a 'reasonable possibility' of a zone change, and the court sustained an objection to the expression of an opinion by the owners' planning expert, whereupon the owners rested their case.

A summary of the state's valuation expert's testimony reflects that the highest and best use of the subject property was R-1 and that there was not a reasonable probability of a zone change from R-1 to R-3 zone. His opinion of the fair market value as of the date of valuation, based on an R-1 use, was in the sum of $35,000. On cross-examination, he testified that the subject property was acquired by the defendant-owners for the sum of $52,500 some three months prior to the commencement of the condemnation action. He further established that the principal zoning of properties on the south side of Trask Avenue easterly of Harbor Boulevard was R-1, and that any zone changes since the year 1956 were based on knowledge of the contemplated freeway. However, absent the freeway influence, there would be no reasonable probability of a zone change of the subject property on the date of valuation.

The plaintiffs' expert planning witness testified that he was planning director for the City of Garden Grove and indicated that applications for rezoning of the subject property had been previously made prior to the date of valuation and that in discussing the issue with the staff of the planning department in the year 1963, it had been concluded that there was no reasonable probability of rezoning the subject property. He reviewed files on zone changes, compared the subject property with other property in the city considered comparable, and formed the opinion on the date of valuation that there was no...