People ex rel. Dept. of Public Works v. Forster

• Decision Date: 31 July 1962
• Citation: People ex rel. Dept. of Public Works v. Forster, 23 Cal.Rptr. 582, 58 Cal.2d 257, 373 P.2d 630 (Cal. 1962)
• Parties: , 373 P.2d 630 The PEOPLE ex rel. The DEPARTMENT OF PUBLIC WORKS, Plaintiff and Appellant, v. Hugo A. FORSTER and Marie E. Forster, Defendants and Respondents. L. A. 26507.
• Court: California Supreme Court

Page 582

23 Cal.Rptr. 582

58 Cal.2d 257, 373 P.2d 630

The PEOPLE ex rel. The DEPARTMENT OF PUBLIC WORKS, Plaintiff and Appellant, v.Hugo A. FORSTER and Marie E. Forster, Defendants and Respondents.

L. A. 26507.

Supreme Court of California, In Bank.

July 31, 1962.

Rehearing Denied Aug. 29, 1962.

George C. Hadley, San Diego, Richard L. Franck, Thomas M. Dankert, Charles E. Spencer, Jr., Los Angeles, and Robert E. Reed, Sacramento, for plaintiff and appellant.

Henry A. Dietz, County Counsel, San Diego, and David B. Walker, Deputy County Counsel, as amici curiae on behalf of plaintiff and appellant.

John W. Solomon, Laguna Beach, Holbrook, Tarr & O'Neill, Francis H. O'Neill and Richard L. Huxtable, Los Angeles, for defendants and respondents.

Stanley B. Christensen, City Atty., Fullerton, Willard Pool, City Atty., Garden Grove, Calvin P. Schmidt, City Atty., Cities of Villa Park, Fountain Valley and Los Alamitos, and James G. Rourke, City Atty., Tustin, amici curiae on behalf of defendants and respondents.

SCHAUER, Justice.

In this condemnation action plaintiff appeals from a judgment entered pursuant to a jury verdict awarding defendants $333,100 as the value of land taken for highway purposes, plus $30,000 severance damage, or a total of $363,100.As hereinafter appears, we have concluded that there is no merit in plaintiff's contentions, 1) that the trial court committed prejudicial error in receiving in evidence over plaintiff's objection an admission or declaration of value in a document referred to as an offer of 'compromise' made by plaintiff's agent to defendants during negotiations prior to trial, and 2) that the court further erred in its awards of fees for an expert witness and of interest.The judgment should therefore be affirmed.

The land taken by plaintiff comprises a strip totaling 96.551 acres, which is part of a tract of 2,948 acres belonging to defendants and located near the town of San Clemente in Orange County.Plaintiff filed this action May 15, 1957.A first trial of the action, in 1959, resulted in a jury verdict awarding defendants $77,240.80 as the value of the land taken, plus $25,660 as severance damages, or a total of $102,900.80.On defendants' motion a new trial was ordered, and resulted in the judgment from which plaintiff now appeals.

The 'Compromise' Offer

The written statement and offer made by an agent of plaintiff to defendants and admitted in evidence over plaintiff's objections was in the form of a letter directed to defendants' attorney Mr. Solomon.Such letter bears the date of September 10, 1958, and provides in part as follows:

'This is a confirmation of a telephone call I had with you on September 5, 1958.The State hereby offers you the sum of $218,000.00 for land and damages.This amount is a compromise figure based on the market value of the parcel as set out in the above mentioned suit.This offer shall continue in effect until 4:30 p. m. on September 17, 1958, and if not accepted on or before said date, this offer shall be considered to be officially revoked.'

Before ruling on plaintiff's objection to introduction of the letter in evidence the court properly heard testimony and argument on the matter outside the presence of the jury.The extrinsic evidence, summarized below, supports the trial court's determination that the letter was not simply an offer of compromise but an admission as to the market value of the property.(SeeE. K. Wood Lumber Co. v. Higgins(1960), 54 Cal.2d 91, 94(1-2), 4 Cal.Rptr. 523, 351 P.2d 795;Woodbine v. Van Horn(1946), 29 Cal.2d 95, 104(1-4), 173 P.2d 17;Stevenson v. County of San Diego(1945), 26 Cal.2d 842, 844-845(2), 161 P.2d 553.)The evidence above referred to is in substance as follows: Defendant's attorney, Mr. Solomon, testified that several days prior to September 10, 1958(the date borne by the letter), Mr. Walls, the right of way agent who wrote the letter on behalf of plaintiff, telephoned the witness and 'stated that he was unable to pay the price that Mr. Forster (defendant) thought his property was worth, because his department could only pay what they determined the property to be worth, and that they had determined that the property was worth $218,000.00, and that was their offer.* * * Mr. Walls said it was their practice to always confirm such conversations by letter * * * This letter of September 10th was the confirmation of the conversation on, I believe it was September 5th or 6th.* * * During our conversation he made no breakdown (as to the severance damages).* * * (H)e implied that with the underpass there was no severance damage.* * * He just told * * * (me) that the Division of Highways had determined * * * what the property was worth and they had determined the property was worth $218,000.00.'

Mr. Lynch, a senior right of way agent for the Division of Highways, stated that he had authorized Walls to write the subject letter offering $218,000 to defendants; that the offer was 'based upon' a conference between the witness and one Mr. Goode, an appraiser employed by defendants, and the letter was 'a result of that conference'; that during the conference the witness and Mr. Goode did not discuss the value of defendants' land but did discuss that of other properties in the same vicinity; that the offer was 'not based upon any appraisals'; that the letter is not in the usual offer form, which form does not contain the statement 'based on the market value of the parcel,' but merely states 'We hereby make you an offer of X number of dollars for the purchase of your property,' and the witness did not know why the usual form was not used; that as a general policy the right of way agents in making offers to buy are restricted to the highest appraisal, but 'there is an exception * * * This is one right here.* * * (I)t was * * * an effort on my part to compromise what I considered to be a very bad lawsuit, there was a lot of other aspects, potential damages, and so forth.* * * (I) felt that this ($218,000) would be a fair figure of * * * A compromise settlement * * * (but) I would assume the compromise would be in my favor or I wouldn't compromise.'(Italics added.)

In certain 'appraisal sheets' produced by the witness Lynch with respect to defendants' land and to other property in the area, in response to subpoena, and which bore a March 1955 date, the trial court particularly noted the following paragraph: 'The appraisals contained herein have been prepared for departmental use only and for the sole purpose of carrying on negotiations with the owners thereof and as a basis upon which offers of settlement may be made which are considered fair and equitable to both the owners and the department.In the event of a trial involving any issue of value, damages, severance or consequential or benefits, then each and every, all and singular matter, fact or things specified, set forth and referred to in these appraisals shall be deemed to have been made solely by way of an offer of settlement pending litigation and not otherwise.'

After hearing the above summarized testimony the trial court ruled that the subject letter would be received in evidence, subject to a limitation, hereinafter quoted, which excluded it from consideration insofar as it might constitute an offer of compromise.Defendants had previously, and prior to presentation of plaintiff's case, introduced testimony on the questions of market value and of severance damage, as follows: The witness Brabant placed the value of the land taken at $3500 per acre, or a total of $337,750, and severance damage at $113,450.Defendant Forster testified that the value was $4000 to $4500 per acre, or a total of $400,000, and severance damage was $100,000.The witness Holden placed the value at $5,000 to $6,000 per acre (which would total $482,500 to $579,000), but expressed no opinion as to severance damage.

At the conclusion of defendants' case and before plaintiff's witnesses had testified, the trial court pursuant to its ruling permitted the subject letter to be read to the jury, but first instructed the jury in the following language: 'there has been a letter which has been by order of the Court received in evidence as Defendants' Exhibit K * * * (and which) makes reference to an offer to compromise the matters with which we are here concerned.An offer to compromise is not admissible in evidence as such.However, any declaration therein of facts involved in this case which are not mere concessions made for the purpose of the offer, but are statements of independent facts, are admissible against the party making them.You will therefore consider this matter for the limited purpose of any bearing it may have on the value of the property, but not for the fact of the offer itself.The law favors compromise and settlements, and the offer to pay a claim made to the defendant by an agent of the State may not be considered by you to be an admission by the State of liability to pay that amount or any other certain amount of money for the property.'Thereupon the letter was read to the jury.

Defendants at this point also offered in evidence a transcript of the testimony given by their attorney, Mr. Solomon, out of the presence of the jury and summarized hereinabove.Plaintiff's objection to such testimony was sustained, however, despite the fact that plaintiff itself had earlier, during the hearing outside the jury's presence, made an 'offer of proof' covering such testimony, and defendants had agreed that that 'evidence may go in before the jury.'

Plaintiff then presented its value testimony.Its witness Fisher testified to a value of $400 per acre, or a total of $38,620, for the land taken; and its witness Wood gave a total valuation of $43,500, or approximately $455 per acre.Both witnesses stated that their appraisals had been made subsequent to the date of September 10, 1958, borne by the subject letter.

An independent expert witness...