Redevelopment Agency v. Penzner

• Decision Date: 29 May 1970
• Citation: 87 Cal.Rptr. 183,8 Cal.App.3d 417
• Court: California Court of Appeals Court of Appeals
• Parties: REDEVELOPMENT AGENCY OF the CITY OF FRESNO, Plaintiff & Appellant, v. William L. PENZNER, Defendant & Respondent. Civ. 1106.

Page 183

87 Cal.Rptr. 183

8 Cal.App.3d 417

REDEVELOPMENT AGENCY OF the CITY OF FRESNO, Plaintiff & Appellant, v. William L. PENZNER, Defendant & Respondent.

Civ. 1106.

Court of Appeal, Fifth District, California.

May 29, 1970.

[8 Cal.App.3d 421] Ross, Webber, & Hackett and Robert S. Webber, San Bruno, for plaintiff and appellant.

Cox & Cummins, by Charles L. Hemmings, Martinez, for defendant and respondent.

OPINION

GARGANO, Associate Justice.

Plaintiff appeals from an order granting defendant a new trial. The chronology is this:

Plaintiff, a public entity, commenced this action on May 4, 1966, to condemn two parcels of real property owned in fee by defendant, William L. Penzner. The complaint named City of Fresno Mall Assessment District No. 1, a special assessment district formed pursuant to the Pedestrian Mall Law of 1960 (Sts. & Hy.Code, div. 13, § 11000 et seq.), as one of the defendants. This special assessment district may levy assessments against property located within its boundaries, and the unpaid assessments are represented by improvement bonds issued pursuant to the Vehicle Parking District Law of 1943. ¹

On May 31, 1966, plaintiff entered into a stipulation with the City of Fresno and with Walter P. Berg, the City's Controller and Treasurer. The stipulation was filed on June 2, 1966, and was approved by the presiding judge on that date; the judge signed an order adopting its provisions. The stipulation, in essence, states that the Penzner properties are located within City of Fresno Pedestrian Mall Assessment District No. 1 and were assessed for benefits derived from the formation of the district; that these special assessments are liens against the properties and are represented by duly issued assessment bonds; that the city and its controller and treasurer are authorized by law to collect the assessments and to cancel the liens and discharge the bonds; that the city appeared in the action but was relieved of further appearances until the amount of the condemnation award, as between plaintiff and all defendants claiming any interest therein, was first determined pursuant to Code of Civil Procedure section 1246.1. ²

On January 15, 1968, the cause proceeded to trial on the valuation issue, and after five days of trial the jury returned a verdict fixing the value of the Penzner properties substantially in accordance with the opinions of Mr. Robert McNab, a real estate appraiser appointed by the court. The verdict was entered in the minutes, and then the court, without objection from defendant, discharged the jury. A few weeks later the court, over defendant's objection, signed findings of fact and conclusions of law which inter alia provide that the court reserved jurisdiction under section 1246.1 to apportion the respective rights of all defendants in and to the award, and gave the City of Fresno fifteen days to seek such apportionment.

On April 15, 1968, the court, pursuant to Code of Civil Procedure section 1264.7, filed a judgment declaring that the Penzner properties were necessary for public use and fixing the condemnation award in accordance with the jury's verdict. On the same day, appellant deposited the award in court, and the court filed an order labeled 'Final Order of Condemnation' condemning the properties to appellant in fee simple absolute (Hamacher v. People, 214 Cal.App.2d 180, 183, 29 Cal.Rptr. 513). On April 29 respondent moved for a new trial, and his motion was granted. The court specified three reasons for granting the motion: that the judgment did not determine the rights of all defendants claiming an interest in and to the property condemned; that the procedure required by Code of Civil Procedure section 1246 was not followed because the City of Fresno did not file an answer; that the jury had been discharged and could not try the second phase of the case as provided by Code of Civil Procedure section 1246.1.

We turn first to the trial judge's statement that the judgment 'does not determine the rights of all persons claiming an interest in and to the property condemned.'

The trial court property severed the valuation issue from the apportionment issue, and after the jury returned its verdict on the former, correctly retained jurisdiction to determine the respective rights of all defendants in and to the award. Section 1246.1 is a procedural statute 'under which a condemnor may insist that the total award for the property to be taken be first determined and then, in the second phase of the trial, the respective shares of the multiple owners in that award be ascertained.' (People ex rel. Dept. of Public Works v. Lynbar, Inc., 253 Cal.App.2d 870, 878, 62 Cal.Rptr. 320, 326.) The court merely bifurcated the case for trial as it was required to do by statute, and the judgments which it signed merely related to the first phase of the proceeding, not the apportionment phase in which appellant has no interest. (Calif. Condemnation Practice (Cont.Ed.Bar), Calif. Specialty Handbook No. 4, § 16.2, pp. 368--369.)

The court's second reason for granting a new trial is an unwarranted construction of section 1246 of the Code of Civil Procedure and places form over substance. The obvious purpose for requiring a defendant in a condemnation action to set forth his estate or interest in the condemned property by way of answer is to enable the condemnor to acquire clear title to property needed for public purposes as expediently as possible. And, when section 1246 is read in conjunction with section 1246.1 it streamlines the rules of pleading in eminent domain proceedings by making it possible for defendants having conflicting interests in property condemned by a public agency to litigate their adverse claims to the condemnation award without the necessity of filing cross-complaints (People v. Frahm, 114 Cal.App.2d 61, 62, 249 P.2d 588). The narrow construction of section 1246 contested for by respondent, if adopted, would create an anomaly in the law and would do violence to the apparent intent and purpose of the Legislature.

Furthermore, respondent has failed to demonstrate that he was prejudiced. Plaintiff's complaint named the City of Fresno Mall Assessment District No. 1 as a defendant, and the stipulation, which was thereafter filed and which the court incorporated in its order, precisely sets forth this defendant's interest in respondent's properties. Albeit the stipulation was not served on respondent, there is no reason to believe that he would have been better informed if the city had filed an answer; there is no requirement that 'a defendant serve his answer upon his codefendants.' (City of Santa Cruz v. MacGregor, 178 Cal.App.2d 45, 49, 2 Cal.Rptr. 727, 729.)

Finally, it is the decisional law of this state that a special assessment lien like an ad valorem tax lien, attaches to the condemnation award which has been deposited in court even though the taxing agency does not appear in the action. (Wilson v. Beville, 47 Cal.2d 852, 306 P.2d 789; City of Los Angeles v. Superior Court, 2 Cal.2d 138, 39 P.2d 401.) As the court stated in City of Long Beach v. Aistrup, 164 Cal.App.2d 41, 48--49, 330 P.2d 282, 287:

'There is no difference in result between a lien on property for a special assessment benefit which cannot be enjoyed and a lien for general taxes on property which likewise cannot be enjoyed. It is well settled in this state that liens for general taxes and liens for special assessments stand on an equal footing before the law.'

And, as the court also said at pages 52--53, 330 P.2d at page 289 of the opinion:

'Where the award in a proceeding in eminent domain is paid into court, the lien attaches to the award and is removed from the condemned land. Wilson v. Beville, 47 Cal.2d 852, 855, 306 P.2d 789; Pomona College v. Dunn, 7 Cal.App.2d 227, 232, 46 P.2d 270. The lien remains a vested interest in the award, which interest must be determined by the trial court. City of Vallejo v. Superior Court, 199 Cal. 408, 416--418, 249 P. 1084, 48 A.L.R. 610. After the amount of award has first been determined, the court is empowered in the same proceeding to determine the respective rights of the defendants having divided interests in the property and to apportion the award accordingly. Code Civ.Proc., §§...