San Bernardino County Flood Control Dist. v. Grabowski

• Decision Date: 01 November 1988
• Docket Number: No. E003690,E003690
• Court: California Court of Appeals Court of Appeals
• Parties: SAN BERNARDINO COUNTY FLOOD CONTROL DISTRICT, Plaintiff and Respondent, v. Patrick F. GRABOWSKI, Defendant and Appellant.

Page 676

252 Cal.Rptr. 676

205 Cal.App.3d 885

SAN BERNARDINO COUNTY FLOOD CONTROL DISTRICT, Plaintiff and Respondent, v. Patrick F. GRABOWSKI, Defendant and Appellant.

No. E003690.

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

Nov. 1, 1988.

Review Denied Jan. 25, 1989.

Goebel, Shensa & Beale and Louis E. Goebel, San Diego, for defendant and appellant

Alan K. Marks, County Counsel, and E.H. Robinson, Deputy County Counsel, San Bernardino, for plaintiff and respondent.

OPINION

CAMPBELL, Presiding Justice.

THE COURT

This is an eminent domain action. Appellant's (Grabowski's) real property is being sought by respondent Flood Control District (District) for a flood control facility. Judgment was entered confirming District's right to acquire the property and awarding Grabowski compensation for the taking. Grabowski appeals from the judgment and certain post-judgment rulings. ¹

FACTUAL AND PROCEDURAL BACKGROUND

In December 1981, the Jurupa Hills Redevelopment Project was adopted by the Fontana Redevelopment Agency. This project was intended to permit the eventual "build out" of the Jurupa Hills area of the City of Fontana, in the County of San Bernardino, adjacent to the Riverside county line. More specific development plans were approved by the redevelopment agency the following year. These more specific plans provided for the development of a lesser, included area to be known as the Southridge Village Project (the development) by Ten-Ninety, Ltd., a private developer.

The area in which the development was to be located encompassed a series of natural watersheds and drainage courses that comprise a portion of what is known as the DeClez Channel drainage system--a natural regional flood drainage system that eventually outlets into the Santa Ana River. In order to reach the Santa Ana River, however, the system's drainage discharge must pass through flood control facilities in Riverside County.

Inasmuch as the development was to be largely financed by mortgage revenue bonds issued under a federal financing guarantee program, a federally-mandated Environmental Impact Statement was prepared with respect to the development. During the preparation of this Statement, it became clear for the first time that the County of Riverside was unable and unwilling to simply accept the increased storm drainage flows that would be produced by the development.

Engineering discussions then ensued among the City of Fontana, the Fontana Redevelopment Agency, the County of Riverside, and the San Bernardino County Flood Control District to ascertain a solution to the problem of the increased drainage discharge created by the development's construction. As a result of these discussions, it was determined that the best engineering solution to the problem was to build a detention basin upstream of the Riverside flood control facilities to temporarily detain the peak flood flows draining from the development area. In April 1983, the Fontana Redevelopment Agency filed an action in eminent domain to acquire Grabowski's real property, located in the County of Riverside, for the detention basin site.

In July, 1983, the Fontana Redevelopment Agency authorized the issuance of federally guaranteed mortgage revenue bonds to finance the construction of the development by Ten-Ninety, Ltd. A few days later, the City of Fontana, the Fontana Redevelopment Agency, Ten-Ninety, Ltd., and Creative Communities (a California corporation which controls Ten-Ninety) entered into an agreement whereby Ten-Ninety agreed (and Creative Communities guaranteed) that Ten-Ninety would pay all of the City's/Redevelopment Agency's costs in acquiring the Grabowski site and building the detention basin.

In August 1983, the San Bernardino County Flood Control District entered into two agreements with various of the parties already involved in the construction of the development, the net result being that the District (rather than the Redevelopment Agency) would acquire the detention basin site, that the District would own, operate and maintain the detention basin once it was built, and that Ten-Ninety would bear the full cost of acquiring the detention basin site and constructing the basin itself. Ten-Ninety further obligated itself to pay a substantial portion of the cost of maintaining and operating the basin for the first several years of its existence.

In September 1983, the Fontana Redevelopment Agency abandoned its eminent domain action. That same month, the District noticed a meeting of its governing body (Board) to consider the adoption of a Resolution of Necessity preparatory to filing an eminent domain action to acquire the detention basin site.

On October 10, 1983, the District Board conducted its hearing on a Resolution of Necessity concerning the Grabowski site. Four of the five members of the Board were present. No one appeared to speak in opposition to the adoption of the resolution. All four Board members who were present voted in favor of the resolution. On October 13, 1983, the District filed its eminent domain action--the action here in issue--to acquire Grabowski's property. Grabowski's answer to the District's complaint generally denied the complaint's allegation that a Resolution of Necessity had been validly adopted, but did not raise a Political Reform Act of 1974 (tit. 9, Gov.Code; hereafter, PRA) challenge to the validity of the Board's vote on that resolution. The District obtained "immediate possession" of the property, pursuant to the provisions of the Eminent Domain Law, and construction of the detention basin was undertaken forthwith. The basin was completed in 1984.

In June 1986, trial was commenced in the action. The trial court first heard evidence on Grabowski's objections to the District's "right to take" the property and found in favor of the District on those issues. The jury phase of the trial was then conducted to determine the fair market value of the acquisition site.

In August 1986, judgment was entered in the matter. Although Grabowski had been given the opportunity to submit interest rate data to the court prior to entry of judgment, he had failed to do so. Within a few weeks, Grabowski moved for a new trial, raising again his objections to the District's "right to take" as well as issues relating to the computation of interest on the award and the allowance of attorney's fees. Upon the trial court's denial of his motion, Grabowski filed the appeal now before us.

In the analysis of the issues which follows, additional factual material will be referred to as required.

ISSUES PRESENTED

This appeal presents the following general and specific issues:

(1) Can a challenge based on the provisions of the Political Reform Act be asserted against the validity of an exercise of the eminent domain power by way of a general denial in an answer filed in the eminent domain action?

(2) Did the District meet its burden of establishing the existence of the conditions precedent necessary to a valid exercise of the eminent domain power?

(3) Did the trial court err in denying Grabowski an award of attorney's fees?

(4) Did the trial court err in computing the interest element of the overall condemnation award by using market rates of interest lower than the statutory "legal interest" rate?

DISCUSSION

I THE POLITICAL REFORM ACT CHALLENGE TO THE DISTRICT'S EMINENT DOMAIN ACTION

The entire framework which exists for the exercise of the inherent governmental power of eminent domain in California is statutory; and these statutory provisions must be strictly complied with when proceeding in an eminent domain action. (Code Civ.Proc., § 1230.020 ²; Sacramento and San Joaquin Drainage Dist. v. Truslow (1954) 125 Cal.App.2d 478, 488, 270 P.2d 928, 271 P.2d 930.)

In order to properly file an eminent domain action, a public agency must first have adopted, upon noticed hearing, a Resolution of Necessity which supports the initiation of the action. ( §§ 1240.040, 1245.220.) The resolution must be approved by a two-thirds majority of all the members of the condemning agency's governing body. ( § 1245.240.) Inasmuch as the District's Board is a five-member body, a minimum of four votes was needed to approve the District's resolution in favor of the acquisition of Grabowski's property. All four of the Board members who were present at the hearing held to consider the resolution voted in favor of it.

Grabowski contends that one of the votes cast in favor of the resolution was invalid under the conflict-of-interest provisions of the PRA and, thus, that the District's actions failed to meet the mandatory procedural requirements of the Eminent Domain Law. ³ In brief, Grabowski is challenging the District's "right to take." Whatever the merits of Grabowski's PRA contention might be, we conclude here that the contention was never properly raised in this eminent domain action. ⁴ For the reasons discussed below, we hold that a challenge to a public agency's "right to take" which is based on the provisions of the PRA, and which is asserted after an eminent domain action has been filed, must be raised by way of a compulsory cross-complaint. ( § 426.30, subd. (a); § 426.70.)

As noted, Grabowski's PRA challenge to the validity of this eminent domain action constitutes an objection to the District's "right to take" and an attempt to secure judicial review of the validity of the District's Resolution of Necessity. As such, Grabowski's PRA challenge is subject to the provisions of section 1245.255, subdivision (a)(2), which states that judicial review of the validity of a resolution may be obtained, once the eminent domain action is commenced, "by objection to the right to take pursuant to this title." (Emphasis added.)

Section 1250.350 specifies the conditions under which an objection to the right to take may be asserted in an eminent domain action: "A defendant may object to the plaintiff's right to take, by demurrer or answer as...