San Diego Gas & Electric Co. v. Daley

• Decision Date: 17 November 1988
• Docket Number: No. D003936,D003936
• Court: California Court of Appeals Court of Appeals
• Parties: SAN DIEGO GAS & ELECTRIC COMPANY, Plaintiff and Appellant, v. Donald L. DALEY et al., Defendants and Respondents.

Page 144

253 Cal.Rptr. 144

205 Cal.App.3d 1334

SAN DIEGO GAS & ELECTRIC COMPANY, Plaintiff and Appellant, v. Donald L. DALEY et al., Defendants and Respondents.

No. D003936.

Court of Appeal, Fourth District, Division 1, California.

Nov. 17, 1988.

C. Larry Davis and Asaro & Keagy and Roscoe D. Keagy, Richard R. Freeland and Arnold Neves, Jr., San Diego, for plaintiff and appellant

Procopio, Cory, Hargreaves and Savitch and Alec L. Cory, James G. Sandler and David A. Niddrie, San Diego, for defendants and respondents.

STANIFORTH ^*, Associate Justice.

San Diego Gas & Electric Company (SDG & E) appeals a judgment entered in a condemnation action instituted by SDG & E against Donald L. Daley and Lawrence A. Daley (Daley), which sought to acquire a two-hundred foot wide power line easement across the Daley property, commonly known as Rancho Jamul. The action was tried by a jury whose verdict awarded Daley $190,000 for the property condemned and severance damage to the remaining property in the sum of $1,035,000. Interest in the amount of $486,066.68 was assessed on the principal amounts determined by the jury. Further, litigation expenses in the sum of $365,794.53 were awarded to Daley.

Daley seeks attorneys fees and litigation expenses on appeal as well as affirmance of the judgment below. (CODE CIV.PROC., § 1250.410¹, subd. (b).) Daley does not contest SDG & E's right to condemn the property. At trial he questioned only the utility company's assessment of "just compensation" which must be paid to him under the eminent domain statutes. ( §§ 1263.310 et seq.) SDG & E contends (1) the trial court over its objection improperly allowed Daley's experts to testify that because there was a "controversy" over whether electromagnetic fields may cause biological injury to humans and animals, they would discourage placement of residences within an area parallel to and as wide as 900 to 1000 feet from the edge of the easement; (2) the court erroneously prohibited it from presenting rebuttal testimony to show that a knowledgeable buyer in the marketplace would not be concerned with the purported

controversy and therefore, no diminution in value would result from such cause; (3) these errors prejudically affected the jury's determination of just compensation causing reversible error; and (4) the court erred in finding SDG & E's final offer made pursuant to section 1250.410, subdivision (a) was unreasonable resulting in assessment of litigation expenses in the amount of $365,794.53. SDG & E seeks reversal including litigation expenses and remand for new trial.

PROCEDURAL BACKGROUND

On March 29, 1982, SDG & E filed its complaint in eminent domain to acquire a 200 foot wide power line easement across the Daley property. At the time of filing the complaint an order for prejudgment possession was issued by the court requiring SDG & E to deposit $110,000, the probable amount of compensation to be awarded. This amount was later withdrawn by Daley pursuant to stipulation of the parties. Daley answered the complaint and later filed his list of expert witnesses identifying his evaluation witnesses as Robert H. Williams, an expert in land planning, and Joseph G. Johns. Daley's statement of evaluation stated Daley was seeking compensation in the amount of $1,450,000 for the taking of the subject property.

At the same time, SDG & E filed and served its designation of expert witnesses, including evaluation experts Lee C. Johnson and Joseph A. Gallagher as well as three experts whose testimony would relate to the existence of biological effects, if any, caused by overhead transmission lines.

On April 10, 1985, the parties exchanged their statutory settlement offers. Daley offered to settle the litigation for $750,000. SDG & E offered to settle the litigation for $330,000. Thereafter, SDG & E filed a motion in limine to exclude anticipated testimony concerning alleged hazardous biological effects resulting from the electromagnetic fields surrounding the power line. The motion also sought to exclude certain testimony by Daley's experts which relied upon as a foundation information received from other experts whose identities were not disclosed before trial. The trial court denied the motion, ruling the Daley experts could testify to the effect on value, if any, of public fear of overhead transmission lines. The court declared the reasonableness of the alleged buyer fear was irrelevant and thus ruled there would be no testimony as to specific fears or as to the reasonableness of such fears. The jury's verdict (by a vote of 9 to 3) declared the fair market value of the easements taken as of March 29, 1983, was $190,000, and further, the severance damage of the remainder of the property as of that date was $1,035,000. SDG & E filed a motion for a new trial and Daley filed a motion for recovery of litigation expenses pursuant to section 1250.410, subdivision (b). The court denied SDG & E's motion for a new trial. Judgment was entered November 14, 1985. On December 4, 1985, the court awarded trial litigation expenses in the sum of $365,794.53.

In its determination to allow testimony concerning the effect of buyer fear and property values without proof of the actual scientific basis for the fear, the court suggested that the appellate court, if the trial court was correct, allow the award to stand; however, if the trial court was in error then that portion of the award (increased severance damages due to buyer "fear") could be stricken so there would not have to be a retrial. The court suggested in implementing this procedure:

"Maybe we could have some special findings in that regard so that we could tailor all of these issues for appellate review, depending upon the pleasures of the parties, of course, so that all the appellate court would have to do is make rulings as to whether I was right or wrong. Then it would--the award would automatically be adjusted in accordance with those views."

Daley agreed to this procedure for special verdicts but SDG & E rejected the use of special verdict forms to determine the extent to which the jury awarded severance damages based upon buyer fear of electromagnetic fields. The Trial

SDG & E's first witness, Terry Mack Winter described how electricity is transmitted: to transmit 500,000 volts, the system would actually have to carry between 525,000 and 550,000 volts because of resistance or loss of energy. SDG & E introduced as part of Winter's testimony the environmental impact report (EIR) which was commissioned for the project in findings of the California Public Utilities Commission (CPUC). Winter testified the EIR identified several factors among others having a major impact upon the environment: (1) the noise, (2) the unsightliness of the project's massive steel towers, and (3) the electromagnetic fields generated by the flow of electrical energy. With regard to this last factor, Winter testified that the studies conducted were "inconclusive." Several studies had suggested that electrical fields were hazardous to humans and animals and that there was at least a controversy within the scientific community on this issue. One of the mitigation requirements of the EIR was that SDG & E continue to review the literature as it becomes available on the subject.

Lawrence Daley testified the project has ruined the beauty of Rancho Jamul. Next called was Robert Walters, a civil engineer, for his opinion as to the highest and best use of the Daley property. Walters concluded the property was unusually good for residential development. Walters also testified concerning the effect of the (SDG & E) project on the development of Rancho Jamul. He testified the presence of the power line caused several problems for potential developers, raising the cost of development. These included visual impairment, the noise of the electromagnetic emanations, construction of easement crossings, additional landscaping to hide the easement, unusual lot shapes, the adding of precautions to ensure safety and security of residences adjacent to the easement, and finally, unusual street locations and drainage configurations. Walters testified he, as a civil engineer on another project involving 500,000 volt transmission lines, had included a setback of the power lines of 1,000 feet in his development plans. These setbacks were to mitigate both the noise and potential adverse effects of electromagnetic radiation. Walters testified he had never done this on any other project because he would not have been aware of "any data to back up such a requirement." Now he had become aware of the controversy surrounding electromagnetic radiation. He testified in the future he would call the potential problems to the attention of developers and "let [them] make the decision as to how [they want] to proceed...."

SDG & E sought to strike Walters' testimony because setbacks had not been routinely used by developers. The trial court denied the motion saying "it goes to the weight rather than the admissibility. [p] This witness is testifying that based upon most recent information that he has received, that he now feels that he has a duty to make these disclosures to developers, ..."

SDG & E's attorney requested he should be allowed to rebut Walters' testimony by producing evidence that electromagnetic fields do not pose any significant health hazard. The court ruled:

"[If] the plaintiff establishes that there is a controversy as to the existence or none [sic] existence of a magnetic field under high power lines, and that that conflicting opinion or controversy is known by people who develop property, they are aware of it as this apparent witness is aware of it, and that it plays some part in the development of property and has a negative impact so far as developers are concerned, then that's as far as we are going to go. And we are not going to open a Pandora's box and have a mini trial on whether or not he's right and who is wrong with...