San Diego Gas & Electric Co. v. 3 Corp.

• Decision Date: 09 November 1988
• Docket Number: D003940,Nos. D005359,s. D005359
• Court: California Court of Appeals Court of Appeals
• Parties: SAN DIEGO GAS & ELECTRIC COMPANY, Plaintiff and Respondent, v. 3250 CORPORATION and 275 Corporation, Defendants and Appellants.

Page 853

252 Cal.Rptr. 853

205 Cal.App.3d 1075

SAN DIEGO GAS & ELECTRIC COMPANY, Plaintiff and Respondent, v. 3250 CORPORATION and 275 Corporation, Defendants and Appellants.

Nos. D005359, D003940.

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

Nov. 9, 1988.

Gaylord L. Henry and J. Ernesto Grijalva, San Diego, for defendants and appellants

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

TODD, Associate Justice.

San Diego Gas & Electric Company (SDG & E) brought this eminent domain proceeding to acquire an easement for an electric transmission line and service road on land owned at the time of judgment by 3250 Corporation and 275 Corporation (Owners). A jury awarded Owners $700,000 consisting of $384,000 for the easement as of the April 1, 1982, date of valuation, and $316,000 in severance damages. A judgment in condemnation was entered July 26, 1985.

Owners pursued various motions, including a motion for new trial, and on November 6, 1985, filed their notice of appeal from the judgment (D003940).

Beginning in August 1985, Owners sought litigation expenses and after trial court orders unfavorable to Owners on this issue filed a second notice of appeal on In their appeal from the judgment in condemnation, Owners challenge the scope of the easement SDG & E acquired to the extent SDG & E is empowered to grant or deny permits for additional rights-of-way over or across the easement acquired, labeling this as an acquisition of a police power by condemnation. Owners also challenge the admission and exclusion of certain evidence of valuation and the refusal of the trial court to instruct the jury on a seller's duty to disclose to a purchaser known, hidden defects which are unknown to and not readily observed by the purchaser. Finding the contentions either waived or unmeritorious, we affirm the judgment in condemnation in D003940.

October 21, 1986 (D005359). SDG & E has moved to dismiss the latter appeal as untimely. We have consolidated these appeals and deferred decision on SDG & E's motion to dismiss until the appeals are considered on their merits.

Finding Owners' purported appeal concerning the denial of litigation expenses is untimely, we dismiss the appeal in D005359.

FACTS

As part of SDG & E's Miguel to Mexico project which imports electricity from Mexico to SDG & E's customers, SDG & E commenced this eminent domain proceeding April 1, 1982, seeking to acquire a 120-foot-wide nonexclusive easement necessary for the construction, maintenance and operation of its 230,000-volt transmission line and a service road. The land affected by the proceeding is in the Otay Mesa area of San Diego County near the United States-Mexico border. When SDG & E filed the complaint it deposited $120,540 and obtained an order for immediate possession of the right-of- (CODE CIV.PROC. , § 1255.010¹, et seq.) The deposit represented the probable amount of compensation to be awarded.

On April 21, 1982, Owners' predecessor in interest, V & V Development Company, answered the complaint asserting five affirmative defenses including the contentions that the public interest and necessity did not require the proposed project and the real property described in exhibits A through G of the complaint was not necessary. Exhibit E of the complaint describes the terms and scope of the easement sought, including the following provisions:

"Grantor agrees that no other easement or right-of-way shall be granted or dedicated on, under or over this Easement without the prior written consent of the Grantee.

"...

"Wherein, in this grant of Easement and right-of-way, Grantee's written consent is required, said consent shall not be unreasonably withheld."

As a result of the sale of the V & V Development Company land in a federal bankruptcy proceeding to Owners and the need of Owners for additional time to obtain appraisals and expert assistance for settlement purposes, on July 18, 1983, Owners stipulated to the abandonment of the five affirmative defenses in the answer filed April 21, 1982. After July 18, 1983, Owners never sought to amend the answer to assert an objection to the right to take.

For the purpose of obtaining an order authorizing withdrawal of the amount on deposit, on April 30, 1984, Owners stipulated the withdrawal "shall constitute a waiver of all defenses ... to [SDG & E's] Complaint, except their claim for greater compensation...."

The order was made April 30, 1984, and Owners withdrew the amount on deposit.

On March 1, 1985, the parties exchanged statutory settlement offers. SDG & E offered $550,000 plus accrued interest. Owners offered to settle for $945,000 plus accrued interest. The parties did not settle and on June 6, 1985, the jury returned its verdict for $700,000.

SDG & E deposited with the State Treasurer the $578,460 balance over the original deposit. Owners withdrew this deposit.

With respect to the litigation expenses appeal in D005359, on August 29, 1985, Owners filed their motion for recovery of fees and costs under section 1250.410, subdivision On January 6, 1986, Owners filed a motion for reconsideration of the order denying their motion for litigation expenses. On June 30, 1986, the court denied the motion for reconsideration, the court ruling Owners had not supported the motion with new or different facts as required by section 1008.

(b). The motion was denied December 20, 1985.

On July 10, 1986, SDG & E moved to set aside the June 30, 1986, order denying Owners' motion for reconsideration. On September 30, 1986, the court denied SDG & E's motion.

On October 21, 1986, Owners filed their notice of appeal from the December 20, 1985, June 30, 1986, and September 30, 1986, orders pertaining to the denial of litigation expenses to Owners.

DISCUSSION

I

Owners first contend the attempt by SDG & E to acquire a power to grant or deny permits for additional rights-of-way over or across the easement to be acquired is an attempt to acquire, by condemnation, a police power; and a privately owned utility does not have authority to acquire a police power. There are two substantive bases for concluding the Owners waived their right to object to SDG & E's right to take insofar as it grants a right also to consent to other use of the easement.

First, section 1255.260 provides:

"If any portion of the money deposited pursuant to this chapter is withdrawn, the receipt of any such money shall constitute a waiver by operation of law of all claims and defenses in favor of the persons receiving such payment except a claim for greater compensation." (Italics added.)

Section 1268.140 provides, in part:

"(a) After entry of judgment, any defendant who has an interest in the property for which a deposit has been made may apply for and obtain a court order that he be paid from the deposit the amount to which he is entitled upon his filing either of the following:

"(1) A satisfaction of the judgment.

"(2) A receipt for the money which shall constitute a waiver by operation of law of all claims and defenses except a claim for greater compensation." (Italics added.)

Under the plain language of these sections, Owners' withdrawal of the initial deposit and the balance after entry of judgment constitute a waiver by operation of law of all claims and defenses. At a very minimum, this "police power" assertion by Owners is a "claim" (other than a claim for greater compensation) waived as a result of the withdrawals. (See San Diego Gas & Electric Co. v. Moreland Investment Co. (1986) 186 Cal.App.3d 1151, 1156, 231 Cal.Rptr. 274--order authorizing withdrawal of deposit, there post-judgment, is in the nature of a "receipt" for purposes of section 1268.140, subd. (a)(2), thereby waiving all claims and defenses except claims for greater compensation.)

Second, Owners' written stipulations of July 18, 1983, and April 30, 1984, under any reasonable construction, constitute voluntary relinquishments of known rights to assert defenses to the scope of the taking such as Owners now assert with respect to SDG & E's right to consent to any other easement or right-of-way in connection with the easement in question. This conclusion is buttressed by the fact Owners did not seek to amend the answer to assert the defense here asserted. (See § 1250.345--"Subject to the power of the court to permit an amendment of the answer, if the defendant fails to object to the complaint, either by demurrer or answer, he is deemed to have waived the objection."; see also §§ 1250.350, 1250.360 and 1250.370--pleading objections to the right to take in answer or demurrer.) No other meaning can reasonably be attributed to those stipulations.

We point out in this regard that there is no merit to the argument Owners present in their reply brief that these stipulations are invalid because they are stipulations as to what the law is or in violation of public policy. The stipulations to waive all defenses neither stipulate what the law is nor Even if we were to hold there was no waiver in this case, we wish to add the general observation that there is lacking record support for the underlying premise that SDG & E has obtained a police power. For example, the terms of the judgment include a provision that SDG & E shall not unreasonably withhold any written consent required by the easement. If unreasonable withholding of consent were to occur sometime in the future, as Owners speculate it might, legal remedies are available.

violate public policy. The rule and cases Owners cite have no application to the stipulations waiving all defenses that are involved in this case.

II

Owners contend the trial court erred in permitting evidence of the Chapter 11 Bankruptcy sale of the subject property held by V & V Development Company to Owners. Before trial, the court conducted a hearing on the question of whether the 1982 bankruptcy sale to Owners was voluntary. The trial court...