San Diego v. Rancho Penasquitos Partnership

• Decision Date: 30 January 2003
• Docket Number: No. D038316.,D038316.
• Citation: 105 Cal.App.4th 1013,130 Cal.Rptr.2d 108
• Court: California Court of Appeals Court of Appeals
• Parties: CITY OF SAN DIEGO, Plaintiff and Appellant, v. RANCHO PENASQUITOS PARTNERSHIP et al., Defendants and Respondents.

130 Cal.Rptr.2d 108

105 Cal.App.4th 1013

CITY OF SAN DIEGO, Plaintiff and Appellant, v. RANCHO PENASQUITOS PARTNERSHIP et al., Defendants and Respondents.

No. D038316.

Court of Appeal, Fourth District, Division 1.

January 30, 2003.

As Modified on Denial of Rehearing

March 3, 2003.

Review Denied May 14, 2003.

Casey Gwinn, City Attorney, Anita M. Noone, Assistant City Attorney, Claudia Gacitua Silva, Deputy City Attorney; Meyers, Nave, Riback, Silver & Wilson, David W. Skinner, San Leandro, and Stefanie Y. Gandolfi, Oakland, for Plaintiff and Appellant.

Rutan & Tucker, Jeffrey M. Oderman, and Douglas J. Dennington, Costa Mesa, for Defendants and Respondents.

NARES, J.

In this eminent domain action the plaintiff City of San Diego (the City) condemned 10.94 acres of real property, part of a 108.75 acre parcel of property zoned for agricultural use that was owned by the defendants Rancho Penasquitos Partnership, Ting Fang Lin, Yu Chun Huang, Cindy C. Kasai and Pai Ho Wey (collectively RPP). The City took RPP's property for the State Route 56 freeway (SR-56) project. The City asserted at jury trial that because it had a zoning restriction in place prohibiting higher density development of properties such as RPP's that were in the potential path of SR-56 until the SR-56 project was approved, a zoning change was not possible absent the SR-56 project, and therefore the property must be valued at its current zoning for agricultural use. The City contended the fair market value of the condemned property was $120,000 per acre, or $1,285,200 in total value, with no severance damages to RPP's property that was not condemned because of off-setting benefits provided by the SR-56 project.

RPP argued that because the City was both the condemning agency and the entity responsible for the prohibition on development, and the restriction was designed to minimize the City's cost of acquiring the property through eminent domain, the condemned property's value must be based upon an appraisal that did not consider the City's prohibition on zoning changes for properties in the potential path of SR-56. Furthermore, RPP argued that it was reasonably probable that the property could be rezoned to residential use and that it had a value of $350,000 per acre, for a total value of $3,830,000, with severance damage to RPP's property that was not condemned of $4,620,000.

The City also sought to exclude testimony from RPP's experts concerning rezonings and sales of neighboring properties that occurred after SR-56 was approved, on the basis that they were "project-enhanced" and in the absence of SR-56 it was too speculative to assume that the rezonings and sales would have occurred. RPP in turn argued that these rezonings and sales would have occurred even without SR-56, and therefore their property also stood a reasonable probability of rezoning to residential use.

The court agreed with RPP on both evidentiary disputes. First, the court granted RPP's motion in limine, excluding from evidence the City's zoning regulations that prohibited a rezoning of RPP's property from agricultural use absent approval of the SR-56 project. The court held that because in eminent domain actions condemned property must be valued at its "before" condition; that is, excluding the fact and impact of the SR-56 project, the City could not base its valuation upon land use regulations that prohibited development pending the SR-56 project, whose very purpose was to minimize the City's acquisition costs. The court also allowed RPP's experts to testify concerning the rezonings and sales of neighboring properties, finding that it was a matter of proof and argument to the jury as to whether they were "project-enhanced" or would have occurred even without SR-56.

The jury found that the fair market value of the condemned property was $2,870,280, and that the damage caused to the property from which its was severed was $1,035,930, for a total award of $3,906,210. The court entered judgment in accordance with the jury's verdict.

The City appeals, asserting that the court committed prejudicial error by (1) excluding the City's zoning restrictions prohibiting a zoning change absent approval of the SR-56 project; (2) allowing RPP to introduce evidence of "project-enhanced" rezonings for other properties in the area in support of RPP's valuation theory; (3) failing to allow evidence of the zoning restriction to rebut RPP's experts' testimony; (4) allowing "perjurious" testimony by RPP's expert and (5) failing to prepare a statement of decision as to its evidentiary rulings.

We conclude that the court correctly excluded from evidence the City's zoning restriction precluding upzoning of RPP's property absent approval of the SR-56 project because (1) the zoning and condemning agencies are the same and (2) the restriction discriminates against RPP's property in order to depress its value for a future taking by eminent domain. We also conclude that the court did not err in allowing RPP's experts to testify concerning rezonings of other properties as it was a question of fact for the jury to determine whether the upzonings were "project-enhanced" or not. We further conclude that the court did not err in refusing to allow evidence of the City's zoning restriction to "rebut" RPP's expert's testimony. We hold that the court did not allow "perjurious" testimony by RPP's expert. Finally, we conclude that the court was not required to prepare a statement of decision in this matter as the court's evidentiary rulings were not akin to a "trial" of factual issues. Accordingly, we affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

A. The Condemned Property

RPP owned approximately 108.75 acres of unimproved land in the City within subarea IV (known as Torrey Highlands) of the North City Future Urbanizing Area (NCFUA). The NCFUA is approximately 12,000 acres created "`to avoid premature urbanization, to conserve open space and natural environmental features and to protect the resources of the City by precluding costly sprawl and/or leapfrog urban development.'" Zoning within the NCFUA was designated as A-l-10 agricultural, allowing one dwelling per every 10 acres, or, under a clustering option, one residence per every four acres.

However, responding to a severe shortage of available land and the lack of an overall plan for the orderly development of the NCFUA, in October 1992 the City adopted a framework plan for the NCFUA, which was incorporated into the City's general plan. The framework plan was designed to provide a blueprint for the future urbanization of the NCFUA.

B. The SR-56 Project

The then-proposed SR-56 was established by the California Legislature in 1959. SR-56 was needed to provide a regional east-west link between Interstate 5 and Interstate 15. SR-56 was a part of the circulation element of the City's planning documents since 1965.

As part of the planning for the future development of the NCFUA, the City restricted development of subareas III and IV (wherein RPP's property lay) because the proposed SR-56 was to cross those areas. To this end, the framework plan provided:

"2.6a Because of the importance of other planning efforts to the future of several NCFUA subareas, the following principles will govern timing of completion of subarea plans for individual subareas:

"........................

"•Subareas III and IV: The City will undertake an alignment study for S56. Subarea Plans for these areas may be approved, provided sufficient corridors are designated for alternative alignments for SR-56. However, discretionary approval for development in these subareas shall not be approved prior to the adoption of the City's final alignment for SR-56." (Italics added.)

C. Approval of Subarea Plan for Torrey Highlands

In 1996, the City adopted a subarea plan for the Torrey Highlands portion of the NCFUA, which was approved by voters in November 1996. The voters authorized a shift in residential land uses in Torrey Highlands from the A-l-10 designation to densities as high as 10 dwelling units per acre. The subarea plan also provided that development could not occur until the exact route of SR-56 was selected:

"8.2.3 State Route 56 Alignment

"Final selection of the alignment for SR-56 must occur prior to discretionary approval of any development in the Torrey Highlands community which is affected by the final alignment." (Italics added.)

The City also adopted a transportation phasing plan for Torrey Highlands which conditioned the right of property owners to obtain building permits for higher density development on the SR-56 project being "assured to the satisfaction of the City Engineer."

According to the City, the purpose of the zoning restriction was to prevent development of land that might conflict with the final alignment of SR-56. However, the ban on development did not apply to properties not within the proposed path of SR-56 and such properties could be upzoned upon application.

D. Final Alignment for SR-56

In June 1998, the City certified the final environmental impact report (EIR) for the middle segment of SR-56 and approved the final alignment of SR-56's path. In November 1998, Caltrans did the same.

In June 1999, the City Engineer determined that the middle section of SR-56 was "assured" or fully funded. In July 1999, the City entered into a cooperative agreement with the State of California obligating it to acquire the rights-of-way for the middle segment of SR-56. The final alignment of SR-56 required the City to condemn 10.94 acres of RPP's property.

E. The Instant Action

In September 1999, the City filed a complaint in eminent domain to condemn RPP's property. As we will discuss in more detail, the main issue in dispute was what evidence could properly be considered in valuing RPP's property. In particular, the parties disputed whether the City could rely upon its zoning restriction prohibiting upzoning of RPP's land absent approval of the...