Rutan has been one of California’s leading firms in eminent domain, inverse condemnation and property valuation law over the past 50 years, in large part because of the quality and experience of its attorneys. We have represented both property owners and public agencies in eminent domain and inverse condemnation actions, and also has a wealth of experience in property valuation related to property tax appeals, lease renewals, estate controversies and partnership disputes. With this thorough understanding of both the public and private sides, we are able to provide clients with a strategic advantage over firms that represent only public agencies or property owners. Further, our broad experience in public agency, land use, environmental and natural resource law adds to the depth of expertise it can bring to bear on property valuation cases, and helps attorneys devise creative strategies that can make the difference between success and failure.
Our attorneys have handled more than 2,000 eminent domain and property valuation matters. These have included cases involving freeway and road projects, city halls and other government buildings, schools, golf courses, public utility facilities, dams and water projects, natural gas pipelines, oil drilling projects, redevelopment projects, professional sports stadiums and extra-territorial acquisitions. Types of property have included hotels, restaurants, office buildings, shopping centers, residences, gas stations, commercial and industrial buildings, farms and citrus groves, car dealerships and auto wrecking yards, billboards, mines, radio towers and contaminated real estate, as well as mineral rights, leaseholds, possessory interests, easements and restrictive covenants.
Our attorneys have dealt with such issues as challenges to the right to take, challenges to environmental review and mitigation, claims for unreasonable delay or unreasonable conduct by a public agency, the effect of toxic contamination on property value, disputes over the highest and best use of a property, claims for loss of business goodwill, severance damages and relocation benefits, and claims that a proposed use is not a valid public use.
HOW WE CAN HELP YOU
Eminent domain and property valuation law bridges many traditional divides: litigation and transaction law; public agencies and private owners; established precedents and creative solutions. It is a dynamic and complex area in which each case has its own unique set of challenges. There is no substitute for the breadth of experience and resources that Rutan attorneys can put to use for you.
THE EMINENT DOMAIN PROCESS
Eminent Domain is the power of a public agency, under both the United States Constitution and the California Constitution, to acquire private property for a public use subject to the requirement that the public agency pay “just compensation” for the property. The power of eminent domain is often used to acquire property that is necessary for a public project when the public agency and the owner cannot agree upon the value of the property or when the owner does not want to sell the property under any circumstances. The power of eminent domain may be exercised to acquire property for a particular use only by a public agency or person authorized by a statute to exercise the power of eminent domain for that use.
Just Compensation includes the fair market value of the real property and improvements being taken as well as any fixtures and equipment. It also includes the diminution in value of the remaining real property and improvements when the property taken is part of a larger parcel (“severance damages”), and loss of business goodwill for any business that is located on the property being taken or on the larger parcel. Occupants of the property may also be entitled to relocation assistance.
A condemnation action resolves the differences between the property owner and the public agency over how much should be paid as just compensation. Both the owner and the public agency are entitled to request a jury trial to determine just compensation. However, any objections the property owner has to the public agency’s right to take the property are determined by the judge, not the jury. The costs of the condemnation procedure (such as filing fees, jury fees, process service fees) are required to be paid by the public agency; however, the property owner is required to pay his or her own attorneys fees and other litigation costs. Under some circumstances, when the court determines that the public agency’s pretrial offer of just compensation was unreasonable and the property owner’s demand was reasonable, the court has discretion to order the public agency to pay all or part of the property owner’s attorneys fees and litigation costs.
Before a public agency may acquire property by eminent domain, it must engage in good faith negotiations with the owner to purchase the property and is required to appraise the property, establish what it believes to be just compensation based upon the appraisal, make an offer to acquire the property for the full amount of the established just compensation, and provide the owner a detailed summary of the basis for the offer. If negotiations fail, the next pre-requisite to a condemnation action is the adoption by the governing body of the public agency of a Resolution of Necessity which requires a 2/3 vote of all members, whether present or not. This requires a noticed hearing at which the governing body determines whether it can make findings that the project is necessary, that the project is planned and located in a manner that is most compatible with the greatest public good and the least private injury, and that the property is necessary for the project. Once the public agency adopts a resolution of necessity and makes these findings, a court will not overturn the public agency’s findings on necessity unless the property owner can show there was fraud or a gross abuse of discretion. The public agency must also make findings to comply with the California Environmental Quality Act for the underlying project at the time it determines to condemn the property. The location, purpose and extent of the acquisition must conform to the adopted general plan and, for most acquisitions, the responsible planning agency must report on this conformity prior to filing the condemnation action.
The public agency may file a condemnation action after the adoption of a resolution of necessity and, if the public agency deposits with the court the amount its appraiser has determined to be just compensation, the public agency may apply for an order for prejudgment possession. If the court issues the order for prejudgment possession, the public agency may take immediate possession of the property and begin construction on the property within 3 to 90 days after service of the order on the property owner and the occupants of the property, even though a trial has not yet been held. Either party is entitled to have a jury determine the ultimate just compensation to be awarded.