Eminent Domain Report

On July 29, 2011, the California Court of Appeal issued an unpublished decision confirming that when condemned property is subject to a roadway easement, and the property owner fails to demonstrate that there is "something special attaching to it," regardless of how the property is ordinarily bought or sold, the landowner is only entitled to nominal value.

In People ex rel. Department of Transportation v. Bakker, No. F060030, the California Department of Transportation (Department) condemned 18.13 acres of land belonging to the Bakkers, 4.4 acres of which were subject to a roadway easement.  After the jury awarded the Bakkers $15,500 per acre, including the 4.4 acres subject to a roadway easement, the trial court entered a directed verdict in favor of the Department, holding that the Bakkers were only entitled to nominal value for the 4.4 acres as a matter of law, and reducing the $68,200 awarded for the 4.4 acres to $200.  The trial court also denied the Bakkers' request for litigation expenses.  

On appeal, the Bakkers argued that they presented proof of special value by way of their appraiser, who also happened to have a broker's license, as he testified that property in the area, regardless of whether it is subject to a roadway easement, is bought and sold based on the gross acreage.  The Court of Appeal first explained, quoting People ex rel. Dept. P.W. v. Schultz Co. (1954) 123 Cal.App.2d 925, that in California, absent "proof of some special value" condemned land subject to a surface easement is only entitled to nominal value.  Then, expressly rejecting the Bakkers' argument, the Court stated that  [i]f the fact that a parcel is usually sold based on gross acreage proved that the portion of the property subject to a roadway easement has special value, the rule set forth in Schultz would never apply."  Accordingly, the Court of Appeal affirmed the trial court's approximately 99.7% reduction in compensation for the 4.4 acres of property. 

As for the issue of litigation expenses, the Court of Appeal found that even though the Department's final offer was only 83% of the revised jury verdict, because the trial court applied established guidelines it did not abuse its discretion in determining that the offer was reasonable.