228 Cal. App. 4th 1280
Cal. Ct. App.2014Background
- SDG&E sought to condemn two contiguous parcels (115 acres total) for an easement for Sunrise Powerlink; highest and best use argued to be mining vs residential; the land contained undeveloped mineral deposits; the date of valuation was June 25, 2010; the jury valued the land around $8 million and awarded compensation of $8,034,000; defendants' experts testified mining could be profitable and legally feasible with a Major Use Permit (MUP); SDG&E challenged the verdict and sought JNOV and new trial on evidentiary issues; defendants cross-appealed for litigation expenses under CCP §1250.410; trial court admitted mining-economy evidence, instructed on discounted cash flow for minerals, and denied relief on SDG&E’s JNOV and trial motions; the appellate court affirmed the verdict but reversed the denial of litigation expenses, remanding to award costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether substantial evidence supports mining as highest and best use | SDG&E argues mining was not reasonably probable and thus not valid highest and best use | Defendants show mining is feasible; expert testimony supported highest and best use | Yes, substantial evidence supports mining as highest and best use |
| Whether the discount cash flow method was proper for mineral valuations | SDG&E challenges use of discounted cash flow under Evidence Code 819 | Discounted cash flow approved in Ventura and Andresen; appropriate for minerals | Yes, method proper and admissible |
| Whether cross-examination and hearsay rulings (Bennett/ crapshoot) deprived SDG&E of a fair trial | Trial court improperly sustained hearsay objections limiting cross-examination | Rules on hearsay and foundations applied correctly; errors harmless | No reversible error; no miscarriage of justice |
| Whether Anderson's discounted cash flow and 71.4%/100% probabilities were speculative | SDG&E contends figures were conjectural and not probative | Evidence supported probability estimates; cross-examination available | Evidence supported the probabilities and method used |
| Whether defendants are entitled to litigation expenses under CCP §1250.410 | Final offer was reasonable; trial result not supporting award of expenses | Defendant's final demand was reasonable in light of trial evidence and verdict | Yes, trial court erred in denying expenses; remanded to award |
Key Cases Cited
- San Diego Metropolitan Transit Development Bd. v. Cushman, 53 Cal.App.4th 918 (Cal.App.4th 1997) (highest and best use and appraisal methods; guidance on valuation standards)
- Andresen, 193 Cal.App.3d 1144 (Cal.App.3d 1987) (condemnation evidence on future land uses)
- Ventura County Flood Control Dist. v. Campbell, 71 Cal.App.4th 211 (Cal.App.4th 1999) (discounted cash flow for mineral deposits)
- City of Stockton v. Albert Brocchini Farms, Inc., 92 Cal.App.4th 193 (Cal.App.4th 2001) (mineral deposits as value-enhancing factor; admissibility of income evidence)
- City of Livermore v. Baca, 205 Cal.App.4th 1460 (Cal.App.4th 2012) (instructional guidance on expert testimony and appellate review)