Opinion
C074052
09-07-2017
SACRAMENTO AREA FLOOD CONTROL AGENCY, Plaintiff and Appellant, v. MARTIN D. SOUZA, as Trustee, etc., et al., Defendants and Respondents.
NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 34201000083124CUEIGDS)
By power of eminent domain, the Sacramento Area Flood Control Agency (SAFCA) acquired approximately two acres of land on Sacramento's Garden Highway from Martin D. Souza, as trustee of the Martin D. and Janet M. Souza Family Revocable Trust (Souza). In a trial to determine just compensation for the acquisition, a jury determined the property taken had a fair market value of $455,000. The trial court entered judgment in that amount and awarded Souza his litigation expenses.
SAFCA now contends (1) the trial court erred in excluding certain evidence, (2) there is insufficient evidence to support the jury verdict, (3) SAFCA was deprived of a fair trial due to attorney misconduct, and (4) the trial court should not have awarded litigation expenses to Souza.
We conclude:
1. The trial court did not abuse its discretion in excluding evidence of severance damages and benefits to the remainder as a result of the project. And although the trial court erred in excluding SAFCA's expert rebuttal testimony, the error is not prejudicial.
2. Substantial evidence supports the verdict.
3. The claims of attorney misconduct which SAFCA has not forfeited by its failure to timely object at trial do not involve misconduct or are harmless.
4. The trial court did not abuse its discretion in awarding Souza litigation expenses.
We will affirm the judgment.
BACKGROUND
SAFCA is a joint powers agency providing local sponsorship for flood control projects in the Sacramento metropolitan area. Among other things, it has joined with state and federal authorities to improve flood protection in the Natomas Basin through the Natomas Levee Improvement Program. Souza owned a 4.68-acre parcel on the Garden Highway in Sacramento. As part of the Natomas Levee Improvement Program, SAFCA acquired 2.256 acres of the Souza property to widen the levee along the Garden Highway, to relocate some utility facilities, and to plant grassland. We will refer to the 4.68-acre parcel as the property, the 2.256 acre portion which SAFCA condemned as the part taken, and the remaining 2.424 acres as the remainder.
At trial, Souza's appraiser referred to the remainder as "the back portion," "the balance" and "surplus land."
SAFCA passed a Resolution of Necessity determining that public interest and necessity required acquisition of Souza's land. A few weeks later, SAFCA filed a complaint in eminent domain seeking condemnation and immediate possession and praying for just compensation to be ascertained and assessed. The trial court entered an order authorizing SAFCA to take possession of the part taken.
Prior to trial, the trial court ruled on various motions in limine, including two we will describe in the discussion. During eight days of trial, Souza presented the expert testimony of its appraiser, Arthur Gimmy, who ultimately opined that the value of the part taken as of July 29, 2010 was $465,000. SAFCA presented the expert testimony of its appraiser Ronald Garland, who ultimately opined that the value of the part taken was $195,000. The jury determined the fair market value of the part taken was $455,000. The trial court entered judgment for Souza in that amount, denied SAFCA's motions for judgment notwithstanding the verdict and for new trial, and awarded Souza his litigation expenses.
Additional facts are included in the discussion.
APPLICABLE LAW
When property is taken for public use, its owner must be paid just compensation, as ascertained by a jury, unless a jury is waived. (Cal. Const., art. I, § 19, subd. (a).) Just compensation is the fair market value of the property taken. (Code Civ. Proc., § 1263.310.) "The fair market value of the property taken is the highest price on the date of valuation that would be agreed to by a seller, being willing to sell but under no particular or urgent necessity for so doing, nor obliged to sell, and a buyer, being ready, willing, and able to buy but under no particular necessity for so doing, each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available." (§ 1263.320, subd. (a).) Fair market value takes into account the " ' "highest and most profitable use to which the property might be put in the reasonably near future, to the extent that the probability of such a prospective use affects the market value." ' " (Metropolitan Water Dist. of So. California v. Campus Crusade for Christ, Inc. (2007) 41 Cal.4th 954, 965 (Campus Crusade); see People ex rel. State Public Works Bd. v. Talleur (1978) 79 Cal.App.3d 690, 695.) "In determining the fair market value of a property, the jury is entitled to consider any factor having 'the potential of affecting the market value' so long as the effect of the factor on market value is not conjectural, speculative, or remote [citation], and does not contradict the scope of the taking as defined by the resolution of necessity [citations]." (Sacramento Area Flood Control Agency v. Dhaliwal (2015) 236 Cal.App.4th 1315, 1330 (Dhaliwal).) At trial, the property owner (the defendant) is first to present evidence on the issue of compensation and is permitted to commence and conclude the argument, but neither party has the burden of proof. (§ 1260.210.)
Undesignated statutory references are to the Code of Civil Procedure.
When the property taken is part of a larger parcel, the owner must be compensated for injury to the remainder, which is commonly called severance damages. (§ 1263.410, subd. (a); Campus Crusade, supra, 41 Cal.4th at pp. 965, 970-971.) Severance damages is the amount of damage to the remainder caused by the taking and/or construction and use of the project for which the property is being taken, reduced by the amount of benefit to the remainder caused by the construction and use of the project. (§§ 1263.410, subd. (b), 1263.420, 1263.430.) But if the amount of benefit exceeds the amount of damage, the benefit cannot be offset against the value of the part being taken. (§ 1263.410, subd. (b).)
DISCUSSION
I
SAFCA contends the trial court erred in excluding certain evidence.
The trial court is vested with broad discretion in admitting or excluding evidence of value. (Redevelopment Agency v. Contra Costa Theatre, Inc. (1982) 135 Cal.App.3d 73, 86.) We review a trial court's evidentiary ruling under the deferential abuse of discretion standard. (Dhaliwal, supra, 236 Cal.App.4th at pp. 1331-1332; City of San Diego v. Rancho Penasquitos Partnership (2003) 105 Cal.App.4th 1013, 1027 (Rancho Penasquitos).) We will not reverse the trial court's ruling if it was based on a reasoned judgment and complies with legal principles and policies appropriate to the particular matter at issue. (Ibid.)
A
SAFCA claims the trial court erred in excluding all mention of the remainder and certificate of compliance in the after condition, as if the levee improvement project had been completed.
The certificate of compliance is an instrument issued by the County of Sacramento which certifies that the property is a legal parcel even though it does not meet the minimum acreage for parcels in the zoning area.
SAFCA also claims the trial court forbade all mention of the remainder. The record does not support that claim.
Souza moved in limine to exclude testimony regarding any benefit the levee improvement project may have on the remainder. SAFCA initially opposed the motion, arguing that evidence of project benefits was relevant. But SAFCA's counsel later disclaimed an intent to introduce evidence of project benefits. During the hearing on Souza's motion, it became clear that SAFCA wanted to preserve its ability to cross-examine Souza's appraiser Arthur Gimmy about his allocation of most of the value of the property to the part taken and his assumption that Souza could not develop the remainder by placing a house on it. SAFCA also sought to have its appraiser testify that the remainder retained its rural residential development potential. However, Souza was not opposed to SAFCA cross-examining Gimmy about his appraisal. Counsel for SAFCA and Souza agreed that while SAFCA may cross-examine Gimmy about his valuation, evidence of benefits the project may have on the remainder or of the effect the taking would have on the remainder would not be introduced.
The trial court granted Souza's in limine motion. It concluded that any after condition benefit to the remainder was not relevant because the parties agreed there were no severance damages and a benefit to the remainder as a result of the project could only be used to offset severance damages. The trial court also granted SAFCA's motion to exclude evidence of severance damages because there was no claim for such damages. The trial court did not exclude all evidence regarding the remainder. The trial court's rulings are proper.
In a case involving a partial taking, there must be an appraisal of the before condition and the after condition of the property. (Rancho Penasquitos, supra, 105 Cal.App.4th at p. 1029.) In determining fair market value of the part taken, any increase or decrease in property value caused by the project for which the property is taken may not be considered. (§ 1263.330; Rancho Penasquitos, supra, 105 Cal.App.4th at p. 1028.) In other words, the part taken is valued in the " 'before condition,' " as if the project had never taken place. (Rancho Penasquitos, supra, 105 Cal.App.4th at p. 1029.) The after condition refers to severance damages. (Ibid.) Enhancements to the value of the remainder which result from the project can set off any severance damages. (Ibid.) But benefits to the property by reason of the project may only be deducted from severance damages; they may not be deducted from compensation for the part taken. (§ 1263.410, subd. (b); People ex rel. Dept. of Transportation v. Yuki (1995) 31 Cal.App.4th 1754, 1761, fn. 3 (Yuki); Contra Costa County Water Dist. v. Zuckerman Construction Co. (1966) 240 Cal.App.2d 908, 910 (Zuckerman Construction Co.).)
Consequently, evidence of benefits to the remainder resulting from the project is irrelevant when no severance damages are claimed. (People ex rel. Dept. Public Works v. Corporation of the President of the Church of Jesus Christ of the Latter-Day Saints (1970) 13 Cal.App.3d 371, 376.) Here, both parties agreed there were no severance damages. In light of that agreement, the trial court did not abuse its discretion in concluding that evidence of severance damages and benefits to the remainder as a result of the project was inadmissible.
Moreover, contrary to SAFCA's appellate claim, SAFCA was able to challenge Gimmy's assumption that the remainder could not be developed. A party to an eminent domain proceeding may present competent evidence to show that an adverse appraisal is based on an erroneous premise. (City of Fresno v. Cloud (1972) 26 Cal.App.3d 113, 120.) SAFCA was permitted to present such evidence. Counsel for SAFCA cross-examined Gimmy about allocating most of the value of the property to the part taken and Gimmy's assumption that the highest and best use for the remainder was not rural residential. Gimmy admitted that a certificate of compliance covered the entire property such that Souza could put a house anywhere on the property if the land were vacant, yet in valuing the land, Gimmy assumed the part taken could be developed and the remainder could not be developed. Gimmy testified he valued the remainder as farmland and land for mitigation purposes, and that land for farming and mitigation purposes had lower value than land for rural residential purposes. SAFCA also elicited testimony from its appraiser Ronald Garland that the certificate of compliance and right to build associated with that certificate applied to any part of the property, and that SAFCA was not taking the certificate of compliance from Souza. Counsel for SAFCA argued to the jury that Gimmy's allocation of value between the part taken and the remainder was incorrect.
SAFCA argues the trial court's ruling prevented Garland from testifying about the test of reasonableness he used to "double check" his appraisal. Garland described his test of reasonableness at his deposition as follows: he determined the value of the remainder in the after condition, using his comparable sale numbers 10 and 11; he then subtracted the value of the remainder in the after condition from the value of the property in the before condition, to conclude that the part taken had a value of $190,000; and he compared the $190,000 obtained using his test of reasonableness to the $195,000 obtained using the cost approach. Garland's test of reasonableness is not the California rule. (Zuckerman Construction Co., supra, 240 Cal.App.2d at pp. 909-910.) In any event, even if the trial court erred in not allowing Garland to testify about his test of reasonableness, SAFCA fails to demonstrate the error is prejudicial.
Garland and Gimmy both used the sales comparison and cost approaches for their appraisals. Garland described in detail how he determined the value of the property under the two approaches. He said the values he obtained under the two approaches were very close and opined that the highest price someone would pay for the part taken on the date of valuation was $195,000. Even if he did not testify about the value of the remainder in the after condition, as he might have if he testified at trial about his test of reasonableness, Garland described his comparable sale numbers 10 and 11 to the jury.
Garland and Gimmy were subjected to vigorous cross-examination about the sales they used under the sales comparison approach and how they determined the value of the part taken under the cost approach. It was up to the jury to determine the credibility and weight of the expert testimonies and to resolve conflicts in the expert opinions. (County of Monterey v. W. W. Leasing Unlimited (1980) 109 Cal.App.3d 636, 646 (W. W. Leasing); People v. Loop (1954) 127 Cal.App.2d 786, 799-800 (Loop) [whether an expert witness is credible in opining that the part taken has higher value than the remainder is a question for the jury to decide].) On this record, it is not reasonably probable that SAFCA would have obtained a more favorable result if Garland had testified about his test of reasonableness. (People ex rel. Dept. of Public Works v. Graziadio (1964) 231 Cal.App.2d 525, 532 [applying People v. Watson (1956) 46 Cal.2d 818 harmless error test].)
B
SAFCA also claims the trial court erred in excluding SAFCA's expert rebuttal testimony.
SAFCA did not disclose before trial that Garland would testify about Gimmy's expert opinion. Garland said at his deposition that SAFCA did not ask him to present a critique opinion. Souza moved in limine to exclude testimony by Garland that would critique Gimmy's expert opinion. SAFCA, on the other hand, sought to have Garland testify that the sales Gimmy used to determine the value of the property under the sales comparison approach were not like the property and that Gimmy's cost approach was improper and resulted in an inflated value for the part taken.
The trial court granted Souza's motion. It began by noting that an expert witness may provide critique opinion, and the relevant statutes did not mandate disclosure of an expert witness's potential critical opinion of another expert's opinion. Nevertheless, it precluded Garland from presenting critique opinion because Garland testified at his deposition that SAFCA did not ask him to provide critique opinion and SAFCA failed to alert Souza of its change in position before trial after Souza requested such notice. The trial court erred.
Section 1258.010 et seq. (Chapter 7 of the Eminent Domain Law) does not replace, restrict, or prevent the use of discovery procedures under the Civil Discovery Act or limit the matters that are discoverable in eminent domain proceedings. (§ 1258.010.) Section 2034.010 et seq. (Chapter 18 of the Civil Discovery Act) governs the exchange of expert witness information, deposition of expert witnesses, motions to augment or amend expert witness lists or declarations, and motions to submit tardy expert witness information in civil actions. But section 2034.010 et seq. does not apply to the exchange of expert witness information in eminent domain proceedings. (§ 2034.010; Dhaliwal, supra, 236 Cal.App.4th at p. 1335.) Instead, sections 1258.010 through 1258.300 govern the discovery and exchange of expert witness information in eminent domain proceedings. (Dhaliwal, at p. 1335.)
Sections 1258.240, 1258.250, 1258.260, and 1258.270 do not state that a party must disclose whether an expert witness will provide an opinion critiquing, evaluating, or contradicting the opinion of another party's expert witness. (Dhaliwal, supra, 236 Cal.App.4th at p. 1335 [the statement of valuation need only include evidence supporting the witness's own opinion]; Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2016) ¶ 8:1792, p. 6, italics omitted ["Disclosure is required only as to those experts intended to be called on direct examination on the party's case-in-chief. Experts who may be called for impeachment or rebuttal purposes need not be disclosed."]; 1 Matteoni & Veit, Condemnation Practice in Cal. (Cont.Ed.Bar 3d ed. 2013) Trial Preparation and Trial, § 9.31, p. 20.2 [§ 1258.280 does not prevent a party from calling an undisclosed expert witness or using undisclosed data in rebuttal].)
Section 1258.280 sets forth the sanction for failing to comply with section 1258.010 et seq. The sanction is "calculated to insure that the parties make a good faith exchange of lists of expert witnesses and essential valuation data." (Cal. Law Revision Com. com., 19 West's Ann. Code Civ. Proc. (2007 ed.) foll. § 1258.280, p. 612.) The sanctions specified in section 2034.010 et seq. for failure or refusal to make discovery do not apply to a failure to comply with the requirements of section 1258.010 et seq. (§ 2034.300.)
The penalty for failure to comply with the disclosure requirements of section 1258.010 et seq. is exclusion of evidence in the delinquent party's case in chief. (§ 1258.280; Dhaliwal, supra, 236 Cal.App.4th at p. 1335.) The Law Revision Commission Comments explain, "Section 1258.280 limits only the calling of a witness, or the presentation of testimony, during the case in chief of the party calling the witness or presenting the testimony. The section does not preclude a party from calling a witness in rebuttal or having a witness give rebuttal testimony that is otherwise proper. [Citations.] The section also does not preclude a party from bringing out additional data on redirect examination where it is necessary to meet matters brought out on the cross-examination of his witness. However, the court should take care to confine a party's rebuttal case and his redirect examination of his witnesses to their purpose of meeting matters brought out during the adverse party's case or cross-examination of his witnesses. A party should not be permitted to defeat the purpose of this article by reserving witnesses and valuation data for use in rebuttal where such witnesses should have been called and such valuation data presented on the direct examination during the case in chief." (Cal. Law Revision Com. com., 19 West's Ann. Code Civ. Proc., supra, foll. § 1258.280, pp. 612-613.)
This court has held it is not error to allow an expert witness to testify about why he disagreed with the valuation of the expert witness called by the other party, even though that subject was not identified in the list of expert witnesses, and no error results from admitting undisclosed sales data to rebut the valuation of the other party's expert witness. (Dhaliwal, supra, 236 Cal.App.4th at pp. 1334-1337.) The court in Dhaliwal distinguished the facts before it from those in a case where the undisclosed information was offered in support of the offering party's valuation, rather than in response to the other party's valuation. (Id. at pp. 1336-1337.) We agree with Dhaliwal.
The Legislature intended section 1258.010 et seq. to govern the disclosure of expert witness information in eminent domain proceedings. (§ 2034.010; Cal. Law Revision Com. com., 19 West's Ann. Code Civ. Proc., supra, foll. § 1258.280, pp. 612-613; Dhaliwal, supra, 236 Cal.App.4th at p. 1335.) Section 1258.010 et seq. did not require SAFCA to disclose that it will present expert opinion critiquing, evaluating or contradicting Gimmy's opinion in rebuttal. (§ 1258.010 et seq.; Dhaliwal, supra, 236 Cal.App.4th at p. 1335; Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial, supra, ¶ 8:1792, p. 6; 1 Matteoni & Veit, Condemnation Practice in Cal., supra, Trial Preparation and Trial, § 9.31, p. 20.2.) As in Dhaliwal, the testimony SAFCA sought to elicit from Garland was in response to Gimmy's direct examination testimony and not additional evidence supporting Garland's own valuation. (W. W. Leasing, supra, 109 Cal.App.3d at pp. 644-646; Edgar v. Workers' Comp. Appeals Bd. (1966) 246 Cal.App.2d 660, 665.) The cases SAFCA and the trial court relied upon are inapposite because they are based on the requirements and/or sanctions set forth in section 2034.010 et seq. (or its predecessor), not section 1258.010 et seq.
Nevertheless, such error does not require reversal unless it caused a miscarriage of justice. (Cal. Const., art. VI, § 13; Evid. Code, § 353; San Diego Gas & Electric Co. v. Schmidt (2014) 228 Cal.App.4th 1280, 1301 (Schmidt).) The appellant must demonstrate that a miscarriage of justice has occurred; we do not presume prejudice. (Property Reserve, Inc. v. Superior Court (2016) 6 Cal.App.5th 1007, 1020; Paterno v. State of California (1999) 74 Cal.App.4th 68, 105.) We will find prejudice only if after an examination of the entire cause, including the evidence, we conclude that it is reasonably probable the appellant would have obtained a more favorable result in the absence of the error. (Schmidt, supra, 228 Cal.App.4th at pp. 1301-1302.)
SAFCA asserts that the trial court's erroneous ruling prevented SAFCA from showing that none of Gimmy's sales were comparable to Souza's property and that Gimmy used an improper methodology in order to inflate the value of the part taken. In particular, SAFCA says in the absence of the trial court's ruling, Garland would have testified that (1) Gimmy's Single Family Residence (SFR) sale 1 was not comparable because it was commercial property and had higher quality improvements and a superior location; (2) Gimmy's SFR sale 2 was not comparable because it could likely be subdivided; and (3) Gimmy's allocation of value between the part taken and the remainder inflated the value of the part taken.
Examining the entire cause, we conclude the trial court's exclusion of Garland's critique opinion testimony was not prejudicial. The jury could have concluded from Gimmy's testimony alone, including his lengthy cross-examination testimony, that the properties associated with his SFR sales 1 and 2 were not comparable to the Souza property. Gimmy testified that SFR sales 1 and 2 were not in the same neighborhood as the property. SFR sale 1 was about 15 miles from the property, in a less desirable location. SFR sale 2 was about eight miles from the property, in an inferior location, and surrounded by residential subdivisions that had already been developed. In contrast, Gimmy said the property was surrounded by farmland and residential properties that were about two and a half acres each, and was close to downtown Sacramento and the river. Gimmy also testified that the houses on SFR sale 1 were superior to the houses on the property. Gimmy's description of SFR sale 1 supports the conclusion that it was used for keeping horses. There was no evidence that Souza used the property for that purpose. And according to Gimmy, SFR sale 2 was zoned for use as public open space which meant it could not be subdivided whereas the property was zoned for both agricultural and residential use.
With regard to Gimmy's allocation of value between the part taken and the remainder, Gimmy explained how he determined the value of the part taken and counsel for SAFCA cross-examined Gimmy about allocating most of the value of the property to the part taken. As we have explained, SAFCA was able to challenge Gimmy's allocation of value and his assumption that the remainder could not be developed.
Moreover, counsel for SAFCA argued to the jury that Gimmy's comparable sales were not comparable to the property. He said the properties Gimmy used for his appraisal were in different markets and were far from the property. Counsel for SAFCA pointed out the differences between the property and Gimmy's SFR sales 1 and 2. He told the jury that Garland's comparable sales were, except in one instance, in the same neighborhood as the property. He also argued that Gimmy's allocation of value between the part taken and the remainder was incorrect because Gimmy double-counted the value of site improvements.
On this record, the trial court's error was harmless.
II
SAFCA next contends Gimmy's appraisal is not substantial evidence supporting the verdict because (1) there were no physical differences between the part taken and the remainder to support Gimmy's valuation of the part taken at four times the value of the remainder; (2) Gimmy falsely asserted the remainder could not be developed; (3) Gimmy said the part taken was more valuable because of the improvements thereon, but he separately valued the improvements; (4) Gimmy improperly considered severance damages in determining the value of the part taken because he considered the size, Garden Highway frontage, and shape of the part taken; (5) Gimmy's SFR sales 1 through 4 did not support a value of $550,000 for the property; (6) Gimmy's lot sales did not support a $275,000 value for the land portion of the part taken; (7) Gimmy failed to consider sales in the neighborhood; and (8) Gimmy categorically excluded real estate owned (REO) sales.
In reviewing a sufficiency of the evidence claim, we presume the record contains evidence sufficient to support the judgment. (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881.) It is the appellant's burden to demonstrate otherwise. (Ibid.) We view the whole record in a light most favorable to the judgment, resolving all evidentiary conflicts and drawing all reasonable inferences in favor of the judgment. (City & County of San Francisco v. Golden Gate Heights Investments (1993) 14 Cal.App.4th 1203, 1211; County of Los Angeles v. Carpenter (1953) 118 Cal.App.2d 871, 873.) Our task begins and ends with the determination whether there is any substantial evidence, contradicted or uncontradicted, which will support the jury's finding. (Crawford v. Southern Pacific Co. (1935) 3 Cal.2d 427, 429.) Substantial evidence is evidence " ' "of ponderable legal significance . . . reasonable in nature, credible, and of solid value." ' [Citations.]" (Pacific Gas & Electric Co. v. Zuckerman (1987) 189 Cal.App.3d 1113, 1134.) We do not reweigh the evidence, consider the credibility of witnesses, or resolve conflicts in the evidence or in the reasonable inferences which may be drawn therefrom. (Golden Gate, supra, 14 Cal.App.4th at p. 1211; Huang v. Board of Directors (1990) 220 Cal.App.3d 1286, 1294.)
In an eminent domain case, the fair market value of the subject property is a fact to be determined by the jury based on factors a buyer would take into consideration in arriving at a fair market price, were the buyer contemplating a purchase of the subject property. (Campus Crusade, supra, 41 Cal.4th at p. 972.) The jury ultimately makes the determination of fair market value, after deciding the weight and degree of credibility to be accorded to conflicting valuations. (Id. at p. 974; W. W. Leasing, supra, 109 Cal.App.3d at p. 646 [verdict is supported by the testimony of the respondent's expert, even if that opinion is contrary to the opinions by the appellant's experts]; South Bay Irrigation Dist. v. California-American Water Co. (1976) 61 Cal.App.3d 944, 965, 970 (South Bay Irrigation Dist.) [the trier of fact may accept only that part of the opinion testimony it concludes is worthy of belief].)
The value of property may be shown by the opinions of witnesses qualified to express such opinions. (Evid. Code, § 813, subd. (a)(1).) Under the sales comparison approach, a valuation expert may consider the sale of comparable property in determining the value of the subject property if the sale was freely made in good faith within a reasonable time before or after the date of valuation. (Evid. Code, § 816; South Bay Irrigation Dist., supra, 61 Cal.App.3d at p. 970.) "[T]he appraiser identifies sales of properties deemed to resemble the condemned property in relevant respects, and then derives a market value for the condemned property from the prices paid for these 'comparables,' typically adjusting the price to reflect such matters as material differences between the properties and differences in market forces between the time and location of the comparable sale and that of the property being valued." (Emeryville Redevelopment Agency v. Harcros Pigments, Inc. (2002) 101 Cal.App.4th 1083, 1094 (Emeryville); see Merced Irrigation Dist. v. Woolstenhulme (1971) 4 Cal.3d 478, 502-503 [courts accept adjustment process as an integral element of the sales comparison approach].)
To be comparable, a sale "must have been made sufficiently near in time to the date of valuation, and the property sold must be located sufficiently near the property being valued, and must be sufficiently alike in respect to character, size, situation, usability, and improvements, to make it clear that the property sold and the property being valued are comparable in value and that the price realized for the property sold may be fairly considered as shedding light on the value of the property being valued." (Evid. Code, § 816.) There is no absolute formula for what constitutes similar or like property. (People ex rel. Dept. of Public Works v. Silveira (1965) 236 Cal.App.2d 604, 624 (Silveira).) And similar does not mean identical. (Ibid.)
SAFCA does not contend that Gimmy is not qualified to testify as an expert on property value or that any of the evidence he now challenges was erroneously admitted. Accordingly, we assume that the sales Gimmy considered in his appraisal had some tendency in reason to prove the fair market value of the part taken.
Gimmy testified and was cross-examined at length about the sales he used to determine the fair market value of the property and his valuation methodologies. The jury could reasonably find from that testimony that Gimmy's SFR sales (which ranged from 4.97 to 5 acres in size) were comparable in size to the property (4.68 acres). Gimmy explained he compared his SFR sales to the property and made adjustments for differences in the timing of the sale in comparison with the date of valuation; location; living area; age, quality, and condition of the property; and existence, size, and quality of ancillary improvements. Gimmy also made adjustments to the sales price of the lot sales he used under his cost approach to account for differences between those properties and the property. Garland likewise made adjustments to reflect material differences between his comparable sales and the property. Such adjustments are a part of the sales comparison approach. (Emeryville, supra, 101 Cal.App.4th at p. 1094.) The trial court instructed the jury on factors to consider in weighing an expert witness's opinion about property value based on other sales. The weight to be given Gimmy's valuation, based on the adjustments he made to the prices of his comparable sales, was a factual question for the jury to determine. (City of Los Angeles v. Retlaw Enterprises, Inc. (1976) 16 Cal.3d 473, 482; People ex rel. Dept. of Public Works v. University Hill Foundation (1961) 188 Cal.App.2d 327, 332; see also County of San Luis Obispo v. Bailey (1971) 4 Cal.3d 518, 525; San Bernardino County Flood Control Dist. v. Sweet (1967) 255 Cal.App.2d 889, 906 (Sweet).)
Although he acknowledged that the certificate of compliance applied to the entire property, Gimmy said in allocating land value he assumed only the part taken could be developed with houses. However, Gimmy's opinion that the part taken was the most valuable part of the property was also based on its Garden Highway frontage, size, shape, and driveway access. Gimmy said the part taken was the most logical part of the property to develop. He said the remainder was worth less because it was not necessary in order to have a "rural ranchette" and it is shaped like a triangle, which reduced its utility. Gimmy opined that the lot sales he used as comparable sales supported his opinion that the part taken was worth 75 to 80 percent of the value of the land.
In a partial taking case, it is not improper to assign a different unit value to the part taken if the part taken is different in value from the remainder. (Sweet, supra, 255 Cal.App.2d at p. 900 ["In proper circumstances, a unit value higher than the average unit value, may be assigned to a part of a single parcel."]; Silveira, supra, 236 Cal.App.2d at p. 617; Loop, supra, 127 Cal.App.2d at p. 799.) It is true that factors such as size and shape of the remainder, loss of highway frontage, and impairment of the use of the property may be considered in determining severance damages. (Sweet, supra, 255 Cal.App.2d at p. 902.) But consideration of factors such as size, loss of frontage, and impairment of use are also proper in determining the value of the part taken and the remainder. (Loop, supra, 127 Cal.App.2d at p. 799.)
SAFCA cross-examined Gimmy and/or presented conflicting expert opinion with regard to the reasons for which it now challenges Gimmy's appraisal. Gimmy testified there were insufficient sales of single family homes in the neighborhood of the property to determine price trends. Hence, three of Gimmy's four SFR sales were located eight to 15 miles from the property. In comparison, five of Garland's eight comparable rural residential sales were located "very close" to the property. On cross-examination, counsel for SAFCA thoroughly challenged Gimmy on the differences between his SFR and lot sales and the property. Counsel for SAFCA also challenged Gimmy's assumption that sellers in REOs and short sales were under "duress" to sell. Gimmy conceded, under cross-examination, that appraisers may use REOs and short sales as comparable sales and Gimmy used an REO sale in appraising a property in the past. Unlike Gimmy, Garland considered REOs and short sales in his appraisal. Garland testified that sellers in REOs and short sales were not necessarily under a compulsion to sell.
Further, counsel for SAFCA accused Gimmy of double counting the value of site improvements by considering the location of those improvements in allocating most of the value of the land to the part taken. Garland's testimony suggested it would be improper to consider the fact that most of the buildings were located on the part taken when allocating the value of the land between the part taken and the remainder under the cost approach. The credibility and weight to be given Gimmy and Garland's opinions and the effect of any inconsistencies in Gimmy's testimony were for the jury to decide. (Loop, supra, 127 Cal.App.2d at pp. 799-800.)
As we previously explained, Gimmy opined that the value of the part taken as of July 29, 2010 was $465,000. Garland opined the value of the part taken as of the same date was $195,000. The jury found that the fair market value of the part taken was $455,000. Examining the entire record, we conclude substantial evidence supports the verdict.
III
SAFCA asserts Souza's attorney committed prejudicial misconduct by (1) violating the trial court's order excluding evidence and argument that Souza opposed the taking; (2) eliciting testimony from Gimmy about an inadmissible landscaping appraisal; (3) asking a witness about the quality of the driveway easement SAFCA was providing Souza to access the remainder; and (4) improperly arguing that Garland misrepresented the condition of a property he used as a comparable sale.
We examine the entire case, including the evidence, jury instructions given, and the entirety of the closing arguments, to determine whether attorney misconduct occurred and whether the misconduct resulted in prejudice. (Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 800-803 (Cassim); Dhaliwal, supra, 236 Cal.App.4th at p. 1339.) Misconduct is prejudicial and requires reversal of the judgment when it is reasonably probable that a result more favorable to the appellant would have been reached in the absence of the misconduct. (Cassim, supra, 33 Cal.4th at pp. 800-803; Dhaliwal, supra, 236 Cal.App.4th at p. 1339.)
SAFCA contends Souza's counsel committed misconduct by referring during closing argument to Souza's unwillingness to sell the property and by arguing to the jury that Garland misrepresented the condition of the property in one of his comparable sales. SAFCA forfeited these claims of misconduct by failing to timely object at trial. (Cassim, supra, 33 Cal.4th at p. 794; Dhaliwal, supra, 236 Cal.App.4th at p. 1339.) " 'The purpose of the rule requiring the making of timely objections is remedial in nature, and seeks to give the [trial] court the opportunity to admonish the jury, instruct counsel and forestall the accumulation of prejudice by repeating improprieties, thus avoiding the necessity of a retrial.' " (People v. Brown (2003) 31 Cal.4th 518, 553; see Garcia v. ConMed Corp. (2012) 204 Cal.App.4th 144, 148 (Garcia).) By failing to object at trial, SAFCA did not give the trial court an opportunity to address its objections and remedy any resulting prejudice. SAFCA does not claim that the circumstances here excused the requirement to timely object and request a jury admonition. (Rayii v. Gatica (2013) 218 Cal.App.4th 1402, 1412 [the failure to timely object and request an admonition results in forfeiture unless the misconduct was so prejudicial that it could not be cured by an admonition, an objection or request for admonition would have been futile, or the court overruled an objection and the objecting party had no opportunity to request an admonition].)
With regard to alleged attorney misconduct to which SAFCA objected at trial, SAFCA asserts Souza's counsel referenced inadmissible matter during his closing argument. In general, counsel enjoys wide latitude to discuss the case during closing argument. (Cassim, supra, 33 Cal.4th at p. 795; Dhaliwal, supra, 236 Cal.App.4th at p. 1338.) Counsel may state fully his or her views as to what the evidence shows and as to the conclusions to be fairly drawn from the evidence. (Cassim, supra, 33 Cal.4th at p. 795; Dhaliwal, supra, 236 Cal.App.4th at p. 1338.)
The trial court granted SAFCA's in limine motion to exclude evidence and argument that Souza objected to the taking. SAFCA contends Souza's counsel violated that ruling in two portions of his closing remarks. The first portion was transcribed at page 1085 of the reporter's transcript. There, Souza's counsel denied the closing remark of SAFCA's counsel that Gimmy did not show the jury any photograph of the second residence that was on the property. Souza's counsel indicated opposing counsel showed the jury certain photographs to disparage Souza for keeping "collectibles" on the property. Souza's counsel continued, "They want to disparage [Souza] for living his life. They're coming in and taking his property . . . ." SAFCA's counsel interposed an objection before Souza's counsel could say more. Souza's counsel did not say in this portion of the argument that the taking was against Souza's will. In any event, the trial court instructed Souza's counsel to rephrase his remark and Souza's counsel thereafter focused on the fact that the "collectibles" were removable and not part of the land. The comment by Souza's counsel was not misconduct.
The second portion of the closing argument cited by SAFCA was transcribed at page 1090 of the reporter's transcript. Souza's counsel argued, in that portion of his closing argument, that it was important for an appraiser to verify his comparable sales. He said, "It's a constitutional issue that we're dealing with here, folks. Mr. Souza is having his property taken against his will. . . ." That remark violated the trial court's in limine ruling excluding argument that Souza objected to the taking, but the trial court immediately sustained the objection to the remark by SAFCA's counsel. The trial court subsequently admonished the jury that what the attorneys said in their opening and closing statements was not evidence, the jury must decide what the facts were based on the evidence admitted at trial, and the jury may not allow sympathy or prejudice to influence its decision. We presume the jury followed the trial court's instructions and discern no prejudice to SAFCA from one quick remark by Souza's counsel. (Cassim, supra, 33 Cal.4th at pp. 803, 805; Garcia, supra, 204 Cal.App.4th at pp. 161-162.)
SAFCA claims counsel for Souza also engaged in misconduct by eliciting testimony about an inadmissible appraisal. Gimmy testified on re-direct that he did not include the value of the trees on the property when he determined the value of site improvements. He said if he had included the value of the trees in the value of site improvements, his valuation for site improvements would have been greater than $30,000 because the landscaping was appraised at $90,000. It appears Gimmy was referring to an arborist's appraisal for the cost of replacing the trees on the property, an appraisal which was not admissible in evidence. If Gimmy's reference to the landscaping appraisal was caused by misconduct from Souza's attorney, it is not reasonably probable that SAFCA would have obtained a more favorable result without the challenged testimony. Counsel for SAFCA immediately objected to Gimmy's testimony about the landscaping appraisal. Following a bench conference, the trial court struck Gimmy's testimony and directed the jury to disregard that testimony. After closing arguments, the trial court again instructed the jury to disregard any testimony the trial court had struck and to treat such testimony as though it did not exist. In the absence of a contrary showing, and none has been shown here, we presume the jury followed the trial court's instructions. (Cassim, supra, 33 Cal.4th at p. 803.)
SAFCA further argues counsel for Souza committed misconduct by eliciting testimony from John Bassett (a director of engineering for SAFCA) about the quality of the driveway easement SAFCA was providing Souza to access the remainder. Bassett testified, in response to questioning by Souza's counsel, that Souza would have an easement to access the remainder from Garden Highway after the project is completed, and Souza's easement right was subordinate to the rights of certain government agencies. Bassett said Souza had access to the property from Garden Highway in the before condition, which right of access was also subject to the rights of a government agency. SAFCA did not object during Bassett's testimony and counsel for SAFCA also elicited testimony from Bassett about the easement. But thereafter SAFCA filed a motion to strike Bassett's testimony. The trial court granted SAFCA's motion. In addition, the trial court instructed the jury not to consider that testimony. The trial court repeated its instruction to disregard struck testimony before deliberations began. We presume the jury followed the trial court's clear instructions and again find no prejudice. (Cassim, supra, 33 Cal.4th at p. 803.)
IV
SAFCA next contends the trial court should not have awarded litigation expenses to Souza.
Section 1250.410 awards reasonable attorney's fees and costs, including reasonable expert witness and appraiser fees, to the property owner in an eminent domain action if the trial court finds that the condemnor's final offer of compensation was unreasonable and that the property owner's final demand for compensation was reasonable, when viewed in the light of the evidence admitted at trial and the verdict. (§ 1250.410, subds. (b), (e).) The purpose of section 1250.410 is to protect property owners from being forced into unnecessary litigation over the value of their condemned property. (City & County of San Francisco v. PCF Acquisitionco, LLC (2015) 237 Cal.App.4th 90, 94 (PCF Acquisitionco); People ex rel. Dept. of Water Resources v. Andresen (1987) 193 Cal.App.3d 1144, 1166 (Andresen).) To effectuate that purpose, section 1250.410 provides for the pretrial exchange of a final offer of compensation by the condemnor and a final demand for compensation by the property owner. (§ 1250.410, subd. (a); PCF Acquisitionco, supra, 237 Cal.App.4th at p. 94.) The final offer and demand must include all compensation required under the Eminent Domain Law. (§ 1250.410, subd. (a).)
The reasonableness of Souza's final demand is not in question.
The reasonableness of a final offer is a question of fact for the trial court to determine. (Redevelopment Agency v. Gilmore (1985) 38 Cal.3d 790, 808) We will not disturb the trial court's determination if it is supported by substantial evidence. (Ibid.; Schmidt, supra, 228 Cal.App.4th at p. 1305; Yuki, supra, 31 Cal.App.4th at p. 1765 [the task of the reviewing court is not to determine whether the plaintiff's offer was reasonable; the reviewing court must uphold the trial court's decision if it is supported by substantial evidence].) We review the trial court's ruling on a motion for award of litigation expenses for abuse of discretion. (Los Angeles County Metropolitan Transportation Authority v. Continental Development Corp. (1997) 16 Cal.4th 694, 722 (Continental Development); Escondido Union School Dist. v. Casa Suenos De Oro, Inc. (2005) 129 Cal.App.4th 944, 987 (Casa Suenos De Oro); City of Carlsbad v. Rudvalis (2003) 109 Cal.App.4th 667, 690.)
The factors a trial court must consider in determining reasonableness are " ' "(1) the amount of the difference between the offer and the compensation awarded, (2) the percentage of the difference between the offer and award . . .[,] and (3) the good faith, care and accuracy in how the amount of offer and the amount of demand, respectively, were determined." ' [Citation.]" (Continental Development, supra, 16 Cal.4th at p. 720.) The condemnor's timely final offer and the property owner's timely final demand are the only offers and demands the trial court may consider in determining the entitlement to litigation expenses. (§ 1250.410, subds. (a), (d).)
After reviewing the evidence presented at trial and the parties' arguments, the trial court granted Souza's motion for an award of litigation expenses. The trial court found that (1) the difference between SAFCA's final offer and the verdict -- $205,000 -- was substantial; (2) the percentage difference between SAFCA's final offer and the verdict -- 182 percent -- was significant; and (3) SAFCA failed to ascribe any weight to Gimmy's appraisal opinions, and its conditional offer indicated a lack of final deliberation and agreement by SAFCA's governing body, all of which showed a lack of good faith, care, and accuracy in how SAFCA determined the amount of its final offer.
The trial court's finding with regard to the mathematical relation between SAFCA's final offer ($250,000) and the verdict ($455,000) is supported by substantial evidence and indicates an unreasonable offer. (Tracy Joint Unified School Dist. v. Pombo (2010) 189 Cal.App.4th 889, 896 (Pombo); People ex rel. Dept. of Transportation v. Woodson (2001) 93 Cal.App.4th 954, 957.) SAFCA's final offer is 54 percent of the verdict. Courts have found final offers that are 60 percent or less of the jury's verdict unreasonable. (City of Long Beach Redevelopment Agency v. Morales (2007) 157 Cal.App.4th 287, 292; City of San Leandro v. Highsmith (1981) 123 Cal.App.3d 146, 156 [final offer that is 61 percent of the verdict is arguably unreasonable as a matter of law].)
Souza argued in the trial court that SAFCA did not exercise good faith, care and accuracy in formulating its final offer, urging that the amount of SAFCA's final offer indicated SAFCA did not take into account the cost of litigation and risk of trial, in particular that the jury would give some weight to Gimmy's opinion. The trial court agreed and we find no abuse of discretion.
Souza's final demand was $135,000 less than Gimmy's appraisal and halfway between Gimmy and Garland's appraisals. SAFCA's final offer, on the other hand, was only $55,000 more than Garland's valuation.
Gimmy and Garland's appraisals for the part taken -- $465,000 versus $195,000 -- varied widely. Their difference in opinion appears to be based on factual issues, such as whether certain other properties were comparable to the property for purposes of determining the fair market value of the part taken. Seven of the 11 sales upon which Garland's appraisal relied were REOs or shorts sales. Garland agreed the properties involved in the REOs and short sales he used were not maintained. One property was vacant for over two years and was "uninhabitable" when it was sold. Garland testified that another sale he used was not made at arm's length. A trier of fact could have reasonably found, under those circumstances, that the sales upon which Garland's appraisal was based were entitled to less weight. (Garden Grove School Dist. v. Hendler (1965) 63 Cal.2d 141, 145-146 [jury decides weight to give a comparable sale wherein the seller needed cash and felt compelled the sell the property].) The verdict indicates the jury credited and gave more weight to Gimmy's opinion, even if Gimmy's testimony had some shortcomings. Nevertheless, the trial court found that SAFCA did not give any weight to Gimmy's appraisal. Having presided over the trial and the mandatory settlement conference, the trial judge was in the best position to evaluate whether SAFCA proceeded with good faith, care and accuracy in preparing its final offer. (Casa Suenos De Oro, supra, 129 Cal.App.4th at p. 987; Yuki, supra, 31 Cal.App.4th at p. 1766.) In light of the evidence admitted at trial and the declaration SAFCA's counsel submitted in opposition to Souza's motion for litigation expenses, we conclude substantial evidence supports the trial court's reasonableness findings. (Pombo, supra, 189 Cal.App.4th at p. 901 [the condemnor did not act in good faith and with care and accuracy in making a final offer when it treated its own appraisal as the only valid one and assumed the jury would totally reject any opposing expert testimony]; City of Gardena v. Camp (1977) 70 Cal.App.3d 252, 257 [unyielding adherence to the appraisal of its own expert is incompatible with the spirit of compromise one would expect of a reasonable condemnor].) In addition, the trial court's conclusion that SAFCA's final offer was unreasonable because it was contingent on approval by SAFCA's governing body is consistent with the law. (PCF Acquisitionco, supra, 237 Cal.App.4th at pp. 95-97 [final offer made contingent on the approval of various government agencies with no assurance of the necessary approvals was not an offer at all and was unreasonable under § 1250.410]; People ex rel. Dept. of Transportation v. Zivelonghi (1986) 183 Cal.App.3d 187, 190-192 [offer made subject to right to appeal did not allow a final resolution of the issue of valuation and was, thus, unreasonable under § 1250.410].)
DISPOSITION
The judgment is affirmed.
/S/_________
MAURO, J. We concur: /S/_________
HULL, Acting P. J. /S/_________
DUARTE, J.