Cucamonga County Water District v. Southwest Water Co.

Opinion

Appellant (plaintiff below) is the Cucamonga County Water District, a public entity formed under the County Water District Law. Respondents are the Southwest Water Company, a privately owned public utility water company, and Rochester Water Company, a mutual water company.

In 1957 Southwest received a certificate of public convenience and necessity to provide water service in the lightly populated Etiwanda area, located between the City of Fontana and the Cities of Upland and Ontario in western San Bernardino County. It lies in country sloping gently southward from the base of the San Gabriel Mountains.

Rochester since the turn of the century has provided water service to a narrow north-south strip of land in the Etiwanda area. Water is collected from tunnels driven into the walls of canyons in the mountains, and after being received into a reservoir flows southward to the service connections scattered along the 4-mile line of Rochester Avenue. Water pumped from a leased well supplements the mountain supply.

As part of the plan of Southwest to provide water service to this area,

The issue of the amount of just compensation was tried before a jury, and the District appeals from a judgment in favor of Rochester for $244,400, and in favor of Southwest for $40,000.

The opening brief of appellant District lists contentions on appeal under 12 general headings. However, the effective disposition of the case features the first and twelfth points of contention, namely the assertion by the District that chapter 8.5 of the Public Utilities Act is unconstitutional, or alternatively, that, if compensation is to be paid under chapter 8.5, the judgment should provide for the condemnation of the Rochester operating system to the use of the District. We set forth below the specifics of our decision that the statute passes the test of constitutionality, but that the District must prevail in its claim for title to Rochester’s operating system.

The latter point will be considered first.

The judgment condemns to the use of the District all of the property of Southwest within proposed Improvement District No. 5. The judgment does not condemn any property of Rochester, providing merely that when the District has paid over $244,400, the District “shall have paid all compensation due or payable to [Rochester] under the provisions of [chapter 8.5 of the Public Utilities Act] by reason of [the District’s] proposed construction.” As will be demonstrated, the judgment misreads the verdict of the jury.

Section 1504 provides, in part: “Whenever the compensation by a political subdivision under this section is an amount equal to the just compensation value of all the property of the private utility in the operating system that the private utility employs in providing water service to the service area, the political subdivision may, by resolution, provide for the acquisition of all such property.”

A resolution of the District board of directors was set forth in the pleadings and put in evidence, which recited that, in the event the compensation required to be paid by the District is an amount equal to the just compensation value of all the property of the Rochester operating system employed in providing water service within proposed Assessment District No. 5, public interest and necessity require that such property be acquired for public use. The verdict of the jury was in two parts: In the first part the jury found that the fair market value of the property employed by Rochester in providing water service within proposed Assessment District No. 5 was $249,000; and in the second part the jury found that the damages suffered by Rochester as a result of being injured by reason

The District’s next contention is that chapter 8.5 of the Public Utilities Act should be construed to provide compensation only for water service facilities constructed by privately owned public utilities and mutual water companies after the effective date of the legislation, and that to do otherwise would violate article XIII, section 25, of the California Constitution, which prohibits the making of a gift of public funds. The plain language of the legislation does not permit such a distinction to be made. Section 1503 reads: “The Legislature finds and declares that whenever a political subdivision constructs facilities to provide or extend water service, or provides or extends such service, to any service area of a'private utility with the same type of service, such an act constitutes a taking of the property of the private utility for a public purpose to the extent that the private utility is injured by reason of any of its property employed in providing the water service being made inoperative, reduced in value or rendered useless to the private utility for the purpose of providing water service to the service area, and such taking shall be compensable under Section 14 of Article I of the Constitution of California.”

Where language is plain and unambiguous there exists no room for construction. (Lockhart v. Wolden, 17 Cal.2d 628 , 631 [ 111 P.2d 319 ]; Caminetti v. Pac. Mutual L. Ins. Co., 22 Cal.2d 344 , 353 [ 139 P.2d 908 ], cert. den. 320 U.S. 802 [ 88 L.Ed. 484 , 64 S.Ct. 428 ]; Ruiz v. Industrial Acc. Com., 45 Cal.2d 409 , 414 [ 289 P.2d 229 ].) Chapter 8.5 covers “any service area of a private utility with the same type of service” and “any of its property employed in providing the water service”; there is no room for judicial gloss. The statute does not authorize a gift of public funds: Although the District complains that it would receive nothing in exchange for the payment to Rochester, as already indicated, the modified judgment will provide for condemnation of the Rochester system to the use of the District, which eliminates the basis of the objection.

A further contention made by the District is that no compensation is payable under article I, section 14 of the California Constitution for

The District urges two other constitutional propositions. One is that chapter 8.5 of the Public Utilities Act violates the provision that the Legislature shall not delegate to any private corporation the power to control or interfere with any municipal improvement. (Cal. Const., art. XI, §13, as effective until deleted at election of June 2, 1970.) The second is that the apparent legislative attempt to make chapter 8.5 of the Public Utilities Act a “two way street” so as to allow damages to the public in the event of duplication of public facilities by private entities cannot be achieved by the legislation. The former contention is without merit, and the latter contention is not included within the issues of the case.

The remaining contentions are considered serially below.

The second and third contentions made by the District criticize that part of the judgment which would compel the District to make payment for damages before the parallel construction is actually completed. However, since as we have determined the judgment must be modified, the property is condemned to the use of the District, and the case falls within the literal terms of the constitution that “Private property shall not be taken or damaged for public use without just compensation having first been made to, or paid into court for, the owner . . .” (Cal. Const., art. I, § 14.)

Some further discussion of the easement is necessary.

In 1889 Rochester received a deed from the original land developers, the first part of which covered the five mountain sections where the water is captured. As to those five sections, the deed grants to Rochester “all of the water, water rights, springs, ciénegas, wells, brooks, tunnels, dams, ditches, acqueducts, pipes, reservoirs, and all the water that flows or that can be developed [thereon]; and the full right and right of way over, through and upon said land for boring, digging, constructing, repairing and maintaining wells, tunnels, ditches, dams, acqueducts and reservoirs, and laying pipes and acqueducts for conveyance of water, and the free right to enter upon said land and make said improvements and for inspecting, repairing, replacing and controlling the same.”

The deed operated to prevent the grantor from complaining of a diversion by Rochester of water from the five sections (Gould v. Stafford, 91 Cal. 146 , 155 [ 27 P. 543 ]; Roberts v. Krafts, 141 Cal. 20 , 27 [ 74 P. 281 ]; Duckworth v. Watsonville Water & Light Company, 150 Cal. 520 , 526 [ 89 P. 338 ]; Duckworth v. Watsonville Water & Light Company, 158 Cal. 206 , 213 [ 110 P. 927 ]; Duckworth v. Watsonville Water & Light Company, 170 Cal. 425 , 433-434 [ 150 P. 58 ]), and the rights conferred thereby are the basis of Rochester’s right to the supply of water. The court found that the average annual flow from the mountain sources, adjusted for dry years, is 8 miner’s inches, and that there were further undeveloped supplies of water properly included in the value of the Rochester system, concerning which more will be said later.

The second part of the 1889 deed relates to property running south of

The District also argues, concerning the water rights, that the court erred when it permitted testimony of separate value for water rights and a separate value for the facilities to collect, divert, and transport the water. Two cases are cited by the District to emphasize the “integrated” and “inseparable” nature of water rights and the collection and distribution facilities of an operating system. County of Tuolumne v. State Board of Equalization, 206 Cal.App.2d 352 [ 24 Cal.Rptr. 113 ] is concerned with the situs of a water right for the purpose of taxation and the equalization of the assessment of the tax. San Bernardino etc. Water Dist. v. Meeks & Daley Water Co., 226 Cal.App.2d 216 [ 38 Cal.Rptr. 51 ] forbids the condemnation of a water right at the point of diversion without assumption of existing obligations to deliver such water elsewhere. Neither case establishes the immutable rule that, as a matter of law, water rights must be valued as a unit with the facilities to collect, divert and transport the water and we do not find authority elsewhere to support the proposition. Indeed, the District’s witness, Danger, expressed an opinion of value which gave a separate value for the reservoir and lines downstream thereof.

By the sixth contention it is claimed the court erred when it allowed Walker Hannon to express any opinion of value. The District correctly points out that by section 813 of the Evidence Code the value of property may be shown only by the opinions of a qualified expert or the owner. Hannon, executive vice-president of Southwest, does not fall into either category. However, the objection made in the court below was limited to Hannon’s lack of qualification as an expert. When the court indicated that Hannon’s testimony would be received as “managing agent of the owner” counsel for the District made no objection. To extend the language of section 813 and expand the category of “owner” to include “managing agent of the owner” is of doubtful validity. (See City of Pleasant Hill v. First Baptist Church, 1 Cal.App.3d 384 , 411 [ 82 Cal.Rptr. 1 ]; 5 Nichols, Eminent Domain (3d ed.) § 18.4[2], pp. 18-117.) However, where inadmissible evidence is offered, the party who desires to raise the point of erroneous admission on appeal must object at the trial, specifically stating the grounds of his objection. (Russell v. Geis, 251 Cal.App.2d 560 , 570 [ 59 Cal.Rptr. 569 ].) Failure to do so in the court below forecloses the District from presenting the question here. It is also noted that the District tendered an instruction which was given by the court, stating: “An expert or the representative of the owner of the property being condemned may give his opinion of such market value and damage and the reason for such opinion.” [Italics

The seventh contention made by the District is that the trial court erred when it refused to strike the testimony of Thomas M. Stetson. The several particular objections are covered by the preceding discussion with two exceptions. The first such objection is that Stetson was not qualified to express an opinion of value relating to the reservoir site. In that regard Stetson valued the site at $1,500, the same figure given by the District’s witness Cedric A. White. The court must disregard error which does not affect the substantial rights of the parties. (Code Civ. Proc., § 475.) Secondly, the District complains that Stetson included in his opinion of fair market value of the Southwest property “consideration of the exclusive right to serve in the area.” Stetson added the value of the “exclusive right to serve” was “in recognition of the growth of the area in the future.” Suffice to say the District’s witness, White, acknowledged that, in arriving at his opinion of value he likewise took into consideration the economic growth potential of the area. The court read to the jury the instruction tendered by appellant defining fair market value, which “presupposes that both parties are familiar with the property and its adaptability and uses.” Moreover, the jury was also instructed that speculative values or injury to a business were not compensable elements of damage, and it cannot be assumed that they read into Stetson’s testimony the claimed “improper considerations.”

By its eighth contention the District asserts the court erred in allowing the use of “settlement documents” for purposes of cross-examination. The particular document was entitled an “Appraisal of Maintenance Equipment of Rochester Water Company” containing preliminary engineering figures prepared by Langer and used in the course of an exchange of information among the engineers. The court allowed counsel to refer to this writing in the course of efforts to impeach Danger’s testimony. The District complains the effect of the writing was to show that Langer “prior to trial considered the valuation of the collecting facilities separate and apart from the valuation of the water rights.” Since, on the basis of the argument already considered, there is no reason why Langer could not have done so, the error, if any, is harmless.

In its ninth contention, the District cites a number of incidents occurring during the trial which it denounces as prejudicial misconduct on the part of opposing counsel. In this regard “Each case must ultimately rest upon a court’s view of the overall record, taking into account such factors, inter alia, as the nature, and seriousness of the remarks and misconduct, the general atmosphere, including the judge’s control of the trial,

Contention number 10 charges irregularity occurring during the deliberations of the jury, evidenced by an affidavit of the foreman to the following effect: that the bailiff was asked to convey a verbal question to the judge “whether the plaintiff would acquire title if plaintiff paid the difference between the amount determined as damages and the amount determined as fair market value”; that the bailiff did so and returned with the answer “that with respect to all of the property of Rochester Water Company involved in this action, if the Plaintiff were to pay the difference between the fair market value of that property and the damages for Plaintiff’s duplication of the Rochester Water Company’s system, in addition to said damages as found to exist by the jury, then the Plaintiff would acquire all of said Company’s property involved in the action.” Such an informal instruction would offend the provisions of section 614 of the Code of Civil Procedure. However, when the fact was presented to the trial court, a counteraffidavit of the bailiff was likewise presented denying recollection of any such incident and alleging a fixed practice “never to converse with the jury in any way concerning the issues of the action which they are considering.” The record discloses that the court considered the declaration of the jury foreman as part of the record on the motion for a new trial. (Cf. People v. Hutchinson, 71 Cal.2d 342 , 346 [ 78 Cal.Rptr. 196 , 455 P.2d 132 ].) In resolving the conflict, the trial judge added his own remark that he had no recollection of any such question being asked of him by the bailiff. In any event, in view of the required amendment of the judgment the claimed error is not prejudicial (Putensen v. Clay Adams, Inc., 12 Cal.App.3d 1062 , 1082 [ 91 Cal.Rptr. 319 ].)

In its final contention the District asserts the trial court erred in giving, modifying, and refusing certain instructions to the jury. For the most part, the arguments presented by the District relating to the instructions duplicate the arguments made as to the underlying contentions already considered. As to the remainder, a total of over 150 proposed jury instructions were tendered to the court, and 62 were finally given. In charging the jury

The judgment is reversed insofar as it denies acquisition of the Rochester system to the District and the trial court is directed to make necessary findings of fact and conclusions of law and enter judgment in accordance with the views herein expressed, including that upon payment of $249,000 there shall be condemned to the use of the District all of the property employed by Rochester in providing water service to that portion of the service area designated as proposed Assessment District No. 5, being water rights arising out of and the easements conveyed to Rochester by the deed from Charles W. Smith, dated February 20, 1889, together with the collection and diversion system, reservoir and reservoir site, and transmission and distribution facilities. The judgment is otherwise affirmed.

Respondents shall recover costs, by analogy to the rule that a successful condemner must nevertheless pay the proper costs of appeal incurred in good faith. (Sacramento Drainage Dist. ex rel. State Rec. Bd. v. Reed, 217 Cal.App.2d 611 , 612-613 [ 31 Cal.Rptr. 754 ].)

Gardner, P. J., and Tamura, J., concurred.

A petition for a rehearing was denied January 18, 1972, and the opinion was modified to read as printed above.