Coachella Valley County Water District v. Dreyfuss

demner, and litigation expenses under Code of Civil Procedure section 1250.41Q.^[1]

In December 1976, Coachella Valley County Water District (plaintiff) filed a complaint in eminent domain to acquire numerous parcels of land, including parcel No. 30 owned by defendants, for flood control purposes. Defendants answered and the case was set for trial for April 24, 1978. On March 28, 1978, pursuant to stipulation, plaintiff obtained an order for immediate possession upon the deposit of $20,940 which sum was disbursed to defendants.

On April 3, 1978, plaintiff served and filed a final offer of compensation of $20,940 pursuant to section 1250.410. On April 5, 1978, defendants filed their final demand under the section for the sum of $36,645. The parties stipulated to waive the statutory requirement that the final offer and demand be filed 30 days prior to the date of trial.

On April 14, 1978, plaintiff served and filed its list of expert witnesses and a statement of valuation data which included the opinion of plaintiff’s appraiser that the fair market value of the property was $20,940 with no severance damage. On April 17, 1978, defendants filed their list of experts and statement of valuation data giving their appraiser’s opinion that the fair market value of the property was $35,000 with $27,000 severance damage and no special benefits.

July selection commenced on April 25, 1978, and was completed on April 26. After the jury was impaneled and sworn, court and counsel met in chambers. Plaintiff’s counsel informed the court that the district had decided to accept defendants’ final statutoiy demand. Defendants’ counsel responded that “for all intents and purposes” this ended the trial

The argument is unpersuasive. The amounts of those items are readily ascertainable within reasonable limits of accuracy so that the condemner would not, as plaintiff contends, be subjecting itself to an open-ended liability of unknown magnitude by accepting a property owner’s final demand.

We conclude that the court erred in striking defendants’ cost bill and in denying interest for the period of the condemner’s prejudgment possession of the property.

We turn to the order denying defendants’ motion for litigation expenses under section 1250.410.^[2] Defendants maintain that in light of the compensation awarded (the amount of defendants’ final demand), plaintiff’s final offer was unreasonable and defendants’ final demand was reasonable, both as a matter of law, and therefore their motion for litigation expenses should have been granted. Plaintiff responds that section 1250.410 was intended to permit an award of such expenses only where the amount of compensation is determined by trial or, in any event, only where the property owner’s final demand is not accepted until after trial has commenced. Plaintiff contends that in the case at bench trial had not commenced when it accepted defendants’ demand.

All of the cases that have arisen under section 1250.410 and its predecessor have been those in which the valuation issue had been actually tried. To our knowledge this is the first case involving the legal effect of a condemner’s “acceptance” of a property owner’s final demand, both as to whether the acceptance is binding on the property owner and whether it precludes them from seeking recovery of litigation expenses.

Although section 1250.410 requires a final offer and a final demand to be filed 30 days before trial, it says nothing about whether or when the

offer or demand may be accepted or the effect of an acceptance on the right of the property owner to recover litigation expenses. The district’s “acceptance” of the owners’ final demand after selection and impanelment of the jury poses two problems: (1) Whether the final demand was then subject to acceptance and (2) if so, whether acceptance precluded an award of litigation expenses.

Despite the absence of an express provision that a final offer or demand may be accepted, since the statute was designed to promote settlement it perforce contemplates settlement by acceptance of an offer or demand. At oral argument both parties agreed that the district’s acceptance of the property owners’ final demand was binding upon the property owners. This is consistent not only with elementary principles of contract law but with the provisions recognizing the right of a party to revise a final offer or demand at any time before or during trial. The section provides that “in determining the amount of such litigation expenses” the court shall consider “any written revised or superseded offers and demands filed and served prior to or during trial.” Absent revision or supersession of a final offer or demand or unless a time limitation is prescribed in the offer or demand itself, the final offer or demand would be subject to acceptance at any time before or during trial.^[3] In the case at bench the final demand remained open and was subject to acceptance when it was accepted by the district.

The question remains whether acceptance of the demand precluded the property owners from claiming litigation expenses. Plaintiff argues that section 1250.410 authorizes an award of such expenses only where the amount of compensation is determined by trial. It bases its interpretation on the fact that the section provides that the court shall award litigation expenses if it finds that the offer was unreasonable and that the demand was reasonable “viewed in the light of the evidence admitted and the compensation awarded in the proceeding,...”

The predecessor section (§ 1249.3) provided that reasonableness was to be “viewed in the light of the determination as to the value of the subject property.” We do not view the language in section 1250.410 requiring the

court to also consider “the evidence admitted” as meaning that litigation costs may be awarded only where the compensation has been determined by trial. Such a construction would lead to unreasonable and absurd results which would be contrary to the spirit and purpose of the section. ”It is settled that a statute is to be construed in such a way as to render it ‘reasonable, fair and harmonious with [its] manifest [legislative] purposes. . . .’ [citation], and the literal meaning of its words must give way to avoid harsh results and mischievous or absurd consequences. [Citations.]” (County of San Diego v. Muniz, 22 Cal.3d 29 , 36 [ 148 Cal.Rptr. 584 , 583 P.2d 109 ].) If plaintiff’s interpretation were adopted, a property owner would be precluded from seeking reimbursement of litigation expenses even if the condemning agency accepted the demand after the case had been submitted to the jury but before it returned its verdict. If the purpose of the statute is to make whole a property owner who has been required to litigate because of the condemner’s unreasonable offer, the right to recover litigation costs should hinge, not on whether the amount of compensation has been determined by a juiy verdict or court finding, but on whether the property owner has been unreasonably required to litigate.

Plaintiff contends, however, that it accepted the demand before trial commenced and therefore should not be liable for litigation costs. Assuming that a claim under section 1250.410 will not lie where a condemner accepts a property owner’s demand before trial commences, here trial had commenced. Where a case has been set for jury trial, trial commences with the examination of prospective jurors. “[T]hat the impanelment of the jury is a part of the trial not only comports with the common understanding among lawyers and judges, but finds support in the rulings of the courts of other jurisdictions . . . .” (Kadota v. City & County of S.F., 166 Cal.App.2d 194 , 195 [ 333 P.2d 75 ]; Vecki v. Sorensen, 171 Cal.App.2d 390 , 393-394 [ 273 P.2d 908 ].)^[4] In the case at bench, jury selection commenced on the previous day and was not completed until the morning of the second day after which plaintiff accepted the demand. Trial clearly had commenced. We therefore

conclude that plaintiffs were entitled to have their motion for litigation expenses under section 1250.410 considered on its merits.^[5]

Defendants urge this court to reverse the order denying litigation expenses with directions to award the expenses as claimed. It would be manifestly inappropriate to do so. Reasonableness of the final offer and demand presents factual issues which depend not only upon the percentage of difference in the monetary amounts of the offer and demand but also on the good faith, care and accuracy in the determination of those amounts, all of which are matters to be evaluated by the fact finder. (People ex rel. Dept. of Transportation v. Societa Di Unione E Beneficenza Italiana, 87 Cal.App.3d 14 , 23 [ 150 Cal.Rptr. 706 ].) In the court below, defendants filed an affidavit by their expert to the effect that plaintiff’s appraiser ignored an important comparable sale until the day of trial. Plaintiff filed an affidavit by its appraiser stating that he did not consider the sale in question because defendants’ valuation data failed to show a recorded transfer; that his investigation revealed that the seller did not consider the sale consummated because it had not been paid; that he continued in his efforts to determine the status of the sale and ultimately learned that the sale was consummated on the day the instant case went to trial. It is for the trial court to judge the credibility of the witnesses and to resolve such conflicts in the evidence.

Since the court denied defendants’ motion under section 1250.410 without explanation, we are unable to determine whether the court denied the motion for the reasons advanced by the district or whether it did so on the merits. In the circumstances, the order must be reversed with directions to the trial court to consider the motion on its merits.

Disposition

The judgment is reversed with directions to modify the same by providing for recovery of interest on the unpaid amount of the award for the period of the condemner’s prejudgment possession of the property and ordinary court costs. The order striking defendants’ memorandum of costs and disbursements is reversed. The order denying defendants’