Saturday, March 2, 2013

Court of Appeal Sheds Light on the Rules of Evidence in Eminent Domain Cases


On November 26, 2012, the California Court of Appeal filed an opinion in connection with an eminent domain case.  In County of Glenn v. Foley (2012) 212 Cal.App.4th 393, the Court of Appeal shed additional light on the interpretation of California Evidence Code sections 822 and 816, which deal with the rules of evidence to be applied in property valuation cases.  The case is about a party named Foley, who had leased 200 acres of his land to the County of Glenn since 1971.  The County had been using Foley’s property as a landfill.  In 2009, the County filed an eminent domain action to acquire the land, plus a substantial amount of surrounding land, also owned by Foley.  
Before the trial, the County filed a motion in limine to exclude all of the testimony of Foley’s appraiser, based on Evidence Code sections 822(a)(4) and 816.  The trial court granted the County’s motion.  Without the testimony of his appraiser, which the trial court excluded from evidence, the property owner stipulated to the value of his property as determined by the County’s appraiser, and the trial judge entered judgment in that amount.  The defendant appealed the judgment, arguing that the exclusion of his appraiser’s testimony violated his constitutional right to a trial by jury. The Court of Appeal held that the constitutional right to a jury trial does not eliminate the requirement that the rules of evidence be followed in an eminent domain case.  However, the Evidence Code must be properly applied.

The defense’s appraisal came in at around $1,700,000.  Foley’s expert had determined that the highest and best use of the property was as an orchard.  The County’s appraiser valued the property at about $637,000, having determined that the highest and best use for the property was as grazing land.   
Evidence Code section 822(a)(4), one of the bases for the trial court’s decision to exclude the testimony of the defense’s appraiser, states that an opinion as to the value of any property other than that being valued, is inadmissible.  The Court of Appeal reversed the trial court’s ruling regarding the section 822(a)(4) issue, stating that excluding an appraiser’s opinion in an eminent domain case is a drastic remedy.  The Court of Appeal felt that the trial court was speculating that the defense appraiser would violate this Evidence Code section, and that instead, the trial judge should have let the jury see the evidence and just allow the County to challenge the weight that the jury should give to the evidence.

Evidence Code section 816, the other bases for the trial court’s decision to exclude the testimony of the property owner’s real estate appraiser, states that, among other things, a valuation witness can rely only on comparable sales that are sufficiently alike in respect to character, size, situation, usability and improvements, to make it clear that the property being sold and the property being valued are comparable.  The Court of Appeal said that section 816 of the Evidence Code is satisfied as long as a comparable sale “sheds light” on the value of the subject property.  As long as the comparable can provide any “rational inference” in support of value, it should be admitted.  The Court of Appeal concluded that in this case, because the comparable sales used by Foley's appraiser had “some tendency in logic to prove the value of the subject property”, the jury should have been able to see that evidence.