Los Angeles County Metropolitan Transportation Authority v. Continental Development Corp.

BAXTER, J., Concurring and Dissenting.

In great part, I agree with Justice Kennard’s thoughtful criticism of the majority’s new “setoff’ rule for partial-takings cases. For the first time in modem California history, a public agency that condemns part of a larger parcel may reduce its monetary liability for severance damages by “setting off’ benefits to the remainder which are widely shared by condemned and uncondemned parcels alike. There has been no change in the well-established laws governing eminent domain valuation that would compel this radical alteration, and, as Justice Kennard indicates, the majority provide no other persuasive justification for decreeing it.

Even more troubling, as Justice Kennard points out, is that the majority expressly overrule a principle of fundamental fairness long followed in this state and elsewhere as a matter of constitutional doctrine. It has been widely understood that the owner of a parcel taken in part is denied “just” compensation for “damage[]” to the remainder (Cal. Const., art. I, § 19; see also Code Civ. Proc., §§ 1263.230, subd. (b), 1263.420) if required to forfeit, as a setoff against such compensation, benefits to the remainder which are shared in common with untouched parcels, and which the latter are allowed to retain. (Beveridge v. Lewis (1902) 137 Cal. 619, 625 [70 P. 1083] (Beveridge); see generally, e.g., 3 Nichols, Eminent Domain (rev. 3d ed. *7371992) § 8A.05, pp. 8A-57 to 8A-58; 1 Lewis, Eminent Domain (3d ed. 1909) § 693, p. 1198; Cooley, Constitutional Limitations (2d ed. 1871) p. 565; but see, e.g., McCoy v. Union Elevated R. R. Co. (1918) 247 U.S. 354, 365-366 [38 S.Ct. 504, 507-508, 62 L.Ed. 1156].)

For this very reason, I would go further than Justice Kennard’s dissent explicitly goes. Even if prior cases have not stated the rule in precisely this way, I would make clear that when part of a larger parcel is taken for a public project, the value of any benefit conferred by the project upon the remainder may be deemed “special,” and may thus be set off against otherwise cognizable severance damages to the remainder, only when the benefit is “reasonably certain and nonspeculative” (maj. opn., ante, at p. 716) and is shared, if at all, only by other parcels similarly subjected to a partial taking. In other words, any benefit conferred by the project upon condemned and uncondemned parcels alike must be considered “general,” and not subject to offset, even if the benefit is clear and present, and its diffusion throughout the community is not particularly broad.

The following example will illustrate the rule I believe to be correct: A new rail transit line will travel, for its entire distance, along the boundary between parcels A and B, two large plots of developed commercial land in separate ownership. A station will be constructed midway along the line to allow passengers to embark and disembark in either direction. By fortuity, both the right-of-way and the land needed for the station will be taken only from parcel A, leaving parcel B untouched, but the station itself will serve both parcels as its primary function, and both will have equal access to it. Parcels A and B will thus enjoy similar immediate and concrete benefits from the line, of a kind and degree not shared by the community in general. Nonetheless, I submit that for purposes of eminent domain law, it is a “general” benefit which may not be offset against severance damages to the untaken portion of parcel A.

If the rule is otherwise, parcel A not only suffers an involuntary severance not imposed upon parcel B, but is required to forfeit, by means of an offset, the monetary value of related benefits that its otherwise identically situated neighbor, parcel B, may retain without cost. Such a formula denies the “just” compensation our state’s Constitution requires insofar as it forces the owner of condemned property, in particular, to “ ‘ “contribute more than his proper share to the public undertaking.” ’ ” (Locklin v. City of Lafayette (1994) 7 Cal.4th 327, 365 [27 Cal.Rptr.2d 613, 867 P.2d 724].)

By distinguishing special from general benefits in the just and simple fashion I have suggested, we also do much to solve the problems of clarity *738and definition that have prompted the majority, unwisely, to abandon the distinction altogether. The majority complain that the Beveridge court “distinguished general and special benefits along two distinct dimensions: generality versus peculiarity and conjecture versus certainty,” but did not explain what result was appropriate when a benefit was peculiar but conjectural, or certain but widespread. (Maj. opn., ante, at p. 707.) We may end any confusion on the point by saying that a special benefit subject to offset is one both reasonably certain and immediate and unique to parcels which have been subjected to a partial physical taking. Under this definition, all other benefits become general and immune from offset.

As all recognize, no amount of legal refinement can solve every difficulty in applying the special/general benefits rule to individual cases. In practice, real estate appraisal is an art, not a science. Legitimate disputes may always be expected to arise about the value of a particular alleged benefit, as well its certainty and peculiarity. The answer, however, is not to abandon a doctrine which, for nearly a century, has justly protected the rights of California property owners against abuse of the awesome sovereign power of eminent domain. On the contrary, the rule should be clarified and strengthened to permit full realization of the sound constitutional policy this court recognized in Beveridge. The solution I propose serves that purpose.

Under that standard, the trial court and the Court of Appeal were obviously correct in concluding that defendant Continental Development Corporation (Continental) gleaned only a general benefit from the proximity of its remainder parcel to the Douglas Street Green Line station. Numerous uncondemned parcels enjoyed an equal or greater proximity to the station. I would therefore affirm the judgment of the Court of Appeal to that extent. Like Justice Kennard, I concur in that portion of the majority judgment which concludes, contrary to the Court of Appeal, that the trial court did not abuse its discretion in denying Continental its litigation costs.

The petition of appellant Continental Development Corporation for a rehearing was denied November 12, 1997. Kennard, J., and Baxter, J., were of the opinion that the petition should be granted.