Opinion ID: 2638197
Heading Depth: 2
Heading Rank: 3

Heading: The Waiver of Claims and Defenses

Text: Section 1255.260 provides: If any portion of the money deposited pursuant to this chapter is withdrawn, the receipt of any such money shall constitute a waiver by operation of law of all claims and defenses in favor of the persons receiving such payment except a claim for greater compensation. This waiver includes the right to contest the condemner's right to take the property. (Clayton v. Superior Court (1998) 67 Cal.App.4th 28, 33, 78 Cal.Rptr.2d 750.) The University contends that even though the District made a deposit here, and the University did not withdraw the money, the deposited amount was effectively rendered unavailable because the University could not withdraw it without waiving its right to fully and finally litigate the condemner's right to take the property. Thus, the University claims it is left without either the property or the deposit, an unconstitutional choice. The University contends that this aspect of the Legislature's quick-take process violates article I, section 19, and allows the government to take possession of the property while withholding the deposit from the property owner, thus violating the governing principle of eminent domain proceedings: financial equivalency. The University asserts that in order to avoid this Catch-22 situation, we should value the property on the date of trial, not the date of the deposit. We disagree. The University initially looks to Steinhart for support. Specifically, it relies on the court's observation that in an immediate possession proceeding, the money must be deposited into court for the owner, and that this has not happened until the owner can actually take it. (Steinhart, supra, 137 Cal. at p. 579, 70 P. 629.) When Steinhart was decided, the California Constitution stated that [p]rivate property shall not be taken or damaged for public use without just compensation having been first made.... (Cal. Const., art. I, former § 14, repealed Nov. 5, 1974.) The parties in that case were governed by former article I, section 14, which did not authorize a condemner to take immediate possession before trial or to deposit the likely amount of just compensation. In Steinhart, a statute allowed a condemner to take possession before trial if it had made a deposit, but did not allow the owner to withdraw the funds. (Steinhart, supra, 137 Cal. at p. 576, 70 P. 629.) The court declared that statute unconstitutional under former article I, section 14, as just compensation had not first [been] made if the owner could not withdraw the deposit. (Steinhart, supra, 137 Cal. at pp. 578-579, 70 P. 629.) Steinhart is inapposite. As previously discussed, the 1974 enactment of article I, section 19 of the state Constitution authorizes the Legislature to provide for prejudgment possession by the condemner upon deposit in court and prompt release to the owner of its probable compensation. (Cal. Const, art. I, § 19.) In addition, unlike the applicable statute in Steinhart, an owner under the present statutory scheme has the ability to withdraw the deposit soon after it is made. (§§ 1255.210-1255.240.) The only constitutional limitations on the right of eminent domain are that the taking be for a public use, and that just compensation be paid. (City of Oakland v. Oakland Raiders, supra, 32 Cal.3d at p. 64,183 Cal.Rptr. 673, 646 P.2d 835; People v. Chevalier (1959) 52 Cal.2d 299, 304, 340 P.2d 598.) A litigant can be heard to question the validity of a statute only when and in. so far as it is applied to his disadvantage. (Rindge Co. v. Los Angeles County (1923) 262 U.S. 700, 709-710, 43 S.Ct. 689, 67 L.Ed. 1186.) The University does not claim that the condemnation is not for a public: use. In addition, section 1255.260 does not require waiving a claim for greater compensation with withdrawal of the deposit. Thus, the University is not being forced to waive a constitutional right. As the Court of Appeal recognized, the University's argument has been advanced and rejected in several cases. In Pacific Gas & Electric Co. v. Superior Court (1973) 33 Cal.App.3d 321, 109 Cal.Rptr. 10 (PG & E ), the condemner made a deposit after trial on the compensation issue. The owner appealed, and the condemner sought an order for possession pending the appeal. (Id. at p. 324, 109 Cal.Rptr. 10.) The owner argued that allowing the condemner to take possession pending the appeal would deprive it of just compensation, since it could not withdraw the deposited funds without waiving its right to a final adjudication oh appeal of the condemnor's right to take the property. (Id. at pp. 324-329,109 Cal.Rptr. 10.) The court disagreed. The deposit of funds satisfied the owner's right to just compensation at; the time of the taking, that is, at the time the condemner had a right to take possession following judgment. (PG & E, supra, 33 Cal.App.3d at p. 327, 109 Cal.Rptr. 10.) The fact that statutory limitations or conditions are imposed upon a property owner's ability to withdraw [deposited] funds in relation to his exercise of his solely statutory right to appeal, does not operate so as to constitute a denial of just compensation. (Ibid.) The same reasoning applies here. The condemner had a right to immediate possession of the property, and made a deposit of probable compensation. The owner had the right immediately to withdraw that deposit. The existence of conditions on withdrawal on the owner's solely statutory right to further litigate the legality of the taking does not deny the owner just compensation. PG & E also rejected the related argument that the owner was placed in a position which required it to give up one constitutional right, the right to just compensation, in order to protect another, the right to take a meaningful appeal. (PG & E, supra, 33 Cal.App.3d at p. 328, 109 Cal.Rptr. 10.) The University makes a similar claim here, asserting that in order to receive the constitutionally required prompt release of the deposit, it must give up its statutory right to fully litigate the District's right to take. Here, no constitutional right to an appeal exists, only a statutory one. (PG & E, supra, 33 Cal.App.3d at pp. 328-329, 109 Cal.Rptr. 10.) This statutory right to appeal may be made subject to reasonable conditions. (Id at p. 329, 109 Cal.Rptr. 10; see also Redevelopment Agency v. Goodman (1975) 53 Cal.App.3d 424, 431-432, 125 Cal.Rptr. 818.) In addition, as the Court of Appeal observed in this case, having to leave funds on deposit is a reasonable condition to place on a condemnee's statutory right to further litigate the right to take issue, or pursue a final adjudication of the issue on appeal. In enacting section 1255.260, the Legislature could have reasonably concluded that a condemnee who denies the condemner's right to take should not be able to withdraw the probable amount of its just compensation.... [¶] Indeed, it would be inconsistent for [the University] to insist on adjudicating the [District's] right to take its property, while it enjoys the use and benefit of the probable amount of its just compensation. A condemnee who denies the condemner's right to take cannot have it both ways. He cannot withdraw the deposit and challenge the right to take. It is reasonable to require him to choose one or the other. In addition, the statutory scheme does provide for prompt resolution of whether the condemner has the right to take the property in question. The owner may request the issue be heard in a bifurcated proceeding, and the matter is entitled to priority on the civil trial calendar. (§§ 1260.010, 1260.110.) The owner may seek review of the issue by extraordinary writ. (§§ 598, 904.1; Plaza Tulare v. Tradewell Stores, Inc. (1989) 207 Cal. App.3d 522, 523-524, 254 Cal.Rptr. 792.) The federal and state Constitutions also require that if the amount of compensation finally determined in the proceeding exceeds the amount of the deposit of probable just compensation, the property owner will be compensated for the delay in payment by prejudgment interest on the balance owed. (U.S. Const., 5th Amend.; Cal. Const., art. I, § 19.) The condemner must also pay prejudgment interest on both the balance owed and any portion of the deposit that the property owner chose not to withdraw, running from the date the condemner was authorized to enter into possession of the property. (§§ 1268.310-1268.360.) Thus, whatever the owner chooses to do, in view of the procedural due process safeguards in place, the waiver rule of section 1255.260 in no way impairs the owner's constitutional right to a prompt release of the deposited funds or imposes an unconstitutional choice on the owner. (Cal. Const., art. I, § 19; § 1255.210, et seq.; see Perry v. Sindermann (1972) 408 U.S. 593, 597, 92 S.Ct. 2694, 33 L.Ed.2d 570 [right of access to government benefit may not be conditioned on relinquishing Constitutional right.].) In sum, the Legislature reasonably could have found that it would be inconsistent for an owner to deny the condemner's right to take with one hand while it withdraws and uses the condemner's deposit with the other. An owner cannot have it both ways. It is reasonable to require the owner to choose one or the other: either to deny the condemner's right to take the property and litigate, or to take the deposit.