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

Heading: University's Contentions

Text: As discussed ante, 54 Cal.Rptr.3d at page 755,151 P.3d at page 1168, section 1263.110 would require that the University's property be valued on the date of deposit, or December 15, 2000. The University asserts that due to fluctuations in the real estate market, using the deposit date as the valuation date would deny its constitutional right to just compensation. The University's point is that if a property owner chooses to challenge the condemner's right to take the property, the condemner can set an early valuation date by depositing funds, and then reap the benefit of a large rise in property values when the valuation trial does not occur for several years (while retaining the option to abandon the action if values fall). The University claims the date of valuation should be the date trial on the just compensation issue commenced, even though the District deposited the probable compensation on December 15, 2000. The University's contention is based on the fact that the parties agree that the property has increased in value since the date of the deposit. The University relies on Saratoga to assert that the statutory date of valuation must be invalidated in this case. (Saratoga, supra, 97 Cal.App.4th at pp. 905-906, 118 Cal.Rptr.2d 696.) Saratoga involved a straight condemnation proceeding where the Court of Appeal held that section 1263.120 was unconstitutional as applied. (Saratoga, supra, 97 Cal.App.4th at pp. 905-906, 118 Cal.Rptr.2d 696.) In Saratoga, trial on the compensation issue began 11 months after the date the proceeding commenced, during which time the fair market value of the property increased from $2 million to $3.2 million. (Id. at pp. 897-898, 118 Cal.Rptr.2d 696.) Even though section 1263.120 required the property be valued as of the date the proceeding commenced, Saratoga held the principal of just compensation required it be valued on the date of trial. (Ibid.) As the Court of Appeal here stated, it is of critical importance that Saratoga was a straight condemnation proceeding where there was no deposit of probable compensation before trial. In order to provide just compensation, the court in Saratoga had to value the property closer to when payment would finally be made available to the owner. Section 1263.120 had to be disregarded to ensure the owner received just compensation at the time payment was tendered and the property was actually taken. In contrast to the condemner in Saratoga, the District here deposited the probable amount of compensation well before the start of trial. As noted, the University had the option to withdraw the funds at that time. (§ 1255.210.) The deposit was supported by an appraisal, as required under section 1255.010. Indeed, when the University made a motion under section 1255.030 to increase the amount of the deposit, the trial court found that the amount deposited was sufficient. When recommending the law, the 1960 Commission wanted to ensure that the owner had the right to withdraw compensation when the condemner actually takes possession of the property. (Commission Report, supra, at p. B-12.) The University had this right but did not exercise it. The University's comparisons to Kirby, another straight condemnation proceeding, are similarly misplaced. (Kirby, supra, 467 U.S. at pp. 16-17, 104 S.Ct. 2187.) In Kirby, the condemned property was valued at trial in 1979, yet the deposit was not made until 1982. (Id. at p. 16, 104 S.Ct. 2187.) The owner retained the rights to sell the land or profit from it during that three-year period. (Id. at pp. 14-15, 104 S.Ct. 2187.) The court held that a condemnation award must be modified when there is a substantial delay between the date of valuation and the date the judgment is paid, during which time the value of the land changes materially.!' (Id at p. 18,104 S.Ct. 2187.) No credible reason exists to invalidate the statutory date of valuation here, when a deposit was made before trial and the owner had access to the money at that time. The fact that the 1974 Commission specifically rejected using the date of trial as the date of valuation in quick-take proceedings is significant. Although it considered the possibility of the issue before us today (see 1974 Commission Report, supra, at p. 1645 [in a rapidly rising market, property values may have increased so much that the property owner cannot purchase equivalent property when he eventually receives the award]), the Commission emphasized the public need for certainty when valuing land for condemnation proceedings. A date of valuation based on a variable date of trial would not provide this certainty. In addition, the Commission observed that a rule valuing property on the date trial commenced might provide an undesirable incentive to condemnees to delay the proceedings to obtain the latest possible date of valuation. (Id. at pp. 1645-1646.) We agree with the Commission's observation. If the date of valuation could be delayed until the date of trial, owners in a rising market would have a considerable incentive to delay proceedings for as long as possible to ensure a greater return on their property. [7]