Ruling draws artificial distinction between eminent domain and inverse condemnation

The California Supreme Court, in Weiss v. People ex re. Department of Transportation, 2020 DJAR 7352 (July 16, 2020), has once again stormed the gates of inverse condemnation, holding that motions under Code of Civil Procedure Section 1260.040 are inapplicable in such actions. The court's rationale is that motions under that statute are limited to eminent domain actions and other remedies, such as summary judgment motions are available. The Weiss decision is logically flawed and will inevitably result in waste of precious judicial resources.

The Ruling

Weiss involved an inverse condemnation action against the Orange County Transportation Authority. The property owner plaintiffs alleged that walls constructed by the agency as sound barriers deflected noise, vibrations, dust and nighttime glare onto their properties. The trial court sustained a demurrer to a trespass cause of action, but overruled demurrers to nuisance and inverse condemnation claims.

Three months prior to trial, the agency filed a motion under Section 1260.040, requesting judgment on the inverse condemnation claim alleging plaintiffs could not demonstrate unique damage to their properties. The homeowners opposed the motion, arguing that such a motion is only proper in an eminent domain action. Further, they argued that such motions are improper to request a liability determination and that they were entitled to a bench trial. The trial court granted the 1260.040 motion and entered judgment against plaintiffs on the inverse condemnation claim.

On appeal, the property owners reiterated their argument that motions under 1260.040 are not proper to dispose of liability issues. The agency argued that, while not directly authorized in inverse condemnation cases, the 1260.040 procedure should be imported into inverse condemnation cases as approved in a 2007 decision, Dina v. People ex rel. Dept. of Transportation, 151 Cal. App. 4th 1029. The Court of Appeal disapproved Dina, to the extent that it authorized 1260.040 motions to decide liability issues in inverse condemnation cases, reasoning there was no reason to judicially create "a novel summary mechanism" for inverse cases. Characterizing the trial court's ruling as "an early summary judgment ruling," the Court of Appeal reversed the lower court judgment. The agency appealed that decision, asserting that importing the 1260.040 procedure into inverse condemnation cases would promote timely resolution of such actions.

The Supreme Court commenced its analysis by reviewing the legislative history of Section 1260.040, noting that the special procedures of eminent domain law are not applicable to inverse condemnation cases. The court emphasized that, in eminent domain actions, a public entity exercises its authority to condemn private property. Further, the public authority concedes liability in eminent domain actions. Conversely, in an inverse condemnation case the property owner commences an action against the public authority after a taking occurs and must establish liability for such a taking.

The Weiss court acknowledged that there is no right to a jury trial on the liability issues in inverse condemnation cases. The court then noted that Section 1260.040 was enacted to promote earlier resolution of issues affecting determination of compensation. The rationale was clearly to increase the likelihood of pretrial settlement of eminent domain actions. In recommending adoption of the statute, the Law Revision Commission intended to narrow the gap between expert valuations regarding compensation for taking the property.

The court continued its opinion by addressing the reasons for declining to import Section 1260.040 into inverse condemnation cases. It acknowledged that California courts have long applied principles affecting the amount of compensation due to a property owner in eminent domain and inverse condemnation actions. Notwithstanding that fact, the court found nothing in the legislative history that suggested the Legislature intended to authorize importing eminent domain procedures into inverse condemnation cases.

The appellants primarily relied on Chhour v. Community Redevelopment Agency, 46 Ca. App. 4th 273 (1996), for their contention that 1260.040 could be imported into an inverse condemnation case. In Chhour, the court noted that it makes sense for the judiciary and Legislature to "cross-pollinate in this area" as the only difference between eminent domain and inverse condemnation actions is who is bringing the lawsuit. The Weiss court concluded that much of the special rules applicable to eminent domain cases would serve no purpose in inverse condemnation cases. In support of its holding, the Weiss court cited Regency Outdoor Advertising, Inc. v. City of Los Angeles, 39 Cal. 4th 507 (2006), which held that an award of expert witness fees under Code of Civil Procedure Section 998 expressly excludes eminent domain cases, but did not preclude such recovery in inverse condemnation cases.

The Weiss court simply declined the property owner's request to create a new, uncodified dispositive motion procedure for inverse condemnation cases. Summary judgment motions or bench trials were available to the property owners to resolve such cases.

A Flawed Decision

There are numerous flaws in the Weiss decision. First, it draws an artificial distinction between inverse condemnation and eminent domain actions. Application of the law should not be dependent on which party initiates the action. If the government as a plaintiff in an eminent domain action can proceed under Code of Civil Procedure Section 1260.040, there is no reason why an aggrieved party seeking just compensation in an inverse condemnation proceeding should not be entitled to the benefits of that statute.

The Weiss court next states that permitting a 1260.040 statute to be used in an inverse condemnation proceeding would improperly permit a motion in limine to be used as a means of summary case disposition in lieu of a summary judgment motion. This analysis flies directly in the face of the express language of 1260.040, which permits such a motion "if there is a dispute between plaintiff and defendant over an evidentiary or other legal issue affecting the determination of compensation." As indicated in Dina, "What could affect the determination of compensation more than whether or not the plaintiffs have a valid cause of action?"

The Weiss court's analysis also omits reference to the Law Revision Commission Comments to 1260.040 which state, "Nothing in this section precludes the use of other procedures for the same purpose, including, without limitation, bifurcation of issues and control of the order of proof pursuant to statute, or other pretrial procedure pursuant to court rule." By so stating, the Law Revision Commission indicated that the 1260.040 motion may be used in addition to, rather than in lieu of, a summary judgment motion.

The court in Weiss ignores the exclusive role of the court in determining the liability issues in an inverse condemnation suit. California law is clear that the court serves as the sole trier of fact on liability issues in inverse condemnation cases. See, e.g., Hensler v. City of Glendale, 8 Cal.4th 1, 15 (1994). The Legislature in enacting 1260.040 acknowledged the court's sole province in determining the liability issues in inverse condemnation cases. Section 1260.040 effectively provides the court a summary procedure, in lieu of an expensive and time consuming bench trial, on the liability issue in inverse condemnation cases.

Contrary to the view of the Weiss court, once the trial court determines liability by a 1260.040 motion, resolution of inverse condemnation cases is promoted. If plaintiff prevails, the defendant will be strongly encouraged to resolve the case prior to a jury trial on damages to avoid incurring attorney fees, expert costs and other expenses recoverable under Code of Civil Procedure Section 1036. If the defense prevails, the inverse condemnation case will be terminated.

In support of its decision, the Weiss court also emphasizes that 1260.040 does not expressly state it applies to inverse condemnation cases. This argument ignores the fact that there are sections within the eminent domain statutes that expressly exclude their application to inverse condemnation cases. For example, Code of Civil Procedure Section 1263.530 (which deals with business goodwill losses) states that "Nothing in this article is intended to deal with compensation for inverse condemnation claims for temporary interference with or interruption of business." It is noteworthy that no such express carve- out for inverse condemnation cases is contained in Section 1260.040.

Conclusion

It is apparent from the recent Oroville v. Superior Court, 7 Cal. 5th 1091 (2019), decision that the California Supreme Court is intent on pumping the brakes on inverse condemnation law. The Weiss court inexplicably has drawn an artificial distinction between eminent domain and inverse condemnation. The anomalous result will be to prolong litigation and place greater pressure on the already overburdened trial courts. 