Facts

This is an eminent domain action by which the Tracy Joint Unified School District took approximately 61 acres of defendants' 230-acre property in order to construct a high school to accommodate new students in the developing western area, which was not located within the incorporated city limits of Tracy. The school district's right to acquire the property was not in dispute, and the only trial issues were the value of the property taken as of June 2007, and whether defendants' remaining property lost value because a portion of it was taken to construct a high school, i.e., severance damages.

Before the case was filed, the school district made an initial offer to defendants in the amount of $3,081,500 as total just compensation. The offer included no severance damages. In making its initial offer, the plaintiff relied on an appraisal performed in 2005 for the original assessment of the viability of the project. Plaintiff's pre-filing offer in March 2007 was for $2,730,000 for less acreage than ultimately sought through the litigation. This offer was based on an appraisal with a February 2007 valuation date. In its Statement of Valuation Data issued in 2008, the plaintiff identified the same comparable sales and made the same land use assumptions as in the original 2005 appraisal.

The defendants' appraisal of the amount of just compensation required to be paid was $12,406,000, which included $3,081,000 in severance damages. The defendants relied on recent sales of development property in Tracy and in Sacramento County. These recent sales closed between February 2005 and August 2007, with contract dates between July 2003 and October 2006. A comparable sale of development property in Pleasanton, Alameda County was excluded by the court in limine rulings.

PLAINTIFF'S CONTENTIONS:
One issue raised during litigation was the timing of the future development Plaintiff also questioned whether any property could be developed relatively promptly under the local ordinances.

DEFENDANTS' CONTENTIONS:
Defendants contended that the district's appraiser did not investigate changes in the subject property's land use as of the date of valuation, and failed to consider the new general plan adopted by the City in June 2006. All of the District's comparable sales were in Tracy, relatively near to the property taken, but only one of the properties was eligible for relatively prompt development under Tracy land use limitations.

Settlement Discussions

The plaintiff's final offer of compensation per C.C.P. section 1250.410 was $3,181,500, an increase of only $100,000 over its appraisal. The defendants' final demand before trial was $7,995,000 in total just compensation (including severance damages).

Result

The jury verdict awarded total just compensation of $7,985,150.

Other Information

The defendants' motion for litigation expenses was argued on Sept. 4, 2008 and the court denied the motion on Dec. 3, 2008. In denying the motion, the court ruled that the district was entitled to rely on its appraiser, and therefore despite the mathematical disparity between its final offer and the jury verdict, the final offer was reasonable. The defendants are considering an appeal of the denial of litigation expenses. FILING DATE: June 4, 2007.

Deliberation

two days

Length

two weeks