Two important cases were published in December 2020 by the California Court of Appeal that have particular relevance to BDG’s public entity clients. The first case, entitled San Joaquin Regional Transit District v. Superior Court (DSS-2731 Myrtle) et al., was an eminent domain case concerning a condemnee’s recovery of damages when a condemning public entity abandons a taking, but the defendant moved from the property before the abandonment. The second case, entitled Menges v. Department of Transportation, concerned the defense of design immunity, and the level of proof required to successfully invoke the immunity at the summary judgment stage.
San Joaquin Regional Transit District v. Superior Court
San Joaquin Regional Transit District v. Superior Court (DSS-2731 Myrtle) et al. was originally decided on December 1, 2020, but was later ordered published on December 28, 2020. In San Joaquin, the San Joaquin Regional Transit District (“District”) filed an eminent domain complaint in 2010 to condemn a parcel in Stockton, California. Thereafter, in April 2011, a stipulated order of possession gave legal possession of the parcel to the District with a right of co-defendant Sardee Industries, Inc. (“Sardee”) to occupy a portion of the property as it explored options for a new facility, to wind down its operations and to move elsewhere. Under the stipulated order, Sardee could occupy the property without charge until March 2012 and until June 30, 2012 by payment of rent. By March 2012, most of Sardee’s equipment and operations had been relocated to Illinois; the only machine items left on the property had been packed and were ready for shipment to Sardee’s new location in Illinois. In April 2012, the District abandoned its condemnation action. Following dismissal of the action, Sardee sought damages under Code of Civil Procedure section 1268.620, which permits an award of damages under prescribed circumstances “after the defendant moves from property in compliance with an order or agreement for possession or in reasonable contemplation of its taking.” (CCP § 1268.620.) At the trial court level, the District argued that complete physical dispossession of the property was a prerequisite to an award of damages under CCP § 1268.620. The trial court disagreed to this all-or-nothing interpretation and concluded that Sardee should be permitted to present its damage claim to a jury. The District appealed before a jury could consider Sardee’s damages claim.
The issue for the Court of Appeal in San Joaquin was the interpretation of the phrase “after the defendant moves from property” found within CCP § 1268.620. The court noted that the statute only requires that the defendant must “move from” the property; the statute does not require the wholesale physical dispossession of the property. Moreover, on the facts, it concluded that there was “[s]ufficient evidence [to] support the [trial] court’s finding that Sardee had moved from the property,” including evidence that (1) the District had taken physical possession of the northern portion of the parcel; (2) Sardee was paying rent to the District; (3) No taxes were being imposed by the County Tax Assessor; (4) Sardee had physically moved almost everything it needed to move from Stockton to Illinois to perform all of Sardee Stockton’s manufacturing operations in Illinois; (5) The Sardee Stockton facility on the southern portion of the parcel was almost empty; and (6) Sardee spent money in preparing for and processing the move; and (7) Sardee was almost finished with the move to Illinois.
Our main takeaway from San Joaquin is that California courts will err on the side of making the condemnee whole when a public entity abandons a taking. Accordingly, public entities should be as certain as they can be about the necessity for the taking, along with project funding, before formally instituting eminent domain proceedings, because the financial consequences for abandoning condemned property may be very steep.
You may review the full opinion in San Joaquin here.
Menges v. Department of Transportation
Menges v. Department of Transportation was both decided and certified for publication on December 24, 2020. In Menges, the plaintiff suffered catastrophic injuries from a motor vehicle accident. Plaintiff sued the California Department of Transportation (“Caltrans”), alleging negligent construction of its interstate off-ramp, which Plaintiff alleged caused the accident. Caltrans moved for summary judgment, asserting design immunity. The trial court granted Caltrans’s motion for summary judgment. On appeal, Plaintiff asserted that the trial court erred because (1) design immunity should not apply since the approved design plans were unreasonable, and (2) the construction of the interstate off-ramp did not match the previously approved design plans. On both arguments, the Menges court held that these two arguments lacked merit.
As to the Plaintiff’s first argument: “A public entity claiming design immunity must establish three elements: (1) a causal relationship between the plan or design and the accident; (2) discretionary approval of the plan or design prior to construction; and (3) substantial evidence supporting the reasonableness of the plan or design.” The third element was the main element on appeal in Menges. The Menges court affirmed longstanding precedent: “‘[A]s long as reasonable minds can differ concerning whether a design should have been approved, then the governmental entity must be granted immunity. The statute does not require that property be perfectly designed, only that it be given a design which is reasonable under the circumstances.” The court’s role in evaluating the third element of the design immunity, even during summary judgment, is not to provide a de novo interpretation of the design, but instead to decide whether there is “any substantial evidence” supporting its reasonableness. “A mere conflict in the testimony of expert witnesses provides no justification for the matter to go to a lay jury who will then secondguess the judgment of skilled public officials.” On the facts, given the standard of review in this specific scenario, the Menges court concluded that Caltrans provided substantial evidence to support discretionary approval of the design plans, an expert opinion as to the reasonableness of the design, and evidence the design complied with California’s approved standards. That was enough to satisfy the third element of design immunity.
As to the Plaintiff’s second argument: Plaintiff asserted that design immunity did not apply because: (1) A “Must Exit” sign was not moved as required by the plans; (2) the gore area (a triangular space separating I-5 and the off-ramp) was not striped to plan specifications; and (3) the channelizer striping was incorrect. The Plaintiff argued that Caltrans never established a design immunity defense because the construction did not conform to the approved plans. The Menges court disagreed: “Substantial conformance” with the design plans is all that is required in order to successfully invoke design immunity; a minor deviation from the approved plan as designed will not preclude the application of design immunity. On the facts, the Menges court held that Caltrans’s evidence demonstrated there was substantial conformance with the design plans, and that because Plaintiff’s experts failed to raise a triable issue of material fact that Caltrans did not substantially conform to the design plans, summary judgment was appropriate.
Overall, Menges is a good case for public entities because it shows the strength of invoking design immunity at the summary judgment stage. Public entities may invoke design immunity, even if there is a disagreement among experts. Moreover, we believe that Menges can apply to any case where the plaintiff alleges an “injury” – Menges is not limited to the fact that it was a personal injury case. We firmly believe that Menges can apply to property damage cases as well.
You may review the full opinion in Menges here.