“Final” Offers And Demands Under Code Of Civil Procedure 1250.410:
Recovery Of Litigation Expenses And Attorney’s Fees
California law provides many opportunities for settlement during the eminent domain process. Of course, even before filing an eminent domain lawsuit, the Government must make a written offer based on an appraisal. Furthermore, typically the court will order the parties to participate in a mediation or settlement conference before trial. Finally, California law provides for a “final” offer and a “final” demand to be exchanged at least 20 days prior to the date of the trial of the issue of how much compensation should be paid.
Ordinarily, attorney’s fees and other litigation expenses are not recoverable in eminent domain. However, the statutory “final” offer and demand procedure is a very narrow exception. Within 30 days of the date of entry of the judgment for compensation, a property or business owner may move for an award of attorney’s fees and litigation expenses under this “final” offer and demand procedure. The court may grant the motion if it finds that, “in light of the evidence admitted and the compensation awarded”: (a) the “final” offers and demands were timely made; (b) the Government’s “final” offer was unreasonable; and (c) the property/business owner’s “final” demand was reasonable. All of these conditions must be found by the trial court.
Of course, the term “final” is a complete misnomer. Nothing is “final” when it comes to settlement. Negotiations can, and often do, continue after the so-called “final” statutory offer and demand, sometimes up to the point where the jury is about to render its verdict. Nevertheless, the statutory “final” offer and demand are the only offers and demands that “shall be considered by the court on the issue of determining entitlement to litigation expenses.” Therefore, even if later offers and demands are reasonable, the court may still only award litigation expenses if the official, statutory “final” offer was unreasonable and the official, statutory “final” demand was reasonable.
However, this statutorily required exchange of offers and demands also often helps lead to a truly “final” settlement, because it can put pressure on the Government to settle to avoid an award of attorney’s fees and litigation expenses, even though such awards are rare. In short, if the “final” demand is crafted so that it takes a reasonable position between the extremes of the opposing appraisals, the Government may accept it to avoid the risk of an award of attorney’s fees and litigation expenses. Careful crafting then can help your case.