The Highest Price

You and your lawyer come into court and sit down for the beginning of your eminent domain trial.  You are worried. You have never experienced an eminent domain trial before. The government is displacing you from property that is your primary source of income, or from the property where you operate the business that earns bread for your family.  Even if you “win,” your life will be changed forever.

You wish you could tell the jury this—tell them how much this property is worth to you.  However, your lawyer tells you that the law does not allow this.  The personal impact of a taking on the displaced property owner or business is not admissible.  You don’t want to drag the case out by presenting evidence that might be excluded or might lead to a mistrial or appeal.  You want to get the most money you can that is fair and just, and move on with your life.

You wonder then—what is our theme?  What is the focus of our case to the jury?  In California eminent domain cases, the jury must award “fair market value” for the property taken.  California law defines “fair market value” for most cases as:

the highest price on the date of valuation that would be agreed to by a seller, being willing to sell but under no particular or urgent necessity for so doing, nor obliged to sell, and a buyer, being ready, willing, and able to buy but under no particular necessity for so doing, each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available.

(California Code of Civil Procedure 1263.320(a), emphasis added.)

The answer, then, is simple and short.  Your theme is “the highest price.” The jury will be pulling for you; but also the jury will want to act responsibly and follow the law.  Here, the law is clear. The jury must award the highest price that property would receive on the open market; not the “most probable” price (as is sometimes the definition applied in lenders’ appraisals).  You lawyer should ask the jury in jury questioning and opening statement to simply do what the law requires—no more and no less—in order to award Just Compensation as the constitution requires and avoid any mistrials or appeals.

This theme should be the focal point throughout the case.  If the government’s appraiser uses property sales at a lower value, it should be pointed out that the law requires the highest price.  If the government’s appraiser values the property as vacant agricultural land when it could reasonably (and without speculation) be used for higher value commercial purposes, it should be pointed out that the law requires the highest price.  If the government’s appraiser ignores the fact that the government’s project has itself depressed the value of the property taken, it should be pointed out that the law requires the highest price.

Does this mean that every property should be valued as if it were a Las Vegas casino or prime Manhattan Island property?  No. The definition quoted above specifically says that the willing buyer must be assumed to know all of the facts. That buyer would know that all properties are not alike and are not equally valuable.  That buyer would, therefore, know better than to pay MORE than “the highest price” under the conditions laid out in the statute quoted above.

Nevertheless, knowing buyers pay a range of prices for property.  Some buyers get better deals on certain properties but pay more on others.  This is so even though the properties are comparable. Under California law, the jury is required to award the “highest” such price.  That should be your theme and focus.

Government agencies are using their teams of experts to protect public projects. It is only prudent for property and business owners to do the same. Make us the legal part of your team. Our attorneys have over 40 years combined experience on representing property and business owners impacted by eminent domain. Contact us to schedule a free initial consultation.

 

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