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People ex rel Dep't of Transportation v. Acosta

October 26, 2009

THE PEOPLE EX REL. DEPARTMENT OF TRANSPORTATION, PLAINTIFF AND APPELLANT,
v.
MERCEDES ACOSTA ET AL., DEFENDANTS AND APPELLANTS.



APPEAL from a judgment of the Superior Court of San Joaquin County, Carter P. Holly, Judge. Affirmed. (Super. Ct. No. CV021454).

The opinion of the court was delivered by: Hull, J.

CERTIFIED FOR PARTIAL PUBLICATION*fn1

In this eminent domain proceeding, defendants Mercedes Acosta and Hammer 99, Inc. (hereafter collectively Acosta), the operator of a gas station and mini mart on a portion of the condemned property whose franchise was terminated as a result of the condemnation, sought an award of damages for lost goodwill pursuant to Code of Civil Procedure section 1263.510. (Unspecified section references that follow are to the Code of Civil Procedure.) Plaintiff California Department of Transportation (Caltrans), the condemner, asserted section 1263.510 is preempted by the Petroleum Marketing Practices Act (PMPA) (15 U.S.C. § 2800 et seq.), which limits a franchisee‟s recovery of goodwill to an allocation of any goodwill recovered by the franchisor.

After the trial court denied Caltrans‟ motion for summary adjudication on the goodwill claim and motion in limine to exclude evidence of goodwill damages, the parties entered into a stipulation for entry of judgment in the amount of $704,500. The court thereafter entered judgment accordingly and awarded Acosta litigation expenses pursuant to section 1250.410.

Caltrans appeals both the judgment and the order awarding litigation expense. Acosta has filed a protective cross-appeal regarding certain interlocutory orders of the trial court.

We conclude Acosta‟s claim for goodwill damages is not preempted by the PMPA and affirm the judgment. We further conclude the order awarding litigation expense is supported by substantial evidence.

FACTS AND PROCEEDINGS

On July 22, 2003, Caltrans filed a complaint in eminent domain to condemn property for the expansion of a highway interchange. Named as a defendant was Scannavino Properties I (Scannavino), the owner of the property. The complaint was later amended to add BP West Coast Products LLC (BP) and Acosta as defendants. BP Oil leased the subject premises from Scannavino, and Acosta subleased the premises from BP. Acosta also maintained a franchise relationship with BP to operate a gas station and mini mart on the premises.

On February 3, 2004, Acosta filed an answer to the complaint. On February 12, BP served upon Acosta a notice of termination of the franchise and sublease. In the notice, BP informed Acosta that, in the event it receives goodwill damages in the condemnation proceeding, it will apportion those damages between itself and Acosta. Acosta thereafter amended its answer to include a claim for lost goodwill.

Caltrans filed a demurrer and motion to strike Acosta‟s answer, asserting the goodwill claim is preempted by the PMPA. The trial court, with Judge Saiers presiding, sustained the demurrer without leave to amend. Acosta filed a motion for reconsideration and requested leave to amend. The trial court granted the motion and modified its order to allow leave to amend.

Acosta filed a second amended answer in which it asserted a right to goodwill damages under both section 1263.510 and the PMPA.

Caltrans again filed a demurrer and motion to strike based on federal preemption, and Judge Saiers again sustained the demurrer without leave to amend.

Caltrans and BP entered into a stipulation for entry of judgment whereby Caltrans agreed to pay BP $575,000 plus $100,000 for the removal of certain underground equipment. The trial court entered judgment accordingly. Caltrans also paid Scannavino $550,000 on its claims in the proceeding.

On September 27, 2005, BP assigned to Acosta whatever rights it might have to goodwill damages in the condemnation proceeding.

Acosta moved for leave to file a third amended answer, and the trial court granted the motion. In the third amended answer, Acosta asserted as a further basis for the recovery of goodwill damages the assignment by BP.

Caltrans again demurred and moved to strike the amended answer. However, this time Judge McNatt overruled the demurrer.

On November 8, 2006, Caltrans moved for summary adjudication of Acosta‟s goodwill claim. Caltrans argued Acosta‟s independent right to goodwill damages is preempted by the PMPA and BP has no goodwill claim to assign to Acosta because such claim was included in the stipulated judgment between Caltrans and BP.

On February 8, 2007, Judge Holly denied the motion for summary adjudication, concluding the PMPA does not preclude assignment of goodwill claims by a franchisor to a franchisee and there is a question of fact whether the stipulated judgment between Caltrans and BP was intended to include goodwill damages.

On February 13, 2007, Acosta filed a final demand for compensation in the amount of $705,000. Two days later, Caltrans submitted a final offer of compensation in the amount of $150,000.

Caltrans filed a motion in limine to exclude evidence of goodwill damages. Judge Holly denied the motion.

On March 26, 2008, Caltrans and Acosta entered into a stipulation for entry of judgment whereby Caltrans agreed to pay Acosta $704,500 on its goodwill claim but reserved the right to appeal the judgment with respect to issues of law. The trial court entered judgment as stipulated.

Acosta moved for an award of litigation expenses. The trial court granted the motion, concluding Acosta‟s final demand of $705,000 was reasonable whereas Caltrans‟ final offer of $150,000 was unreasonable. The court awarded Acosta $288,537.75 in litigation expenses and expert fees.

Caltrans appeals both the judgment and the order awarding litigation expenses. Acosta filed a protective cross-appeal regarding Judge Saiers‟s earlier rulings on the demurrers.

DISCUSSION

I. Reconsideration of Prior Rulings

Caltrans contends Judge Holly violated section 1008 when he reconsidered the prior rulings of Judge Saiers and concluded Acosta‟s claim for goodwill damages is not preempted by the PMPA. Section 1008 applies to all applications to reconsider prior, interim rulings (Le Francois v. Goel (2005) 35 Cal.4th 1094, 1098) and requires that such applications be based on "new or different facts, circumstances, or law." (ยง 1008, subds. (a),(b).) Caltrans argues there were no new facts, circumstances ...


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