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People Ex Rel., Department of Transportation v. Balbir Sohal

January 7, 2011

PEOPLE EX REL., DEPARTMENT OF TRANSPORTATION, PLAINTIFF AND RESPONDENT,
v.
BALBIR SOHAL, DEFENDANT AND APPELLANT; DARREL AND JANE SMITH FAMILY PARTNERSHIP, DEFENDANT AND RESPONDENT.



(Super. Ct. No. CVCS071309)

The opinion of the court was delivered by: Blease , Acting P. J.

P. ex rel., DOT v. Sohal

CA3

NOT TO BE PUBLISHED

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

A roadway improvement project for Highway 99 in Sutter County required condemnation of a 70-acre prune orchard leased by appellant Balbir Sohal from respondent Darrel and Jane Smith Family Partnership (the Partnership). Sohal expected to harvest 10 more annual crops during the remainder of a lease that was cut short when the prune orchard was condemned by respondent, the State of California, acting by and through the Department of Transportation (the Department). Although the Department's right to condemn the property was uncontested, the parties proceeded to trial due to their inability to agree on valuation.

Sohal appeals from a directed verdict awarding him $93,000 as his total compensation for his leasehold interest. He contends his interest was worth more than a million dollars because he expected to reap 10 more years of harvests. He argues that his receipt only of the "bonus rent" arising from the favorable rent specified in his lease fails to adequately compensate him.

We shall affirm the trial court's judgment.

FACTUAL AND PROCEDURAL HISTORY

Condemnation

In July 2007, the Department initiated condemnation proceedings for the entirety of the property on which the prune orchard stood. December 2007 served as the date for valuation of the property.

Valuation

In July 1992, Sohal and the Partnership entered into a 25-year lease of 70 acres of rice fields. Sohal leveled the fields, installed irrigation, and planted prune trees. In 2007, Sohal's orchard was fully mature and productive. At the time of the taking, Sohal expected to harvest another 10 crops under terms of the lease.

The only witness to testify regarding valuation of interests in the property was the Partnership's expert, Richard Stover. Stover had 40 years' experience as a real estate appraiser. He reviewed the lease for the condemned property and determined that it was quite favorable to Sohal. Although most leases require the lessee-farmer to pay a quarter of the crop's gross value to the landowner, Sohal's lease specified rent in the lesser amount of (1) an eighth of each crop's gross, or (2) $11,900 per year as base rent plus an adjustment based on the consumer price index. Sohal secured the favorable rent terms on account of his initial investment in the orchard.

Stover testified that the present value of Sohal's advantageous rent term for the 10 years remaining on the lease amounted to $93,000. Because the property as a whole was worth $700,000, the Partnership was entitled to the remaining $603,000 as compensation for the taking.

On cross-examination, Sohal's counsel questioned Stover whether his opinion of the property value was affected by exhibits 26 and 27. Sohal introduced exhibits 26 and 27 into evidence to show calculations by Richland Enterprises LLC, which concluded that $1,193,055 constituted the "present value of this cash flow stream [from prune farming] at 6% interest for the next ten years." Stover testified that Sohal's ability to produce income from future crop harvests did not factor into the value of Sohal's ...


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