California Court of Appeals, First District, Third Division
City & County of San Francisco Super. Ct. No. CGC11507339 Ronald Evans Quidachay, Judge.
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Matteoni, O’Laughlin & Hechtman, Bradley M. Matteoni and Norman E. Matteoni for Defendants and Appellants.
Dennis J. Herrera, City Attorney, James Emery and Brian F. Crossman, Deputy City Attorneys for Plaintiff and Respondent.
In an eminent domain action, may a condemnor’s final pre-trial settlement offer, made 20 days before trial and contingent on obtaining approvals fro other government entities, be found reasonable under Code of Civil Procedure 1250.410,  and thus bar a defendant who rejects it from later recovering its litigation costs? The property owners here, Convenience Retailers and PCF Acquisitionco, LLC (jointly PCF), contend such a contingent offer from the City and County of San Francisco (the City) was unreasonable as a matter of law because it was conditioned on the approval of three different government bodies, thus providing no assurance that PCF’s acceptance would result in a pre-trial settlement. We agree. The City’s contingent settlement offer did not serve section 1250.410’s aims of encouraging the pretrial settlement of eminent domain actions and making property owners whole, and thus was not reasonable within the statute’s meaning. We therefore reverse the order denying PCF’s motion for litigation expenses and remand to the trial court for further proceedings.
Prior to this action, PCF was the owner of real property at the corner of 4th and Folsom Streets in San Francisco. Formerly a gas station, the site is the future site of the Central Subway’s Moscone station.
Following several years of negotiations and the exchange of proposed valuations for the property ranging from a low of $3, 800, 000 (from the City, on January 7, 2010) to a high of $10, 875, 000 (from PCF, on February 26, 2013), the parties were unable to reach a settlement. Twenty days before trial, pursuant to section 1250.410, the City made its final offer of compensation and PCF made its final demand. The City’s offer, for $5, 000, 000, was expressly made “contingent on the approval of the Federal Transportation Authority, the Board of Directors of the San Francisco Municipal Transportation Agency, and the San Francisco Board of Supervisors." PCF demanded $8, 600, 000 plus statutory costs and interest. The disparity between the offer and demand appears to be due primarily to differing views on the likelihood of rezoning and the cost of environmental remediation.
No settlement was reached, and the parties proceeded to trial. The jury determined the total compensation to be awarded for the property was $7, 319, 000, which reflected a fair market value of $7, 400, 000 minus $81, 000 for environmental remediation. PCF then moved to recover its litigation expenses under section 1250.410. The City opposed the motion on the grounds that its final ...