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Property Reserve, Inc. v. Superior Court (Department of Water Resources)

California Court of Appeals, Third District

December 16, 2016

PROPERTY RESERVE, INC., Petitioner;
v.
THE SUPERIOR COURT OF SAN JOAQUIN COUNTY, Respondent; DEPARTMENT OF WATER RESOURCES, Real Party in Interest. CAROLYN A. NICHOLS, as Trustee, etc., et al., Petitioners, DEPARTMENT OF WATER RESOURCES, Real Party in Interest. CAROLYN A. NICHOLS, as Trustee, etc., et al., Petitioners,
v.
THE SUPERIOR COURT OF SAN JOAQUIN COUNTY, Respondent; DEPARTMENT OF WATER RESOURCES, Real Party in Interest. COORDINATED PROCEEDINGS SPECIAL TITLE (RULE 3.550) DEPARTMENT OF WATER RESOURCES CASES

         OPINION ON REMAND from the California Supreme Court (case No. S217738). APPEAL from a judgment of the Superior Court of San Joaquin County and ORIGINAL PROCEEDINGS in mandate and prohibition, JCCP No. 4594, John P. Farrell, Judge. (Retired judge of the L.A. S.Ct. assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution. ).

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          COUNSEL

         Matteoni, O'Laughlin & Hechtman, Norman E. Matteoni, Gerry Houlihan; Kirton & McConkie and Christopher S. Hill for Petitioner Property Reserve, Inc.

         Freeman, D'Aiuto, Pierce, Gurev, Keeling & Wolf, Thomas H. Keeling, Arnold J. Wolf; Nomellini, Grilli & McDaniel and Dante J. Nomelini, Jr., for Petitioners Mark G. Scribner, Jr., Randy J. Baranek, Siara Andrews, J.H. Jonson & Sons, Inc., Arnaudo Bros., Delta Wetlands Properties, The 2000 tevelde Family Trust, The Biagi Living Trust Agreement, The Carolyn Nichols Revocable Living Trust dated 12/09/1999, Carolyn A. Nichols, as Trustee, Venice Island, Coney Island Farms, Inc., Robert A. DalPorto, Jr., Islands, Inc., Richard Brann, as Trustee, S.S. & S.M. Oates Family Trust, Wilson Vineyard Properties, Eileen V. Nichols Revocable Living Trust dated

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12/09/1999, Eileen V. Nichols, as Trustee, Victoria Island, L.P., Lucille L. Christensen Family Trust dated 8/31/2004, Lucille J. Christensen, as Trustee, Smith and Karen Cunningham, Zuckerman Mandeville, Inc., and Heritage Land Co., Inc.

         Downey Brand and Scott D. McElhern for Petitioners CCRC Farms, LLC, and Tuscany Research Institute.

         Somach Simmons & Dunn, Stuart L. Somach and Daniel Kelly for Petitioners Sutter Home Winery, Inc., and Delta Ranch Partnership.

         J. David Breemer and Jonathan Wood for Pacific Legal Foundation as Amicus Curiae on behalf of Petitioners.

         Luke A. Wake; Damon Key Leong Kupchak Hastert, Robert H. Thomas; Manatt, Phelps & Phillips and Edward G. Burg for Owners' Counsel of America and National Federation of Independent Business Small Business Legal Center as Amici Curiae on behalf of Petitioners.

         Jenny & Jenny and Scott E. Jenny as Amici Curiae on behalf of Petitioners.

         Nancy N. McDonough and Kari E. Fisher for California Farm Bureau Federation as Amicus Curiae on behalf of Petitioners.

         No appearance for Respondent.

         Kamala D. Harris, Attorney General, Steven M. Gevercer and Kristin G. Hogue, Assistant Attorneys General, Alberto González, John M. Feser, Jr., Michael P. Cayaban, James C. Phillips, Neli N. Palma and Gregory D. Brown, Deputy Attorneys General, for Real Party in Interest Department of Water Resources.

         Jeanne Scherer, David Gossage and Lucille Y. Baca for Department of Transportation as Amicus Curiae on behalf of Real Party in Interest.

         Meyers, Nave, Riback, Silver & Wilson and David W. Skinner for League of California Cities, California State Association of Counties and Association of California Water Agencies as Amici Curiae on behalf of Real Party in Interest.

         Woodruff, Spradlin & Smart, Gary C. Weisberg and Laura A. Morgan for Orange County Transportation Authority as Amicus Curiae on behalf of Real Party in Interest.

         Stephanie D. Morris for State Water Contractors as Amicus Curiae on behalf of Real Party in Interest.

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         Best, Best & Krieger and Kendall H. MacVey for Riverside County Transportation Commission as Amicus Curiae on behalf of Real Party in Interest.

          OPINION

          [212 Cal.Rptr.3d 26] NICHOLSON, J.

          In Property Reserve, Inc. v. Superior Court (2016) 1 Cal.5th 151 [204 Cal.Rptr.3d 770');">204 Cal.Rptr.3d 770, 375 P.3d 887] ( Property Reserve I ), the California Supreme Court reversed a decision of this court and remanded the matter for us to consider issues we had not addressed. We address them now. The Department of Water Resources (Department) petitioned the trial court for orders authorizing it to enter onto various properties to conduct precondemnation studies and surveys. Before the trial court convened a hearing on the matter, the landowners requested to conduct discovery. The trial court denied the request, ruling the proceeding was exempt from discovery. The landowners also objected to the Department not naming allegedly indispensable parties. The trial court held the rules governing indispensable parties did not apply to this matter, but it ordered the parties to notify all the persons and entities the landowners claimed were indispensable parties.

         The landowners both petitioned for writ relief against, and appealed from, the trial court's award of an entry order, challenging the constitutionality of the precondemnation entry statutes and attacking the court's decisions to deny discovery and not order the joinder of indispensable parties. Property Reserve I resolved the constitutional issues, but the high court directed us to address the landowners' claims against the trial court's rulings on discovery and indispensable parties.

         We conclude the trial court erred in holding the proceeding was exempt from discovery, but we also find the landowners have not shown prejudicial error. We also conclude the landowners' contention regarding indispensable parties is moot, as the trial court gave the landowners all of the relief they sought and which we could have provided. We affirm.

         STATUTORY BACKGROUND

         Before proceeding, we reacquaint the reader with the precondemnation entry statutes and the process they prescribe for authorizing precondemnation entries onto property, as explained by the Supreme Court. " [Code of Civil Procedure] Section 1245.010 sets forth the general authority granted to public entities by the precondemnation entry and testing statutes.[1] It provides:

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'Subject to requirements of this article, any person authorized to acquire property for a particular use by eminent domain may enter upon property to make photographs, studies, surveys, examinations, tests, soundings, borings, samplings, or appraisals or to engage in similar activities reasonably related to acquisition or use of the property for that use.' ( Ibid. )

         " Section 1245.020 establishes the circumstances under which the property owner's consent or, alternatively, a court order is required before a public entity can enter property to conduct precondemnation testing. The section provides: 'In any case in which the entry and activities mentioned in Section 1245.010 will subject the person having the power of eminent domain to liability under Section 1245.060, before making such entry and undertaking such activities, the person shall secure: [¶ ] (a) The written consent of the owner to enter upon his property and to undertake such activities; or [¶ ] (b) An order for entry from the superior court in accordance with Section 1245.030.' ( Ibid. )" ( Property Reserve I, supra, 1 Cal.5th at p. 175.)

          [212 Cal.Rptr.3d 27] " Section 1245.030 sets forth the procedure governing an order for entry. The section provides: '(a) The person seeking to enter upon the property may petition the court for an order permitting the entry and shall give such prior notice to the owner of the property as the court determines is appropriate under the circumstances of the particular case. [¶ ] (b) Upon such petition and after such notice has been given, the court shall determine the purpose for the entry, the nature and scope of the activities reasonably necessary to accomplish such purpose, and the probable amount of compensation to be paid to the owner of the property for the actual damage to the property and interference with its possession and use. [¶ ] (c) After such determination, the court may issue its order permitting the entry. The order shall prescribe the purpose for the entry and the nature and scope of the activities to be undertaken and shall require the person seeking to enter to deposit with the court the probable amount of compensation.' ( Ibid. )

         " Although section 1245.030 does not explicitly require the trial court to hold a hearing and afford the property owner an opportunity to present evidence relevant to the factors that the court is required to consider under section 1245.030, we conclude a hearing and an opportunity to be heard on a public entity's entry petition is clearly contemplated by and implicit in the statutory scheme. The notice to the property owner required by section 1245.030 would make little sense if the owner had no ability to respond to the notice and make its views known prior to the issuance of any order, and the very next section--section 1245.040--explicitly provides that the court may modify any order entered under section 1245.030 'after notice and hearing ' (§ 1245.040, subd. (a), italics added)." ( Property Reserve I, supra, 1 Cal.5th at pp. 175-176.)

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         " Section 1245.040 authorizes the trial court, after notice and hearing, to modify any order entered under section 1245.030 and to require the public entity to deposit additional funds if it determines the initial deposit is inadequate. The section provides: '(a) The court, after notice and hearing, may modify any of the provisions of an order made under Section 1245.030. [¶ ] (b) If the amount required to be deposited is increased by an order of modification, the court shall specify the time within which the additional amount shall be deposited and may direct that any further entry or that specified activities under the order as modified be stayed until the additional amount has been deposited.' (§ 1245.040.)

         " Section 1245.050 governs the deposited funds. It provides: '(a) Unless sooner disbursed by court order, the amount deposited under this article shall be retained on deposit for six months following the termination of the entry. The period of retention may be extended by the court for good cause. [¶ ] (b) The deposit shall be made in the Condemnation Deposits Fund in the State Treasury or, upon the written request of the plaintiff filed with the deposit, in the county treasury. ...' ( Ibid. )

         " Finally, section 1245.060 addresses the property owner's right to recover damages. The section provides: '(a) If the entry and activities upon property cause actual damage to or substantial interference with the possession or use of the property, whether or not a claim has been presented in compliance with [the California Tort Claims Act presentation requirements], the owner may recover for such damage or interference in a civil action or by application to the court under subdivision (c). [¶ ] (b) The prevailing claimant in an action or proceeding under this section shall be awarded his costs and, if the court finds that any [212 Cal.Rptr.3d 28] of the following occurred, his litigation expenses incurred in proceedings under this article: [¶ ] (1) The entry was unlawful. [¶ ] (2) The entry was lawful but the activities upon the property were abusive or lacking in due regard for the interests of the owner. [¶ ] (3) There was a failure substantially to comply with the terms of an order made under Section 1245.030 or 1245.040. [¶ ] (c) If funds are on deposit under this article, upon application of the owner, the court shall determine and award the amount the owner is entitled to recover under this section and shall order such amount paid out of the funds on deposit. If the funds on deposit are insufficient to pay the full amount of the award, the court shall enter judgment for the unpaid portion. [¶ ] (d) Nothing in this section affects the availability of any other remedy the owner may have for the damaging of his property.' ( Ibid. )" ( Property Reserve I, supra, 1 Cal.5th at pp. 176-177.)

         In order to bring this proceeding into compliance with the California Constitution, the Supreme Court reformed section 1245.060, subdivision (c), " to afford the property ...


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