Following the grant of a motion in limine to exclude the testimony of the defense appraiser in this action for eminent domain, the parties stipulated to a valuation of the real property in the amount the appraiser for plaintiff County of Glenn (the County) had set, and the trial court entered judgment in accordance with this stipulation. Defendant Patrick Foley, trustee of a marital trust holding fee title to the subject property, filed a timely notice of appeal.
The County submitted the following facts in support of its July 2010 motion in limine. It has been renting nearly 200 acres on Foley's property for use as a landfill since 1971. In 2008, the board of supervisors determined that the County should acquire a fee interest in the existing leased land (which was nearing capacity) along with additional acreage around it (to enlarge it and maintain a buffer zone), and to take title to incidental acreage that would otherwise become landlocked as a result of the County's acquisition of the landfill, expansion zone, and buffer zone. It therefore filed the eminent domain action in February 2009, seeking to acquire approximately 439 acres.
As described in the report of the defense expert, Gregory House, the subject property at issue is located in a rural agriculturally productive area that is "well-suited to a variety of crops, including fruit and nut orchards" if "sufficient irrigation is available and soil quality is not a limitation." In the area generally surrounding the subject property, the agricultural uses include rice, row crops, olive orchards, almond orchards, and livestock grazing (which is the current use for the subject property adjacent to the present landfill). The soil ratings for the property are II to IV on one scale (I being the best, and V to VIII being unsuitable for agriculture) and an average of 39.5 on the other scale (100 being optimal). Well water sufficient to sustain 400 acres of olives is available at a cost of about $245,000. Because "the anticipated return from an orchard use compared to grazing exceeds the cost to develop the necessary irrigation supply, ... the highest and best use of the subject [land] is orchard land such as olives."
House identified seven comparable sales in the period of 2006 to 2008.
In contrast, the County's expert, Ray Howard, believed the status quo of grazing land was the best and highest use of the gently rolling topography of the subject property. In support of this conclusion, Howard noted only that the soil types present on the subject property generally lent themselves to pasture use; he did not discuss whether a conversion to orchards was feasible. Based on the sales price of nine comparable plots of grazing land, Howard set the reasonable value of the subject property at approximately $637,000.
In its motion in limine, the County contended that House's valuations of the "non-land components" on the comparable properties was a violation of Evidence Code section 822, subdivision (a)(4) (hereafter section 822(a)(4)).
In its initial ruling, the trial court agreed that House's adjustments to the values of the comparable properties violated section 822, citing Emeryville Redevelopment Agency v. Harcros Pigments, Inc. (2002) 101 Cal.App.4th 1083 [125 Cal.Rptr.2d 12] (Emeryville). In response to a request for "clarification" from the County regarding the alternative basis for its motion in limine (§ 816), the trial court issued an amended ruling in which it concluded the subject property's character (rolling hills, without irrigation) was not comparable to the other sales on which "plaintiff" (sic) relied, because it was not cost effective to improve the property for olive orchards.
Thus, if the trial court was correct in concluding that House used an improper methodology, the constitutional guarantee of a jury trial on the valuation issue would not be a bar to the exclusion of the expert's opinion. On the other hand, if the trial court erred in its application of the Evidence Code, the addition of a constitutional gloss would not add anything to our analysis. We therefore do not address the question further.
Although we ordinarily review a trial court's decision to exclude evidence for an abuse of discretion (9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, § 363, par. (8), p. 419), when the nonstatutory procedure of a motion in limine strays beyond its traditional confines and results in the entire elimination of a cause of action or a defense, we treat it as a demurrer to the evidence and review the motion de novo, lest it be used to evade the more exacting standards for such a motion. (Amtower v. Photon Dynamics, Inc. (2008) 158 Cal.App.4th 1582, 1593-1595 [71 Cal.Rptr.3d 361].)
Foley contends the trial court could not properly consider the Howard deposition that was not submitted to it in connection with the motion in
In a 1960 report that was the basis for the predecessor of the present Evidence Code provision, the California Law Revision Commission noted that opinions regarding the value of comparable property (as opposed to objective evidence such as sales price) should be excluded from determining just compensation "because their consideration would require the determination of many other collateral questions ... which would unduly prolong the trial of condemnation cases. Opinion evidence on value should be confined to opinions of the value of the property being taken ...." (Recommendation and Study Relating to Evidence in Eminent Domain Proceedings (Oct. 1960) 3 Cal. Law Revision Com. Rep. (1961) p. A-8; accord, Sacramento & San Joaquin Drainage Dist. v. Jarvis (1959) 51 Cal.2d 799, 804 & fn. 3 [336 P.2d 530]; 1 Witkin, Cal. Evidence (4th ed. 2000) Opinion Evidence, § 98, p. 646, § 116, p. 661 (Witkin); see City of Corona v. Liston Brick Co. (2012) 208 Cal.App.4th 536, 542 [145 Cal.Rptr.3d 702] [§ 822(a)(4) exclusion is known as "`the rule against appraising the comparable'"].)
In the present case, the values of the comparable properties House identified are tied to an objective measure: their sales price. The County did not challenge the House adjustment to a sales price on the basis of his methodology in accounting for any material differences. Rather, it asserted his adjustment opinions were inadmissible qua opinions under section 822. This flies in the face of the distinction drawn in Merced Irrigation (and in our Stevenson opinion) between pure opinions of value and opinions regarding the need to adjust a sales price with various factors.
We do not discern any basis in Emeryville to support the trial court's ruling under section 822. In Emeryville, there was a particular comparable sale that yielded an objective value per square foot based on the total sales price. However, the parties to the transaction (a commercial "big box" project) included a recital in their contract, which divided the project along an intersecting municipal boundary and allocated a much higher portion of the purchase price to the part in Emeryville than the part in Oakland. The defendant's appraiser then based his value of the condemned property on this higher value. (Emeryville, supra, 101 Cal.App.4th at p. 1100.) The trial court allowed use of the recital as a basis for assigning a higher value to the sales price of the comparable property. (Id. at pp. 1100-1101.) The Emeryville court concluded the appraiser had simply incorporated the opinion of the parties to the comparable transaction as to the proper allocation of value between the portions of the property, which did not have any objective arm's-length basis, and thus violated the prescription in section 822. (Emeryville, at pp. 1101-1102.)
The comparable sales included in the House appraisal that involved orchard properties, while differing as expected in certain circumstances, cannot be said to be incapable of shedding light (in the form of a rational inference) on the value of the Foley land if converted to orchard use. While there might be arguments pro and con regarding the value of improvements not present on the Foley land, ultimately there do not appear to be insurmountable obstacles to a jury being able to derive a rational value of the comparable properties as bare land.
The County focuses on the prior use of several of the properties to grow row crops, all of which were converted to olive orchards after the sale. It points to House's deposition testimony that there is a higher value for a property with row crop use than the grazing use on the subject property, and the unsuitability of row crop use on the subject property. This, however, is a nonsequitur. The unsuitability of the subject property for the use of row crops does not prevent a rational inference about its value when used for olive orchards. In fact, that crop land was converted to olive orchards indicates that is an even more desirable use of the property.
In short (at the risk of mixing metaphors), the proffered comparable sales did not present the risk of comparing apples with oranges (or high-density residential property with barren land). It was a comparison of a feasible use of the subject property with recent sales of property used for that purpose, with the differential for the costs of improvements either documented in university studies (the cost of establishing the orchards) or not impossible to determine (the other improvements). As a result, these other sales had some tendency in logic to prove the value of the subject property sufficient to make it a jury question, and consequently they are not subject to exclusion under section 816.
The judgment is reversed and the matter remanded with the direction to issue a new order denying the County's motion in limine in its entirety. Foley shall recover his costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1), (2).)
Hull, Acting P. J., and Robie, J., concurred.
Section 822 provides, in pertinent part: "In an eminent domain ... proceeding ..., the following matter is inadmissible as evidence and shall not be taken into account as a basis for an opinion as to the value of property: [¶] ... [¶] (4) An opinion as to the value of any property or property interest other than that being valued." (§ 822(a)(4), italics added.)