People Ex Rel. Department of Public Works v. Hayward Building Materials Co.

213 Cal. App. 2d 457, 28 Cal. Rptr. 782, 1963 Cal. App. LEXIS 2752
CourtCalifornia Court of Appeal
DecidedFebruary 28, 1963
DocketCiv. 20367
StatusPublished
Cited by22 cases

This text of 213 Cal. App. 2d 457 (People Ex Rel. Department of Public Works v. Hayward Building Materials Co.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
People Ex Rel. Department of Public Works v. Hayward Building Materials Co., 213 Cal. App. 2d 457, 28 Cal. Rptr. 782, 1963 Cal. App. LEXIS 2752 (Cal. Ct. App. 1963).

Opinion

SULLIVAN, J.

This is an eminent domain proceeding brought to acquire for highway purposes certain real property and improvements owned by the appellant Hayward Building Materials Co. The property condemned, referred to in this proceeding as parcel 25, has an area of 18,992 square feet. It is part of a larger parcel owned by appellant, the total area of which is 84,898 square feet. The remainder, not acquired by the state, therefore has an area of 65,906 square feet.

All of the property, both parcel 25 and the remainder, was improved and used as a building materials plant and sales yard. At the commencement of the instant action it was operated by Pacific Cement & Aggregates, Inc. under a lease from appellant. A disclaimer and waiver by such lessee of any interest in the award was filed in the court below on the first day of the trial. There was also filed at the same timé a stipulation entered into between the parties that the fair market value of parcel 25, of the improvements thereon, and of a certain building owned by appellant but located on an adjoining railroad right-of-way, was the sum of $42,520. 1 In accordance with additional provisions of the stipulation, the amount of severance damages was left for the determina *460 tion of the jury. The jury rendered a verdict awarding appellant the sum of $42,520 pursuant to the above stipulation and in addition the sum of $20,530 as severance damages. Such amounts were thereafter incorporated in the court’s findings of fact and conclusions of law, and the total thereof, or the sum of $63,050, included in the judgment of condemnation. The appellant has appealed from such judgment.

Appellant’s principal attack is directed against the expert testimony on severance damages. As the court instructed the jury, severance damage “is that damage measured in terms of market value, which will accrue to the remaining portion of the larger parcel, of which the land taken is a part, by reason of its severance from the land sought to be condemned and the construction of the improvement in the manner proposed by the plaintiff. ” In a word, it is the damage to the remaining 65,906 square feet after the taking by the state of parcel 25. The record shows that in the determination of such damage the witnesses for both parties faced the subsidiary question whether the remainder in its “after” condition was or could be made capable of accommodating the continued functioning of a building materials plant and sales yard. In their analysis of this question such witnesses were in agreement that certain improvements located on parcel 25 (acquired by the state) would have to be replaced on the remaining parcel so that the above business operation could continue. However, the parties accepted the premise that the improvements actually located on parcel 25 could not themselves be physically removed therefrom and relocated on the remainder. The replacement of such improvements therefore appears to have meant their reconstruction on the remaining parcel.

Replacement and reconstruction of improvements on the remainder parcel posed the related problem of making the latter parcel capable of accommodating them to the end of preserving an efficient operation. Evidence was therefore introduced pointing up the necessary relocation or removal of existing facilities on the remainder so as to provide for the replacements and other construction required therewith, as for example appropriate changes in paving, fencing, and spur trackage. It is from the costs thus occurring and from the treatment of such costs in the expert testimony that the present controversy arises.

The state presented its expert testimony on severance dam *461 ages through the witnesses Maury Holmes and David Simmons, both qualified real estate appraisers. Both witnesses in turn relied heavily on the testimony and report of Professor Oglesby, a qualified industrial engineer, which proposed certain plans of reconstruction and set forth certain data bearing on the cost of reconstruction. Both witnesses emploj’ed two separate approaches to severance damages: first, a cost analysis or so-called “cost to cure” approach and secondly, an income analysis or income approach.

Holmes testified to severance damages in the amount of $22,900. 2 He qualified such testimony by stating that if a certain old shop building could be utilized, the total severance damage would be only $17,000. On appeal, appellant appears to have considered the larger figure. Using the first method of cost analysis, Holmes first segregated those items of parcel 25 which were “removed and replaced” from those items ‘ ‘ removed and not replaced. ’ ’ The former category embraced items for which substitute facilities would be constructed on the remaining parcel in order to continue the operation. Within the latter category were the other items acquired by the state for which no substitutes were to be constructed; illustrative of these, was the land of parcel 25. Holmes’ cost analysis or cost to cure approach can be summarized as

follows:

Cost of land and improvements removed but not replaced (i.e., with substitute facilities on the remainder parcel) ....................... $29,940
Cost of improvements removed and replaced (i.e., cost of restoration of substitute facilities on remainder parcel) ..................... 35,480 3
Total...............................$65,420
Less stipulated value of land and improvements “taken” by the state..................... 42,500
Severance damage ......................... $22,920
“rounded out” by the witness to............$22,900

*462 A summary of Holmes’ income analysis, employed as a .second method of arriving at severance damage, is as follows:

Value of entire property in “before” condition ..................................$245,000 4
Less stipulated value of land and improvements “taken”................................ 42,500
Value of remainder in “before” condition.. .. 202,500
Cost of restoration (“cost to cure”) ......... 35,480
Value of remainder as restored.............. 237,980
Value of remainder in after condition........ 216,000 5
Severance damage .........................$ 21,980 6

The witness David Simmons, as we have already pointed out, used two similar approaches to the problem. His cost analysis or cost to cure approach produced a severance damage figure in the sum of $14,660.

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Bluebook (online)
213 Cal. App. 2d 457, 28 Cal. Rptr. 782, 1963 Cal. App. LEXIS 2752, Counsel Stack Legal Research, https://law.counselstack.com/opinion/people-ex-rel-department-of-public-works-v-hayward-building-materials-co-calctapp-1963.