Jury's Award to San Diego County Landowner Gets Greatly Reduced
A state appellate court has greatly reduced the amount of damages that San Diego County must pay to a landowner in an inverse condemnation case. The court reduced a jury's award of $646,000 by $187,000 and directed the trial court to reconsider other costs included in the award.
The decision came in a Fourth District Court of Appeal, Division One, ruling that was only partially published.
In 1988, Dana Ferrell purchased land in Lakeside, 90% of which was in a floodplain. Although the land was zoned for agricultural and residential uses, Ferrell planned to develop a construction material recycling center on the site.
After Ferrell bought the property, his neighbor Reid Enniss began developing his own property by placing 800,000 cubic yards of fill dirt on the site to raise it above the floodplain. Enniss' construction increased the flow of water onto Ferrell's property. Enniss also did not grade his property according to approved plans and ended up grading the slope for a drainage channel on Ferrell's property.
Ferrell then sued Enniss and the county. Enniss paid Ferrell $60,000 to drop the suit. But Ferrell's inverse condemnation claim against the county went to trial. The trial court found that the county was liable for approving and accepting for public use Enniss' drainage improvements that increased the flow of water onto Ferrell's property. However, a jury awarded Ferrell no damages. On appeal, the Fourth District ruled in a 1998 unpublished opinion that the jury should not have had the option of awarding zero damages, and the Fourth District sent the case back to the Superior Court.
A second jury trial resulted in Ferrell winning an award of $646,000, including $189,000 for mitigation damages, $6,600 in ordinary costs, $1,890 in stipulated damages, $196,000 in prejudgment interest, and $252,000 for costs and expenses, including attorneys, appraisal and engineering fees.
Ferrell appealed again, arguing that the trial court improperly excluded his appraisal expert and that he was due additional costs and attorney's fees under Code of Civil Procedure § 1036. The county also appealed, contending that the trial court should have granted its request for a "judgment notwithstanding verdict." The county also argued that the jury awarded Ferrell excessive prejudgment interest and excessive costs and attorneys fees.
A unanimous three-judge appellate panel rejected Ferrell's appeal and accepted most of the county's arguments.
In considering Ferrell's appeal, the court held that Superior Court Judge Thomas R. Murphy correctly rejected Ferrell's request for $12,200 in "costs, disbursements and expenses" for such things as mileage, postage, telephone charges, meals and parking. In an unpublished portion of the opinion, the appellate court ruled that Murphy properly excluded Ferrell's appraisal expert - and eliminated his fees - because the expert's opinion "was based on an improper factual assumption." Also in the unpublished part of the case, the court held that Ferrell's request for $17,000 in attorneys fees from the first trial was too late.
In turning to the county's appeal, the court addressed the request for a "judgment notwithstanding the verdict" (JNOV). Most of this part of the ruling is in unpublished sections of the opinion.
The jury had awarded Ferrell $189,000 for costs he incurred while unsuccessfully applying for a use permit to develop his construction material recycling plant. Ferrell said the legal, engineering and environmental specialists' costs were incurred while he tried to mitigate the damages caused by the county's inverse condemnation.
But the appellate court said Ferrell's claim was bogus because he had intended to pursue the recycling facility all along. The use permit application would have allowed Ferrell to remedy the drainage problem created by Enniss, "but those features were merely incidental to the sole purpose of the [use permit] application from its inception - to allow Ferrell to develop the property for use as a recycling center as he intended on, and even before, the date he brought the property," Justice Alex McDonald wrote in the unpublished part of the ruling.
Because Ferrell did not prove that he suffered any economic loss or diminution of property value, the appellate court directed the trial court to award Ferrell $1 for nominal damages, plus the county's stipulated damages of $1,890. The appellate panel also directed to lower court to re-determine other costs and the prejudgment interest award.
Dana K. Ferrell v. County of San Diego, No. D034864, 01 C.D.O.S. 5757, 2001 DJDAR 7029. Filed June 8, 2001, certified for partial publication July 9, 2001.
For Ferrell: Michael H. Fish, McKenna and Cuneo, (619) 595-8088.
For the county, William A. Johnson Jr. and Timothy M. Barry, deputy county counsels, (619) 531-4847.