State of California v. Anderprises, Inc. – $26M

Condemnation & Eminent Domain

Case Summary:

Caltrans contended that the Andersons had never intended to develop the property and that the property was, at best, valued as a speculative investment that would probably always be open space.

Plaintiff’s Technical Expert Witnesses:

Michael F. Waldron
MAI Waldron & Associates, Inc.
205 S. Orange Street, Suite 100 Orange, CA 92866

Anthony G. Ambrose
AICP Burkett & Wong Engineers
3434 Fourth Avenue San Diego, CA 92103

Norman C. Arndt
PE Rick Engineering Company
5620 Friars Road San Diego, CA 92110

Bruce April
State of California Department of Transportation
4050 Taylor Street San Diego, CA 92110

Defendant’s Technical Expert Witnesses:

Albert A. Schlarmann
Appraisal Research Company
257 North First Street, Suite 7 San Jose, CA 95113

Patrick Kennedy
655 West Broadway, Suite 1300 San Diego, CA 92101

Vincent N. Scheidt
Consulting Environmental Biologist
3158 Occidental Street San Diego, CA 92122

Michael Pallamary
Pallamary & Associates
7755 Fay Avenue La Jolla, CA 92037

Facts and Background:

The Andersons acquired 208 acres in Otay Mesa in 1974. They had lived through the Great Depression and were distrusting of stocks but saw significant value in real property. They engaged in a search for property that would sell for much less than it would eventually be worth as San Diego County developed. During the 1980’s, the Mesa was under a development stay because the City was planning for the potential development of an International airport in the area. When that stay was lifted, the Andersons engaged Kimley Horn to develop plans for building a residential development on the property. Before that process was completed, however, Caltrans announced its plan to construct the 905 and cut off the property’s access. The Andersons switched from active development plans to discussions with Caltrans about how access to their property would exist in the after condition. At that time, Caltrans was representing that the freeway would be built beginning in 1997.

In 1992, the Andersons were approached by a potential lessor who wanted to rent the property to park trucks, a common interim use in the Mesa at that time. Unfortunately, when the lessor found out that the property would be cut off from access to public streets in 1997, it determined that the financial viability of development for truck parking would not pencil out in that time frame. The Andersons were unable to find another lessor for this interim use and the property stayed vacant.

Caltrans did not build its freeway in 1997. It did not condemn its right of way on this land until 2006. The Andersons claimed that this was unreasonable delay between the announcement of the intent to condemn and the actual condemnation. The Court agreed and ruled that the delay was unreasonable. The damages related to this unreasonable delay were set at $5,108,033 in lost rents.

In 2006, Caltrans actually condemned 2.8 acres of land at the very top of the Anderson parcel. Those acres were in between the street access, Camino Maquiladora, and the 54 bottom acres of the property, 38 of which were flat mesa tops that appeared very developable. During a meeting in January 2006, Caltrans advised the Andersons that they had considered providing alternate access but had concluded that it would be too expensive and as such no such access would be provided. This left the Andersons’ remaining 54 acres landlocked and unusable.

At trial, the Andersons presented evidence that their 2.8 acres were worth $1,875,285 and that the landlocked portion had been damaged $22,869,644. Caltrans contended that the condemned land was worth only $172,410 and that the severed acres were not damaged.

Plaintiff’s Contentions, Allegations: Caltrans filed the case for condemnation of Otay Mesa property.

Injuries and/or Damages:
The Andersons claimed that the property formally taken was worth $1,875,285, that the severed property was damaged at a value of $22,869,644, and that their precondemnation damages due to the loss of use of their property since 1993 were $5,108,033.

Caltrans contended that the Andersons had never intended to develop the property and that the property was, at best, valued as a speculative investment that would probably always be open space. Their “just compensation” figure was $172,410.

Verdict or Award: $26,566,609

Post Trial Motions and Post Verdict Settlements: N/A

Attorney for client: Glenn Mueller and Rhonda Mallory, State of California, Department of Transportation

Attorney for defendant:
Thorsnes Bartolotta McGuire
Vincent J. Bartolotta, Jr., Karen R. Frostrom
2550 Fifth Ave 11th Floor, San Diego, CA 92103

Individual Defendants: Anderprises, Inc.

Civil Trial Lawyers