AB 328
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ASSEMBLY THIRD READING
AB 328 (Smyth)
As Introduced February 10, 2011
Majority vote
JUDICIARY
Ayes:
10-0
Feuer, Wagner, Atkins, Dickinson,
Gorell, Huber, Huffman, Jones,
Monning, Wieckowski
SUMMARY: Applies the doctrine of comparative fault and existing rules governing a plaintiff's
ability to recover post-offer costs to inverse condemnation actions. Specifically, this bill:
1) Requires a court or arbiter, in an inverse condemnation proceeding, to reduce the
compensation to be paid to a plaintiff in direct proportion to his or her percentage of fault, if
any, in the damaging of property that constitutes a taking.
2) Extends to actions in inverse condemnation an existing statute which provides that when a
plaintiff rejects a defendant's settlement offer and then fails to obtain a more favorable
judgment or award, then the plaintiff is prohibited from recovering his or her post-offer costs
and is required to pay the defendant's costs from the time of the offer.
EXISTING LAW:
1) Prohibits the government from taking or damaging private property for a public use without
the payment of just compensation and permits a person to maintain an action in inverse
condemnation for the purpose of obtaining compensation for the taking or damage.
2) Provides that for purposes of apportioning liability a plaintiff's damages may be reduced in
direct proportion to his or her percentage of fault. (Li v. Yellow Cab (1975) 13 Cal.3d 804.)
3) Exempts from the above comparative fault rule an inverse condemnation action, except in
certain actions relating to damages caused by public flood control projects. [Blau v. City of
Los Angeles (1973) 32 Cal. App. 3d 77; Locklin v. City of Lafayette (1994) 7 Cal. 4th 327;
Bunch v. Coachella Valley Water District (1997) 15 Cal 4th 432.]
4) Provides that, in any trial or arbitration, if an offer made by a defendant is not accepted and
the plaintiff fails to obtain a more favorable judgment or award, the plaintiff shall not recover
his or her post-offer costs and shall pay the defendant's costs. Provides, in addition, that in
any action or proceeding other than an eminent domain action, the court or arbitrator may
require the plaintiff to pay reasonable costs for expert witnesses, as specified.
5) Holds that the Legislature perceives a difference between "eminent domain" and "inverse
condemnation," and therefore the Legislature does not intend for its reference to eminent
domain in Code of Civil Procedure (CCP) Section 998 to encompass inverse condemnation
proceedings. (Regency Outdoor Advertising, Inc. v. City of Los Angeles (2006) 39 Cal 4th
507, 530.)
AB 328
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6) Permits a prevailing plaintiff (property owner) in an inverse condemnation action to recover
reasonable litigation costs, including reasonable attorney fees.
FISCAL EFFECT: None
COMMENTS: According to the author and sponsor, the failure to apply well-established
comparative fault doctrine to inverse condemnation actions "results in a windfall to the plaintiff
and seriously burdens the governmental agency and its residents." Whereas plaintiffs in other
actions are held responsible for their portion of the damage, the public entity in an inverse
condemnation action must foot the entire cost, even if the plaintiff was responsible for a greater
portion of the damage. This bill would expressly provide that the doctrine of comparative fault
shall apply to actions in inverse condemnation. In addition, the bill would expressly apply to
inverse condemnation actions the post-offer cost rules of CCP Section 988. That statute provides
that if a plaintiff rejects a settlement offer that turns out to be more than the final judgment
awarded, then the plaintiff cannot recover post-offer costs and may be required to pay the
defendant's post-offer costs. In short, this bill seeks, when appropriate, to limit a plaintiff's
recovery in inverse condemnation actions in the same manner that it would be limited in a civil
action between private parties.
In 1975 California adopted the doctrine of "comparative fault" in Li v. Yellow Cab. Under this
tort doctrine, a plaintiff's damages may be reduced in direct proportion to his or her percentage of
fault. Although the principle of comparative fault is well-established in tort law, it has not
generally been applied to other kinds of actions, including actions in inverse condemnation
against a government entity for damage to private property. Significantly, since the 1990s the
California Supreme Court has carved out an exception to the exception, so to speak, in the case
of damages caused by a public flood control project. In those cases, comparative fault applies
and the public entity is only liable for that portion of damages that it caused.
There is no case law that definitively applies CCP Section 998 to actions in inverse
condemnation. Although at least one appellate court has held that CCP Section 998 treats
"eminent domain" and "inverse condemnation" synonymously, more recent decisions by the
California Supreme Court and another appellate court hold that the references to "eminent
domain" actions in CCP Section 998 were not intended to include actions in inverse
condemnation. This bill would clarify the potential confusion arising out of these cases by
stating expressly that CCP Section 998 applies to an action in inverse condemnation for the
purpose of reducing the compensation paid to a prevailing plaintiff in appropriate cases. CCP
Section 1036, in general, guarantees a plaintiff's right to recover costs in an inverse
condemnation, but this bill would clarify that, like any other plaintiff, that recovery may be
reduced if the plaintiff has rejected a settlement offer that is more than the final award.
Analysis Prepared by:
Thomas Clark / JUD. / (916) 319-2334
FN: 0000081