No Appraisal Exchange In Inverse Condemnation Cases?

In an eminent domain case, the acquiring agency admits it is taking private property for a public project.   Certain aspects of eminent domain law and procedure are codified in the Code of Civil Procedure, which provisions make up the Eminent Domain Law.  One of these procedures requires that parties in an eminent domain case exchange appraisal summary statements 90 days before trial.

Courts have historically held that, in many ways, inverse condemnation is the same as eminent domain, except that the case is initiated by the property owner and the question of whether a legally-recognized “taking” has occurred is often a matter of dispute.  The Legislature generally has left inverse condemnation law for determination by judicial development.  In some ways, this leaves attorneys in a quandary as to when to apply aspects of the Eminent Domain Law in an inverse condemnation case.

Specifically, I am often asked whether the 90-day exchange of appraisal summary statements is supposed to occur in inverse condemnation cases.  Some practitioners believe it should, others do not.

The California Supreme Court appears to have answered that question last week in the case of Weiss v. People ex rel. Dept. of Transportation, et al.  The Supreme Court expressly noted that the Legislature has not made Eminent Domain Law’s special pretrial procedures for the exchange of appraisal summary statements applicable in inverse condemnation actions.

This means that, unless the parties agree otherwise, an inverse condemnation action proceeds under the rules governing ordinary civil actions.  Under these rules, the disclosure of valuation experts occurs only 50 days before trial, or even sooner in some cases.  Moreover, in ordinary civil actions there is no legal obligation that an appraisal report be prepared (though USPAP and other governing bodies regulating property valuations may require one) or, if prepared, that it be exchanged at the time the appraiser’s name is disclosed to the other side.  This leaves open the possibility that counsel may not learn of the other side’s valuation opinion until the day the appraiser’s deposition is taken.

To me, it does not make sense to treat the expert valuation procedure differently in eminent domain and inverse condemnation cases.   However, until the Legislature makes the eminent domain exchange procedure applicable to inverse condemnation actions, it appears under Weiss this is the law.

As always, I welcome any thoughts by appraisers and legal practitioners on this issue.

The Weiss case, which actually discusses a myriad of other issues, can be found here.

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