Stanford Law School - Robert Crown Law Library

Filed 11/14/11

IN THE SUPREME COURT OF CALIFORNIA

LOS ANGELES COUNTY
METROPOLITAN
TRANSPORTATION AUTHORITY,
Plaintiff and Appellant,
S188128
v.
Ct.App. 2/4 B212643
ALAMEDA PRODUCE MARKET,
LLC, et al.,
Los Angeles County
Super. Ct. No. BC313010
Defendants and Respondents. )

Under California‘s ―quick-take‖ eminent domain procedure, a public entity
filing a condemnation action may seek immediate possession of the condemned
property upon depositing with the court the probable compensation for the
property. (Mt. San Jacinto Community College Dist. v. Superior Court (2007) 40
Cal.4th 648, 653 (Mt. San Jacinto); see also Code Civ. Proc., §§ 1255.010,
1255.410.)1 Any defendant in the condemnation action — which includes anyone
the public entity knows to have or claim an interest in the property (§ 1250.220,
subd. (a)) — may apply to the court to withdraw all or any portion of the deposit
(§ 1255.210). Section 1255.260 provides that, ―[i]f any portion‖ of the deposit ―is
withdrawn, the receipt of any such money shall constitute a waiver by operation of
law of all claims and defenses in favor of the persons receiving such payment

1
All further statutory references are to the Code of Civil Procedure.

---

except a claim for greater compensation.‖ The Court of Appeal in this case held
that, under this statute, if a lender holding a lien on condemned property applies to
withdraw a portion of the deposit, and the property owner does not object to the
application, the lender’s withdrawal of a portion of the deposit constitutes a
waiver of the property owner’s claims and defenses, except a claim for greater
compensation. We find that the Court of Appeal‘s conclusion is inconsistent with
the relevant statutory language and framework. We therefore reverse the Court of
Appeal‘s judgment.
FACTUAL BACKGROUND
In January 2004, a federal court, to implement a 1996 consent decree
requiring improvement in the quality of bus service in Los Angeles, ordered
plaintiff Los Angeles County Metropolitan Transportation Authority (MTA) to
place an additional 145 buses in service by year‘s end. To comply with this order,
in March 2004, MTA‘s governing board adopted a resolution of necessity that
authorized the taking of property in downtown Los Angeles owned by Alameda
Produce Market, Inc. (APMI).2 One week later, MTA filed a complaint seeking to
acquire the property by eminent domain. At the same time, it applied to the court
for an order for immediate possession of the property (§ 1255.410, subd. (a)) and
deposited $6.3 million with the court as the probable amount of compensation for
the property (§ 1255.010, subd. (a)).

On May 20, 2004, APMI filed an amended answer to the complaint raising
numerous objections to the proposed taking. It argued in part that MTA‘s
resolution of necessity was invalid because it did not meet the statutory
requirements. APMI also objected to MTA‘s request for an order allowing it to
take possession of the property. The court overruled APMI‘s objection to MTA‘s
request for immediate possession and, on November 24, 2004, MTA took

2
APMI later filed for bankruptcy and was succeeded in this litigation by
Alameda Produce Market, LLC.
2

---

possession of the property. In June 2005, after making improvements, MTA
began using the property for additional bus and employee parking.
Not long after MTA filed the complaint and deposited probable
compensation, three lenders that held liens against the property (Lenders) — VCC
Alameda, LLC (VCC Alameda), Namco Capital Group, Inc. (Namco), and
California National Bank — applied to the court to withdraw a portion of the
deposit.3 Withdrawal applications are authorized by section 1255.210, which
provides in part: ―Prior to entry of judgment, any defendant may apply to the
court for the withdrawal of all or any portion of the amount deposited.‖4 As this
section requires, Lenders served copies of their applications on MTA.
MTA objected to the applications under section 1255.230, subdivision
(b)(1), which provides that a public agency seeking condemnation may object to a
withdrawal application on the ground that ―[o]ther parties to the proceeding are
known or believed to have interests in the property.‖ MTA‘s objection triggered
section 1255.230, subdivision (c), which provides in relevant part: ―If an
objection is filed on the ground that other parties are known or believed to have
interests in the property, the plaintiff shall serve or attempt to serve on such other
parties a notice that they may appear within 10 days after such service and object
to the withdrawal.‖ In accordance with this provision, on April 27, 2004, MTA
served noticed on APMI of its right to object to the withdrawal applications. The
notice advised APMI that its ―failure to object‖ to the applications would ―result in

3
The complaint identified VCC Alameda as the property owner, but that
entity had transferred the property to APMI the day before MTA filed the
complaint. The complaint erroneously sued APMI as a tenant of the property and
identified it as Alameda North Parking, Inc.
4
The complaint named VCC Alameda and California National Bank as
defendants. Namco joined the action by filing an answer to the complaint as a
Doe defendant.
3

---

waiver of any rights against the plaintiff to the extent of the amount withdrawn.‖
APMI received the notice, but did not file an objection.
MTA later withdrew its objection to the withdrawal applications and, on
June 8, 2004, several weeks after APMI filed its amended answer objecting to
MTA‘s right to take the property, signed a stipulation with Lenders agreeing to the
withdrawals. The stipulation, which APMI did not sign, stated that APMI was
―not objecting to the instant withdrawal of funds.‖ Pursuant to the stipulation, the
court granted the withdrawal applications and authorized Lenders collectively to
withdraw $6.1 million of the deposit, leaving $200,000 remaining. After using the
funds to pay APMI‘s loans, Lenders filed disclaimers of interest with the court. In
October 2004, on APMI‘s motion, MTA increased the deposit by $2.4 million.
APMI has never applied to withdraw any of the deposited funds.
In July 2006, after conducting a bench trial on the merits, the trial court
entered an ordering conditionally dismissing MTA‘s complaint, finding: (1)
MTA‘s resolution of necessity was conditional in that it required MTA to
negotiate further with the appropriate defendants on a mutually agreeable parking
plan; and (2) MTA failed to engage in meaningful negotiations, rendering the
conditional resolution invalid. The trial court ruled that it would dismiss the
complaint unless, as the resolution of necessity contemplated, MTA engaged in
fully informed, good faith negotiations. In September 2008, after the parties‘
mutually selected mediator reported that MTA had failed to negotiate in good
faith, the trial court entered a final order dismissing MTA‘s complaint and
requiring MTA to relinquish the property to APMI within 90 days.
At the bench trial and during subsequent proceedings, MTA argued that,
under section 1255.260, APMI‘s earlier failure to object to Lenders‘ withdrawal
applications constituted a waiver of APMI‘s right to challenge the taking, other
than the amount of compensation. Although initially declining to address the
argument, the trial court ultimately rejected it on its merits, finding that section
4

---

1255.260 was inapplicable because APMI had committed no affirmative act
sufficient to constitute a waiver.
The Court of Appeal reversed, finding that Lenders‘ withdrawal of funds to
satisfy APMI‘s loan obligations resulted in a waiver under section 1255.260. It
relied principally on Redevelopment Agency of San Diego v. Mesdaq (2007) 154
Cal.App.4th 1111, 1138-1139 (Mesdaq), which found a waiver under section
1255.260 where a property owner, in a filed response to his mortgage lender‘s
withdrawal application, informed the court he was not objecting to the withdrawal
request. The Court of Appeal found ―no valid basis‖ for distinguishing Mesdaq,
noting that APMI had not objected to Lenders‘ withdrawal application and that the
trial court, in granting the applications, had relied on Lenders‘ representation that
APMI did not object. Given its conclusion, the Court of Appeal did not reach the
merits of MTA‘s alternative attacks on the trial court‘s judgment.
We then granted APMI‘s petition for review. Shortly before oral argument,
the parties notified us they had settled their dispute. Although the appeal is,
therefore, now moot as to them, because there has been no request for dismissal
and the issue presented is ―of continuing public importance,‖ we have elected to
retain jurisdiction. (Lundquist v. Reusser (1994) 7 Cal.4th 1193, 1202, fn. 8.)
DISCUSSION
At issue is section 1255.260‘s proper interpretation. ―As in any case
involving statutory interpretation, our fundamental task here is to determine the
Legislature‘s intent so as to effectuate the law‘s purpose.‖ (People v. Murphy
(2001) 25 Cal.4th 136, 142.) The well-established rules for performing this task
require us to begin by examining the statutory language, giving it a plain and
commonsense meaning. (Ibid.) We do not, however, consider the statutory
language in isolation; rather, we look to the statute‘s entire substance in order to
determine its scope and purposes. (Ibid.) That is, we construe the words in
question in context, keeping in mind the statute‘s nature and obvious purposes.
(Ibid.) We must harmonize the statute‘s various parts by considering it in the
5

---

context of the statutory framework as a whole. (Ibid.) If the statutory language is
unambiguous, then its plain meaning controls. If, however, the language supports
more than one reasonable construction, then we may look to extrinsic aids,
including the ostensible objects to be achieved and the legislative history. (In re
Young (2004) 32 Cal.4th 900, 906.)
The language of the statute at issue here supports APMI‘s view that
Lenders‘ withdrawal of some of the deposited funds did not, under section
1255.260, constitute a waiver of APMI‘s right to contest MTA‘s authority to take
the property. As noted above, section 1255.260 provides: ―If any portion of the
money deposited pursuant to this chapter is withdrawn, the receipt of any such
money shall constitute a waiver by operation of law of all claims and defenses in
favor of the persons receiving such payment except a claim for greater
compensation.‖ (Italics added.) ―The word ‗receive,‘ in its commonly accepted
meaning, carries with it the concept that something has been physically delivered,
or placed in the hands of the recipient.‖ (Labarthe v. McRae (1939) 35
Cal.App.2d 734, 737, italics added; see also Adoption of Kelsey S. (1992) 1
Cal.4th 816, 826 (Kelsey S.) [―[o]n its face,‖ statutory phrase ―receives the child
into his home‖ ―refers to actual receipt of the child,‖ and ―does not refer either
explicitly or implicitly to . . . constructive receipt‖].) Moreover, in 1975, when the
Legislature passed section 1255.260, a leading legal dictionary similarly defined
the word ―receive‖ as ―[t]o take into possession and control; accept custody of.‖
(Black‘s Law Dict. (rev. 4th ed. 1968) p. 1433, col. 2.) In this case, none of the
deposited funds were delivered to or placed in the hands of APMI; nor did APMI
take possession and control, or accept custody, of any withdrawn funds. Instead,
the withdrawn funds were delivered to, and placed in the possession, custody, and
control of, Lenders. Thus, APMI was not a ―person[] receiving such payment‖
(§ 1255.260) as those words are commonly understood.
MTA argues otherwise. It asserts that ―the plain meaning‖ of the statutory
language may include not only a mortgage lender that ―actually withdraw[s] the
6

---

deposited funds,‖ but also a property owner who does not object to, and ―receives
the direct benefit of,‖ the withdrawal. In support of this assertion, MTA relies on
the fact that section 1255.260 by its terms establishes a waiver as to ―persons
receiving such payment,‖ not as to ―persons withdrawing the money.‖ The
Legislature would have used the latter language, MTA argues, had it intended to
―limit the reach of [the] statute‘s waiver to only the withdrawing party.‖
According to MTA, given the language the Legislature chose and the statute‘s
―purpose‖ – ―to prevent owners from having it ‗both ways‘ ‖ – the statute ―is most
naturally read to prevent owners from de facto obtaining the deposit withdrawn by
third parties and still challenging the condemnation.‖
MTA‘s argument is unpersuasive. Unlike MTA, we find little, if any,
substantive difference between the language the Legislature chose — ―persons
receiving such payment‖ (§ 1255.260) — and the language MTA concedes would
limit the statute‘s waiver to the withdrawing party — ―persons withdrawing the
money.‖ In context, the phrase ―persons receiving such payment‖ (ibid.) clearly
refers to the withdrawing party. Thus, in order to adopt MTA‘s statutory
construction, we would essentially have to insert the words ―the benefit of‖ into
section 1255.260 so it would read ―in favor of the persons receiving the benefit of
such payment.‖ ―Doing so would violate the cardinal rule that courts may not add
provisions to a statute. [Citations.]‖ (Kelsey S., supra, 1 Cal.4th at p. 827
[declining to read ― ‗receives the child into his home‘ ‖ as ― ‗receives or attempts
to receive‘ ‖ the child into his home (italics omitted)].) This rule takes on added
significance in this case given that the Legislature, in another section of the
statutory chapter that sets forth the quick-take procedure, used precisely the words
— ―the benefit of‖ — that MTA asks us to read into section 1255.260. Section
1255.075, subdivision (a), which the Legislature enacted at the same time it
enacted section 1255.260, provides that any defendant with an interest in the
property to be condemned may move to have funds that have been deposited
pursuant to the quick-take procedure invested ―for the benefit of the defendants.‖
7

---

― ‗It is a settled rule of statutory construction that where a statute, with reference to
one subject contains a given provision, the omission of such provision from a
similar statute concerning a related subject is significant to show that a different
legislative intent existed with reference to the different statutes.‘ ‖ (In re
Jennings (2004) 34 Cal.4th 254, 273.) In light of this rule, the Legislature‘s
omission of the phrase ―the benefit of‖ in section 1255.260 suggests that MTA‘s
construction does not reflect the Legislature‘s intent.
In addition, MTA‘s broad reading of section 1255.260 is in tension with the
statutory scheme read as whole. (See Barratt American, Inc. v. City of Rancho
Cucamonga (2005) 37 Cal.4th 685, 699 [courts ―must construe a statute in the
context of the entire statutory scheme of which it is a part‖].) According to MTA,
although APMI did not itself actually withdraw any of the deposited funds, under
section 1255.260, it waived its right to contest the taking by failing to object to
Lenders‘ withdrawal applications. However, nothing in section 1255.260, on its
face, refers to a nonwithdrawing defendant‘s failure to object. Moreover, another
section of the quick-take statutes — section 1255.230, subdivision (c) — does
expressly speak to this circumstance. The quick-take statutes provide that a
defendant applying to withdraw deposited funds must serve its application only
―on the plaintiff,‖ i.e., the party seeking to take the property; it need not serve any
of the other defendants. (§ 1255.210.) Section 1255.230, subdivision (c),
specifies that a plaintiff who files an objection to the proposed withdrawal ―on the
ground that other parties are known or believed to have interests in the property‖
must serve a notice ―on such other parties‖ advising them that they have 10 days
to ―object to the withdrawal.‖ It also specifies: (1) the notice ―shall advise such
parties that their failure to object will result in waiver of any rights against the
8

---

plaintiff to the extent of the amount withdrawn‖ 5; and (2) parties served with this
notice ―shall have no claim against the plaintiff for compensation to the extent of
the amount withdrawn by all applicants.‖ (§ 1255.230, subd. (c), italics added.)
Thus, through this section, the Legislature has expressly specified that forfeiture of
any ―claim against the plaintiff for compensation to the extent of the amount
withdrawn by all applicants‖ is both the consequence of a notified defendant‘s
failure to object to a withdrawal application and the only consequence that the
required notice must identify. Given this provision, MTA‘s view that section
1255.260 — which on its face says nothing about a defendant‘s failure to
object — implicitly attaches to that omission the additional, far broader
consequence of waiving all of the property owner‘s claims and defenses —
including the right to object to the taking — is untenable.6
In support of its position, MTA relies on Mesdaq. There, in response to an
eminent domain complaint, a property owner challenged the plaintiff‘s authority to
take his property. (Mesdaq, supra, 154 Cal.App.4th at p. 1118.) Seven months
after the trial court rejected the owner‘s challenge, the owner‘s mortgage lender
applied to withdraw some of the funds the plaintiff had deposited as probable
compensation for the property. (Id. at p. 1138.) In a written response filed with
the court, the owner stated: (1) the application had ― ‗no legal basis‘ ‖ and
―violated‖ the deed of trust on the property and a stipulation between the owner
and the lender, ―which ‗both provide that [the lender] is not entitled to withdraw
funds unless the case is settled or goes to judgment‘ ‖; (2) despite these
circumstances, ―he was ‗not objecting to the withdrawal of [funds] . . .‘ to pay off

5
As previously noted, in accordance with this requirement, on April 27,
2004, MTA served APMI with a notice advising it of the withdrawal applications
and stating that its ―failure to object to said application[s] . . . will result in waiver
of any rights against the plaintiff to the extent of the amount withdrawn.‖
6
We have found nothing in the relevant legislative history supporting
MTA‘s view.
9

---

his loan‖; and (3) he did, however, object to withdrawal insofar as the lender was
seeking funds to pay its attorney fees. (Id. at pp. 1138-1139.) ―In light of [the
owner‘s] consent to the bulk of [the] request,‖ the trial court authorized the lender
to withdraw ―the amount of [the lender‘s] request minus the amount‖ to which the
owner had objected. (Id. at p. 1139.) On these facts, the Court of Appeal held
that, under section 1255.260, the owner had waived his right to challenge on
appeal the plaintiff‘s legal authority to take his property. (Mesdaq, at pp. 1138-
1140.) In reaching this conclusion, the court rejected the owner‘s argument that,
because he had not received the withdrawn funds, there was no waiver under the
statute as to him, reasoning: ―We do not believe there is any legal distinction
under section 1255.260 between [the lender] and [the owner] with respect to the
withdrawal of funds in this case. The money withdrawn was used to satisfy [the
owner‘s] indebtedness to [the lender], resulting in a direct increase in the value of
[the owner‘s] ownership interest in the condemned property, and relieving him of
his mortgage obligations and accrual of interest on those obligations. Such a
transaction easily constitutes [the owner‘s] ‗receipt of‘ the money withdrawn from
the deposit. (§ 1255.260.) [¶] Further, the payment of [the owner‘s] indebtedness
with the deposit funds was accomplished with [the owner‘s] explicit consent.
[The owner] noted in his pleadings with the court that [the lender] did not have the
legal authority to withdraw the . . . deposit, but nonetheless informed the court that
he (the rightful owner of the deposit) did not object to [the lender‘s] withdrawal of
the funds for the purpose of satisfying [his] loan obligation. [Citation.] . . . We
see no distinction between this scenario — where [the owner] consented to the
withdrawal of the deposit by his bank to pay off his loan on the property — and a
scenario where [the owner] himself withdrew the deposit and forwarded it to [the
lender] for that purpose. In both situations, [the lender] has received the funds
from the . . . deposit, and section 1255.260 consequently mandates a waiver of any
future objections to the taking.‖ (Id. at p. 1140, italics omitted.)
10

---

For several reasons, we reject MTA‘s reliance on Mesdaq. First, Mesdaq is
factually distinguishable from the case now before us. As noted above, in
reaching its conclusion, the Mesdaq court emphasized that the owner there had
―explicit[ly] consent[ed]‖ to his lender‘s withdrawal request by filing with the
court a written response ―not[ing]‖ that the lender ―did not have the legal
authority to withdraw the . . . deposit‖ (Mesdaq, supra, 154 Cal.App.4th at p.
1140) — because the owner and the lender had agreed in writing that the lender
was ― ‗not entitled to withdraw funds unless the case is settled or goes to
judgment‘ ‖ (id. at p. 1138) — ―but nonetheless inform[ing] the court that he (the
rightful owner of the deposit) did not object to [the lender‘s] withdrawal of the
funds for the purpose of satisfying [his] loan obligation‖ (id. at p. 1140, some
italics added). Similar circumstances are absent here; APMI filed no response to
Lenders‘ withdrawal applications and it never represented to the court (or, as far as
the record shows, to anyone else) that written agreements precluded withdrawal or
that it would waive such agreements if Lenders used the withdrawn funds to pay
off APMI‘s loans. Second, the statutory analysis in Mesdaq is abbreviated. The
opinion contains little examination of the words of the statute, either in isolation or
in the context of the entire statutory scheme. In particular, it does not consider
that the Legislature, in section 1255.230, subdivision (c), has expressly specified
that forfeiture of any ―claim against the plaintiff for compensation to the extent of
the amount withdrawn by all applicants‖ is both the consequence of a notified
defendant‘s failure to object to a withdrawal application and the only consequence
that the required notice must identify. As explained above, given this provision,
we find untenable MTA‘s view that section 1255.260 — which on its face says
nothing about a defendant‘s failure to object — implicitly attaches to that omission
11

---

the additional, far broader consequence for which MTA argues. For these reasons,
MTA‘s reliance on Mesdaq fails.7
MTA also argues that its construction ―is beneficial as a matter of public
policy,‖ in that it would ―promote[] efficiency and protection of public funds by
allowing adjudication of right-to-take challenges before any withdrawals are
approved.‖ According to MTA, ―[i]f the owner objects and the court denies a
lender‘s application for withdrawal pending resolution of a condemning entities‘
right to take, the law provides for prompt resolution of such challenges.‖ By
contrast, MTA asserts, APMI‘s interpretation would enable ―large commercial
property owners [to] us[e] complex business relationships to circumvent section
1255.260.‖ ―For example,‖ MTA explains, ―upon notice of an agency‘s intent to
exercise eminent domain, a company holding title to the subject property can
transfer it to a related company in exchange for a promissory note and a deed of
trust. By doing so, the ‗lender‘ company may withdraw the deposited funds while
the related ‗owner‘ company argues that it has preserved its right to take
challenge. The simple step of requiring the owner to object forecloses such
schemes.‖8

7
As noted, Mesdaq is factually distinguishable. We therefore disapprove
Redevelopment Agency of San Diego v. Mesdaq, supra, 154 Cal.App.4th 1111
only to the extent it is inconsistent with our opinion.
8
Consistent with this argument, in its answer brief, MTA attacks the validity
of Namco‘s loan to APMI, asserting that APMI ―used‖ Namco as ―a straw lender
to withdraw deposit funds.‖ In trial briefs it filed in superior court, MTA raised
factual questions regarding this loan‘s validity. However, the trial court, in ruling
for APMI on the merits, made no factual findings on this subject. MTA did not
raise the subject during posttrial proceedings in the trial court or in the opening
brief it filed in the Court of Appeal. Instead, at the hearing in the trial court on
MTA‘s motions for new trial and to set aside the dismissal, MTA agreed with the
court that it was ―undisputed‖ the funds ―were withdrawn by three lenders of‖
APMI. And it stated in its opening brief in the Court of Appeal that one of ―the
undisputed facts in the record pertaining to the waiver issue‖ is that ― ‗funds were
withdrawn by three lenders of‘ ‖ APMI. Given these circumstances and the

(footnote continued on next page)
12

---

However, construing section 1255.260 in accordance with its language and
the overall statutory framework does not undermine the policy goals MTA has
identified. Even under that construction, the statutes place a plaintiff in a better
position than a property owner to ensure that courts adjudicate right-to-take
challenges before granting withdrawal applications. As already explained, under
the statutes, only the plaintiff is initially entitled to receive notice of a withdrawal
application (§ 1255.210), to file an objection to the application (§ 1255.230, subd.
(b)), and to request a hearing on the application (§ 1255.230, subd. (d)); only if the
plaintiff files an objection on the ground that other parties are known or believed
to have interests in the property do the statutes provide for the owner‘s receipt of
notice and an opportunity to object to the withdrawal (§ 1255.230, subd. (c)).9
Also unpersuasive is MTA‘s argument that its interpretation puts ―the
obligation to object‖ where, as a matter of public policy, it belongs: ―on the most
knowledgeable party,‖ the property owner, that alone ―knows whether it would
rather oppose any withdrawals and thereby preserve its right-to-take challenge, or
whether it would rather waive any such challenges in exchange for receiving the
direct benefit of the deposited funds.‖ Where, as here, the owner‘s answer to the
condemnation complaint contests the plaintiff‘s right to take and the owner does
not itself apply to withdraw deposited funds, the plaintiff should have no
confusion about whether the owner wants to preserve its right-to-take challenge.

(footnote continued from previous page)

parties‘ settlement of the case, we decline to discuss MTA‘s current attack on the
Namco loan‘s validity.
9
It may be, as APMI argues, that a plaintiff can further protect public funds
by getting the court to require, pursuant to section 1255.240, subdivision (a), the
applicant for withdrawal to file an undertaking. (See § 1255.230, subd. (b)(2)
[plaintiff may object to proposed withdrawal on the ground that ―[a]n undertaking
should be filed by the applicant as provided in [s]ection 1255.240 . . .‖].) To
decide the case before us, we need not determine this question.
13

---

In any event, this policy argument, like MTA‘s others, ―is best directed to the
Legislature, which can study the various policy and factual questions and decide
what rules are best for society. Our role here is to interpret the statute[s] [as they
are written], not to establish policy. The latter role is for the Legislature.‖
(Carrisales v. Department of Corrections (1999) 21 Cal.4th 1132, 1140.) Under
the existing statutes, the Legislature has placed the obligation to object to a
withdrawal application first and foremost on the plaintiff, by providing for initial
service of a withdrawal application on only the plaintiff (§ 1255.210), specifying
that ―the plaintiff may file objections‖ to the application within 20 days of service
(§ 1255.230, subd. (b), italics added), and making the property owner‘s right to
notice and an opportunity to object dependent on the plaintiff’s filing of an
objection (§ 1255.230, subd. (c)). Whether placing this obligation principally on
the plaintiff is, as a matter of public policy, ―sufficiently effective is not for us to
say. If the Legislature believes it necessary or desirable to impose [a greater
obligation on property owners], it can do so. But we believe that had it already
intended to do so, it would have used clearer language than that found in‖ the
existing statutes. (Carrisales, supra, at p. 1140 [construing Gov. Code, § 12940,
subd. (h)(1)].)
Moreover, from a policy perspective, we can discern legitimate reasons
why the Legislature may have chosen not to make a property owner‘s failure to
object to another party‘s withdrawal request a waiver of the owner‘s claims and
defenses other than a claim for greater compensation. The statutory scheme
contemplates that the defendants in an eminent domain proceeding – e.g., owner,
lienholder, easement grantee, tenant – may have distinct interests in the property at
issue and affords all such defendants the right to apply for withdrawal.
(§§ 1235.125 [― ‗interest‘ includes any right, title, or estate in property‖],
1250.220 [complaint shall name as defendants ―persons who appear of record or
are known by the plaintiff to have or claim an interest in the property‖], 1250.230
[―Any person who claims a legal or equitable interest in the property . . . may
14

---

appear in the proceeding . . . as a defendant‖], 1255.050 [leasehold interest],
1255.210 [―any defendant may apply to the court for the withdrawal of all or any
portion of the amount deposited‖].) The various defendants may not be aligned in
protecting their interests. (See, e.g., Pomona College v. Dunn (1935) 7
Cal.App.2d 227, 241 [discussing ―antagonistic‖ interests of mortgagee and
mortgagor in condemnation action].) As this case illustrates, an owner may have
any number of reasons for wanting to retain its property, while a lienholder may
have no incentive to contest a proposed taking if the deposited funds cover the
lien. In such a situation, a lender may decide that withdrawing the portion of the
deposited funds to which it is entitled serves its own economic interests. By
expressly providing that ―the receipt of any such money shall constitute a waiver
by operation of law of all claims and defenses in favor of the persons receiving
such payment except a claim for greater compensation,‖ section 1255.260, on its
face, reasonably ensures that a lender‘s receipt of deposited funds will cut off its
own rights without waiving all rights of an owner that does not apply for a
withdrawal and has no control over the actions of a lender with a valid legal claim
to a portion of the deposit. By the same token, section 1255.230 reasonably
provides a more limited consequence for an owner that fails to object to a lender‘s
withdrawal application despite notice: the loss of any ―claim against the plaintiff
for compensation to the extent of the amount withdrawn . . . .‖ (§ 1255.230, subd.
(c).) Although MTA has identified competing policy concerns that may support a
different rule, our role as a court is not to ― ‗sit in judgment of the Legislature‘s
wisdom in balancing such competing public policies. [Citation.]‘ ‖ (Sunset Sky
Ranch Pilots Assn. v. County of Sacramento (2009) 47 Cal.4th 902, 909.) Instead,
―due respect for the power of the Legislature and for the separation of powers‖
requires us to ―follow the public policy choices actually discernible from the
Legislature‘s statutory enactments.‖ (California Teachers Assn. v. Governing Bd.
of Rialto Unified School Dist. (1997) 14 Cal.4th 627, 651.)
15

---

Finally, MTA insists that our conclusion is inconsistent with ―the rationale‖
of section 1255.260. Citing Mt. San Jacinto, supra, 40 Cal.4th 648, MTA asserts
that section 1255.260‘s purpose is to prevent owners from challenging a plaintiff‘s
right to take ―while enjoying the benefit of the deposit of probable compensation.‖
According to MTA, to implement this purpose, we must read the statute as
precluding owners that ―de facto obtain[] the deposit‖ from ―still challenging the
condemnation.‖
MTA‘s argument is unpersuasive. It is true, as MTA observes, that in Mt.
San Jacinto, we said that ― ‗it would be inconsistent for [a property owner] to
insist on adjudicating the [condemner‘s] right to take its property, while it enjoys
the use and benefit of the probable amount of its just compensation.‘ ‖ (Ibid.)
However, in the same paragraph, we also said that, ― ‗[i]n enacting section
1255.260, the Legislature could have reasonably concluded that a condemnee who
denies the condemner‘s right to take should not be able to withdraw the probable
amount of its just compensation‘ ‖ and that a condemnee ― ‗cannot withdraw the
deposit and challenge the right to take.‘ ‖ (Mt. San Jacinto, supra, at p. 665, first
two italics added.) As explained above, because the interests of a property owner
and a lienholder may diverge, valid reasons exist for distinguishing between
owners that actually apply for withdrawal of a deposit and owners that fail to file
with the court an objection to a lienholder‘s withdrawal application. Thus, our
discussion in Mt. San Jacinto – which presented questions regarding the proper
date for valuing the condemned property and factually did not even involve a
withdrawn deposit – does not warrant construing section 1255.260,
notwithstanding its language and the statutory framework, as waiving all defenses
and claims of an owner who does not actually withdraw deposited funds but fails
to object to withdrawal by its lender.
For the reasons discussed above, we conclude the Court of Appeal erred in
holding that, under section 1255.260, APMI waived its right to challenge MTA‘s
16

---

authority to take the property by failing to object to Lenders‘ withdrawal
applications.
DISPOSITION
We reverse the Court of Appeal‘s judgment and remand the matter for
proceedings consistent with this opinion.
CHIN, J.
WE CONCUR:

CANTIL-SAKAUYE, C.J.
KENNARD, J.
BAXTER, J.
WERDEGAR, J.
CORRIGAN, J.
MARCHIANO, J.*

_____________________________
* Presiding Justice of the Court of Appeal, First Appellate District, Division One,
assigned by the Chief Justice pursuant to article VI, section 6 of the California
Constitution.
17

---

See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion Los Angeles County Metropolitan Transportation Authority v. Alameda Produce Market
__________________________________________________________________________________

Unpublished Opinion

XXX NP opn. filed 10/6/10 – 2d Dist., Div. 4
Original Appeal
Original Proceeding
Review Granted
Rehearing Granted

__________________________________________________________________________________

Opinion No.

S188128
Date Filed: November 14 , 2011
__________________________________________________________________________________

Court:

Superior
County: Los Angeles
Judge: James R. Dunn

__________________________________________________________________________________

Counsel:

Andrea Sheridan Ordin, County Counsel, Robert E. Kalunian, Acting County Counsel, Charles M. Safer,
Assistant County Counsel, Joyce L. Chang, Principal Deputy County Counsel; Jones Day, Elwood Lui,
Brian D. Hershman, Peter E. Davis and Jolene D. Mate for Plaintiff and Appellant.

Woodruff, Spradlin & Smart and M. Lois Bobak for Orange County Transportation Authority as Amicus
Curiae on behalf of Plaintiff and Appellant.

Meyers, Nave, Riback, Silver & Wilson, David W. Skinner, Neli N. Palma and Eugenia Amador for
League of California Cities, California State Association of Counties, California School Boards
Association and its Education Legal Alliance, Association of California Water Agencies, City of Long
Beach, Exposition Metro Line Construction Authority and Pasadena Metro Blue Line Construction
Authority as Amici Curiae on behalf of Plaintiff and Appellant.

Best Best & Krieger, Kendall H. MacVey, Bruce W. Beach, Steven C. DeBaun and Kira L. Klatchko for
Riverside County Transportation Commission as Amicus Curiae on behalf of Plaintiff and Appellant.

Matteoni, O‘Laughlin & Hechtman, Norman E. Matteoni, Peggy M. O‘Laughlin Gerry Houlihan; Oliver,
Sandifer & Murphy, Connie Cooke Sandifer, Cynthia C. Marian; Horvitz & Levy, Curt Cutting; Lesnick
Prince and Christopher E. Prince for Defendants and Respondents.

---

Counsel who argued in Supreme Court (not intended for publication with opinion):

Elwood Lui
Jones Day
555 South Flower Street, Fiftieth Floor
Los Angeles, CA 90071-2300
(213) 489-3939

Christopher E. Prince
Lesnick Prince
185 Pier Avenue, Suite 103
Santa Monica, CA 90405
(213) 291-8984

Curt Cutting
Horvitz & Levy
15760 Ventura Boulevard, 18th Floor
Encino, CA 91436
(818) 995-0800

19

---

Petition for review after the Court of Appeal reversed the judgment in a civil action. This case presents the following issue: Does a lender's withdrawal of a portion of the deposit of probable compensation in an eminent domain proceeding effect a waiver under Code of Civil Procedure section 1255.260 of the property owner's right to challenge the taking?

Opinion Information

Date:	Citation:	Docket Number:	Category:	Status:
Mon, 11/14/2011	52 Cal. 4th 1100, 264 P.3d 579, 133 Cal. Rptr. 3d 738	S188128	Review - Civil Appeal	submitted/opinion due

Opinion Authors
Opinion	Justice Ming W. Chin

Dockets
Nov 15 2010	Petition for review filed Defendant and Respondent: Alameda Produce Market, LLCAttorney: Norman E. Matteoni
Nov 15 2010	Record requested
Dec 6 2010	Answer to petition for review filed Plaintiff and Appellant: Los Angeles County Metropolitan Transportation AuthorityAttorney: Elwood Lui
Dec 9 2010	2nd record request
Dec 10 2010	Received Court of Appeal record   five (5) doghouses ( volume 1 thru 5 )
Dec 16 2010	Reply to answer to petition filed Defendant and Respondent: Alameda Produce Market, LLCAttorney: Margaret Mary O'Laughlin
Dec 21 2010	Petition for review granted   George, C.J., and Werdegar, J., were absent and did not participate. Votes: Baxter, A.C.J., Kennard, Chin, and Corrigan, JJ.
Dec 21 2010	Letter sent to:   all parties - grant letter/cip letter
Dec 28 2010	Request for extension of time filed   respondent - Alameda Produce Market Inc. requesting extension until February 3, 2011 to file opening brief on the merits. by Peggy M. O'Laughlin, counsel
Dec 30 2010	Extension of time granted   On application of respondent and good cause appearing, it is ordered that the time to serve and file the opening brief on the merits is extended to and including February 3, 2011.
Jan 6 2011	Certification of interested entities or persons filed   Submitted by Connie Cooke Sandifer, counsel for Alameda Produce Market, LLC.
Feb 3 2011	Opening brief on the merits filed Defendant and Respondent: Alameda Produce Market, LLCAttorney: Margaret Mary O'Laughlin
Feb 9 2011	Request for extension of time filed   Respondent - Los Angeles County Metropolitan Transportation Authority requesting extension until April 6, 2011 to file answer brief on the merits. by Elwood Lui, counsel
Feb 18 2011	Extension of time granted   On application of appellant and good cause appearing, it is ordered that the time to serve and file the answer brief on the merits is extended to and including April 6, 2011.
Apr 7 2011	Answer brief on the merits filed Plaintiff and Appellant: Los Angeles County Metropolitan Transportation AuthorityAttorney: Elwood Lui   crc.8.25(b)
Apr 7 2011	Received:   application for permission to transmit trial exhibits pursuant to rule 8.224. by Elwood Lui, counsel
Apr 21 2011	Order filed   On application by appellant filed on April 7, 2011, requesting to submit attached trial exhibits is hereby granted.
Apr 26 2011	Reply brief filed (case fully briefed) Defendant and Respondent: Alameda Produce Market, LLCAttorney: Margaret Mary O'Laughlin
May 24 2011	Application to file amicus curiae brief filed   Riverside County Transportation Commission in support of appellant. by Kendall H. McVey, counsel
May 26 2011	Application to file amicus curiae brief filed   by League of California Cities et al. in support of appellant, Amicus Curiae David W. Skinner, Retained Counsel (to court for permission to file)
May 27 2011	Application to file amicus curiae brief filed   by Orange County Transportation Authority, Amicus Curiae M. Lois Bobak, Retained Counsel (to court for permission to file) CRC, rule 8.25(b)
Jun 2 2011	Permission to file amicus curiae brief granted   The application of Riverside County Transportation Commission for permission to file an amicus curiae brief in support of appellant is hereby granted. An answer thereto may be served and filed by any party within 30 days of the filing of the brief.
Jun 2 2011	Amicus curiae brief filed Amicus curiae: Riverside County Transportation CommissionAttorney: Kira Lee Klatchko   The application of Riverside County Transportation Commission for permission to file an amicus curiae brief in support of appellant is hereby granted. An answer thereto may be served and filed by any party within 30 days of the filing of the brief.
Jun 6 2011	Permission to file amicus curiae brief granted   The application of Orange County Transportation Authority for permission to file an amicus curiae brief in support of appellant is hereby granted. An answer thereto may be served and filed by any party within 30 days of the filing of the brief.
Jun 6 2011	Amicus curiae brief filed Amicus curiae: Orange County Transportation AuthorityAttorney: M. Lois Bobak
Jun 6 2011	Permission to file amicus curiae brief granted   The application of League of California Cities, California State Association of Counties, California School Boards Association and its Education Legal Alliance, Association of California Water Agencies, City of Long Beach, Exposition Metro Line Construction Authority and Pasadena Metro Blue Line Construction Authority for permission to file an amicus curiae brief in support of appellant is hereby granted. An answer thereto may be served and filed by any party within 30 days of the filing of the brief.
Jun 6 2011	Amicus curiae brief filed Amicus curiae: League of California CitiesAttorney: David W. Skinner Amicus curiae: California State Association of CountiesAttorney: David W. Skinner Amicus curiae: California School Boards AssociationAttorney: David W. Skinner Amicus curiae: Association of California Water AgenciesAttorney: David W. Skinner Amicus curiae: City of Long BeachAttorney: David W. Skinner Amicus curiae: Exposition Metro Line Construction AuthorityAttorney: David W. Skinner Amicus curiae: Pasadena Metro Blue Line Construction AuthorityAttorney: David W. Skinner
Jun 22 2011	Response to amicus curiae brief filed Defendant and Respondent: Alameda Produce Market, LLCAttorney: Margaret Mary O'Laughlin   To Riverside County Transportation Commission Amicus Brief
Jun 22 2011	Response to amicus curiae brief filed Defendant and Respondent: Alameda Produce Market, LLCAttorney: Margaret Mary O'Laughlin   To League of California Cities Amicus Brief
Jul 28 2011	Case ordered on calendar   to be argued Wednesday, September 7, 2011, at 9:30 a.m., at Hastings Law School, San Francisco
Aug 5 2011	Received:   Notice of settlement of claims. by Elwood Lui, counsel for appellant - Los Angeles County Metropolitan Authority.
Aug 8 2011	Notice of substitution of counsel   from Fred Skaggs, Chief Financial Officer of Meruelo Maddux Properties, Inc. and authorize signatory of respondent Alameda Produce Market, LLC: Lesnick Prince, LLP (Christopher E. Prince, 185 Pier Avenue, Suite 103, Santa Monica, CA 90405) substuted for Matteoni O'Laughlin & Hectman as well as Oliver Sandifer & Murphy.
Aug 8 2011	Filed:   Association of Counsel filed by Christopher E. Prince, counsel for respondent Alameda Produce Market, LLC, associating Horvitz & Levy, LLP as co-counsel law firm in this matter.
Aug 15 2011	Application filed   Application to divide oral argument time filed by Christopher E. Prince, counsel for respondent Alameda Produce Market, LLC, asking to share 20 minutes of time with associated counsel Curt Cutting of Horvitz & Levy, LLP.
Aug 17 2011	Order filed   The request of counsel for respondents in the above-referenced cause to allow two counsel to argue on behalf of respondents at oral argument is hereby granted. The request of respondents to allocate to Christopher Prince 10 minutes and Curt Cutting 20 minutes of respondents' 30-minute allotted time for oral argument is granted.
Sep 7 2011	Cause argued and submitted
Nov 10 2011	Notice of forthcoming opinion posted   To be filed Monday, November 14, 2011 at 10 a.m.

Briefs
Feb 3 2011	Opening brief on the merits filed Defendant and Respondent: Alameda Produce Market, LLCAttorney: Margaret Mary O'Laughlin
Apr 7 2011	Answer brief on the merits filed Plaintiff and Appellant: Los Angeles County Metropolitan Transportation AuthorityAttorney: Elwood Lui
Apr 26 2011	Reply brief filed (case fully briefed) Defendant and Respondent: Alameda Produce Market, LLCAttorney: Margaret Mary O'Laughlin
Jun 6 2011	Amicus curiae brief filed Amicus curiae: League of California CitiesAttorney: David W. Skinner Amicus curiae: California State Association of CountiesAttorney: David W. Skinner Amicus curiae: California School Boards AssociationAttorney: David W. Skinner Amicus curiae: Association of California Water AgenciesAttorney: David W. Skinner Amicus curiae: City of Long BeachAttorney: David W. Skinner Amicus curiae: Exposition Metro Line Construction AuthorityAttorney: David W. Skinner Amicus curiae: Pasadena Metro Blue Line Construction AuthorityAttorney: David W. Skinner
Jun 2 2011	Amicus curiae brief filed Amicus curiae: Riverside County Transportation CommissionAttorney: Kira Lee Klatchko
Jun 6 2011	Amicus curiae brief filed Amicus curiae: Orange County Transportation AuthorityAttorney: M. Lois Bobak
Jun 22 2011	Response to amicus curiae brief filed Defendant and Respondent: Alameda Produce Market, LLCAttorney: Margaret Mary O'Laughlin
Jun 22 2011	Response to amicus curiae brief filed Defendant and Respondent: Alameda Produce Market, LLCAttorney: Margaret Mary O'Laughlin

Brief Downloads
s188128-casesummary.pdf (11301 bytes) - Case Summary
s188128-1-respondent-alameda-petition.pdf (371200 bytes) - Respondent Alameda Petition
s188128-2-appellants-answer-petition-review.pdf (311898 bytes) - Appellants Answer to Petition for Review
s188128-3-respondent-alameda-answer.pdf (190981 bytes) - Respondent Alameda Answer
s188128-4-respondent-alameda-opening.pdf (418092 bytes) - Respondent Alameda Opening Brief on the Merits
s188128-5-appellants-answer-brief-on-the-merits.pdf (545413 bytes) - Appellants Answer Brief on the Merits
s188128-6-respondent-alameda-produce-reply.pdf (368603 bytes) - Respondent Alameda Reply Brief

If you'd like to submit a brief document to be included for this opinion, please submit an e-mail to the SCOCAL website

May 23, 2012 Annotated by Helen Chacon	-FACTS- In March 2004, Los Angeles County Metropolitan Transportation Authority (MTA) filed a complaint seeking to acquire property owned by Alameda Produce Market (APMI). MTA then deposited $6.3 million with the court as compensation for the property and in compliance with California Code § 1255.410(a). In May 2004, APMI filed an answer to the complaint, raising objections to the proposed taking. Shortly after MTA deposited the compensation with the court, three lenders that held liens against the property applied to withdraw a portion of the deposit in accordance with California Code § 1255.210. MTA objected to these applications for withdrawal under California Code §1255.230(b)(1) which allows for objections buy the public agency seeking condemnation on the grounds that “[o]ther parties to the proceeding are known or believed to have interested in the property.” This, in turn, triggered §1255.230(c) which required MTA to serve or attempt to serve APMI a notice that “they may appear within 10 days after such service and object to the withdrawal.” MTA served such notice on APMI on April 27, 2004 but APMI did not file an objection. On June 8th, 2004, the lenders withdrew $6.1 million of the deposit, leaving $200,000 remaining. In a July 2006 a bench trial on the merits of MTA’s complaint was conducted by the trial court. MTA argued that, under § 1255.260, APMI’s earlier failure to object to the withdrawal of the funds deposited constituted a waiver of APMI’s right to challenge the taking, other than the amount of compensation. The trial court dismissed MTA’s complaint, finding §1255.260 inapplicable because APMI had not committed an affirmative act sufficient to constitute a waiver. The Court of Appeal’s reversed, finding that APMI’s failure to object to the withdrawal of funds did, in fact, constitute a waiver.
May 23, 2012 Annotated by Helen Chacon	-PROCEDURAL POSTURE- Plaintiffs filed a complaint in March 2004 seeking to acquire defendant’s property by eminent domain. In May 2004, defendant objected to the complaint. In July 2006, trial court entered an order conditionally dismissing the plaintiff’s complaint unless the plaintiff engaged in fully informed, good faith negotiations. In September 2008, after the parties’ mediator informed the court that the plaintiffs failed to negotiate in good faith, the trial count entered a final order dismissing the plaintiff’s complaint. The Court of Appeal reversed. The Supreme Court of California granted the defendant’s petition for review. Before the oral arguments began, the parties settled the dispute, but the Supreme Court of California retained jurisdiction because there had been no request for dismissal and the issues presented is of continuing public importance.
May 23, 2012 Annotated by Helen Chacon	-ISSUE- Whether California Code §1255.260 should be interpreted to mean that if a lender holding a lien on condemned property applies to withdraw a portion of the deposit, and the property owner does not object to the application, the lender’s withdrawal of a portion of the deposit constitutes a waiver of the property owner’s claims and defenses, except a claim for greater compensation.
May 23, 2012 Annotated by Helen Chacon	-HOLDING- A property owner who does not actually withdraw deposited funds but, instead, fails to object to withdrawal by its lender does not constitute a waiver of all defenses and claims.
May 23, 2012 Annotated by Helen Chacon	-ANALYSIS- The Court first established that when the issue involves statutory interpretation, the main task is to determine the Legislature’s intent. The Court determined that both the language of the statute and the statutory scheme as a whole support the finding that a property owner’s failure to object to the withdrawal of funds by lenders did not constitute a waiver of claims and defenses. The Court focused on §1255.260’s wording explicitly stating that withdrawal would constitute a waiver “of all claims and defenses in favor of the persons receiving such payment except a claim for greater compensation.” Given that none of the deposited funds were delivered or placed in possession of any withdrawn funds, the Court found that APMI did not ‘receive’ payment. The Court also felt that the statutory scheme as a whole supported the finding. The Court was persuaded by the absence of any reference to a nonwithdrawing defendant’s failure to object in §1255.260 whereas other sections of the quick-take statutes (such as do expressly speak to that circumstance. Therefore, the Court felt that implicitly attaching the consequence of waiving all of the property owner’s claims and defenses was untenable. The Court also set out policy reasons as to why the Legislature might not have wanted a property owner’s failure to object to withdrawal applications result in his/her waiver of all claims and defenses. The various defendants in an eminent domain proceeding may not be aligned in protecting their interests. Furthermore, there is some consequence to a property owner failing to object to a withdrawal application – they lose any “claim against the plaintiff for compensation to the extent of the amount withdrawn.” (§ 1255.230(c)).
May 23, 2012 Annotated by Helen Chacon	-KEY RELATED CASES- Mt. San Jacinto Community College Dist v. Superior Court (2007) http://scholar.google.com/scholar_case?case=11763117656077139252&q=Mt.+S... Redevelopment Agency of San Diego v. Mesdaq (2007) http://scholar.google.com/scholar_case?case=18244972888573268078&q=Redev...
May 23, 2012 Annotated by Helen Chacon	-KEY STATUTES- §1255.260 http://www.leginfo.ca.gov/cgi-bin/displaycode?section=ccp&group=01001-02... §1255.230 http://www.leginfo.ca.gov/cgi-bin/displaycode?section=ccp&group=01001-02... §1255.410 http://www.leginfo.ca.gov/cgi-bin/displaycode?section=ccp&group=01001-02... §1255.210 http://www.leginfo.ca.gov/cgi-bin/displaycode?section=ccp&group=01001-02...
May 23, 2012 Annotated by Helen Chacon	-TAGS- eminent domain, waiver, withdrawal of deposit, California Code of Civil Procedure