IN THE SUPREME COURT OF CALIFORNIA
REGENCY OUTDOOR
ADVERTISING, INC.,
Plaintiff and Appellant,
S132619
v.
Ct.App. 2/4 B159255
CITY OF LOS ANGELES et al.,
Los Angeles County
Defendants and Respondents. )
Super. Ct. No. YC037625
As part of a roadway beautification project in advance of the 2000
Democratic National Convention, the City of Los Angeles (City) planted a number
of palm trees on City-owned property along a public street. Plaintiff Regency
Outdoor Advertising, Inc. (Regency) claims that the trees made several of its
roadside billboards less visible, at least as seen from particular perspectives along
the boulevard. Regency asserts that the City must compensate it for the allegedly
lessened value of its billboards pursuant to inverse condemnation principles, as
well as under state law concerning billboards specifically. The superior court
conducted a bench trial on Regency’s inverse condemnation claim, ultimately
ruling against the firm. The trial court then awarded the City costs and expert
witness fees pursuant to Code of Civil Procedure section 998, with this award
including an amount attributable to expert witness fees that the City incurred
before, as well as after, it extended its offer to compromise.
When Regency appealed, the Court of Appeal affirmed, resolving the
inverse condemnation issue by determining that the property right for which
Regency demands compensation—the right to be seen from a public way—simply
does not exist under the circumstances presented. The Court of Appeal also
rebuffed Regency’s reliance on state law pertaining to billboards, reasoning that
the planting of palm trees near Regency’s displays did not mean that the billboards
had been “removed,” nor their “maintenance or use . . . limited,” as is necessary
for compensation under Business and Professions Code section 5412. Finally, the
Court of Appeal affirmed the award of costs and fees, in full. We granted review,
and now affirm.
With regard to the inverse condemnation issue, we conclude that owners
and occupiers of roadside property do not possess a “right to be seen” that requires
the payment of compensation for municipal landscaping efforts having no
injurious effect on any property rights other than the claimed right to visibility.
We also agree with the Court of Appeal that the planting of trees in the vicinity of
Regency’s billboards did not implicate the compensation requirement set forth in
Business and Professions Code section 5412. Finally, we affirm the award of
costs and fees, rejecting Regency’s arguments that Code of Civil Procedure
section 998 categorically does not apply to offers made by defendants in inverse
condemnation actions, that the City’s offer to compromise was so low as to bar it
from the subsequent recovery of costs and fees, and that Code of Civil Procedure
section 998 does not authorize an award, to a defendant, of expert witness fees
incurred before the defendant extends its offer to compromise.
I. FACTUAL AND PROCEDURAL BACKGROUND
In June 2000, the City undertook a beautification program aimed at
enhancing the appearance of Century Boulevard, a primary access route to and
from Los Angeles International Airport. As part of this project, the City planted
2
mature palm trees along the north and south sides of the road, and in the median of
the roadway. This landscaping all occurred on property owned by the City.
At the relevant times, Regency owned numerous billboard facings located
near Los Angeles International Airport. Several of these displays lined Century
Boulevard, occupying property leased by Regency for commercial advertisement
purposes. Regency protested when the City planted the palm trees along the road.
While Regency acknowledges that the plantings did not physically occupy any
land owned by its lessors, and does not contend that the trees have interfered with
ingress to or egress from these parcels, it claims that the trees screened at least six
of its billboard facings from motorists traveling along Century Boulevard. Since
fewer people could see its billboards clearly with the trees in the way, Regency
argues that the City must compensate it for the supposedly reduced value of the
obscured facings.
Regency pursued these arguments by way of an inverse condemnation
claim alleged in a complaint filed in Los Angeles Superior Court. Regency
subsequently filed an amended complaint that added a claim alleging that the
plantings breached a contract between itself and the City, pursuant to which the
City had agreed not to obstruct the visibility of Regency’s billboards. The
superior court granted the City’s motion for summary adjudication with regard to
the contract claim, but allowed the inverse condemnation claim to go to trial. Prior
to this bench trial, the City sent Regency an offer to compromise pursuant to Code
of Civil Procedure section 998. This proposal offered to settle the matter by
paying Regency $1,000 and removing one of the offending trees. Regency
rejected the offer, and the parties proceeded to argue the case.
At trial, the parties agreed about certain facts, but disputed others. The
parties stipulated that the palm trees along Century Boulevard were situated on
public property owned by the City, “dedicated for public use,” but they disagreed
3
about whether the trees, in and of themselves, had lessened the value of Regency’s
billboards. According to Regency, the trees had occluded several billboard
facings so severely that they impaired or destroyed altogether the billboards’
ongoing economic value.1 The City’s expert, meanwhile, testified that Regency’s
billboards remained visible from multiple perspectives along the road even after
the trees were in place. This expert testified that the billboards had an apparent
value of $4,594,000 before the landscaping and $3,955,000 afterward. However,
the City’s expert opined that this reduced value was attributable to factors such as
a decline in billboard advertising generally and a failure by Regency to
aggressively market its billboards after the trees were planted. In his view, the
planting of the trees, by itself, did not cause Regency to suffer any unavoidable
damages.
The superior court ultimately ruled in the City’s favor. The court
concluded that Regency had failed to prove that “the loss of visibility, if any,
decreased the fair market value of [its] property.” The court also determined that
“defendant’s planting of the trees on Century [Boulevard] as part of the highway
beautification project does not amount to a taking of plaintiff’s property.” In
denying Regency’s motion for a new trial, the superior court concluded that the
“bottom line is that the plaintiff really has not proved a loss, and [plaintiff’s
1
Regency’s briefing includes two sets of “before” and “after” photographs,
depicting two of its billboard facings prior and subsequent to the plantings, as seen
from Century Boulevard. The photographs are intended to demonstrate how much
more difficult it was for drivers to see Regency’s billboards after the City planted
its trees. These pictures are misleading, in that the “after” photographs appear to
have been taken from a greater distance from the billboards than the “before”
pictures had been, a difference that would make Regency’s billboard facings less
obvious in the “after” photographs regardless of whether any trees had been
planted.
4
evidence] was all hearsay. It was all speculative evidence and not reliable
evidence whatsoever.” The superior court also awarded the City $99,145.64 in
costs and fees, a sum that included an amount attributable to expert witness fees
incurred by the City before it extended its offer to compromise.
On Regency’s appeal, the Court of Appeal affirmed. With regard to
Regency’s inverse condemnation claim, the Court of Appeal analyzed numerous
California appellate decisions discussing a right to a reasonable view of one’s
property from a public way, ultimately concluding that a reduction of visibility has
only warranted compensation in situations where the government’s actions also
infringe upon a separate and distinct property right, such as the right of access to
and from the road. Addressing Business and Professions Code section 5412, a
statute that Regency had not relied upon before the trial court, the Court of Appeal
concluded that the City’s actions had neither “removed” the firm’s billboards nor
“limited” their “customary maintenance or use,” as is required for compensation
under the statute. The Court of Appeal then disposed of Regency’s arguments that
the City should not have received costs and fees under Code of Civil Procedure
section 998, finding the offer to compromise statute applicable to inverse
condemnation proceedings, regarding the City’s offer to compromise as
reasonable under the circumstances, and concluding that the statute allows
defendants in the City’s position to recover expert witness fees incurred both
before and after they extend their compromise offers.
We granted review.
II. DISCUSSION
The following discussion addresses in turn Regency’s arguments that
(1) the City has “taken or damaged” its property within the meaning of article I,
section 19 of the California Constitution, and therefore must compensate the firm
for its claimed losses; (2) Regency’s billboards have been “removed,” or their
5
“customary maintenance or use” “limited,” such that the City must provide
compensation under Business and Professions Code section 5412; and (3) the
Court of Appeal erred in affirming the award of costs and fees.
A. Inverse Condemnation
Article I, section 19 of the California Constitution provides, in pertinent
part, that “[p]rivate property may be taken or damaged for public use only when
just compensation, ascertained by a jury unless waived, has first been paid to, or
into court for, the owner.”2 Inverse condemnation actions provide a vehicle for
property owners to obtain “just compensation.” (San Diego Gas & Electric Co. v.
Superior Court (1996) 13 Cal.4th 893, 939; Baker v. Burbank-Glendale-Pasadena
Airport Authority (1985) 39 Cal.3d 862, 866.)
In an inverse condemnation action, before the question turns to the amount
of compensation due, “ ‘the property owner must first clear the hurdle of
establishing that the public entity has, in fact, taken [or damaged] his or her
property . . . .’ [Citation.]” (San Diego Gas & Electric Co. v. Superior Court,
supra, 13 Cal.4th at p. 940.) As part of this threshold showing, the plaintiff must
demonstrate that the government has “taken or damaged” a cognizable property
right. (Selby Realty Co. v. City of San Buenaventura (1973) 10 Cal.3d 110, 119-
120; Hollister Park Inv. Co. v. Goleta County Water Dist. (1978) 82 Cal.App.3d
290, 293.) An inverse condemnation plaintiff does not establish that its property
has been “taken” or “damaged” merely by showing that government action has
2
The words “or damaged” in article I, section 19 signify “that application of
the just compensation provision is not limited to physical invasions of property
taken for ‘public use’ in eminent domain, but also encompasses special and direct
damage to adjacent property resulting from the construction of public
improvements.” (Customer Co. v. City of Sacramento (1995) 10 Cal.4th 368, 379-
380.)
6
somewhat decreased the market value of the property. (HFH, Ltd. v. Superior
Court (1975) 15 Cal.3d 508, 518.)
Regency claims that the City’s landscaping has damaged its “right of
visibility, i.e., the right of the property owner to have the property seen from the
adjacent public street.” The Court of Appeal, after surveying past decisions by
this court and the Courts of Appeal discussing a right to be seen from a public way
(E.g., People v. Ricciardi (1943) 23 Cal.2d 390; Williams v. Los Angeles Ry. Co.
(1907) 150 Cal. 592 (Williams); United Cal. Bank v. People ex rel. Dept. Pub.
Wks. (1969) 1 Cal.App.3d 1; Goycoolea v. City of Los Angeles (1962) 207
Cal.App.2d 729; People ex rel. Dept. of Public Works v. Stevenson & Co. (1961)
190 Cal.App.2d 103; People v. Loop (1954) 127 Cal.App.2d 786; see also People
ex rel. Dept. of Transportation v. Wilson (1994) 25 Cal.App.4th 977), concluded
that no prior appellate court in this state had ever recognized a “freestanding” right
to be seen from a public road, and resolved that it would not be the first. In
determining whether the Court of Appeal correctly rejected Regency’s inverse
condemnation claim, we begin by examining the nature and contours of this
asserted right. (See Bacich v. Board of Control (1943) 23 Cal.2d 343, 349.)
Beginning in the 1800s, American courts began to recognize a number of
“abutter’s rights” enjoyed by property owners along public roads. (See Wilson,
Billboards and the Right to Be Seen from the Highway (1942) 30 Geo. L.J. 723,
729-730.) These rights, described as being in the nature of easements and
“deduced by way of consequence from the purposes of a public street” (Perlmutter
v. Greene (N.Y. 1932) 182 N.E. 5, 6), include the right of access to and from the
road, and the right to receive light and air from the adjoining street. (See Eachus
v. Los Angeles etc. Ry Co. (1894) 103 Cal. 614, 617-618; Barnett v. Johnson
(1863) 15 N.J. Eq. 481, 487-488; 10A McQuillin, The Law of Municipal
Corporations (3d ed. 1999) §§ 30.65 at p. 426; Pepin, California and the Right of
7
Access: The Dilemma Over Compensation (1965) 38 So.Cal. L.Rev. 689, 690.)
Judicial recognition of these rights derives from the perceived expectations of
those who own or purchase property alongside a public street, to the effect that the
land enjoys certain benefits associated with its location next to the road. (See
Colberg, Inc. v. State of California ex rel. Dept. Pub. Wks. (1967) 67 Cal.2d 408,
424; Barnett v. Johnson, supra, 15 N.J. Eq. at pp. 488-489; Bohm v. Metropolitan
El. Ry. Co. (N.Y. 1892) 29 N.E. 802, 805-808; Lohr v. Metropolitan Elevated R.
Co. (N.Y. 1887) 10 N.E. 528, 531-532; cf. Civ. Code, § 831.) It is well-
established, however, that abutter’s rights are qualified, rather than absolute; a
property owner “cannot demand that the adjacent street be left in its original
condition for all time.” (People v. Ayon (1960) 54 Cal.2d 217, 222-223; see also
Brown v. Board of Supervisors (1899) 124 Cal. 274, 281; cf. Albers v. County of
Los Angeles (1965) 62 Cal.2d 250, 265.)
Regency claims that it possesses an abutter’s right to have its billboards
seen from the adjacent public road. Cases discussing whether abutter’s rights
include a right to maintain the visibility of property adjoining a public way
typically fall within one of three categories. The first and most ancient class of
cases involves private parties who place, within or along a street, an obstruction
that impairs the visibility of roadside property. Courts have sometimes treated
these impediments as akin to nuisances and afforded relief to the abutting
landowner. The second and third categories of cases both involve public
defendants, and sound in eminent domain or inverse condemnation rather than in
nuisance. The second type of dispute involves physical takings of private
property, or substantial impairments of the access rights enjoyed by abutting
landowners, that also happen to reduce the visibility of the affected private
property. In this second scenario, some courts have identified a “right to be seen,”
regarding the lost visibility as a type of damage associated with the physical taking
8
or loss of access. The third set of cases concerns government action that impairs
only the visibility of abutting property, without infringing upon any other
recognized property right. In this latter context—typified by the present case—the
virtually unanimous rule provides that there is no freestanding right to be seen, and
that the government need not pay compensation for any lessened visibility. A
more detailed discussion of these three scenarios follows.3
First, some courts have invoked a “right to visibility” in situations in which
a private party has obstructed a road or sidewalk so as to substantially impair the
visibility of an abutting business’s wares or signage. (See, e.g., Williams, supra,
150 Cal. at pp. 594-597; First Nat. Bank v. Tyson (Ala. 1902) 32 So. 144, 150;
Perry v. Castner (Iowa 1904) 100 N.W. 84, 87; Bischof v. Merchants’ Nat. Bank
(Neb. 1906) 106 N.W. 996, 997-998; but cf. Hay v. Weber (Wis. 1891) 48 N.W.
859, 860 [denying the existence of any independently compensable visibility right
where the defendant’s bay window did not affect access to the plaintiff’s store].)4
3
This does not exhaust the catalogue of abutter’s rights that courts have
identified. Some jurisdictions, for example, have regarded property owners as
having an affirmative though qualified right to plant and grow shade trees along
the street adjacent to their property. (See Webb v. Strobach (Mo.App. 1910) 127
S.W. 680, 684; 10A McQuillin, The Law of Municipal Corporations, supra,
§§ 30.66, 30.67 at pp. 428-432, 432-434.)
4
At the same time, the entrenched rule of general application has provided
that absent an agreement to the contrary, no one has a right to an unobstructed
view of their property, from a road, over another’s private property. (See, e.g.,
Mohr v. Midas Realty Corp. (Iowa 1988) 431 N.W.2d 380, 383; Knowles v.
Richardson (K.B. 1670) 184 Eng.Rep. 404, 404; cf. Katcher v. Home S. & L. Assn.
(1966) 245 Cal.App.2d 425, 429 [explaining, in a case involving a claimed right to
a view from the plaintiffs’ property over that of another, that it “has long been
established in this state that a landowner has no easement over adjoining land for
light and air in the absence of an express grant or covenant”]; Crofford v. Atlanta,
B. & A. R. Co. (Ala. 1908) 48 So. 366, 367 [“No one can doubt the right of a party
to build on his own land, even though it entirely cuts off the view, light, and air of
(footnote continued on next page)
9
These obstructions have been regarded as tantamount to nuisances, susceptible to
attack by an aggrieved landowner upon an appropriate showing of harm. (See,
e.g., Bischof v. Merchants’ Nat. Bank, supra, 106 N.W. at p. 997.)
In
Williams, supra, 150 Cal. 592, we recognized an enforceable right to be
seen under such circumstances. The plaintiff in Williams owned a streetside retail
curio store in Los Angeles. (Id. at p. 593.) The defendant, the operator of an
electric street railway, built a switching tower on the sidewalk in front of the
plaintiff’s store. (Id. at pp. 593-594.) The superior court denied the plaintiff’s
request for injunctive relief. (Id. at p. 593.) On appeal, though affirming the
denial of an injunction (id. at p. 597), we acknowledged that lots fronting upon a
street possess certain easements in the street in front of and adjacent to the lot, and
that “[a]ny obstruction to the use of the street which impairs or destroys these
easements is a private injury, special and peculiar to the owner of the lot.” (Id. at
p. 594.) We identified these abutter’s easements as the right of access to and from
the lot by means of the adjacent street, the right to receive light and air from the
street, and “[t]he right to have the street space kept open so that signs or goods
displayed in and upon the lot may be seen by the passersby, in order that they may
be attracted as customers to patronize the business carried on thereon.” (Id. at pp.
594-595.)5
(footnote continued from previous page)
his neighbor on the side next to such building”]; but cf. Prah v. Maretti (Wis.
1982) 321 N.W.2d 182.)
5
Williams, supra, 150 Cal. 592, however, did leave open the possibility that
the landowner might lack enforceable abutter’s rights were it shown that the
private switching tower, for which the city had implicitly granted a license,
necessarily had to be placed on the sidewalk or street, instead of upon nearby
private property. (Id. at pp. 595-596.)
10
It is this third asserted right—the “right to have the street space kept open
so that signs or goods displayed in and upon the lot may be seen by the passersby”
(Williams, supra, 150 Cal. at p. 595)—that Regency presently invokes with its
inverse condemnation claim. The situation here does not implicate this first
general category of visibility cases, however, as Regency alleges that the City, and
not a private party, has infringed upon its claimed abutter’s rights.
Second, courts also have recognized a compensable visibility interest when
government action that includes a partial physical taking of a landowner’s
property impairs the visibility of its remainder, as seen from the adjacent road.
(See, e.g., People v. Ricciardi, supra, 23 Cal.2d at p. 399; People v. Loop, supra,
127 Cal.App.2d at p. 803; see also 8,960 Sq. Feet v. Dept. of Transp. (Alaska
1991) 806 P.2d 843, 848; State v. Strom (Minn. 1992) 493 N.W.2d 554, 561; State
v. Wieswasser (N.J. 1997) 693 A.2d 864, 876; but see State v. Lavasek (N.M.
1963) 385 P.2d 361, 364-365; State v. Schmidt (Tex. 1993) 867 S.W.2d 769,
774.)6 In these cases, the “right to be seen” bears upon the value of the residual
parcel. In other words, the diminution of visibility in these circumstances does
not, by itself, result in the taking or damaging of property, but once a physical
6
Certain jurisdictions draw a distinction between situations in which the
improvement that blocks visibility is located on property taken from the
landowner, and circumstances in which the occluding improvement is located on
property owned by someone else, with the landowner’s property merely being
taken as another part of the overall project. (See, e.g., 8,960 Sq. Feet v. Dept. of
Transp., supra, 806 P.2d at p. 848.) Pursuant to Code of Civil Procedure section
1263.420, this state recognizes no such distinction; however, this does not free the
property owner from demonstrating some physical taking or similar, distinct
impairment of its property in the first instance to justify compensation for an
attendant loss of visibility.
11
taking is established, such diminution is taken into account in determining
damages in a condemnation or inverse condemnation proceeding.7
Third, the government may take action having the sole allegedly injurious
effect of reducing the visibility of roadside property as seen from the street. The
virtually unanimous rule applied in this class of cases provides that any such
impairment to visibility does not, in and of itself, constitute a taking of, or
compensable damage to, the property in question. (See Reid v. Jefferson County
(Ala. 1995) 672 So.2d 1285, 1290; 8,960 Sq. Feet v. Dept. of Transp., supra, 806
P.2d at p. 848; Troiano v. Colorado Department of Highways (Colo. 1969) 463
P.2d 448, 455; Moreton Rolleston, Jr. Living Trust v. DOT (Ga. 2000) 531 S.E.2d
719, 722; Stagni v. State ex rel. Dept. of Transp. (La.App. 2002) 812 So. 2d 867,
871; Malone v. Commonwealth (Mass. 1979) 389 N.E.2d 975, 979; State v. Strom,
supra, 493 N.W.2d at p. 561; Kansas City v. Berkshire Lumber Company (Mo.
1965) 393 S.W.2d 470, 474-475; State v. Wieswasser, supra, 693 A.2d at p. 876;
Perlmutter v. Greene, supra, 182 N.E. at p. 6; Adams Outdoor Adv. v. Dept. of
7
Two Court of Appeal decisions (United Cal. Bank v. People ex rel. Dept.
Pub. Wks., supra, 1 Cal.App.3d at p. 7; Goycoolea v. City of Los Angeles, supra,
207 Cal.App.2d at p. 735) identified a visibility right in situations in which there
was no physical taking of private property, but there was a substantial impairment
of the right of access to and from the affected parcels due to road work by the
government. While these decisions discuss a “right” to visibility, in both cases the
reduced visibility was tethered to a compensable claim of impaired physical
access. (See United Cal. Bank v. People ex rel. Dept. Pub. Wks., supra, 1
Cal.App.3d at p. 7; Goycoolea v. City of Los Angeles, supra, 207 Cal.App.2d at
pp. 735-736.) Both United Cal. Bank and Goycoolea, therefore, can be reconciled
with cases involving partial physical takings, in that these two decisions
considered a diminution of visibility in ascertaining the ramifications of
government action that also took or damaged a properly compensable property
interest. Contrary to Regency’s characterization of these decisions, neither United
Cal. Bank nor Goycoolea stands for the proposition that a reduction of visibility,
on its own, requires the payment of compensation.
12
Transp. (N.C.App. 1993) 434 S.E.2d 666, 668; Filler v. City of Minot (N.D. 1979)
281 N.W.2d 237, 244; In re Condemnation by the Delaware River Port Authority
(Pa.Commw.Ct. 1995) 667 A.2d 766, 768; Outdoor Advertising Ass’n of Tenn. v.
Shaw (Tenn.App. 1980) 598 S.W.2d 783, 788; Randall v. City of Milwaukee (Wis.
1933) 249 N.W. 73, 76.)8
Courts gainsaying any compensable “right to be seen” absent a physical
taking, or an infringement upon the right of access, have advanced different
justifications for their shared conclusion. Some jurists emphasize that
construction and landscaping that may limit visibility along a street lies within the
contemplation of those who dedicate part of their property to, or who settle along,
public roads. Given this foreseeability, it works no unanticipated unfairness to
refuse compensation when such obstructions come into being as part of
improvements to the road. “ ‘What makes street frontage valuable is the fact that
people travel over the street, and the abutter cannot complain of improvements
that facilitate such travel. He must anticipate that such improvements will be
made . . . .’ ” (Kansas City v. Berkshire Lumber Company, supra, 393 S.W.2d at
p. 475; cf. Palmer v. Larchmont Electric Co. (N.Y. 1899) 52 N.E. 1092, 1093
[stating that the installation of lights along city streets “is deemed one of the uses
for which the land was taken as a public highway”].)
8
One court has concluded that the government may interfere with an
easement of view without giving rise to a taking if said “interference is
reasonable.” (State v. Suit City of Aventura (Fla. Dist.Ct.App. 2000) 774 So. 2d 9,
14.) Another jurisdiction has recognized a cognizable visibility interest in
displaying wares situated or services offered on the roadside premises, but not in
using abutting property to advertise goods or services located or offered off-site.
(Kelbro, Inc. v. Myrick (Vt. 1943) 30 A.2d 527, 529-531.)
13
Another line of decisions stresses a related consideration, namely the
government’s authority to maintain and improve the road system. Pursuant to this
view, “[i]n the exercise of such supervision and control [over public roads]
doubtless [the government] may plant shade trees along the road to give comfort
to motorists and incidentally to improve the appearance of the highway. By so
doing [the government] aims to make a better highway than a mere scar across the
land would be. If trees interfere with the view of the adjacent property from the
road, no right is interfered with.” (Perlmutter v. Greene, supra, 182 N.E. at p. 6;
see also Reid v. Jefferson County, supra, 672 So.2d at p. 1290; Outdoor
Advertising Ass’n of Tenn. v. Shaw, supra, 598 S.W.2d at p. 788 [“the State may
with impunity interfere with the view of motorists to adjacent property so long as
the interference is the result of a bona fide program of highway beautification”].)
A similar, but slightly more nuanced view regards the rights to reasonable
ingress and egress as the only abutter’s rights warranting compensation for their
abridgement when the government acts to improve a public road. “Generally,
there are two primary purposes for the existence of a street or highway. The first
is to provide a means of passage for the public and the second is to provide a
means of access to and egress from abutting lands. Any other benefits to abutting
lands that may result from the existence of a street or highway are merely
incidental to such existence and do not generally represent reasons for its
establishment as a public highway. [¶] Hence, in our opinion, any rights which
owners of such abutting land may have with respect to such other benefits are
necessarily held subject to the public right to make improvements for
accomplishment of the foregoing two primary purposes for the existence of a
street or highway.” (State v. Preston (Ohio 1960) 166 N.E.2d 748, 751-752
[discussing visibility from and of roadside property].)
14
We follow the weight of authority and conclude that Regency has no
visibility right warranting compensation here. It bears emphasis that Williams,
supra, 150 Cal. 592, the first decision in this state recognizing any “right to be
seen,” qualified its holding by noting that “[a]ny obstruction to the use of the
street which impairs or destroys [an abutter’s] easements is a private injury.” (Id.
at p. 594, italics added.) Our careful phrasing implied that activity that comports
with the fundamental purposes served by the roads does not produce a private
injury. The planting of trees along a road is, in general, fully “consistent with [the
road’s] use as an open public street” (McNair v. McNulty (N.Y. App.Div. 2002)
744 N.Y.S.2d 438, 439), and in fact may enhance both travel and commerce along
the street. Regency has not argued and cannot claim that this general rule does not
hold true here, and that the trees at issue have subverted or restricted either of the
fundamental purposes that roads serve. (See State v. Preston, supra, 166 N.E.2d
at pp. 751-752.) No one has complained that the trees have made it more difficult
to gain access to or from, or to travel along, Century Boulevard.
Moreover, Regency cannot claim unfair surprise from the plantings. Local
governments have long planted trees along roads for aesthetic reasons, to lessen
the burdens of climate, and for other salubrious purposes. “The maintenance of
trees in a street for the purpose of ornament and shade is a proper street use,
sanctioned both by statute and the custom of the country.” (Donahue v. Keystone
Gas Co. (1905) 73 N.E. 1108, 1109; see also L.A. Res. No. 89,450 (Jan. 21, 1998)
[resolving that “[s]treet trees are recognized as an essential part of the City of Los
Angeles urban forest infrastructure” and announcing a goal of achieving “an
optimum degree of canopy cover in order to shade City streets”]; McNair v.
McNulty, supra, 744 N.Y.S.2d at p. 439 [“The maintenance of trees in a street for
the purposes of ornament and shade has been determined to be a proper street
use”].) Anyone who purchases or occupies property along a public road is
15
presumed aware of this heretofore undisturbed—indeed, typically welcomed—
custom. When such landscaping is involved, at least absent unusual circumstances
not present here, denying compensation for reduced visibility, in and of itself,
without an additional showing of a partial physical taking or substantially
impaired access, visits no unfairness upon property owners or others who occupy
roadside parcels.
The foregoing, on its own, establishes that the superior court and Court of
Appeal properly rejected Regency’s inverse condemnation claim. But we also
observe in passing that there has been no showing here that the City’s landscaping
reduced the value of any of the parcels abutting Century Boulevard upon which
Regency’s billboards sit. Nor can we infer any such damage, for “[i]f [a] street is
improved so as to be more useful, or ornamented so as to be more beautiful, the
public is benefited generally and the abutter is benefited specially.” (Donahue v.
Keystone Gas Co., supra, 73 N.E. at p. 1110.) Meanwhile, even if one were to
assume that the trees prevented abutting owners from displaying billboards on
their property, this would represent, at worst, one manifestation of “traditional
land-use regulations” that “have long been held to be valid exercises of the city’s
traditional police power, and do not amount to a taking merely because they might
incidentally restrict a use, diminish the value, or impose a cost in connection with
the property. [Citations.]” (Ehrlich v. City of Culver City (1996) 12 Cal.4th 854,
886.)
Regency, of course, claims a more specific and severe impairment of the
particular “strand” it has severed from the bundle of rights enjoyed by its lessors.
Through its lease agreements Regency has acquired a property interest acutely
sensitive to impairments to visibility. But as a general matter, “we do not believe
that a property owner, confronted with an imminent property regulation, can
nullify . . . a legitimate exercise of the police power by leasing narrow parcels or
16
interests in his property so that the regulation could be characterized as a taking
only because of its disproportionate effect on the narrow parcel or interest leased.”
(Adams Outdoor Advertising v. City of East Lansing (Mich. 2000) 614 N.W.2d
634, 639; see also Tahoe-Sierra Preservation Council v. Tahoe Regional Planning
Agency (2002) 535 U.S. 302, 327 [reiterating that “taking” jurisprudence “ ‘does
not divide a single parcel into discrete segments and attempt to determine whether
rights in a particular segment have been entirely abrogated’ ”].) As previously
established, Regency and the owners of the property upon which its billboards sat
bargained in the shade of the government’s well-established prerogative to plant
trees on its own property. Regency now would have us foist onto the public what
was appropriately a subject for negotiation between the firm and its lessors. We
perceive no constitutional requirement that the public absorb these costs.
All in all, we conclude that the Court of Appeal was correct, and that
Regency has not advanced a property right warranting compensation here. Where,
as in this case, an impairment of a billboard’s visibility is the sole harm alleged
from a municipal landscaping project occurring on city-owned property, eminent
domain and inverse condemnation principles do not require the payment of
compensation.
B. Business and Professions Code Section 5412
Regency also claims that Business and Professions Code section 5412, part
of the Outdoor Advertising Act (Bus. & Prof. Code, § 5200 et seq.), directs that it
receive compensation for the allegedly lessened value of its billboards. Section
5412 provides, in pertinent part, “Notwithstanding any other provision of this
chapter, no advertising display which was lawfully erected anywhere within this
state shall be compelled to be removed, nor shall its customary maintenance or use
be limited, whether or not the removal or limitation is pursuant to or because of
this chapter or any other law, ordinance, or regulation of any governmental entity,
17
without payment of compensation . . . .” Regency asserts that the City’s plantings
have effectively “removed,” or “limited” the use of its billboard facings, requiring
the payment of compensation.
In interpreting Business and Professions Code section 5412, “we look to the
intent of the Legislature in enacting the law, ‘being careful to give the statute’s
words their plain, commonsense meaning. [Citation.] If the language of the
statute is not ambiguous, the plain meaning controls and resort to extrinsic sources
to determine the Legislature’s intent is unnecessary.’ [Citation.]” (In re Jennings
(2004) 34 Cal.4th 254, 263.) “If, however, the statutory language lacks clarity, we
may resort to extrinsic sources, including the ostensible objects to be achieved and
the legislative history.” (People v. Walker (2002) 29 Cal.4th 577, 581.)
The language within Business and Professions Code section 5412 regarding
the “removal” of billboards does not apply here. The planting of trees close to a
billboard does not “remove” the display, for obvious reasons. Trees or no, the
billboard remains in place. Whether the City’s actions have “limited” the
“customary maintenance or use” of the billboards at issue poses a more difficult
interpretive question. “Limit,” when used as a verb, means “to assign to or within
certain limits” or “to set bounds or limits to.” (Webster’s 3d New Internat. Dict.
(2002) p. 1312, col. 3.) Thus, Business and Professions Code section 5412 could
be construed as stating, in pertinent part, “nor shall [a billboard’s] customary
maintenance or use be set or assigned to or within certain bounds or limits,”
without payment of compensation. Under this interpretation of the statute, the
compensation requirement would seem to apply only to government action
specifically directed at limiting the “maintenance or use” of a billboard or
billboards. Furthermore, the statute’s enumeration of specific methods of
billboard control that necessitate compensation—“law[s], ordinance[s], [and]
regulation[s]”—suggests that the Legislature was principally, though perhaps not
18
exclusively (see Bus. & Prof. Code, § 5412.6), concerned with the control of
billboards through positive law, not prosaic government activity of the sort at issue
here. However, as it is also possible that the statute sweeps more broadly to
encompass any government action with the effect of restricting a billboard’s
“customary maintenance or use,” perhaps including actions that incidentally
impair a billboard’s visibility, we must turn to other sources, including the history
of Business and Professions Code section 5412, to ascertain the intent of the
enacting Legislature.
Business and Professions Code section 5412 is but one component of the
state’s regulatory scheme governing billboards. Since 1967, the Outdoor
Advertising Act has provided for the payment of compensation upon the removal
of certain billboards, as needed to satisfy federal highway beautification law. (See
former Bus. & Prof. Code, § 5288.3a, enacted by Stats. 1967, ch. 1408, § 21, pp.
3313-3314, and repealed by Stats. 1970, ch. 991, § 1, p. 1764; former Bus. & Prof.
Code, § 5412, as enacted by Stats. 1970, ch. 991, § 2, pp. 1776-1777.) As
previously codified, this statutory compensation requirement only pertained to
those billboards that had been removed in order to comply with federal law and
thus protect California’s receipt of highway funds. (See former Bus. & Prof.
Code, § 5288.3a, enacted by Stats. 1967, ch. 1408, § 21, pp. 3313-3314, and
repealed by Stats. 1970, ch. 991, § 1, p. 1764; former Bus. & Prof. Code, § 5412,
as enacted by Stats. 1970, ch. 991, § 2, pp. 1776-1777; Metromedia, Inc. v. City of
San Diego (1980) 26 Cal.3d 848, 879.) These earlier statutes also did not require
compensation for “limitations” placed on an advertising display’s maintenance or
use.
In 1982, however, the Legislature repealed and reenacted Business and
Professions Code section 5412 (Stats. 1982, ch. 494, §§3-4, p. 2112), and in so
doing rewrote its compensation language to provide, as it presently does, that
19
“[n]otwithstanding any other provision of this chapter, no advertising display
which was lawfully erected anywhere within this state shall be compelled to be
removed, nor shall its customary maintenance or use be limited, whether or not the
removal or limitation is pursuant to or because of this chapter or any other law,
ordinance, or regulation of any governmental entity, without payment of
compensation . . . .” The amended statute thus directs the payment of
compensation for the removal of billboards lawfully erected anywhere in the state,
subject to specific exemptions recognized by the Legislature (see Bus. & Prof.
Code, §§ 5412.1, 5412.2, 5412.3), and adds a compensation requirement
implicated when the government “limit[s]” the “customary maintenance or use” of
a display. (Id., § 5412.)
Curiously, while the committee reports and analyses prepared for the 1982
repeal and reenactment of Business and Professions Code section 5412 discuss the
compensation requirement at length insofar as it concerns the removal of
billboards, the legislative history is completely silent with regard to any need to
pay for limitations placed upon a billboard’s “customary maintenance or use.”
(See, e.g., Assem. 3d Reading Analysis, Assem. Bill No. 1353 (1981-1982 Reg.
Sess.) June 28, 1982, p. 1.) In discussing the fiscal effect of the new provisions,
for example, an analysis of the proposed legislation states only that “[l]ocal
governments could incur undeterminable state mandated costs to compensate for
the required removal of certain outdoor advertising displays. These costs are
potentially reimbursable. The bill contains a general local costs disclaimer.”
(Ibid.) No mention is made of any costs attributable to the “limitation” of
billboards.
We believe that the requirement in Business and Professions Code section
5412 that the “customary maintenance or use” of a billboard shall not “be limited,”
“whether or not” by “law, ordinance, or regulation of any governmental entity,”
20
“without payment of compensation,” does not pertain to municipal landscaping
efforts that may incidentally impair the visibility of nearby advertising facings.
We premise our conclusion on the following grounds. First, “it is not to be
presumed that the legislature in the enactment of statutes intends to overthrow
long-established principles of law unless such intention is made clearly to appear
either by express declaration or by necessary implication.” (County of Los
Angeles v. Frisbie (1942) 19 Cal.2d 634, 644; see also Torres v. Automobile Club
of So. California (1997) 15 Cal.4th 771, 779.) As detailed in connection with
Regency’s inverse condemnation claim, no appellate court in this state has ever
recognized a right to compensation for impaired visibility, standing alone. Had
the Legislature intended to adopt a more generous stance toward those who own
and operate billboards, we believe that it would have made its intentions more
clear than simply prohibiting the uncompensated “limit[ation]” of a display’s
“customary maintenance or use.”
Likewise, had the Legislature in fact intended to mandate compensation in
every situation in which government activity happens to incidentally affect the
visibility of a billboard, we do not believe that this point would have gone
unremarked upon in the legislative history, particularly in discussions of the fiscal
effect of the proposed legislation. Regency argues that the Legislature that
repealed and reenacted Business and Professions Code section 5412 adopted a
novel compensation requirement for reduced visibility attributable to government
action, a mandate that applies regardless of whether the government intended to
block the affected billboard or billboards from view. Under this interpretation of
the statute, payment would be required not only for the planting of trees, but also
in a myriad of other situations, e.g., whenever the government erects a building
that partially occludes a nearby billboard. The costs attendant to this new
compensation requirement would be considerable. We doubt that a Legislature
21
that actually intended to compel payment for reduced visibility would completely
overlook these costs when discussing the statute’s fiscal effect.
The arguments Regency advances in favor of a broader interpretation of
Business and Professions Code section 5412 are unconvincing. Regency claims to
find support for its interpretation of the statute in a section of the Outdoor
Advertising Act addressing “landscaped” freeways. Subject to certain exceptions,
“no advertising display may be placed or maintained on property adjacent to a
section of a freeway that has been landscaped if the advertising display is designed
to be viewed primarily by persons traveling on the main-traveled way of the
landscaped freeway.” (Bus. & Prof. Code, § 5440; see also id., § 5216 [defining
“landscaped freeway”].) Business and Professions Code section 5443, subdivision
(b) states that, provided other requirements are also met, the prohibition
announced by section 5440 will not bar government entities “from entering into a
relocation agreement pursuant to Section 5412 or the [Department of
Transportation] from allowing any legally permitted display to be increased in
height at its permitted location or to be relocated if a noise attenuation barrier is
erected in front of the display or if a building, construction, or structure, including,
but not limited to, a barrier, bridge, overpass, or underpass, has been or is then
being erected by any government entity that obstructs the display’s visibility
within 500 feet of the display . . . .” In leveraging this language, Regency notes
that government entities may avoid paying compensation under the Outdoor
Advertising Act by authorizing the relocation of removed billboards. (Bus. &
Prof., § 5412.) According to Regency, by authorizing relocation agreements in
situations involving government improvements that obstruct the visibility of
advertising displays, Business and Professions Code section 5443, subdivision (b)
implicitly recognizes that, absent these agreements, all barriers to visibility erected
by the government will otherwise require compensation under section 5412.
22
Regency reads too much into Business and Professions Code section 5443,
subdivision (b). The Legislature enacted the provisions invoked by Regency
merely to clarify that, the restrictions on advertising displays along landscaped
freeways notwithstanding, the Department of Transportation may allow existing
displays to be heightened or moved to alternative locations when certain
government projects impair their visibility. (See, e.g., Assem. 3d Reading
Analysis, Assem. Bill No. 2795 (1991-1992 Reg. Sess.) as amended Apr. 6, 1992,
pp. 1-2 [discussing the purpose of an earlier version of the statute that related only
to visibility problems caused by soundwalls].)9 That the Legislature has specified
that the Department of Transportation may allow the relocation or raising of a
billboard under specified circumstances falls well short of showing that the agency
must do so in order to avoid the compensation requirement imposed by Business
and Professions Code section 5412.
To summarize, we conclude that roadway beautification projects that may
affect the visibility of nearby billboards, but are not undertaken for the purpose of
limiting the “customary maintenance or use” of the displays, do not trigger the
statutory compensation requirement. Here, Regency has offered no evidence
establishing that the trees at issue were planted along Century Boulevard for the
purpose of blocking its billboards from view—indeed, the evidence adduced at
9
This analysis provides, in pertinent part, “When Cal-Trans [sic] erects
freeway noise abatement walls, many times permitted billboards will be partially
or completely covered by the sound walls. Typically, Cal-Trans will deny a
billboard owner permission to increase the height of the billboard enough to clear
the sound wall and allow unobstructed vision on the basis that the freeway is
‘landscaped’ and billboards are not permitted on landscaped freeways. [¶] This
bill stipulates that the landscape requirements do not prohibit Cal-Trans from
increasing the height of a legally permitted sign unless the action would cause a
reduction in federal highway funds.” (Assem. 3d Reading Analysis, Assem. Bill
No. 2795 (1991-1992 Reg. Sess.) as amended Apr. 6, 1992, pp. 1-2.)
23
trial was to the contrary, with the manager of the landscaping project testifying
that the trees had not been planted for this reason. Business and Professions Code
section 5412 does not apply to these circumstances.
C. Code of Civil Procedure Section 998
The third issue implicated in this appeal involves the trial court’s decision,
subsequently affirmed by the Court of Appeal, to award the City fees and costs
pursuant to Code of Civil Procedure section 998. Regency challenges this award
on three grounds. The firm argues that Code of Civil Procedure section 998,
subdivision (c)(1) does not apply to inverse condemnation actions; that the trial
court abused its discretion in awarding fees and costs because the City’s offer to
compromise was not extended in good faith, and that the trial court erred in
awarding the City expert witness fees incurred prior to the date of its offer to
compromise. We conclude that all of Regency’s arguments lack merit, and that
the award of fees and costs should stand.
Code of Civil Procedure section 998 is designed to encourage the
settlement of lawsuits before trial. (T. M. Cobb Co. v. Superior Court (1984) 36
Cal.3d 273, 280.) Pursuant to section 998, “[n]ot less than 10 days prior to
commencement of trial or arbitration,” a party in a case “may serve an offer in
writing upon any other party to the action to allow judgment to be taken or an
award to be entered in accordance with the terms and conditions stated at that
time.” (Code Civ. Proc., § 998, subd. (b).) If the party to whom the offer is
extended accepts the offer, it is filed with the clerk and judgment is entered
accordingly. (Id., subd. (b)(1).) On the other hand, as pertinent here, “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 postoffer
costs and shall pay the defendant’s costs from the time of the offer. In addition, in
any action or proceeding other than an eminent domain action, the court or
24
arbitrator, in its discretion, may require the plaintiff to pay a reasonable sum to
cover costs of the services of expert witnesses, who are not regular employees of
any party, actually incurred and reasonably necessary in either, or both,
preparation for trial or arbitration, or during trial or arbitration, of the case by the
defendant.” (Id., subd. (c)(1).) Furthermore, “If an offer made by a plaintiff is not
accepted and the defendant fails to obtain a more favorable judgment or award in
any action or proceeding other than an eminent domain action, the court or
arbitrator, in its discretion, may require the defendant to pay a reasonable sum to
cover postoffer costs of the services of expert witnesses, who are not regular
employees of any party, actually incurred and reasonably necessary in either, or
both, preparation for trial or arbitration, or during trial or arbitration, of the case by
the plaintiff, in addition to plaintiff’s costs.” (Id., subd. (d).)
In challenging the award of cost and fees on the asserted ground that Code
of Civil Procedure section 998, subdivision (c)(1) categorically does not apply to
inverse condemnation actions, Regency focuses upon the subdivision’s proviso
that its discretionary language applies to “any action or proceeding other than an
eminent domain action.”10 (Ibid.) Emphasizing our description of an inverse
condemnation action as “ ‘an eminent domain proceeding initiated by the property
owner rather than the condemner’ ” (Customer Co. v. City of Sacramento, supra,
10 Cal.4th at p. 377, fn. 4), Regency asserts that this exclusion of eminent domain
proceedings also encompasses inverse condemnation actions, and applies to the
entire subdivision. In so arguing, Regency acknowledges that its interpretation of
“eminent domain,” as used within Code of Civil Procedure section 998,
10
Code of Civil Procedure section 998, subdivision (g)(1) also provides that
the statute does not apply to offers made by plaintiffs in eminent domain actions.
25
subdivision (c)(1), was rejected by Goebel v. City of Santa Barbara (2001) 92
Cal.App.4th 549, 558-559 (Goebel), but urges us to disapprove that decision.
Goebel, supra, 92 Cal.App.4th 549, was, like this, an inverse condemnation
action in which the plaintiffs rejected a city’s offer to compromise and the trial
court ultimately awarded the city costs and expert witness fees. The plaintiffs
challenged the award of fees, arguing that Code of Civil Procedure section 998
does not apply to inverse condemnation claims. The Goebel court, recognizing
that Code of Civil Procedure section 998, subdivision (c)(1) refers only to eminent
domain actions, stated that “[t]he validity of the court’s fee award depends on
whether ‘eminent domain,’ as used in section 998, should be read to include
‘inverse condemnation.’ ” (Goebel, supra, 92 Cal.App.4th at p. 558.) The court
then noted that inverse condemnation and eminent domain proceedings “are not
synonymous, and the terms are not interchangeable. In an eminent domain
proceeding, a public entity files suit to condemn a piece of private property that is
necessary for a public use. In an inverse condemnation action, the property owner
seeks just compensation from a public entity that has taken or damaged property
for a public purpose. [Citation.] [¶] If the Legislature had intended to restrict the
use of section 998 offers in all inverse condemnation actions, we believe it would
have done so explicitly.” (Goebel, supra, 92 Cal.App.4th at pp. 558-559.)
We agree with Goebel. While in certain circumstances it may be
appropriate for courts to apply, in inverse condemnation actions, principles
developed in connection with eminent domain proceedings (see Pacific Bell v.
City of San Diego (2000) 81 Cal.App.4th 596, 602), as the Goebel court
recognized, inverse condemnation and eminent domain proceedings are not
identical. A property owner initiates an inverse condemnation action, while an
eminent domain proceeding is commenced by a public entity. (Klopping v. City of
Whittier (1972) 8 Cal.3d 39, 43.) Eminent domain actions typically focus on the
26
amount of compensation owed the property owner, since by initiating the
proceeding the government effectively acknowledges that it seeks to “take or
damage” the property in question. (San Diego Gas, supra, 13 Cal.4th at pp. 939-
940.) In an inverse condemnation action, by contrast, “ ‘the property owner must
first clear the hurdle of establishing that the public entity has, in fact, taken [or
damaged] his or her property before he or she can reach the issue of “just
compensation.” ’ [Citation.]” (Id. at p. 940; see also Beaty v. Imperial Irrigation
District (1986) 186 Cal.App.3d 897, 903-904 [discussing the differences between
inverse condemnation actions and eminent domain proceedings].)
We doubt that these differences have been lost on the Legislature. The Law
Revision Commission comments to the Eminent Domain Law, Code of Civil
Procedure section 1230.010 et seq., discern a difference between the two forms of
action, as they provide that the law’s provisions “are intended to supply rules only
for eminent domain proceedings” with “[t]he law of inverse condemnation . . . left
for determination by judicial development.” (Cal. Law Revision Com. com.,
19 West’s Ann. Code Civ. Proc. (1982 ed.) foll. § 1230.020, p. 395.) Moreover,
the Legislature is fully capable of referring to inverse condemnation actions by
name in connection with the award of costs; Code of Civil Procedure section 1036
pertains expressly to the award of costs in inverse condemnation proceedings that
result in compensation being paid to the plaintiff. We conclude from these indicia
that the Legislature perceives a difference between eminent domain and inverse
condemnation, and that the Legislature did not intend for its reference to eminent
domain in Code of Civil Procedure section 998, subdivision (c)(1), to encompass
inverse condemnation proceedings.11
11
Regency also asserts that the just compensation requirement under article I,
section 19 of the California Constitution prohibits the award of costs or fees under
(footnote continued on next page)
27
Next, Regency asserts that the City’s offer of $1,000 and removal of one of
the trees was “unreasonable,” and therefore provided no basis for an award of fees
and costs. Regency’s argument stems from decisions holding that, to provide
grounds for an award under Code of Civil Procedure section 998, an offer to
compromise must be extended in “good faith,” meaning that the offer “must be
realistically reasonable under the circumstances of the particular case” (Wear v.
Calderon (1981) 121 Cal.App.3d 818, 821), and “carry some reasonable prospect
of acceptance” (Elrod v. Oregon Cummins Diesel, Inc. (1987) 195 Cal.App.3d
692, 698). Assuming without deciding that Code of Civil Procedure section 998
entails such a requirement, we conclude that the trial court did not abuse its
discretion in awarding fees and costs.
Throughout the proceedings below, the City pursued ultimately meritorious
arguments that provided a complete defense to Regency’s claims. Although, at the
time of the City’s offer, the superior court had denied its motion for summary
judgment or, in the alternative, summary adjudication insofar as it pertained to
(footnote continued from previous page)
Code of Civil Procedure section 998, subdivision (c)(1) against a plaintiff in an
inverse condemnation action who has established that it has suffered compensable
harm (see Orpheum Bldg. Co. v. San Francisco Bay Area Rapid Transit Dist.
(1978) 80 Cal.App.3d 863, 878), and that section 998 cannot be read as
authorizing only awards against unsuccessful inverse condemnation plaintiffs.
Regardless of whether Regency has espied a valid constitutional concern in the
context of section 998 with regard to successful inverse condemnation plaintiffs
(see Locklin v. City of Lafayette (1994) 7 Cal.4th 327, 376; City of Los Angeles v.
Ricards (1973) 10 Cal.3d 385, 390-391; Goebel, supra, 92 Cal.App.4th at p. 559),
we disagree with the premise underlying its argument, namely that the existence of
a narrow, constitutionally required exception to a statute compels us to rewrite the
law in other respects, as would occur here if we were to ignore the difference
between eminent domain and inverse condemnation.
28
Regency’s inverse condemnation claim, we disagree with Regency’s opinion that
this setback required the City to issue an offer more generous than the one it
extended. Given Regency’s assertions that the impaired visibility of its billboards
cost it millions in damages, the City’s offer to remove one of the trees that it had
planted possessed genuine value. Moreover, the City maintained throughout the
litigation, and the trial court ultimately agreed, that Regency had no compensable
right warranting compensation; this lawsuit was not a mere dispute over the extent
of damages. (See Nelson v. Anderson (1999) 72 Cal.App.4th 111, 134 [noting that
even a modest offer may be reasonable if an action is completely lacking in
merit].) Under the circumstances, we conclude that by offering to remove one of
the trees and pay Regency $1,000, the City satisfied whatever good faith
requirement may apply to a settlement offer under Code of Civil Procedure section
998.
Third and finally, Regency argues that the trial court erred in awarding the
City expert witness fees, at least to the extent that these fees were incurred prior to
the City’s offer to compromise. Regency contends that Code of Civil Procedure
section 998, subdivision (c)(1) limits recoverable fees to those incurred after an
offer is extended. The Court of Appeal below held that, to the contrary, this
subdivision authorizes compensation for fees incurred both prior to and after a
compromise offer is extended. We agree with the Court of Appeal.
As stated previously, Code of Civil Procedure section 998, subdivision
(c)(1), provides in relevant part that “[i]f 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 postoffer costs and shall pay the defendant’s
costs from the time of the offer. In addition . . . the court or arbitrator, in its
discretion, may require the plaintiff to pay a reasonable sum to cover costs of the
services of expert witnesses . . . actually incurred and reasonably necessary in
29
either, or both, preparation for trial or arbitration, or during trial or arbitration, of
the case by the defendant.” The first sentence quoted above limits recoverable
“costs” to those incurred from the time of the offer. The second sentence, which
relates to the “costs of the services of expert witnesses,” contains no such
limitation. The Court of Appeal concluded that the omission in the second
sentence was intentional, and that the City was entitled to both preoffer and
postoffer expert witness fees.
Regency interprets Code of Civil Procedure section 998, subdivision (c)(1)
differently, regarding expert witness fees as one of many “cost” items recoverable
only to the extent they are incurred after an offer is extended. While Regency
allows that Code of Civil Procedure section 1033.5, which defines “costs” for
purposes of Code of Civil Procedure section 998, excludes expert witness fees to
the extent that these witnesses were not ordered by the court (id., § 1033.5, subd.
(b)(1)), Regency argues that the offer to compromise statute, by referring to the
“costs of the services of expert witnesses,” nonetheless treats these fees as an item
of costs governed by the postoffer limitation.
We disagree with Regency, for its argument overlooks the fact that awards
of expert witness fees under Code of Civil Procedure section 998, subdivision (c)
have never been tied to when these fees were incurred relative to a compromise
offer. As originally enacted, Code of Civil Procedure section 998, subdivision (c)
provided, “If an offer made by a defendant is not accepted and the plaintiff fails to
obtain a more favorable judgment, the plaintiff shall not recover his costs and shall
pay the defendant’s costs from the time of the offer. In addition, in any action or
proceeding other than an eminent domain action, the court, in its discretion, may
require the plaintiff to pay the defendant’s costs from the date of filing of the
complaint and a reasonable sum to cover costs of the services of expert witnesses,
who are not regular employees of any party, actually incurred and reasonably
30
necessary in the preparation of the case for trial by the defendant.” (Former Code
Civ. Proc., § 998, subd. (c), as added by Stats. 1971, ch. 1679, § 3, p. 3606.) The
first sentence directed the payment of defense costs “from the time of the offer,”
the second gave the court discretion to award both “costs from the date of filing of
the complaint” and “costs of the services of expert witnesses . . . actually incurred
and reasonably necessary in the preparation of the case for trial by the defendant.”
Thus, only the first, directive provision was limited to postoffer costs.
The Legislature amended Code of Civil Procedure section 998, subdivision
(c) in 1997 (Stats. 1997, ch. 892, § 1), deleting its language allowing the
discretionary award of costs “from the date of filing of the complaint.”
Significantly, the 1997 amendments to section 998, subdivision (c) preserved
within the new subdivision (c)(1) the prerogative of the court to award “a
reasonable sum to cover costs of the services of expert witnesses . . . actually
incurred and reasonably necessary in preparation for trial or arbitration of the case
by the defendant.” (Stats. 1997, ch. 892, § 1.)12 Had the Legislature intended
with this amendment to limit defendants to postoffer expert witness fees, we think
12
The 1997 amendment thus made minor modifications to the language
within Code of Civil Procedure section 998, subdivision (c) relating to the award
of expert witness fees, which from 1977 to that time had authorized the award of
fees “actually incurred and reasonably necessary in either, or both, the preparation
or trial of the case by the defendant.” (See Stats. 1977, ch. 458, § 1, p. 1513,
italics added.) In 1999, the Legislature amended section 998, subdivision (c)(1) to
reinstate the court’s authority to award expert witness fees incurred at trial or
arbitration, which inadvertently had been repealed in 1997. (Stats. 1999, ch. 353,
§ 1; Assem. Com. on Judiciary, Analysis of Sen. Bill No. 1161 (1999-2000 Reg.
Sess.) July 13, 1999, pp. 1-2.)
31
it would have said so more clearly, rather than retain language that defined the
scope of allowable expert fees by their connection to trial.13
We therefore reject all three of Regency’s challenges to the award of costs
and fees.
III. DISPOSITION
We affirm the judgment of the Court of Appeal.
MORENO,
J.
WE CONCUR: GEORGE, C. J.
13
Also, the Legislature’s avowed purpose in amending the statute in 1997
was to “remove an inequality in the current law which treats defendants more
favorably than plaintiffs.” (Assem. Com. on Judiciary, Analysis of Sen. Bill. No.
73 (1997-1998 Reg. Sess.) July 16, 1997, p. 6.) At that time and up until a 2005
amendment to the statute, plaintiffs could receive expert witness fees under Code
of Civil Procedure section 998, subdivision (d), regardless of when these fees were
incurred relative to the compromise offer. (See Stats. 2005, ch. 706, § 13 [adding
the word “postoffer” to section 998, subdivision (d)].) We hesitate to read the
1997 amendments as putting defendants in a worse position than that occupied by
plaintiffs at that time with regard to the recovery of expert witness fees, as
Regency would have us do.
32
KENNARD,
J.
BAXTER,
J.
WERDEGAR,
J.
CHIN,
J.
CORRIGAN,
J.
33
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. Name of Opinion Regency Outdoor Advertising, Inc. v. City of Los Angeles
__________________________________________________________________________________
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 126 Cal.App.4th 1281
Rehearing Granted
__________________________________________________________________________________
Opinion No.
S132619Date Filed: August 7, 2006
__________________________________________________________________________________
Court:
SuperiorCounty: Los Angeles
Judge: Jean E. Matusinka
__________________________________________________________________________________
Attorneys for Appellant:
Berger & Norton, Manatt, Phelps & Phillips, Michael M. Berger and Edward G. Burg for Plaintiff andAppellant.
__________________________________________________________________________________
Attorneys for Respondent:
Rockard J. Delgadillo, City Attorney, Eduardo A. Angeles, Assistant City Attorney, and D. Timothy Dazé,Deputy City Attorney, for Defendants and Respondents.
Sabine and Morrison and Randal R. Morrison for League of California Cities as Amicus Curiae on behalf
of Defendants and Respondents.
Counsel who argued in Supreme Court (not intended for publication with opinion):
Michael M. BergerManatt, Phelps & Phillips
11355 West Olympic Boulevard
Los Angeles, CA 90064-1614
(310) 312-4000
D. Timothy Dazé
Deputy City Attorney
1 World Way
P.O. Box 92216
Los Angeles, CA 90009-2216
(310) 646-3260
35
Date: | Docket Number: |
Mon, 08/07/2006 | S132619 |
1 | Regency Outdoor Advertising, Inc. (Plaintiff and Appellant) Represented by Michael M. Berger Manatt, Phelps & Phillips, LLP 11355 W. Olympic Boulevard Los Angeles, CA |
2 | Regency Outdoor Advertising, Inc. (Plaintiff and Appellant) Represented by Edward G. Burg Manatt, Phelps & Phillips 11355 West Olympic Blvd. Los Angeles, CA |
3 | City Of Los Angeles (Defendant and Respondent) Represented by David Timothy Daze Office of the City Attorney 1 World Way, Room 104 Los Angeles, CA |
4 | League Of California Cities (Amicus curiae) Represented by Randal Ralph Morrison Sabine and Morrison P.O. Box 531518 San Diego, CA |
Disposition | |
Aug 7 2006 | Opinion: Affirmed |
Dockets | |
Mar 29 2005 | Petition for review filed by counsel for aplt c/a rec req |
Apr 7 2005 | Received Court of Appeal record one doghouse |
Apr 19 2005 | Request for depublication (petition for review pending) non party The Richard Hamlin Attorneys |
May 11 2005 | Petition for review granted (civil case) Votes: George, C.J., Kennard, Baxter, Werdegar, Chin, Brown, and Moreno, JJ. |
May 13 2005 | Received Court of Appeal record |
May 25 2005 | Certification of interested entities or persons filed from appellant |
May 27 2005 | Request for extension of time filed by appellant to file the opening brief on the merits, to July 11. |
Jun 3 2005 | Extension of time granted to 7-11-05 for aplt to file the opening brief on the merits. |
Jul 5 2005 | Request for extension of time filed by appellant to file the opening brief on the merits, to 9-9-05. |
Jul 12 2005 | Extension of time granted to 8-10-05 for appellant to file the opening brief on the merits. No further extensions of time are contemplated. |
Aug 8 2005 | Request for extension of time filed for aplt to file the opening brief on the merits, to 10-9-05. |
Aug 10 2005 | Extension of time granted to 9-7-05 for appellant to file the opening brief on the merits. No further extensions of time will be granted. |
Sep 7 2005 | Opening brief on the merits filed Appellant (Regency Outdoor Advertising). |
Sep 30 2005 | Request for extension of time filed on behalf of respondent CITY OF LOS ANGELES by counsel to file respondent's brief on the merits to December 6, 2005. |
Oct 7 2005 | Extension of time granted to 11/7/05 (only) for resp to file the answer brief on the merits. |
Nov 1 2005 | Answer brief on the merits filed on behalf of respondent CITY OF LOS ANGELES |
Nov 16 2005 | Request for extension of time filed for aplt to file the reply brief on the merits, to 12-30-05. |
Nov 18 2005 | Extension of time granted to 12-20-2005 for aplt to file the reply brief on the merits. No further extensions of time are contemplated. |
Dec 21 2005 | Reply brief filed (case fully briefed) Appellant, Regency Outdoor Advertising by counsel, Michael M. Berger. |
Jan 20 2006 | Received application to file Amicus Curiae Brief League of California Cities in support of respondent, City of Los Angeles by consel, Randal R. Morrison. |
Jan 25 2006 | Permission to file amicus curiae brief granted League of California Cities in support of respondent. Answer due within 20 days. |
Jan 25 2006 | Amicus curiae brief filed League of California Cities in support of respondent. by counsel, Randal R. Morrison. |
Feb 14 2006 | Response to amicus curiae brief filed Regency Outdoor Advertising, Inc., appellant by Michael M. Berger, cousel to AC Brief file by The League of California Cities |
May 2 2006 | Case ordered on calendar June 7, 2006, at 9:00 a.m., in Los Angeles |
Jun 7 2006 | Cause argued and submitted |
Aug 7 2006 | Opinion filed: Judgment affirmed in full Opinion by Moreno, J. -----joined by George, C. J.,Kennard, Baxter, Werdegar, Chin & Corrigan, JJ. |
Aug 22 2006 | Rehearing petition filed Regency Outdoor Advertising, Inc., appellant Michael M. Berger, counsel |
Aug 29 2006 | Time extended to consider modification or rehearing To November 3, 2006. |
Oct 11 2006 | Rehearing denied |
Oct 11 2006 | Opinion modified - no change in judgment |
Oct 11 2006 | Remittitur issued (civil case) |
Oct 19 2006 | Received: receipt for remittitur CA 2/4. |
Briefs | |
Sep 7 2005 | Opening brief on the merits filed |
Nov 1 2005 | Answer brief on the merits filed |
Dec 21 2005 | Reply brief filed (case fully briefed) |
Jan 25 2006 | Amicus curiae brief filed |
Feb 14 2006 | Response to amicus curiae brief filed |