City of San Leandro v. Highsmith

In City of San Leandro v. Highsmith (1981) 123 Cal.App.3d 146, the condemnor (the City) filed an offer of $250,000 under section 1250.410, prior to the date set for trial. The property owners did not make a formal demand under the statute. Rather, less than 30 days prior to the date set for trial they communicated to the City their opinion of value in the amount of $550,000 at a deposition, and repeated this valuation in the pretrial and settlement conference statements. (Highsmith, supra, 123 Cal.App.3d at pp. 151, 153.) The trial date was continued, however, and 14 days before trial the property owners filed a "Final Demand for Compensation" in the amount of $450,000. The jury found the property was worth $410,000, but the trial court denied the property owners' motion for litigation expenses. (Id. at p. 152.) On appeal, the property owners conceded that their demand for $450,000 filed 14 days before trial was untimely, but argued that the $550,000 demand in their pretrial and settlement conference statements "'substantially complied'" with the statutory requirements. (Highsmith, supra, 123 Cal.App.3d at p. 153.) Although these earlier demands were not made at least 30 days prior to the first scheduled trial date, they were nonetheless timely, the property owners claimed, because they were made more than 30 days before the actual trial date. (Id. at p. 154.) The court rejected both arguments. It concluded that "a recital of the demand and offer in a settlement conference statement, or in any other document, is not an adequate substitute for the formal demand and offer contemplated by section 1250.410 unless the parties have stipulated to a less formal exchange." (Highsmith, supra, 123 Cal.App.3d at p. 155.) It further ruled that "the original trial date is the proper one for measuring the 30-day notice. To hold otherwise would encourage procrastination in making an offer or demand and would delay meaningful negotiations. 'The purpose of the statute is to encourage early settlement so trial can be avoided' , and the statute imposes upon 'both parties to the litigation the duty to act reasonably in an effort to settle the disputes.' To allow either party to gamble on a delay in the trial court would not serve the purposes of the statute." (Id. at pp. 154-155.) In short, the owners submitted a settlement demand less than 30 days prior to the scheduled trial date but more than 30 days prior to the actual trial date. The appellate court held that the scheduled trial date was controlling and therefore the demand was untimely. On this basis alone, the court upheld the denial of litigation expenses. (Highsmith, supra, 123 Cal.App.3d at pp. 153-155.) In dicta, the court also found evidentiary support for an implied finding by the trial court that the owners' demand was unreasonable.