Merced Irrigation Dist. v. Woolstenhulme

In Merced Irrigation Dist. v. Woolstenhulme (1971) 4 Cal.3d 478, the defendant's property was taken by an irrigation district so that substantial improvements to an existing reservoir could be made. The improvements would, for the first time, provide irrigation and electrical power to areas around the reservoir. The improvements would also include new recreation facilities. After the agency announced its plans, including the enhanced recreation facilities, the sale prices of land in the vicinity of the reservoir increased substantially. The defendant offered and the trial court admitted evidence of those sales; however, the defendant's appraiser isolated what he determined was the amount of "project enhancement" in the sales and the trial court instructed the jury that the enhancement should be excluded in determining the value of the land. On appeal the district argued that in light of the impact the proposed project had on prices, the sales offered by the property owner were not comparable within the meaning of section 816 and that the appraiser's attempt to isolate the amount of the project enhancement in the other sales was evidence of the value of the other property in violation of former section 822, subdivision (d), now section 822, subdivision (a)(4). The court rejected both arguments. With respect to the admission of comparable sales permitted by section 816, the court stated: "Given the inherent vagueness of this standard of 'comparability,' appellate courts have recognized that '"the trial judge . . . must be granted a wide discretion"' in determining the admissibility of sales sought to be relied upon as 'comparable.' 'No general rule can be laid down regarding the degree of similarity that must exist to make such evidence admissible. It must necessarily vary with the circumstances of each particular case. Whether the properties are sufficiently similar to have some bearing on the value under consideration, and to be of any aid to the jury, must necessarily rest largely in the sound discretion of the trial court, which will not be interfered with unless abused. ' . . . "We recognize, of course, that in many, perhaps most, cases, a trial judge may find that sales of neighboring property which 'substantially' reflect an enhancement value not properly shared by the condemned property, will not 'shed light' on the value of the subject property, but rather will tend to confuse the issue if admitted into evidence. In such cases the sales should properly be excluded. We can conceive of a variety of situations, however, in which a trial court may reasonably find that such sales will 'shed light' on the value of condemned land even though the sales reflect 'substantial enhancement.' "In some cases, for example, a project will remain in the planning and construction stage for a great many years before a tract of land, originally designated for condemnation, is actually taken by the condemner. Although all sales in the neighborhood over that period may reflect 'substantial project enhancement,' such sales may also reflect recent increases in land values attributable to other factors, such as other new public or private improvements or zoning changes, which the owner of the condemned land is entitled to have included in a consideration of the market value of his land at the time of taking. "Under these circumstances a trial court might reasonably conclude that the 'substantially enhanced' sales could 'fairly be considered as shedding light' on the value of the condemned property, since without the admission of such sales a landowner could not support his appraiser's opinion of the increase in value attributable to these non-project factors. The conclusion is particularly viable if an expert appraisal witness can fairly estimate the amount of each of the enhanced sales prices which is attributable to 'project enhancement.' In such a case, the trier of fact could subtract the amount of value which he finds to be due to project enhancement, and could then test the witness's valuation of the condemned land against this 'adjusted' sales price. Indeed, the trial court followed the latter procedure in the instant case: the defendant's appraisal witness introduced evidence of other sales in the neighborhood and estimated the extent of 'project enhanced value' at $ 50 an acre; the plaintiff contended, on the other hand, that in each of these sales, any amount over $ 125 an acre was attributable to project enhancement." ( Merced, supra, 4 Cal.3d at pp. 500-501.)