Escondido Union School Dist. v. Casa Suenos De Oro, Inc

In Escondido Union School Dist. v. Casa Suenos De Oro, Inc. (2005) 129 Cal.App.4th 944, the parties differed on a complex legal issue rather than the proper valuation of the property. In affirming the denial of litigation expenses, the Court of Appeal said: "In our view, the trial court's finding of reasonableness was supported by substantial evidence. We acknowledge that if our review was based strictly on the numbers, District's revised final offer of $ 200,000 was significantly disproportionate to the ultimate award and was only slightly more than half of Casa Sueos's final demand. However, this case was more about the legal issue of whether the manufactured homes were 'improvements to the realty' under section 1263.210 than it was about numbers. This legal issue was the crux of the parties' disagreement. District's stance that the manufactured homes were not 'improvements pertaining to the realty' because they did not have certificates of occupancy was not unreasonable. The question of applying Health and Safety Code section 18551 to condemnation law was a novel issue, and arguments in support of applying it were by no means frivolous. A condemning agency need not 'compromise its legal position just to avoid litigation.'" (Id. at p. 986.) In Escondido Union School Dist. v. Casa Suenos De Oro, Inc. (2005) 129 Cal.App.4th 944, a school district condemned the owner's land after two manufactured (prefabricated) homes had been partially constructed on it. (Escondido, supra, 129 Cal.App.4th at pp. 954-956.) The trial court was presented with an issue of first impression--whether the manufactured homes (which were capable of being moved to another location) were " 'improvements pertaining to the realty' and therefore compensable under eminent domain law. ( 1263.205, 1263.210.)" (Escondido, at pp. 957-958, 986.) The owner's pretrial demand totaled $ 370,000, while the district offered $ 200,000. (Id. at p. 957 & fn. 7.) The trial court, sitting without a jury, awarded the owner $ 494,850, but denied its motion for litigation expenses. (Id. at p. 958.) The appellate court affirmed the order, inasmuch as (1) compensation for the manufactured homes constituted the bulk of the award, (2) the city took a reasonable and legitimate stance that the homes were not compensable, and (3) resolution of the dispute involved a complex and novel legal issue. (Escondido, supra, 129 Cal.App.4th at pp. 986-987.)