Commentary & Articles

City of Tustin found not liable for $46.5 million pre-condemnation damages

by Mark Wasser, July, 2010

What started as a typical eminent domain action by the City of Tustin, California in acquiring 34 acres for road improvements ended with a jury trial and ultimately a $5 million dollar loss for the property owner who launched a very aggressive and high exposure claim for damages. Determining the value of the 34 acres was not particularly challenging but defending against the $46.5 million damage claim was and it became the focus of the trial.

A real estate investment company, the owner of the of the property in question, claimed the City was liable for $46.5 million damages – over and above the value of the 34 acres. We believed the property owner’s position was so aggressive the jury would reject it if we could demonstrate the simple facts about what really happened during the 9 years in question. To accomplish that, we developed evidence of the property’s history, we demonstrated the owner had not behaved like it wanted to develop the property, we assembled a cast of witnesses who explained why the owner’s claim was both unreasonable and unrealistic and we retained an appraiser who deconstructed the owner’s damage calculations. We admitted the City had caused the owner to incur about ten thousand dollars in damages as a result of a dispute over a short-term lease on the property which in the end was a convincing position as the jury was persuaded by our evidence.

After 5 weeks of testimony, most of which was devoted to the damage claim, the jury returned a verdict awarding the owner fifty thousand dollars in damages. Combined with the compensation for the 34 acres that were taken, the owner ultimately received about $5 million less than the City had offered over a year earlier. It vindicated our trial strategy and gave the City the result it had hoped for.

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