Filed 1/28/00

CERTIFIED FOR PARTIAL PUBLICATION*

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION THREE

APPEAL from a judgment of the Superior Court of Los Angeles County. James A. Bascue, Judge. Affirmed.

Laskin & Graham and Richard Laskin for Defendant and Appellant.

Arthur J. Hazarabedian, Oliver, Vose, Sandifer, Murphy & Lee, David S. Cunningham, III, JoAnne Victor and Jackson & Lewis for Plaintiff and Respondent.

________________________

*Pursuant to California Rules of Court, rules 976(b) and 976.1, this opinion is certified for partial publication. The portions deleted are noted by the insertion of the following symbol of omission [[ ]].

INTRODUCTION

Defendant, World Wide Enterprises Inc. (World Wide), appeals from the judgment and final order of condemnation assessing the fair market value of its real property at $850,000. In its appeal, World Wide assigns as error three evidentiary rulings. No error is demonstrated. In the published portion of this opinion, we hold that the trial court did not err in precluding at the trial on just compensation the cross-examination of the condemning agency’s appraiser about his prior inconsistent appraisal made for purposes of calculating the deposit of probable compensation. Accordingly, we affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

In March 1996, the Community Redevelopment Agency of Los Angeles (CRA) entered into an agreement with the Metropolitan Transportation Authority (MTA) and the Los Angeles Housing Department (LAHD) for a joint mixed-use development project in connection with the MTA’s Hollywood/Western Metro Red Line Station (the joint-powers project). On March 21, 1996, the CRA designated certain property in the area for condemnation, including property owned by World Wide.

On March 29, 1996, the CRA filed a complaint seeking to condemn and acquire fee simple title to World Wide’s real property (the property). The property consisted of approximately 29,520 square feet of land located on the corner of Western Avenue and Carlton Way, just south of Hollywood Boulevard in Los Angeles. In 1996, when the eminent domain action was filed, the property contained a dilapidated four-story multi-unit apartment building built in 1927, and two smaller two-story apartment buildings of 1916 vintage. All of the buildings had extensive histories of building, electrical, and health code violations beginning in the 1980s. The 1994 Northridge earthquake caused additional structural damage to the buildings. Vacant since the earthquake, the buildings had been the subject of extensive vandalism.

In advance of trial, the parties exchanged appraisals of the property. World Wide’s appraiser, Lawrence Brown, opined the value of the property to be $2,500,000. The CRA submitted Zoraster’s second valuation of $810,000. At trial, World Wide’s appraiser testified that he had revised his appraisal to $1,665,000. Zoraster testified to his opinion that the property’s value was $810,000. The jury entered a verdict valuing the property at $850,000. Judgment was entered thereon and World Wide’s appeal followed.

CONTENTIONS

World Wide assigns as trial court error the following rulings: [[(1) precluding World Wide’s appraiser from considering the zoning designation of the property before city-wide zoning revisions in 1990;]] (2) precluding World Wide from impeaching the CRA’s appraiser during cross-examination about his prior inconsistent deposit-related valuation; [[and (3) excluding World Wide’s appraiser from factoring into his valuation an expired city-wide program offering landowners demolition and asbestos removal free of charge.]]

DISCUSSION

[[1. Downzoning

World Wide contends that the court erred in refusing to consider the R-4 and C-2 zoning which applied to the property until 1990, when the area was "downzoned," i.e., re-zoned to a more restrictive, less valuable zoning designation.

a. The motion in limine concerning zoning.

Before trial, World Wide moved for a ruling that the CRA be prohibited from presenting evidence of the fact that the property was zoned [Q]R-4 and [Q]R-5 (qualified residential), because World Wide wanted the applicable zoning designation to be the less restrictive R-4 (residential) and C-2 (commercial), as it was prior to the 1990 downzoning. World Wide cited section 1263.330, which precludes consideration of the effect on the property’s value of the project for which the property is being taken. World Wide insisted that the downzoning was brought about solely as part of the general Hollywood Redevelopment Plan enacted in 1986, which was the very same project for which the property was being taken. Because the downzoning was "project influenced," i.e., enacted for the purpose of depressing the value of the property in contemplation of the taking, World Wide argued the new zoning designations should not be considered in valuing the property.

The CRA asserted, as it does here, that the 1990 zone change was brought about in connection with a city-wide change to comply with a court order, not because of the "project" at issue, with the result that the applicable zoning designation is [Q] R-4 and [Q] R-5.

The court denied World Wide’s motion finding there was ". . . no evidence that the down-zoning in 1990 . . . had any nexus or relationship to the taking of the property by the project . . . ." in 1996, with the result that the appropriate zoning designation for purposes of valuation is [Q]R-5 and [Q]R-4.

b. The trial court’s ruling was correct.

Section 1263.330, subdivision (a) provides in pertinent part that "[t]he fair market value of the property taken shall not include any increase or decrease in the value of the property that is attributable to any of the following: [¶] (a) The project for which the property is taken."

At issue is whether the 1990 rezoning, which reduced the property’s value, is attributable to "[t]he project for which the property [was] taken." (Ibid.) We conclude that substantial evidence supports the trial court’s finding that the 1990 rezoning was not occasioned by the project for which the property was taken. Hence, section 1263.330 does not apply with the result that the zoning designation of the property in 1996, for purposes of valuation, was [Q]R-5 and [Q]R-4.

It is clear from the evidence that the 1990 zoning redesignations were brought about as the result of a lawsuit to require the City of Los Angeles to bring its community-based zoning into compliance with its General Plan. A document from the Director of Planning to the City Planning Commission states that rezoning was accomplished because "[t]he City of Los Angeles is required by a court order to achieve consistency between its zoning and General Plan. . . . These particular Community Plan amendments and changes of zone and height district are part of a citywide effort to bring all areas of the City into legal compliance." (Italics added.) The same report reiterates later, "[t]he proposed changes will implement the land use plan for the Hollywood Community and will achieve consistency between zoning and the General Plan as mandated by state legislation and a court settlement agreement." (Italics added.) World Wide’s own appraiser had no evidence to refute this fact.

While the re-zoning was accomplished in 1990, "[t]he project for which [World Wide’s] property is taken" (§ 1263.330, subd. (a)) was not even envisioned until 1992. A memorandum from the MTA to its Board of Directors seeking approval of the MTA’s participation in the joint-powers project states that the project was ". . . first envisioned in a 1992 MTA station area master plan study for this station area." The CRA and the MTA did not enter into a cooperation agreement for the acquisition and development of World Wide’s property until March 1996, six years after the zone changes occurred. This evidence more than sufficiently supports the court’s conclusion that the 1990 zone change was not the result of any specific redevelopment project in the area. That is, the 1990 zone changes were not made in furtherance of the joint-powers project which had not yet been conceptualized.

In an attempt to connect the zone changes to the project for which its property was being taken so as to avail itself of section 1263.330, World Wide argues that the re-zoning and the taking were both conducted as part of the Hollywood Redevelopment Plan. The evidence does not support World Wide’s assertion.

The Hollywood Redevelopment Plan was revised to comply with the City of Los Angeles’s General Plan. In 1986, the City’s Planning Commission staff stated that "[t]he proposed Redevelopment Plan, with changes recommended by staff, would help achieve the goals of the adopted Community Plan." Then, in 1990, after a lawsuit required that zone changes be implemented, the City’s Planning Department staff report reflected that among the concerns expressed by the public was the possibility that the zone changes were inconsistent with the Hollywood Redevelopment Plan. The City responded that "Redevelopment Plans must conform to the General Plan for a City, not the other way around." The fact that the zone changes, made to conform to the General Plan, were considered by some to be inconsistent with the Hollywood Redevelopment Plan is further evidence that the 1990 zone changes were not made for the purpose of conforming to the Redevelopment Plan.

Nor was the Hollywood Redevelopment Plan "[t]he project for which the property [was] being taken" pursuant to section 1263.330. "Redevelopment is . . . a process which occurs over a period of years. These realities dictate that a redevelopment plan be written in terms that enhance a redevelopment agency’s ability to respond to market conditions, development opportunities and the desires and abilities of owners and tenants. Such a plan then cannot always outline in detail each project that a redevelopment agency will undertake during the life of the plan. [Citations.]" (County of Santa Cruz v. City of Watsonville (1985) 177 Cal.App.3d 831, 841, italics added.) Necessarily, a redevelopment plan serves as the framework within which specific projects take place. Accordingly, a redevelopment plan must be general in nature so as to have the flexibility to incorporate specific projects as they are proposed. (Ibid.; In re Redevelopment Plan for Bunker Hill (1964) 61 Cal.2d 21, 52-54.)

Here, the Hollywood Redevelopment Plan is a broad formula, adopted in 1986, to address blight in a 1,100 acre area in Hollywood. The intent of the plan was to "[U]pgrade the environment of the affected areas by rehabilitating existing residences and businesses; developing additional housing; encouraging new commercial and industrial development; providing a basis for programming public service, parks, and recreational facilities; and providing for well-planned pedestrian and vehicular circulation and adequate parking . . . ." In that it merely describes in broad terms its goals and the tools for implementing these goals, the Hollywood Redevelopment Plan does not specify an implementing project on World Wide’s property.

A "project," by comparison, is the site-specific improvement to which the condemned property is to be put. (See Gov. Code, § 7267.2 ["Any decrease or increase in the fair market value of real property to be acquired . . . caused by the public improvement for which the property is acquired . . . shall be disregarded in determining the compensation for the property." (Italics added.)].) Hence, the Law Revision Commission Comment to section 1263.330 explained, "Subdivision (a) of Section 1263.330 is also intended to codify the proposition that any increase or decrease in value resulting from the use which the condemnor is to make of the property must be eliminated in determining compensable market value. [Citation.]" (Cal. Law Revision Com. com., West’s Ann. Code Civ. Proc., § 1263.330, p. 62, italics added.)

In sum, the zone changes decreasing the value of World Wide’s property were not attributable to the project for which the property was acquired, with the result that the court properly ruled that the post-1990 zoning designations were the proper designations for purposes of valuation.]]

2. The deposit-related appraisal.

World Wide contends that the trial court abused its discretion in granting the CRA’s motion in limine to preclude World Wide from impeaching the CRA’s appraiser, Zoraster, about inconsistencies between his two appraisals. The court granted the CRA’s motion in limine based on section 1255.060, subdivision (b), and on a finding that there were no inconsistencies between the two appraisals. We conclude the ruling was correct.

The deposit of probable compensation is made by the condemning agency that wishes to obtain an order allowing it to take immediate possession of the property in advance of the just compensation trial. (14 Cal. Real Estate Law & Practice (1999) Prejudgment Possession, § 505.01, p. 505-3.) The deposit must be based on an appraisal by an expert appraiser. (§ 1255.010, subd. (b).) Zoraster appraised the property twice. The first appraisal, made for the purpose of calculating the deposit of probable compensation pursuant to section 1255.010, concluded that the property was worth $1,020,000. Zoraster later conducted a second appraisal in connection with the trial of just compensation and opined that the value of the property was $810,000, a sizeable reduction from his earlier deposit-related appraisal.

The CRA argued at the hearing on its motion in limine to exclude reference to the deposit-related appraisal that while Zoraster’s two appraisals were different, they were not inconsistent. The deposit-related appraisal had been made subject to the assumption that the property was free of toxic substances, including asbestos. That appraisal contained no analysis of the effect of asbestos on valuation. Once the CRA filed its deposit of probable compensation and obtained possession of the property, it was able to investigate the condition of the buildings and found a significant amount of asbestos in the interior. Additionally, the condition of the buildings’ interiors was so poor as to render the buildings valueless. Hence, Zoraster testified that in his second appraisal he deducted from his estimation of the property’s value, the cost of demolition and asbestos abatement.

Section 1255.060 expressly forbids the impeachment of a witness by reference to any appraisal report made in connection with the deposit of probable compensation. (§ 1255.060, subds. (a) - (b).) Section 1255.060, subdivisions (a) and (b) state, "(a) The amount deposited or withdrawn pursuant to this chapter shall not be given in evidence or referred to in the trial of the issue of compensation. [¶] (b) In the trial of the issue of compensation, a witness may not be impeached by reference to any appraisal report, written statement and summary of an appraisal, or other statements made in connection with a deposit or withdrawal pursuant to this chapter, nor shall such a report or statement and summary be considered to be an admission of any party." (Italics added.)

The Law Revision Commission Comment to section 1255.060 states that ". . . the purpose of subdivision[] (b) . . . is to encourage the plaintiff [condemning agency] to make an adequate deposit by protecting the plaintiff [condemning agency] from the defendant’s [landowner’s] use of the evidence upon which the deposit is based in the trial on the issue of compensation. If such evidence could be so used, it is likely that the plaintiff would make an inadequate deposit in order to protect itself against the use at the trial of evidence submitted in connection with the deposit. . . . Subdivision (b) precludes impeachment of a witness at the trial by reference to appraisal reports . . . or other statements made in connection with the deposit and notice thereof and proceedings to determine or redetermine the amount of the deposit."

Based on section 1255.060, subdivision (b), the trial court did not err in granting the CRA’s motion in limine to preclude reference in the cross-examination of Zoraster to his deposit-related appraisal.

Citing County of Contra Costa v. Pinole Point Properties, Inc. (1994) 27 Cal.App.4th 1105, World Wide contends that the ruling was error. In that case, the trial court cited section 1255.060, and based thereon precluded the landowner, Pinole Point, from cross-examining the county’s appraiser about his deposit-related appraisal. To challenge the court’s ruling, Pinole Point argued that the county had waived the privilege when it called its appraiser to testify at trial. The appellate court agreed with Pinole Point, stating ". . . when a condemner calls an expert witness to testify at trial to valuation of the subject property, section 1255.060, subdivision (b) does not proscribe his impeachment by use of an appraisal that the witness theretofore made in connection with the condemner’s deposit for pretrial possession of that property." (Id., at p. 1113, original italics.)

The Pinole Point court gave two reasons for its conclusion. First, the court was concerned that section 1255.060 raised a constitutional problem, because at bottom a condemnation action serves to determine the property’s fair market value. A rule prohibiting a landowner from questioning a witness about a prior inconsistent opinion in the Pinole Point court’s view, interfered with the constitutional right to compensation "in a very fundamental way." (Id., at p. 1112.) The court also noted that historically courts have allowed impeachment of appraisers with prior inconsistent opinions. (County of Contra Costa v. Pinole Point Properties, Inc., supra, 27 Cal.App.4th at p. 1112.)

As the second reason for its conclusion, the Pinole Point court cited the statute’s legislative history: Former section 1243.5, subdivision (e), prohibited parties from mentioning the amount of the security deposit at trial. The rule eliminated the possibility that deposit appraisals could be used against condemning agencies at trial, thereby encouraging agencies to make adequate deposits. (County of Contra Costa v. Pinole Point Properties, Inc., supra, 27 Cal.App.4th at pp. 1112-1113.) However, as the result of judicial interpretation of former section 1243.5, subdivision (e), while the amount of the deposit was inadmissible, landowners could call as a witness at trial the appraiser who helped the condemning agency prepare its deposit. Concluding that this judicial interpretation of former section 1243.5, subdivision (e) "defeat[ed] the spirit of the rule," the California Law Revision Commission recommended enactment of the current statute, section 1255.060, to close the "loophole." (Recommendations Relating to Eminent Domain Law (Dec. 1976) 13 Cal. Law Revision Com. Rep. (1976) p. 1048; County of Contra Costa v. Pinole Point Proprerties, Inc., supra, at p. 1113.) Based on this history, the Pinole Point court concluded that section 1255.060 was enacted for the purpose of preventing a landowner from calling the appraiser who helped the condemning agency prepare its deposit. (Id., at pp. 1112-1113.)

For these reasons, the Pinole Point court concluded that subdivision (b) of section 1255.060 does not prevent the impeachment of the condemning agency’s appraiser by reference to his or her deposit-related appraisal, if the agency calls that appraiser at the valuation trial. (County of Contra Costa v. Pinole Point Properties, Inc., supra, at p. 1113.) Yet, despite this analysis, the Pinole Point court went on to hold that any error was not pivotal because the landowner was able to place the appraisal-related evidence in front of the jury. (Ibid.)

Even if the discussion in Pinole Point about section 1255.060 were dictum, we respectfully conclude Pinole Point was wrongly decided and decline to follow it.

Section 1255.060 does not ban cross-examination, either generally or based on inconsistent statements, as Pinole Point suggests and World Wide would have us believe. Section 1255.060 merely precludes cross-examination on one restricted topic, namely the deposit appraisal. Thus, the rule constitutes a reasonable, statute-based, evidentiary exclusion. "The Evidence Code contains a host of rules excluding evidence which is both relevant and nonprivileged, but the admission of which would tend to frustrate public policy. [Citations.]" (People v. Crow (1994) 28 Cal.App.4th 440, 449, citing Evid. Code, §§ 1100-1159.) "[O]ffers to compromise a claim, as well as conduct and statements occurring in the course of negotiations for the settlement of a claim, are inadmissible to prove either the validity or invalidity of the claim. [Citations.] The exclusion of that evidence ‘is based upon the public policy in favor of the settlement of disputes without litigation.’ [Citation.]" (Ibid., citing Evid. Code, §§ 1152-1154, Recommendation Proposing an Evidence Code (Jan. 1965) 7 Cal. Law Revision Com. Rep. (1965) p. 218.) Section 1255.060 is a limitation similar to that applied to testimony concerning compromise offers. (Evid. Code, §§ 1152, 1154.) The express purpose of the exclusion of deposit-related testimony is to "encourage the plaintiff [condemnor] to make adequate deposits." (13 Cal. Law Revision Com. Rep. (1976) p. 1048.)

Additionally, contrary to the suggestion in Pinole Point, evidentiary exclusions do not generally rise to the level of a constitutional transgression. (People v. Cudjo (1993) 6 Cal.4th 585, 611.) Even in criminal trials, "[c]ourts retain . . . a traditional and intrinsic power to exercise discretion to control the admission of evidence in the interests of orderly procedure and the avoidance of prejudice. [Citations.]. . .’ [Citation.]" (Ibid.; People v. Rodriguez (1999) 20 Cal.4th 1, 10, fn. 2; People v. Fitch (1997) 55 Cal.App.4th 172, 179.) Section 1255.060 does not preclude the landowner from presenting a case, from cross-examining the agency’s appraiser, or from impeaching the appraiser with respect to inconsistencies. All that section 1255.060 does is to prohibit anyone from raising at trial the deposit-related appraisal. (§ 1255.060, subd. (b).)

Furthermore, we think Pinole Point misreads the purpose of the amendments to section 1255.060. While the precursor to section 1255.060 prevented use of the deposit amount in the just compensation trial, case law had created a "loophole" enabling landowners to call the condemning agency’s appraiser as their own witnesses. It is that loophole that the Law Revision Commission suggested be closed. (13 Cal. Law Revision Com. Rep., supra, at p. 1048.) Pinole Point concluded that in enacting section 1255.060 to "clos[e] the loophole," the Legislature intended only "to prevent a landowner from calling the [condemning agency’s] appraiser" but that "[n]othing in the legislative history suggests the statute was intended to protect a deposit appraiser when the condemning agency elects to call that appraiser as its valuation witness at trial." (County of Contra Costa v. Pinole Point Properties, Inc., supra, 27 Cal.App.4th at p. 1113, original italics.) We disagree.

Section 1255.060 applies bilaterally i.e., to both sides of the valuation question. The Law Revision Commission states plainly, "Subdivisions (b) and (c), apply, of course, to witnesses for the defendants as well as those for the plaintiff." (Italics added.) The statute itself makes no preferential reference to witnesses called by one side or the other. Rather, the statute refers to the appraisal-report witness in the generic sense, when it states, ". . . a witness may not be impeached by reference to any appraisal report . . . made in connection with a deposit. . . ." (§ 1255.060, subd. (b), italics added.) It appears to us the "loophole" that the Legislature sought to close in enacting section 1255.060, was the judicially created exception to the bilateral exclusion of all references to the deposit-related appraisals that allowed landowners to call the condemning agency’s appraiser. The Legislature closed this loophole by overruling the two offending cases (see Law Revision Comm. com. to § 1255.060, at pp. 691-692), and by making the statute apply to witnesses called by either the landowner or the condemning agency. By allowing the landowner to impeach the condemning agency’s appraiser when the agency calls its appraiser at the compensation trial, Pinole Point has created an entirely new exception to section 1255.060, subdivision (b), which exception enjoys no support in the Law Revision Commission report.

Finally, as a matter of policy, we decline to conclude, as Pinole Point did, that the CRA waived the privilege by calling Zoraster to testify in the trial on just compensation. A holding under which the condemning agency waives its privilege "defeats the spirit of the rule" and violates subdivision (a) of section 1255.060 which provides flatly that "[t]he amount deposited . . . shall not be given in evidence or referred to in the trial of the issue of compensation." (Italics added.) Moreover, the effect of such a holding would be to encourage the agency to hire two appraisers, one for the deposit, and one for the trial, thereby increasing the cost to the condemning agency. For all of these reasons, we disagree with Pinole Point, and respectfully decline to follow it.

[[3. The free demolition and asbestos abatement program.

World Wide contends that the court erred in disallowing introduction of evidence of a program under which the City of Los Angeles would demolish earthquake-damaged buildings and abate asbestos free of charge (the program). World Wide argues that its property was worth more vacant, and if its buildings had been demolished for free, World Wide would have saved approximately $277,000, which was ultimately charged against the property’s value. Citing subdivision (c) of section 1263.330, providing that valuation of the property shall not include increase or decrease of the value attributable to "[a]ny preliminary actions of the plaintiff relating to the taking of the property," World Wide asserts it would have taken advantage of the free demolition and abatement program to demolish the property but for the fact that it was informed of the eminent domain. The contention is meritless.

The program to which World Wide refers did not exist as of the date of valuation. As World Wide explains in its brief, the program expired on March 8, 1996, three weeks before the complaint was filed in this case and one month and three weeks before April 26, 1996, the date of valuation. Therefore, as of the date fixed by statute for valuation (§§ 1263.110, 1263.120), no such program existed and World Wide had not applied to the program.

Furthermore, the evidence is uncontradicted that World Wide did not intend to utilize the demolition program when it was available. Milton Avol, president and sole shareholder of World Wide, testified that World Wide never intended to demolish the buildings. Avol stated in his deposition that after the 1994 earthquake, he decided because of the low cost to repair the buildings and the increase in value from repairs, that the best course of action was to repair the property, and toward that end he applied for earthquake-related repair loans. In a letter dated February 6, 1995, to the Earthquake Recovery Division of the Los Angeles Bureau of Engineering, Avol stated, ". . . I believe that there is no reason to consider demolition. . . ." World Wide’s contention that the program should be considered in the valuation because it would have demolished the buildings under the program but for the eminent domain proceeding is thus belied by Avol’s decisions between the 1994 earthquake and 1996, when the program expired, to assume debt to repair the buildings and not to demolish the structures.

World Wide argues that notification in November 1995 that the CRA was contemplating taking the property constitutes the "preliminary action[] of the plaintiff relating to the taking" under subdivision (c) of section 1263.330, which, World Wide notes, preceded expiration of the demolition program, with the result that the program should have been considered in the property’s valuation. In support of this contention, World Wide insists that the evidence does not show World Wide never intended to take advantage of the demolition program. Rather, without support from the evidence, World Wide asserts that it ". . . ceased further efforts towards rehabilitation of the building" when it learned in November 1995 of the taking.

We disagree. The evidence supports the court’s conclusion that Avol never intended to demolish the building. It was Avol who stated ". . . I wasn’t contemplating demolition so I didn’t get interested in it [the program]." Therefore, for purposes of valuation, the program was irrelevant both because it did not exist

at the date of valuation and because Avol had repeatedly declined to avail himself of the program before it expired. There was no error.]]

DISPOSITION

The judgment is affirmed. Costs on appeal awarded to Respondent.

CERTIFIED FOR PARTIAL PUBLICATION

ALDRICH, J.

We concur:

CROSKEY, ACTING P. J.

SCHNEIDER, J.*

*Assigned by the Chairperson of the Judicial Council.