Opinion
D050944
6-24-2008
OPM, INC., et al., Plaintiffs and Respondents, v. SAN DIEGO METROPOLITAN TRANSIT DEVELOPMENT BOARD, Defendant and Appellant.
Not to be Published
We affirm the judgment in this inverse condemnation case. Plaintiffs and respondents OPM, Inc., and Aminpour & Sons, Inc., a California corporation dba Gateway Inn (OPM), own a motel and parking lot near the international border at San Ysidro. Defendant and appellant San Diego Metropolitan Transit Development Board (MTDB) is a public agency which owns and operates a trolley system. The trolley runs in front of OPMs motel and parking lot. In the late 1990s MTDB determined that in order to facilitate the movement of its trolleys in the border vicinity and improve overall traffic in the area, MTDB needed to move its trolley tracks from the center of East San Ysidro Boulevard, which fronts OPMs property, to the eastern edge of East San Ysidro Boulevard, immediately abutting OPMs property. In moving the tracks to the front of OPMs property, MTDB was required to eliminate the two northbound lanes of East San Ysidro Boulevard which had previously fronted OPMs property. In place of the two northbound lanes which had provided fairly free-flowing access to and from OPMs property, MTDB constructed one northbound lane on the west side of its new tracks and two new entrances across its tracks to OPMs property. The two new entrances to OPMs property were regulated by rail crossing gates and bells which activated when a trolley was within 100 feet of the crossing.
The trial court found the movement of the trolley line substantially impaired access to and from OPMs property, and in addition OPMs property was damaged by the noise and vibration of the trolley operations. A jury determined OPM suffered a total of $3 million in damages.
On appeal MTDB contends that because the Public Utilities Commission (PUC) approved the new entrances to OPMs property and required both the rail crossing gates and bells, the trial court had no power to undermine the PUCs determination by way of an award of compensation. Like the trial court, we reject MTDBs jurisdictional argument. While the PUC has exclusive regulatory authority over MTDBs operations and may impose safety requirements on MTDB, that regulatory power does not intrude upon the trial courts jurisdiction over MTDBs liability for inverse condemnation.
MTDB also contends that as a matter of law OPM failed to demonstrate access to its property was so substantially impaired that MTDB was required to compensate OPM for its loss. We do not accept this argument. A public agency may, without fear of liability for inverse condemnation, make alterations in traffic patterns and conditions which as a consequence make access to and from a particular property more inconvenient or circuitous. However, where, as here, a public agency physically alters the access available to a parcel and that alteration substantially interferes with the uses to which the property has been or may be employed, liability for inverse compensation may be imposed.
Finally, MTDB makes a number of evidentiary contentions which we find unpersuasive.
FACTUAL AND PROCEDURAL BACKGROUND
OPMs Property
OPMs property is located at 701 East San Ysidro Boulevard in the City of San Diego. It is approximately 1,000 feet north of the port of entry at San Ysidro. OPM operates two businesses on its property, a Gateway Inn motel and two parking lots. The northern parking lot serves tourists who park at the lot during the day and walk into Mexico, and the southern parking lot serves both the motel and tourists.
We have attached to this opinion the trial courts exhibit 58, which portrays the trolley line and street alignment as it existed before the MTDBs improvement project.
As exhibit 58 demonstrates, prior to construction of MTDBs improvement project in the area, OPMs property was fronted by two northbound lanes of East San Ysidro Boulevard. MTDBs trolley line ran down the center of East San Ysidro Boulevard. Southbound drivers had access to OPMs businesses by heading south along East San Ysidro Boulevard and making a U-turn at a regulated intersection of East San Ysidro Boulevard and the end of the on and off ramp for Interstate 5. The light at the intersection controlled both vehicular traffic and trolley traffic, and drivers either making the U-turn or coming north from Interstate 5 would cross over the trolley tracks and onto the two northbound lanes of East San Ysidro Boulevard. OPM customers could then enter OPMs southern parking lot or proceed north along East San Ysidro Boulevard and enter OPMs northern lot. OPM customers could leave OPMs property by turning right out of either parking lot and proceeding along East San Ysidro Boulevard to an unregulated grade trolling crossing in the middle of East San Ysidro Boulevard at the intersection of Beyer Boulevard.
According to the witnesses OPM presented at trial, under this set of circumstances — in the parlance of condemnation law, the before condition — access to and from OPMs property flowed fairly smoothly. According to OPMs witnesses, given the propertys proximity to the port of entry, the parking lot did a fairly brisk business and the motel was usually full on weekends.
MTDBs Improvement Project
In the late 1990s MTDB determined substantial improvement of its operations in the area north of the port of entry were needed to relieve traffic congestion and provide safe pedestrian access to the trolley. MTDBs project entailed construction of a new parking lot for federal employees who worked at the port of entry, a crossover bridge for the use of the federal employees, a new ticket and information booth, and reconfiguration of the freeway on and off ramp where the ramp meets East San Ysidro Boulevard. However, the majority of the proposed project involved moving the trolley tracks from the center of East San Ysidro Boulevard to the east side of the street, replacing the two northbound lanes of the street with one northbound lane west of the tracks, and constructing two grade crossing to OPMs property, both of which would be controlled by rail crossing gates. One grade crossing would permit access from northbound East San Ysidro Boulevard to OPMs southern parking lot, and the other grade crossing would permit access to OPMs northern parking lot at Beyer Boulevard.
Before moving the trolley tracks, MTDB applied to the PUC for a permit allowing the movement to take place. In making its permit application, MTDB asked that it be relieved of the obligation of installing audible warnings at the grade crossings in front of OPMs property. The PUC denied MTDBs request and required as a condition of obtaining the permit that MTDB install audible warning mechanisms at the grade crossings.
MTDBs project was completed in 2003. We have attached to this opinion the trial courts exhibit 59, which portrays the trolley line and road alignment after MTDBs project was completed. According to OPMs witnesses, the project severely impaired access to OPMs property. The witnesses testified that cars were discouraged from entering OPMs property because they had to use one northbound lane of East San Ysidro Boulevard and when the rail crossing gates were down, northbound through traffic queuing behind them would become impatient and through drivers would begin honking their horns.
OPM also presented evidence that noise and vibration from the trolleys and the alarm bells which activated when the crossing gates were lowered had a severe impact on operation of the motel.
Trial Court Proceedings
OPM filed a complaint, alleging MTDBs improvement project had substantially impaired the value of its property. OPM alleged the restricted access, noise and vibration gave rise to claims for inverse condemnation, nuisance, intentional interference with prospective economic advantage, negligence, negligence per se, and declaratory and injunctive relief. Later, by way of a seconded amended complaint, OPM limited its claims to inverse condemnation and declaratory and injunctive relief.
MTDB answered the second amended complaint and moved to bifurcate trial of the liability and damages issues. The trial court granted MTDBs motion to bifurcate, and the liability phase of the trial was heard by the court. Following a five-day trial, which included a view of the area by the trial court, the trial court found MTDB was liable both for "damages caused by impairment of access due to the crossing gates at the access of OPMs property" and for "noise and vibration caused by the trolley and warning bells on the crossing gates at the entrances to [OPMs] property." The damages phase of the trial was heard by a jury which found that before MTDBs improvement project OPMs property was worth $6 million, that after the project OPMs property was worth $3 million, and accordingly the improvement had caused $3 million in damage to OPMs property. The trial court entered judgment in OPMs favor for $3 million and awarded OPM $978,000 in attorney fees and costs. MTDB filed a timely notice of appeal.
DISCUSSION
I
In the trial court MTDB demurred and moved for judgment on the pleadings on the grounds the propriety of the trolley realignment, crossing gates and warning bells were in the exclusive jurisdiction of the PUC. The trial court overruled MTDBs demurrer and denied its motion for judgment on the pleadings. On appeal MTDB renews its contention the trial court had no power to award OPM damages for the realignment and safety measures which had been approved by the PUC.
In arguing the PUCs regulatory power displaced the trial courts power to award compensatory damages, MTDB relies on Public Utilities Code section 1759, which provides: "(a) No court of this state, except the Supreme Court and the court of appeal, to the extent specified in this article, shall have jurisdiction to review, reverse, correct, or annul any order or decision of the commission or to suspend or delay the execution or operation thereof, or to enjoin, restrain, or interfere with the commission in the performance of its official duties, as provided by law and the rules of court.
"(b) The writ of mandamus shall lie from the Supreme Court and from the court appeal to the commission in all proper cases as prescribed in section 1085 of the Code of Civil Procedure."
MTDB also relies on the fact that those adversely affected by the operation of a public utility may file a complaint with the PUC challenging the propriety of the public utilities activity. (See Pub. Util. Code, §§ 705, 761, 762.)
As OPM points out, the Supreme Court has expressly rejected the contention that an agencys regulatory power prevents an award of damages for inverse condemnation when a safety measure ordered by the agency impacts the rights of a property owner. In S. H. Chase Lumber Co. v. Railroad Com. (1931) 212 Cal. 691, 705-706, the former Railroad Commission had initiated proceedings under which it proposed to not only order the construction of a railroad crossing but set the compensation to which the plaintiff property would be entitled. Relying on former section 14, article I of the California Constitution, now section 19, article I, which guaranteed property owners a jury trial on the issue of compensation when their property was taken or damaged for a public purpose, the court stated: "We cannot agree with this contention in the light of the long history which lies behind the enactment of section 14 of article I of the state Constitution and of the rights and interests of the private individual which have been thereby safeguarded. To say that these constitutional rights and guaranties are to be disregarded merely because it is to the interest of a municipality or a railroad to construct a separated grade crossing somewhere would be to go farther in the avoidance of this essential constitutional guarantee than any case to which we have been referred in this state or elsewhere has ever gone." (S. H. Chase Lumber Co. v. Railroad Com., supra, 212 Cal. at pp. 705-706.)
In Breidert v. Southern Pac. Co. (1964) 61 Cal.2d 659, 661-662, the court reiterated its holding in S. H. Chase. In Breidert the PUC ordered that the defendant close a railroad crossing which provided access to plaintiffs property. The plaintiff in fact participated in commission proceedings and unsuccessfully objected to the closing. In rejecting the railroads contention the commissions order immunized it from liability, the court in Breidert stated: "Plaintiffs do not seek an order to reopen the crossing: rather they demand damages for an invasion of a property right. The power to determine whether the plaintiffs have suffered a compensable invasion of their rights resides with the courts." (Id. at p. 662; see also Hensler v. City of Glendale (1994) 8 Cal.4th. 1, 15 ["A property owner is, of course, entitled to a judicial determination of whether the agency action constitutes a taking"].)
Contrary to MTDBs argument, nothing in San Diego Gas & Electric Co. v. Superior Court (1996) 13 Cal.4th 893, 923-924, expands the powers of the PUC over the issue of just compensation, now the subject of section 19, article I of the Constitution. In San Diego Gas & Electric Co. the plaintiffs brought trespass, nuisance and inverse condemnation claims against a utility based upon their exposure to electromagnetic fields produced by the utilitys power lines. The PUC had previously determined the power lines did not produce dangerous electromagnetic emissions. The court held that with respect to the plaintiffs nuisance claims, liability would undermine the PUCs determination of the hazard issue and were therefore barred by Public Utilities Code section 1759. However, with respect to the plaintiffs trespass and inverse condemnation claims, the court made no attempt to apply any principle of regulatory preemption but instead found those claims failed on substantive grounds. In particular, the court found the inverse condemnation claim failed because the plaintiffs could not show the electromagnetic fields themselves or public fears about them constituted a direct and substantial burden on their property. (San Diego Gas & Electric Co. v. Superior Court, supra, 13 Cal.4th at pp. 941-943.)
In sum, notwithstanding the PUC orders which allowed MTDB to move its trolley lines to the eastern side of San Ysidro Boulevard and required crossing gates and audible warning devices, the trial court had jurisdiction to hear OPMs inverse condemnation claim.
II
Next, MTDB challenges the trial courts finding the new trolley alignment and grade crossings impaired access to OPMs property to such an extent and caused so much noise and vibration that MTDB was required to compensate OPM for its damage. We find no error.
The substantive and procedural rules which govern our review of this issue were set forth by the court in Breidert: "We have long recognized that the urban landowner enjoys property rights, additional to those which he exercises as a member of the public, in the street upon which his land abuts. Chief among these is an easement of access in such street. [Citations.] This easement consists of the right to get into the street upon which the landowners property abuts and from there, in a reasonable manner, to the general system of public streets. [Citations.]
"To designate the right, however, is not to delineate its precise scope. Not every interference with the property owners access to the street upon which his property abuts and not every impairment of access, as such, to the general system of public streets constitutes a taking which entitles him to compensation. Such compensation must rest upon the property owners showing of a substantial impairment of his right of access to the general system of public streets.
"The determination of whether such substantial impairment has been established must be reached as a matter of law. The extent of such impairment must be fixed as a matter of fact. The cases have consistently held that the trial court must rule, as a matter of law, whether the interference with access constitutes a substantial or unreasonable impairment. Thus in People v. Ricciardi, supra, 23 Cal.2d 390, 402-403, we said: `It was . . . within the province of the trial court and not the jury to pass upon the question whether under the facts presented, the defendants right of access will be substantially impaired. If it will be so impaired the extent of the impairment is for the jury to determine. This is but another way of saying that the trial court and not the jury must decide whether in the particular case there will be an actionable interference with the defendants right of access."
"Substantial impairment cannot be fixed by abstract definition; it must be found in each case upon the basis of the factual situation. `While certain general rules have been set forth in the various decisions which have considered the nature and scope of this right, each case must be considered upon its own facts. [Citation.]" (Breidert, supra, 61 Cal.2d at pp. 663-665, fns. omitted.)
Admittedly, there is some dispute in the cases as to whether the question of substantial impairment is predominantly a question of law which we should review de novo or a question of fact which we review for substantial evidence. (Compare Brumer v. Los Angeles County Metropolitan Transportation Authority (1995) 36 Cal.App.4th 1738, 1745 [predominately a question of law], and San Diego Metropolitan Transit Development Bd. v. Price Co. (1995) 37 Cal.App.4th 1541, 1548 [question of law reviewed for substantial evidence].) We need not consider this dispute because even if we review the record as a question of law, it is clear OPMs property was substantially impaired by MTDBs improvement project.
III
With respect to access, the court in Brumer conducted an extensive review of the cases which have considered whether limitations on access have caused substantial impairment. "A loss of direct access to an abutting road is considered a substantial impairment of access. Thus construction built directly on a portion of a road which cuts off direct access from an abutting property is an actionable impairment. (People v. Loop (1954) 127 Cal.App.2d 786, 802-804 [triangular piece of land taken from part of property fronting on Wilshire Boulevard to build Harbor Freeway off-ramp left owners with very limited access to Wilshire Boulevard]; Goycoolea v. City of Los Angeles (1962) 207 Cal.App.2d 729, 733-735 [construction of raised viaduct on major portion of abutting road left property with one-lane passageway too small for commercial trucks to reach industrial property]; see also 3 Manaster & Selmi, Cal. Environmental Law and Land Use Practice, supra, Constitutional Controls, § 68.20[4][b], p. 68-49, and cases collected.)
"Also a major change in the grade of the road, such as construction of highway underpasses, overpasses and freeway off-ramps, which prevents direct access to a property abutting the new construction, is a substantial impairment of access. (See, e.g., Blumenstein v. City of Long Beach (1956) 143 Cal.App.2d 264, 267-269 [freeway off-ramp]; Anderson v. State of California (1943) 61 Cal.App.2d 140, 143 [grade of road fronting plaintiffs property elevated several feet to build bridge]; Goycoolea v. City of Los Angeles, supra, 207 Cal.App.2d 729, 733-735 [street abutting plaintiffs property substantially narrowed to create a raised viaduct on remaining portion of road which blocked air, light and view to property] and cases collected in 14 Dankert, Cal. Real Estate Law & Practice, supra, Condemnation Practice, § 512.32[3], p. 512-29-30.) After replacing an old road with a major highway, the provision for service road access to abutting property owners property will not necessarily preclude a finding of substantial impairment of access if the service road is too narrow to permit the intended use of the abutting owners property. (See, e.g., Rose v. State of California, supra, 19 Cal.2d 713, 729 [single-lane service road too narrow and dangerous for commercial trucks to reach industrial property]; People v. Ricciardi, supra, 23 Cal.2d 390, 403-404 [provision for narrow service road still left property with impaired access as property hidden behind ramp and freeway traffic from off-ramp emptied substantial distance away from owners property].)
"In building Californias freeway systems, several residential streets were turned into cul-de-sacs which cut off access to one of the two next intersecting streets. The Supreme Court recognized the right of a property owner to convenient access to intersecting streets in both directions. (See, e.g., Bacich v. Board of Control, supra, 23 Cal.2d 343, 351-355.) However, creation of a cul-de-sac is not a compensable taking as a matter of law, but is considered a substantial factor is assessing whether there has been an unreasonable impairment of access in a given case. (Bacich v. Board of Control, supra, 23 Cal.2d 343, 352-355; Breidert v. Southern Pac. Co., supra, 61 Cal.2d 659, 663-665; Valenta v. County of Los Angeles (1964) 61 Cal.2d 669, 671-672.) For example, no actionable taking is found where a property owner can reach the general system of streets by traveling only a fraction of a mile farther than before creation of the cul-de-sac. (See, e.g., People v. Symons, supra, 54 Cal.2d 855, 859-861; People ex rel. Dept. of Public Works v. Wasserman (1966) 240 Cal.App.2d 716, 727-730.)
"In People v. Ayon, supra, 54 Cal.2d 217, the Supreme Court clarified limitations on finding an impairment of access. In Ayon the property in question was a supermarket and adjoining customer parking lot. Prior to the street improvements customers traveling in either direction could enter the customer parking lot directly from Azusa Avenue. There was no divider strip separating the traffic lanes, and customers traveling north on Azusa Avenue could make a left-hand turn into the supermarket parking lot. Southbound traffic could turn right into the lot. Traffic flow in this area was rerouted, allowing only southbound traffic on a portion of Azusa Avenue. In addition, a metal divider strip was placed in the center of a now widened Azusa Avenue, preventing left-hand turns into the lot from north bound traffic lanes. Supermarket customers traveling in this direction had to take a more circuitous route to reach the store.
"The lessee and sublessee of the market sought damages for impaired access to their property caused by the diversion and rerouting of traffic on the street abutting their property. The Supreme Court affirmed the trial courts finding the parties had suffered no substantial impairment of access. `"The courts of this state, from time immemorial and in cases too numerous to mention, have declared and enforced an abutting property owners right to a free and convenient use of and access to the highway on which his property abuts. [Citing cases.] (People v. Ricciardi, 23 Cal.2d 390, 397.) But it is equally true that the right of a property owner to ingress and egress is not absolute. He cannot demand that the adjacent street be left in its original condition for all time to insure his ability to continue to enter and leave his property in the same manner as that to which he has become accustomed. Modern transportation requirements necessitate continual improvements of streets and relocation of traffic. The property owner has no constitutional right to compensation simply because the streets upon which his property abuts are improved so as to affect the traffic flow on such streets. If loss of business or of value of the property results, that is noncompensable. It is simply a risk the property owner assumes when he lives in modern society under modern traffic conditions.
"`The compensable right of an abutting property owner is to direct access to the adjacent street and to the through traffic which passes along that street (People v. Ricciardi, supra.) If this basic right is not adversely affected, a public agency may enact and enforce reasonable and proper traffic regulations without the payment of compensation although such regulations may impede the convenience with which ingress and egress may thereafter be accomplished, and may necessitate circuitry of travel to reach a given destination. "In the proper exercise of its police power in the regulation of traffic, a state or county may do many things which are not compensable to an abutting property owner, such as constructing a traffic island, placing permanent dividing strips which deprive an abutter of direct access to the opposite side of the highway, painting double white lines on the highway, or designating the entire street as a one-way street. [Citations.]" (People v. Russell, 48 Cal.2d 189, 197.) The Russell case held that the use of a parkway as a traffic separation strip between a state highway and a county road was a noncompensable traffic regulation.
"`Under these well-settled rules the appellants are not entitled to compensation because of the divider strip placed in the middle of Azusa. They have direct access to that street and to traffic traveling in one direction on the street. [Citations.]
"`Nor can appellants complain because the relocation plan will divert some southbound traffic from Azusa in front of appellants property. A property owner has no right to compensation because traffic is rerouted or diverted to another thoroughfare even though the value of his property is substantially diminished as a result. [Citations.] (People v. Ayon, supra, 54 Cal.2d. at pp. 223-224.) " (Brumer, supra, 36 Cal.App.4th at pp. 1746-1748.)
In applying these principles to the circumstances before it, the court in Brumer easily concluded no substantial impairment had occurred. In Brumer the plaintiff landowner had never had effective access from the road which was closed to it by the defendants trolley line and future development of the property could occur because access to two abutting cross street was unaffected by the trolley line. In Border Business Park, Inc. v. City of San Diego (2006) 142 Cal.App.4th 1538, 1559, the court, applying the same principle found that no substantial impairment occurred as result of a citys decision to reroute truck traffic in the vicinity of plaintiffs business park. The court found that although the rerouted traffic made access to the business park more difficult, it did not rise to the level of substantial impairment. (Ibid.)
Here, the circumstances are in marked contrast to those considered in Brumer and Border Business Park. The only access OPM had to the system of roads was via East San Ysidro Boulevard. The parking lot and motel businesses OPM operated on its property depended heavily on the ability of its customers to easily and conveniently enter and exit its property. Moreover, the same would be true of any likely future tourist-based development of the property. Moving the trolley line to the eastern edge of the street cut off all access to the traffic system, except by means of the guarded trolley crossings the MTDB installed. Like the trial court we cannot accept MTDBs contention the guarded trolley crossings provided anything resembling reasonable access to OPMs property for the tourist-based businesses OPM conducted. This impairment was far more direct and substantial than the inconvenience considered in Brumer and Border Business Park. The difficulties patrons of the businesses face waiting for the crossing gates to rise were plainly exacerbated by the single northbound lane MTDB installed. Although MTDB installed a short and narrow turning lane at the crossings, in light of the single northbound lane, the record shows OPMs patrons are nonetheless discouraged from waiting for the crossing gates to rise by traffic queuing up behind them.
In short, OPM demonstrated substantial impairment of access to its property because its business depended on free access to its parking lots, its only access was from East San Ysidro Boulevard, and MTDBs project severely hampered that access.
VI
Contrary to MTDBs argument, there was substantial evidence from OPMs witnesses the noise and vibration of the trolley line caused it substantial and peculiar damage. In addition to the trial courts own inspection of the property, OPMs shareholders testified the high decibel bells at its entrances caused motel patrons to leave after they had checked in to the motel and started hearing the bells.
V
With respect to the damages phase of the trial, MTDB argues the trial court committed five evidentiary errors. As OPM points out, in general the trial court may exercise its discretion in the admission and exclusion of evidence, and even when the trial court abuses its discretion, reversal is not warranted unless the trial courts error has prejudiced the appellant. (See City of Ontario v. Kelber (1972) 24 Cal.App.3d 959, 970; County of Monterey v. W. W. Leasing Unlimited (1980) 109 Cal.App.3d 636, 642.) An error is prejudicial only if it is "reasonably probable that a result more favorable to the appealing party would have been reached in the absence of the error." (People v. Watson (1956) 46 Cal.2d 818, 836.)
A. Schlarmann Testimony
OPMs expert appraiser Albert Schlarmann testified that before MTDBs improvement project, OPMs property was worth $6 million. Schlarmann did not believe the Gateway Inn which occupied the property added any value to the property because it was not profitable. Thus Schlarmann assumed OPMs property would be valued by a prospective buyer as vacant land. As the potential site of a mixed-use development, including a motel, retail stores and a parking lot, Schlarmann concluded OPMs property had a value of $100 a square foot. This conclusion was based on Schlarmanns review of what undeveloped property in San Diego area was selling for, the income OPMs parking lot earned, the income other parking lots earned, the occupancy rates of motels in the vicinity and the propertys proximity to the border.
In reaching his conclusion as to the value of OPMs property, Schlarmann had attempted to locate other directly comparable sales. In conducting his research, Schlarmann located four recent sales in downtown San Diego. However, because of their distance from OPMs property Schlarmann did not consider them in reaching his conclusion as to the value of the property. Schlarmann also reviewed sales of parking lots, motels, and vacant commercial land throughout San Diego, Chula Vista, National City, San Ysidro and Imperial Beach. Again, however, Schlarmann conceded none of the sales were directly comparable to OPMs property.
Contrary to MTDBs argument, there was ample foundation for Schlarmanns opinion, even though he conceded he was unable to find any directly comparable sales. Evidence Code section 814 provides that an opinion as to the value of property may be based on data "of a type that reasonably may be relied upon by an expert in forming an opinion as to the value of property, including but not limited to the matters listed in Sections 815 to 821, inclusive, unless a witness is precluded by law from using such matter as a basis for an opinion." In addition, Evidence Code 823 provides: "Notwithstanding any other provision of this article, the value of property for which there is no relevant, comparable market may be determined by any method of valuation which is just and equitable." As the court stated in South S. F. etc. School Dist. v. Scopesi (1960) 187 Cal.App.2d 45, 51, noted: "It often happens, as in this case, that the experts know of few, if any, comparable sales in the area for such purposes. That circumstance, however, when called to the attention of the trier of fact goes to the weight to be accorded the experts opinion rather than its admissibility." Here, Schlarmann reached his conclusion by making the reasonable assumption that the highest and best use of the property was as the site of a mixed-use development and then, based on a broad range of factors, including the unique location of the property and what other land was selling for in the region, making an estimation of what a developer would pay for OPMs property. Schlarmanns method was reasonable under the circumstances and his opinion was admissible.
B. Schematic Drawing
In testifying, Schlarmann relied in part on a schematic drawing of how OPMs property might be developed as a mixed-use project. Although MTDB had objected to the drawing in limine, the trial court permitted Schlarmann to refer to it in his testimony and admitted into evidence, but only for the purpose of showing what kind of development might have occurred on the property.
Contrary to MTDBs argument, the trial court acted well within its discretion in permitting Schlarmann to use the schematic in demonstrating how OPMs property might be developed. (See People ex rel. Dept. of Transportation v. Tanczos (1996) 42 Cal.App.4th 1215, 1218-1220.) Here, we note the trial court ruled the schematic could not be used to suggest a specific project with a specific number of rooms or specific square feet of retail space would have been built.
C. Cost of Mitigation
At trial, MTDB attempted to offer evidence of the cost of mitigating the noise and vibration damage caused by the trolley. MTDB argued the noise and vibration damage should have been calculated on the basis of the cost of mitigating it. The trial court ruled such evidence was irrelevant because the severe limitation on access was not repairable and could only be measured by diminution in value. The trial court did not abuse its discretion in limiting the damages theories presented to the jury. It would have been unduly confusing and impractical to ask the jury to determine part of the damages on the basis of diminution in value and part on the cost of mitigation.
D. Loss of Business Testimony
In light of the fact OPM damages were based on a diminution in the value of its land, the trial court properly excluded evidence of the loss of any business goodwill. Nonetheless the trial court permitted OPM to present the testimony of a business appraiser. The business appraiser testified that after MTDBs improvement, both OPMs parking lot and motel businesses lost a considerable amount of revenue. OPM relied on this testimony to show that any new businesses on the property would have a difficult time succeeding. As evidence of the impact MTDBs improvement would have on any future businesses, the appraisers testimony was relevant and admissible. Contrary to MTDBs argument on appeal, this testimony was not solely inadmissible evidence of the loss of business goodwill.
E. Citys Preliminary Report
In an attempt to rebut OPMs testimony to the effect its property was not developable because it did not have frontage on East San Ysidro Boulevard, MTDB offered the testimony of its own appraiser. The appraiser consulted the City of San Diego and obtained a Preliminary Review Report from the city which stated in part that the existing and permitted uses on the property would be allowed by the city. The trial court expressly permitted the expert to rely on the citys report in reaching his conclusion as to the highest and best use of the property after MTDBs improvements were completed. However, at trial on direct examination of the appraiser, the trial court sustained hearsay objections to references to the contents of the report itself.
The trial court correctly sustained OPMs hearsay objections. The report, although something which the expert could rely upon in reaching his conclusion, was itself hearsay and MTDB offered no exception to the hearsay rule which would permit its contents to be admitted. (See e.g. People ex rel. Dept. Pub. Wks. v. Hunt (1969) 2 Cal.App.3d 158, 167, fn. 5.)
Judgment affirmed. Respondents to recover their costs of appeal.
WE CONCUR:
McCONNELL, P. J.
HUFFMAN, J.