People Ex Rel. Dep't of Pub. Works v. McCoy

BROWN (H.C.), J.

This is an appeal from the denial of plaintiff’s motion to offset the value of possession and of rents received by defendants against an award of interest under the provision of section 1255b of the Code of Civil Procedure.

The People of the State of California (now appellant) filed a complaint in eminent domain to condemn a portion of certain property generally known as the Los Robles property in Santa Rosa. This property was owned by respondents’ predecessors in interest. The whole of the property was under lease to Redwood Hotels Corporatipn who were the assignees of Claus Neumann and Antonio Vieini. The property under this lease consisted of a motel, restaurant, real estate office and a parking lot used by the lessee. The parking lot (re

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ferred to as Parcel 1) was the only portion of the property that was the subject matter of this condemnation suit.

The jury arrived at a verdict and fixed the value of Parcel 1 at $55,000 and determined severance damages at $30,000. Interest was awarded at 7 percent per annum from February 15, 1963, the date on which appellant was entitled to possession.

This appeal is from that portion of the judgment awarding respondents interest. Although the appellant was entitled to possession as of February 15, 1963, actual possession was not taken until May of 1964, and respondent lessee continued to use the parking lot on which respondent lessors received the rents without any diminution during that period of time. The appellant claims that the value of possession and of such rents should be a setoff against the interest award, which commenced as of February 15, 1963, pursuant to the provisions of section 1255b of the Code of Civil Procedure.

The trial court disallowed the claim of offset because (1) appellant did not make it an issue at trial, (2) it was not claimed until after the jury had arrived at its verdict, and (3) there was no evidence in the record to support an offset.

The pertinent provision of section 1255b of the Code of Civil Procedure as amended in 1961 provides: “(a) The compensation and damages awarded in an eminent domain proceeding shall draw legal interest from the earliest of the following dates: (1) The date of the entry of judgment. (2) The date that the possession of the property sought to be condemned is taken or the damage thereto occurs. (3) The date after which the plaintiff may take possession of the property as stated in an order authorizing the plaintiff to take possession, (b) If after the date that interest begins to accrue the defendant continues in actual possession of or receives rents, issues and profits from the property, the value of such possession and of such rents, issues and profits shall be offset against the interest that accrues during the period the defendant continues in actual possession or receives such rents, issues or profits. ...”