City & County of San Francisco v. PCF Acquisitionco, LLC
Annotate this CasePrior to this action, PCF Acquisitionco, LLC owned a former gas station at the corner of 4th and Folsom Streets in San Francisco. The site was marked as the future site of the Central Subway's Moscone station. Following several years of negotiations and the exchange of proposed valuations for the property, the parties were unable to reach a settlement. The matter proceeded to trial, and a jury determined the total compensation to be awarded for the property was approximately $7.3 million, which reflected a fair market value minus costs for environmental remediation. PCF then moved to recover its litigation expenses. The City opposed the motion on the grounds that its final offer was reasonable and, alternatively, that PCF's claimed litigation expenses were excessive. The issue this case presented for the Court of Appeal's review centered on whether the City's final pre-trial settlement offer, made 20 days before trial and contingent on obtaining approvals from other governmental entities, could have been reasonable under Code of Civil Procedure 1250.410, and thus bar PCF (who rejected the offer) from later recovering litigation costs. PCF argued that such a contingent offer was unreasonable as a matter of law because it was conditioned on the approval of three different governmental bodies, thus providing no assurance that OCF's acceptance would result in a pre-trial settlement. The Court of Appeal agreed: the City's contingent settlement offer did not serve section 1250.410's aims of encouraging the pre-trial settlement of eminent domain actions and making property owners whole, and thus was not reasonable within the statute's meaning. The Court therefore reversed the order denying PCF's motion for litigation expenses and remanded to the trial court for further proceedings.
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