Earlier this week, Governor Brown vetoed AB 374, a bill to amend Code of Civil Procedure section 1263.510, the statute governing recovery of loss of business goodwill in an eminent domain case. But it’s not the veto that caught my eye so much as the veto message, which really left me scratching my head until I looked more carefully at what was going on (or at least what appeared to be going on).
Some history: last year, the Court of Appeal issued the decision in People ex rel. Department of Transportation v. Dry Canyon Enterprises 211 Cal.App.4th 486 (2012). The case purported to make some new law, requiring a business owner to prove that the business possessed goodwill before the taking (i.e., in the before condition) in order to seek recovery for loss of business goodwill.
Even that had me scratching my head, because section 1263.510 already required an owner to prove that “the loss [of business goodwill] is caused by the taking of the property or the injury to the remainder.” Silly me, I had always assumed that to lose something, one had to have it to lose.
But still, Dry Canyon clarified things, holding that the business did in fact have to possess goodwill in order to lose goodwill as part of satisfying the entitlement factors (along with proving the loss was caused by the taking, the loss could not be prevented by reasonable mitigation measures, and compensation for the loss would not be duplicated through another form of recovery). Fair enough.
Then AB 374 came along, presumably seeking to codify the Dry Canyon result by adding specific language to section 1263.510, so that the introduction would now read:
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