California law requires a condemnor to present to the property owner a final pre-trial settlement offer 20 days before trial, and for the property owner to make a final demand. If a court later determines that the condemnor's final offer was unreasonable and the property owner's final demand was reasonable, the property owner is entitled to litigation expenses.
In City and County of San Francisco v. PCF Acquisitionco, LLC, No. A139836 (May 26, 2015), the court concluded that the offer by the city, which "was expressly made 'contingent on the approval of the Federal Transportation Authority [FTA], the Board of Directors of the San Francisco Municipal Transportation Agency [MTA], and the San Francisco Board of Supervisors [the Board]'," was unreasonable as a matter of law because it wasn't a "final offer." Thus, the trial court wrongly denied the property owner's request for fees and costs.
The court held that the purpose behind the statute is to promote settlement, and that the city's contingent offer -- which might result in the property owner getting nothing were the FTA, the MTA and the Board to reject it -- didn't do so. Thus, the "final offer" wasn't so much of an offer as a "recommendation to enter a settlement."
Keeping in mind the statute‘s purposes of promoting settlement and making a property owner whole for the cost of unnecessary litigation, we do not think the Legislature intended to make a condemnee chose between entering into an uncertain and contingent bargain or risk losing any chance of recovering its litigation expenses if it proceeds to trial.
Slip op. at 4. The court also rejected the city's argument that it was impractical for it to use a different procedure, and that it was exempt from the statute by virtue of the city's Charter.
The court remanded the case for a determination of how much the city owes the property owner for fees and expenses.