Andresen

Introduction

The State of California appeals from a jury verdict awarding $3.2 million •to the defendants in a condemnation action. The defendants received an additional $1.5 million in prejudgment interest and were awarded $1.2 million in attorney fees.

Acting through the Department of Water Resources, the State of California brought the condemnation action on December 4, 1981, to acquire 689 acres adjacent to the San Luis Reservoir. A rockslide on the San Luis Dam caused serious damage which required immediate attention before water could be stored in significant quantities again. In addition, the O’Neill Forebay Dam was in need of repair.

The condemned property is 689 acres which contains a 134-acre basalt rock quarry used in the original construction of the dams. The state used rock in the quarry to repair the damage to both dams.

The only issue at trial was the value of the condemned property. The defendant landowners maintained that the highest and best use of the subject property was as a rock quarry. Because the rock quarry had been dormant since construction of the new dams, the state contended that valuation of the property as a quarry business was…