Pulgarin

Elisa and Juan Pulgarin, doing business as Mid Town Recycling (collectively Mid Town) appeal from an order dismissing their claim for loss of goodwill allegedly caused by the acquisition by eminent domain of the real property upon which Mid Town’s business was conducted. We conclude that the lack of a written lease is not fatal to Mid Town’s entitlement to compensation for goodwill, and reverse the order.

FACTUAL AND PROCEDURAL SUMMARY

The Los Angeles Unified School District (LAUSD) filed an action in eminent domain to acquire commercial property owned by A&D Investment Corporation for construction of a school. Several small businesses occupied this property, including Mid Town, a recycling business. Mid Town occupied the property under a month-to-month tenancy; it did not have a written lease.

Shortly before trial on the issue of just compensation, LAUSD filed a motion pursuant to Code of Civil Procedure section 1260.040 for a pretrial determination that in the absence of a lease, Mid Town had no legally enforceable interest in the property and thus was not entitled to compensation for loss of business goodwill. Mid Town opposed the motion, asserting a written…