People Ex Rel. Department of Transportation v. Presidio Performing Arts Foundation

Presidio Performing Arts Foundation (the Foundation) appeals from a judgment entered after the court, at a bench trial, ruled that the Foundation failed to establish its entitlement to compensation for lost goodwill after its location was taken by respondent by eminent domain. (Code Civ. Proc., § 1263.510.) The trial court found that, although the Foundation demonstrated it had goodwill before the taking and lost goodwill due to the taking, it did not prove a “quantitative” loss of goodwill by calculating its pre-taking goodwill value (by subtracting the value of its tangible assets from its total business value), and then subtracting from that amount its post-taking goodwill value. The Foundation, a nonprofit organization, contends the court erred by requiring it to demonstrate entitlement in this manner, and that its expert’s quantification based on a change in cash flow was sufficient.

We will reverse the judgment. For purposes of the threshold determination of entitlement to compensation, a party must establish that the taking caused some amount of loss of goodwill due to the taking (along with the other requisites of the statute), but need not quantify the loss in…