CITY OF SAN DIEGO v. NEUMANN
CITY OF SAN DIEGO, Plaintiff and Respondent, v. Fritz NEUMANN et al., Defendants and Appellants.
No. D014683.
Asaro & Keagy, Roscoe D. Keagy and Richard R. Freeland, San Diego, for defendants and appellants. John W. Witt, City Atty., C. Alan Sumption, Chief Deputy City Atty., Leslie J. Girard, and Linda Bartz Kinsey, Deputy City Attys., for plaintiff and respondent.
This case involves a single issue which appears, at least in California, to be one of first impression. When a condemnation action takes land which is legally separate from other contiguous land commonly owned by the condemnee, is the condemnee entitled to recover "severance damages" as to the contiguous lots where all of the separate lots were held in anticipation of their later being joined and developed as a unit? The trial court ruled that because the separate lots here were not presently devoted to a unified use, the property lacked sufficient unity to allow the separate lots to be considered parts of a "larger parcel."
We conclude that if the landowner establishes there is a reasonable probability all of his contiguous commonly owned lots will be available for development or use as an integrated economic unit in the reasonably near future, all of the separate lots may be collectively considered as a larger parcel for the purpose of determining the just compensation for the property taken.
I. Factual and Procedural Background
A. The Condemnation
As of October 29, 1986 (the date of value) appellants Fritz and Betty Neumann (Neumanns) owned several lots south of San Ysidro Boulevard. Specifically, Neumanns owned the lots designated as 5, 6, 17, 19 and 23. Lots 5, 6 and 17 (the "taken" property) fronted the south side of the then existing San Ysidro Boulevard. Lots 19 and 23 (the "untaken" property) were contiguous with the southern boundaries of the taken property. Respondent City's condemnation effort designated two parcels: parcel 4, composed of lots 5 and 6, and parcel 9, composed of lot 17 plus a small strip of lot 19. (This small strip was of no moment in the issue raised on appeal, and hence we treat parcel 9 as a take of lot 17, and lots 19 and 23 as being untaken.)
Trial proceeded in three stages. In stage one the "right to take" issue was decided adversely to Neumanns. In the second stage—from which the current appellate issue emerged—the court, again sitting without a jury, heard arguments and evidence on the so-called "larger parcel" question. Trial of the "larger parcel" issue was conducted before the jury trial on damages was held, because no evidence of severance damages would be tendered to the jury unless the trial court first determined a larger parcel existed. Accordingly, the court heard the following evidence on the interrelationship of the taken and untaken property.
B. The Untaken Property
As of the date of the take, the untaken property was zoned residential and in use as a trailer park. However, the property was in an area designated as "future commercial" on respondent's community plan, and was in fact rezoned commercial prior to trial. The trailer park was an "interim use" and not the "highest and best use" of the property. Neumanns did not intend to develop the property themselves, but anticipated someone else would purchase and develop the taken and untaken property together at some future date.
C. The Taken Property
As of the date of the take, the taken property was zoned commercial. Parcel 9 was used by Baja–Mex (an entity selling insurance) and a small currency exchange business. The existing users were on a month-to-month tenancy terminable on 30 days' notice. The existing use was not the highest and best use of parcel 9. Neumanns purchased parcel 9 so that when the untaken property was developed it would have frontage along and access to San Ysidro Boulevard across Parcel 9. It was physically possible to put a driveway from San Ysidro Boulevard to the untaken property over parcel 9. However, at the time of the take there was no physical access across parcel 9 and such parcel was separated from the untaken property by a fence.
The other taken parcel (parcel 4) was also purchased by Neumanns to provide frontage along and access to San Ysidro Boulevard from the untaken property. Parcel 4 was used by money exchanges and a used car lot, on a month-to-month tenancy terminable on 30 days' notice. The improvements on the property were temporary in character, and the existing use was not its highest and best use. At the time of the take there was no physical access from the untaken property across parcel 4 to San Ysidro Boulevard, and parcel 4 was separated from the untaken property by a fence and a 12–foot slope. Although a driveway across parcel 4 had been approved in concept, it had not yet been planned or built.
D. The Trial Court's Ruling
The trial court held the taken lots were not part of a "larger parcel" encompassing lots 19 and 23, and accordingly ruled Neumanns would not be permitted to introduce evidence of "severance damages" accruing to lots 19 and 23 from the taking of parcels 4 and 9. The trial court's ruling was based on its understanding that existing law permitted legally separate lots to be considered portions of a larger parcel only if there was sufficient present "unity of use." Since the existing uses were diverse and not currently interdependent, the trial court ruled severance damages would not be allowed.
E. The Jury's Award
In the subsequent valuation trial, expert appraisers presented evidence of the values of the taken property. The City's expert valued parcel 4 at $66,300 and parcel 9 at $64,875.
Neumanns' expert valued parcel 4 at $215,625 and parcel 9 at $90,840, explaining that his opinion on the market value of the parcels was based on their being part of a larger parcel including the untaken property. In other words, his valuation of the taken parcels was based on their being joined to the untaken property and providing access to the untaken property. However, the "incremental" value he ascribed to the taken parcels as "access providers" was not identical to the amount he would have calculated as severance damages.
The jury awarded $164,110, allocating $95,300 for parcel 4, $63,000 for parcel 9, and an additional $5,810 for severance damages to parcel 9. Following entry of judgment thereon, Neumanns appealed.
II. General Principles of Eminent Domain Law
A. Just Compensation
A condemnee is entitled to receive just compensation for property taken by eminent domain. Just compensation is measured by the amount the owner has lost, not by the amount the condemnor has gained (County of San Diego v. Bressi (1986) 184 Cal.App.3d 112, 123, 229 Cal.Rptr. 44), because "[t]he principle sought to be achieved by the concept of just compensation is to reimburse the owner for the property interest taken and to place the owner in as good a position pecuniarily as if the property had not been taken." (People ex rel. Dept. of Transportation v. Southern Pac. Transportation Co. (1978) 84 Cal.App.3d 315, 324, 148 Cal.Rptr. 535.)
B. The Taken Property
A primary component of just compensation is the fair market value of the property taken (Code Civ.Proc., § 1263.310), that is, the value a willing buyer would pay a willing seller, "each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available." (County of San Diego v. Bressi, supra, 184 Cal.App.3d at p. 122, 229 Cal.Rptr. 44, emphasis in original.) In determining fair market value, the condemnee is not limited to the value of the land in its existing condition and usage. Instead, the condemnee may introduce evidence of all uses for which the property is available and to which it is adaptable. Such evidence may also include the highest and most profitable use to which the property might be put in the reasonably near future, to show that such prospective higher use affects its market value. (Redevelopment Agency v. Contra Costa Theatre, Inc. (1982) 135 Cal.App.3d 73, 83–84, 185 Cal.Rptr. 159.)
C. Damages to Untaken Property
A second component of damages, denominated "severance damages," is available if the taken property is only a portion of a "larger parcel." Where such a "partial taking" occurs, the condemnee may recover an amount to compensate for any injury to the remainder, measured by the amount of damage to the remainder reduced by the amount of benefit to the remainder. (Code Civ.Proc., § 1263.410.)
No severance damages can be recovered unless the part taken was part of a "larger parcel." (People ex rel. Dept. Pub. Wks. v. International Tel. & Tel. Corp. (1972) 22 Cal.App.3d 829, 833–834, 99 Cal.Rptr. 836.) What constitutes a "larger parcel" is a question of law for determination by the trial court. (Ibid; People ex rel. Dept. Pub. Wks. v. Younger (1970) 5 Cal.App.3d 575, 582, 86 Cal.Rptr. 237.) While legal determinations are subject to de novo review, we are required to resolve any factual disputes in favor of the respondent if there is substantial evidence in support thereof. (People ex rel. Dept. Pub. Wks. v. International Tel. & Tel. Corp., supra, 22 Cal.App.3d at p. 835, 99 Cal.Rptr. 836.)
Against the foregoing background we turn to the issue presented: whether diversity of current uses on adjacent parcels owned by the same condemnee conclusively precludes the untaken parcel from being considered part of a larger parcel as relates to the taken parcel.
III. The Trial Court Erred in Holding that Present Diversity of Use by Itself Precludes Finding of a "Larger Parcel"
As discussed above, the trial court's ruling of "no larger parcel" was based on its understanding that existing law permitted legally separate lots to be considered portions of a larger parcel only if there was present "unity of use." The Legislature specifically declined to define what constitutes a "larger parcel," leaving the definition uncodified to permit further judicial development. (See Cal.Law Revision Com. com., West's Ann.Code Civ.Proc., § 1263.410.) We must therefore resort to existing judicial analysis of the "larger parcel" question to determine if the trial court's premise is correct, keeping in mind that "larger parcel" is a concept within the broader statutory scheme designed to carry out the constitutional mandate of "just compensation." (City of Los Angeles v. Wolfe (1971) 6 Cal.3d 326, 330, 99 Cal.Rptr. 21, 491 P.2d 813.)
The traditional analysis of "larger parcel" issues turned on whether there was a "unity of the property," which in turn depended on the confluence of three factors: (1) unity of title; (2) the parcels ordinarily being contiguous; and (3) unity of use. (City of Los Angeles v. Wolfe, supra, at p. 330, 99 Cal.Rptr. 21, 491 P.2d 813.) Here, contiguity and title are not in issue; unity of use is the question. In that the parties have not cited, nor has our research uncovered, any California case specifically declaring severance damages are allowable where the unity of use is prospective only, we turn first to other jurisdictions for assistance with this issue.
A. Other Authorities
The courts in other jurisdictions, as well as the Model Eminent Domain Code, have permitted the award of severance damages where legally separate but contiguous lots under common ownership were prospectively joinable for development as a common parcel.
In In re Elgart's Appeal (1959) 395 Pa. 343, 149 A.2d 641, the condemnee owned adjoining parcels not unified in use at the time of the condemnation. The court noted that although prior Pennsylvania cases had required "unity of existing use" to allow severance damages, those cases had been decided in the context of noncontiguous parcels. The Elgart court held that while "unity of existing use" was a proper limitation in cases involving noncontiguous parcels, a prospective unity of use was the only requirement in cases involving contiguous parcels. The Elgart court reasoned it was an economic reality of land ownership and development that contiguous parcels, though not currently linked with existing improvements, had value to developers greater than merely the sum of their parts, because an additional increment of value inhered in having a larger parcel available to develop as a larger unit. In that the condemnation deprived the owner of both the taken land and the increment of added value to the untaken land, providing compensation for the additional loss was appropriate.
The court in State, Com'r of Transp. v. Bakers Basin Rlty. Co. (1975) 138 N.J.Super. 33, 350 A.2d 236 held that a condemnee who had assembled land for the purpose of development as an integrated unit (a shopping center) should have been allowed severance damages regardless of the undeveloped state of the property. The court noted that prior authorities had rejected future unity of use as a basis for severance damages, on the ground that determining damages based on "future unity" is speculative, such damages being too remote. However, on the facts of the New Jersey case severance damages were not deemed too remote or speculative because there was a reasonable probability the lands would be combined for a particular purpose in the reasonably near future, making it appropriate to consider them as a larger parcel. (See also State v. Silver (1983) 92 N.J. 507, 457 A.2d 463 [potential for future unified use of two remainder parcels may be considered for purposes of determining highest and best use of remainders to assess "after" value of untaken lands].)
Additional cases approving the "prospective unity of use" approach have come from Pennsylvania (see, e.g., Com., Dept. of General Services v. Fake (1979) 45 Pa.Cmwlth. 46, 405 A.2d 971), Massachusetts (see Valley Paper Company v. Holyoke Housing Authority (1963) 346 Mass. 561, 194 N.E.2d 700), and North Carolina (see Barnes v. North Carolina State Highway Commission (1959) 250 N.C. 378, 109 S.E.2d 219 [three contiguous tracts of vacant land held for future development considered parts of larger parcel].) However, other states have reached opposite conclusions. (See, e.g., Hutchinson v. Maiwurm (Iowa 1968) 162 N.W.2d 408.) 1
The federal courts have also addressed whether a potential future use may be considered. In United States v. Mattox (4th Cir.1967) 375 F.2d 461, the court acknowledged that tracts of land adjoining each other and available for integrated uses add an incremental value to the sum of their parts. Although the facts of that case led the Mattox court to deny the condemnee's attempt to recover severance damages, it recognized (albeit in dicta) severance damages might be appropriate if there were a "reasonable probability that the separate tracts would have been combined for such integrated use." (Id. at p. 463.) Similarly, the court in United States v. Certain Parcels of Land, etc. (4th Cir.1967) 384 F.2d 677 allowed severance damages where the prospective highest use of the property was development as a single unit. As with the state courts, however, other federal courts have reached contrary conclusions. (See, e.g., United States v. Certain Parcels of Land in Jackson Co., Mo. (W.D.Mo.1971) 322 F.Supp. 841.)
The Model Eminent Domain Code would specifically permit severance damages upon a proper showing. Section 1007 thereof provides:
"For purposes of determining compensation under this Article, all parcels of real property, whether contiguous or noncontiguous, that are in substantially identical ownership and are being used, or are reasonably suitable and available for use in the reasonably foreseeable future, for their highest and best use as an integrated economic unit, shall be treated as if the entire property constitutes a single parcel." (Emphasis added.)
It thus appears that the weight of authority, along with the Model Code, would permit a finding of a "larger parcel" upon a factual showing the lands are contiguous, under common ownership, and there is a reasonable probability the lots are developable as an integrated economic unit in the reasonably foreseeable future. We thus must turn to California precedent to determine whether decisional law would permit adoption of a similar approach here.
B. California Law
The definition of "larger parcel" in California has evolved on a case-by-case analysis. While earlier case law strictly applied the "three unities" test, judicial recognition of the realities of the marketplace has led courts to depart from a strict construction of the elements. Thus, for example, while some courts have held unity of title does not exist unless there is fee ownership of both the taken and untaken parcels, California has permitted severance damages if the separately owned parcels are used in common under a contract or arrangement. (People ex rel. Dept. Pub. Wks v. Nyrin (1967) 256 Cal.App.2d 288, 295–296, 63 Cal.Rptr. 905.) Strict contiguity also is not invariably required, and a lack of strict contiguity can be overcome if there is a present interdependent use. (City of Los Angeles v. Wolfe, supra, 6 Cal.3d at pp. 335–338, 99 Cal.Rptr. 21, 491 P.2d 813.)
Focusing specifically on the "unity of use" issue, California courts appear not to have imposed an inflexible requirement that the uses be present and interdependent. In People v. Thompson (1954) 43 Cal.2d 13, 271 P.2d 507, parts of the property were agricultural, while others were undeveloped beach lands or swamp areas. (Id. at p. 17, 271 P.2d 507.) The court held that all of the contiguous lands should be deemed a "larger parcel" for the purpose of severance damages, notwithstanding the lack of a present interdependent usage. The court distinguished City of Stockton v. Marengo (1934) 137 Cal.App. 760, 31 P.2d 467 because the uses in Marengo (part for farming, and part for a gas station under long-term lease to a stranger) were actually diverse and likely to remain so for some time. Contrasting Marengo to its own case, the Thompson court stated: "By contrast, there is in the present case no actual diversity or division of use, but simply a failure to use some of the property." (People v. Thompson, supra, 43 Cal.2d at p. 26, 271 P.2d 507.)
Thompson's conclusion that a larger parcel can exist without its current uses being unified and interdependent is consistent with the approach allowing a finding of a larger parcel if there is a reasonable probability the land is developable in the reasonably near future as an integrated economic unit. In the case at bar it was stipulated that the existing uses on Neumanns' properties were interim and temporary rather than established uses with an anticipated long-term tenure. Such a use could well be viewed as simply a failure to use the property pending future integration.
Respondent cites numerous cases holding severance damages were impermissible because the existing uses were diverse, and concludes from these cases that an actual, existing unity of use is essential and a possibility of future integration insufficient. Our review of those cases suggests they can be harmonized with the approach we adopt. In City of Stockton v. Marengo, supra, 137 Cal.App. 760, 31 P.2d 467, for example, the portion of the tract the court held separate from the larger parcel was both physically separate and, more importantly, under a long-term lease to a third party for a use inconsistent with the balance of the tract. (Id. at p. 767, 31 P.2d 467.) Such improvement of a portion of the property, and its devotion to long-term diverse use, reasonably precluded any probability the land would be developable in the reasonably near future as an integrated economic unit. However, the facts of our case are susceptible to a different interpretation: The property was not improved in a manner suggesting an intent indefinitely to devote the property to its existing uses; it was not under long-term lease to strangers for diverse uses; and there was evidence of an intent to unify and develop the property as a whole.2
The court denied severance damages for analogous reasons in People ex rel. Dept. Pub. Wks. v. International Tel. & Tel. Corp., supra, 22 Cal.App.3d 829, 99 Cal.Rptr. 836. There, an owner of an electronics plant on one parcel acquired an adjoining parcel which had been, and thereafter remained, devoted to agricultural uses. The condemnee claimed severance damages to the plant based on a partial taking of the agricultural land, arguing the agricultural land had an actual unity of use because it served as a "buffer" against contaminants and dust from the surrounding areas. (Id. at p. 834, 99 Cal.Rptr. 836.) The court simply held that as a factual matter the agricultural parcel was not connected by any actual use reasonably necessary to the operation of the plant, because the plant had existed for 20 years without a "buffer," the agriculture in the "buffer" parcel was ongoing within that time frame and itself created dust problems, and the two parcels were physically divided and differentially zoned. (Id. at pp. 832–835, 99 Cal.Rptr. 836.) In short, severance damages were rejected not because the unity of use was prospective but because the present uses were diverse rather than interdependent, and no evidence suggested a potential for becoming interdependent.
Respondent's position similarly is not furthered by People v. Ocean Shore Railroad (1948) 32 Cal.2d 406, 196 P.2d 570 because of distinctions between the facts of that case and those present here. In Ocean Shore, the condemnee owned a right-of-way over a roadbed located on two tracts of land, only one of which was taken. The tracts were separated by a public park over which no right-of-way existed. The principal issue in Ocean Shore was whether the condemnee did have a right-of-way through the park which linked the two tracts, since "it is not disputed that [the condemnee] would be entitled to severance damages if the roadbed were contiguous․" (Id. at p. 414, 196 P.2d 570, emphasis added.) The Ocean Shore court concluded severance damages would not be allowed because of lack of contiguity, and that the exception for noncontiguous parcels—allowing severance damages where there is actual unity of use—could not be triggered merely by a prospect of future unity of use. (Id. at pp. 423–424, 196 P.2d 570.) This holding accords with the approach of In re Elgart's Appeal, supra, 395 Pa. 343, 149 A.2d 641: unity of existing use is a proper limitation in cases involving non contiguous parcels, but does not preclude a condemnee from showing a prospective unity of use in cases involving contiguous parcels.
Respondent points out that the California cases upholding severance damages have generally discussed the principle of unity of use in language couched in the present tense—a fact which apparently was quite significant to the trial judge below. It is our view, however, that the tense selected in these cases is not persuasive on this issue. The use of the present tense in cases such as People ex rel. Dept. Pub. Wks. v. International Tel. & Tel. Corp., supra, 22 Cal.App.3d 829, 99 Cal.Rptr. 836 simply reflects the fact that the issue there presented was current unity of use, not the possibility of future unity of use. The statements in City of Los Angeles v. Wolfe, supra, 6 Cal.3d at pp. 335–336, 99 Cal.Rptr. 21, 491 P.2d 813 regarding the need for actual and existing unity of use and purpose were specifically made to evaluate whether noncontiguous parcels could nevertheless be viewed as parts of a larger parcel, with the court concluding an existing unity of use could overcome the lack of contiguity. (Ibid.) Neumanns' land does not suffer the shortfalls which needed overcoming in Wolfe.
IV. Other Principles of "Just Compensation" Reinforce the Conclusion that Future Uses May Be Considered on the Issue of Severance Damages
As previously noted, "just compensation" is achieved when the owner of the property taken is reimbursed sufficiently to place him in a position pecuniarily as if the property had not been taken. (People ex rel. Dept. of Transportation v. Southern Pac. Transportation Co., supra, 84 Cal.App.3d 315, 324, 148 Cal.Rptr. 535.) To disallow severance damages when land has a reasonable probability of being developed as an integrated unit in the near future merely because it has not yet been so developed, would ignore the fact that the taking deprives the owner of more than just a portion of one lot; it also deprives him of the incremental value the assembled property would generate on the open market. In that "larger parcel" is a concept within the broader statutory scheme designed to carry out the constitutional mandate of "just compensation" (City of Los Angeles v. Wolfe, supra, 6 Cal.3d 326, 330, 99 Cal.Rptr. 21, 491 P.2d 813), and just compensation is measured by the amount the owner has lost (County of San Diego v. Bressi (1986) 184 Cal.App.3d 112, 123, 229 Cal.Rptr. 44), disallowing severance damages for the totality of assembled property would under-compensate an owner for what he in fact lost.
Additionally, it is well established that the measurement of just compensation properly accounts for future potentialities. The taken property has long been valued upon the basis of its "highest and best use," not merely on its use at the time of the taking, permitting consideration of the most profitable use to which the property is adaptable and for which it is needed or likely to be needed in the reasonably near future. (Pacific Gas & Elec. Co. v. Hufford (1957) 49 Cal.2d 545, 560, 319 P.2d 1033.) Thus, in the valuation process it is proper to consider future zoning changes (see People ex rel. Dept. Pub. Wks. v. Arthofer (1966) 245 Cal.App.2d 454, 462, 54 Cal.Rptr. 878) as well as whether the property might be joined to adjacent property in the future for development as a larger unit, if such future events are reasonable probabilities (People v. Murray (1959) 172 Cal.App.2d 219, 228–229, 342 P.2d 485). 3
The policy underlying the requirement of just compensation is to make the landowner whole, implemented in part by accounting for, and paying compensation based on, future events which are "reasonably probable." We perceive no logical basis for distinguishing future probabilities which affect the market value of the taken property and allowing compensation for that loss, while concomitantly disregarding future probabilities as to joinder and denying the owner any compensation for that loss.4
V. Conclusion
We conclude that if the landowner establishes there is a reasonable probability his contiguous commonly owned lots are or will be available for development or use as an integrated economic unit in the reasonably near future, all of the separate lots may be considered as a larger parcel. However, we caution that our decision not be misconstrued or over-extended. First, we do not hold that existing diverse uses are irrelevant to the issue, because the presence of such diverse uses is proper evidence in evaluating the probabilities of an integrated development: Would the existing uses make it impossible or cost-prohibitive to integrate the properties in the near future, or are they merely minor impediments which can be quickly and economically eliminated? Second, our reversal here is not a determination that a "larger parcel" does exist in this case, since many factors may enter into the determination of the "reasonable probability" of a development in the "reasonably near" future, such as local market conditions, the political climate and track record for approving similar projects, the actual intentions of the condemnee, and no doubt other factors dependent upon the land in question.
These factual issues, to be identified and evaluated by the trial judge in identifying the larger parcel, were not the subject of evidence, argument or decision below. We thus cannot hold that a "larger parcel" including the adjacent lots does exist here, and instead only hold that present unified use is not the litmus test.
The judgment is reversed. Appellants shall recover costs.
1. Addressing the split of authority, one writer has summarized: "A number of courts have held that the property sought to be treated as a unit must be put to an actual present unifying use, and that a mere intended, prospective or potential unifying use is insufficient to support an award of severance damages with respect to remaining property [citing, among other cases, City of Menlo Park v. Artino (1957) 151 Cal.App.2d 261 [311 P.2d 135]]․ [¶] However, the more widespread and predominant view is to the effect that land which is not, at the time of condemnation, put to a unified use, may nevertheless be treated as a unit ․ where the property owner shows an intended unifying use of the property, where the property is reasonably adaptable to such use within the immediate future, or within a reasonable period of time․" (See Annot., Eminent Domain: Unity or Contiguity of Separate Properties Sufficient to Allow Damages for Diminished Value of Parcel Remaining After Taking of Other Parcel (1988) 59 A.L.R.4th 308, 326–327.)
2. For similar reasons we believe City of Menlo Park v. Artino (1957) 151 Cal.App.2d 261, 311 P.2d 135 is distinguishable on its facts. In Artino, the condemnee owned three adjoining lots, each improved by a single family dwelling, one of which had been placed on the lot just five months before the condemnation proceedings started. In rejecting the claim of prospective unitary use, the court noted there was no evidence of any intent to use the property other than as separate dwelling units, and concluded any prospective unified use was too remote and speculative to support an award of severance damages. (Id. at pp. 269–270, 311 P.2d 135.) Again, we agree that the facts of Artino (i.e., recent improvements showed an intent to use the property as separate units—no evidence of a contrary plan or intent) justified a conclusion that the property had been improved and devoted to a diverse use and would remain devoted to that use for the foreseeable future, precluding any reasonable probability the land would be developed in the reasonably near future as an integrated economic unit. However, a factual conclusion of no reasonable probability of developing an integrated economic unit in the reasonably near future does not equate with the proposition urged by respondent: prospective unitary use is never sufficient.
3. Of course the "highest and best use" analysis, which permits consideration of the value the property would have if integrated with other parcels in the future, has traditionally been applied to calculate whether the value of the taken property was greater due to the possibility of joinder, not to evaluate whether severance damages were proper. (People v. Ocean Shore Railroad, supra, 32 Cal.2d at pp. 423–424, 196 P.2d 570.) We recognize also that the Ocean Shore court broadly stated "․ [future] joinder ․ is an element to be considered in determining the value of the property taken, but it has no bearing on the allowance of severance damages." (Ibid., emphasis added.) However, we have trouble attributing dispositive significance to the emphasized language for several reasons. First, the statement was dictum, because the disallowance of severance damages in Ocean Shore rested primarily on the lack of contiguity and the dim possibilities for future joinder. Second, the sweeping statement, made without citation to authority, has to our knowledge never subsequently been relied upon. Finally, the broad statement seems inconsistent with the subsequent Supreme Court opinion in People v. Thompson, supra, 43 Cal.2d 13, 271 P.2d 507, which held that all of the contiguous lands should be deemed a "larger parcel" for the purpose of severance damages, notwithstanding the lack of a present interdependant usage. Thompson would appear to allow future joinder to be considered on the "larger parcel" issue, at least for cases involving contiguous lands with a reasonable probability of development in the reasonably near future as an integrated economic unit.
4. Some courts have recognized that loss of value can be characterized either as severance damage or as loss of potential through future joinder. (See In re Incorporated Village of Hewlett Bay Park (1968) 56 Misc.2d 1085, 290 N.Y.S.2d 841.) The additional value inhering in the taken property (as an "access provider" to the contiguous lands) may well overlap the "before versus after" value of the lands if viewed as an integrated unit. Because of this potential for overlap, there exists a danger of a double recovery: "To ascribe an increment in value for a probable particular use [of the taken land] and then add another increment for the extinguishment of that use [as severance damages] is in this Court's opinion to award double damages for one taking." (290 N.Y.S.2d, supra, at p. 847.) For that reason, if on remand the trial court below determines a "larger parcel" exists, it must consider methods to avoid such a double recovery.
FROEHLICH, Associate Justice.
WIENER, Acting P.J., and WORK, J., concur.