## Facts

- Vaquero Farms, Inc. owned a roughly 6,000-acre ranch in Contra Costa County used primarily for cattle ranching.
- Portions of the ranch were leased long-term for wind-energy generation, and numerous wind turbines were installed under a lease granting development and operational rights for windpower in exchange for compensation.
- Contra Costa Water District planned the Los Vaqueros Reservoir Project, a major public water-storage and conveyance project.
- The District filed an eminent domain action (June 1993) to acquire approximately 3,500 acres in several parcels.
- In its proposed resolution and pleadings, the District sought to take the fee interest in the condemned land but expressly severed and reserved “windpower rights” to Vaquero rather than condemning those rights.
- Vaquero demurred, arguing the District could not take the fee while reserving windpower rights and was required to condemn and pay for those rights; the trial court overruled the demurrer.
- After a jury trial on valuation, Vaquero received approximately $14.4 million in compensation, including $1 million in severance damages for impacts on the remainder.
- The trial court denied Vaquero’s new trial motion, which asserted error regarding windpower rights, denial of precondemnation damages, and inadequacy of severance damages.

## Issues

1. In an eminent domain action, may the condemnor acquire the fee in the taken land while severing and reserving windpower rights to the owner, rather than condemning and compensating for those rights?
2. Was the owner entitled to damages for unreasonable precondemnation conduct under Klopping v. City of Whittier based on the condemnor’s planning and acquisition activities?
3. Was the jury’s $1 million severance-damages award unsupported by the evidence?

## Decision

- The Court of Appeal affirmed the judgment.
- The District was not required to condemn and pay for windpower rights; it could sever and reserve those rights to Vaquero.
- Vaquero was not entitled to precondemnation damages because the District’s conduct did not satisfy the Klopping standard for unreasonable delay or other unreasonable conduct causing compensable loss.
- Substantial evidence supported the $1 million severance-damages award; the appellate court would not reweigh conflicting valuation evidence.

## Legal Principles

- A condemning agency may define and limit the scope of the property interests it takes, and it is not required to acquire the entire “bundle of rights” associated with ownership if reserved interests do not conflict with the public use.
- Windpower development rights may be treated as a severable property interest that can be reserved to the owner in structuring a taking, avoiding compensation for an interest the condemnor does not acquire.
- Klopping precondemnation damages require proof of unreasonable delay after announcement of intent to condemn or other unreasonable governmental conduct that causes a compensable decline in value; ordinary project planning and timing, without more, does not suffice.
- Severance damages are measured by diminution in fair market value of the remainder caused by the taking, and an award will be upheld if supported by substantial evidence.

## Conclusion

The court upheld an eminent domain taking structured to acquire the fee while reserving windpower rights to the landowner, rejected claimed Klopping precondemnation damages for the condemnor’s project planning and timing, and affirmed the jury’s severance-damages award under substantial-evidence review.


Contra Costa Water Dist. v. Vaquero Farms, Inc., 58 Cal. App. 4th 883 (Ct. App. 1997)