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Los Angeles County Metropolitan Transportation Authority v. Yum Yum Donut Shops, Inc.

Facts: A regional transportation planning agency condemns a commercial property through eminent domain which is in the path of a proposed rail line. The government agency offers compensation for the property and relocation costs and proposes multiple relocation sites. The property owner refuses each relocation site and seeks additional compensation for the loss of goodwill.

Claim: The government agency seeks to condemn the commercial property without further compensating the owner for lost goodwill, claiming they are not entitled since their refusal to relocate precludes compensation for intangible goodwill.

Counterclaim: The commercial property owner seeks additional money losses for lost goodwill, claiming they are entitled under eminent domain law since their loss of goodwill is unavoidable no matter the relocation site they choose.

Holding: A California court of appeals holds the property owner is entitled to compensation for lost goodwill since, regardless of their refusal to relocate, there is an unavoidable loss of goodwill. [Los Angeles County Metropolitan Transportation Authority v. Yum Yum Donut Shops, Inc. (February 26, 2019)_CA6th_]

Editor’s note — Learn more about the eminent domain process the government agency employs in this case in Legal Aspects of California Real Estate Chapter 1: California real estate law.

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