Mary Lynn and Warren Reichelt v. California Department of Transportation

An $89,000.00 price differential settlement on a writ of mandamus action resolving an issue where our client was relocated to an inferior neighborhood by CalTrans. Lead attorney partner Vincent J. Bartolotta with associate Karen Frostrom

Date, Time and Place of Incident(s): October 2004 La Mesa, CA

Facts and Background:
In October 2004, Caltrans acquired a home at 8951 Mariposa Street, La Mesa, California, then owned by the Reichelts, Warren, Mary Lynn, and their two children. That acquisition was based on an appraisal using nearby homes and adjusting for differences between those homes and the Reichelt residence. The Reichelts do not take issue with this appraisal. However, the appraisal process is not the end of the acquisition process. Once the Reichelt home was acquired, Caltrans was required to relocate them to a comparable home in a neighborhood equal to or better than the one in which they lived. This Caltrans failed to do. The Reichelts immediately began to actively look for a new home in their neighborhood. Like many other home-buyers in San Diego, however, they discovered that, due to the escalating San Diego housing market and the lack of available homes in their area, they could not buy back into their neighborhood for the Caltrans acquisition price. Such a problem is not unknown to Caltrans and, indeed, for this very reason, Caltrans uses a two-step process when it relocates homeowners due to road construction. The displaced home is valued according to traditional appraisal principles. Then, at the time of the move, another market survey is conducted to determine whether comparable homes exist at or below the acquisition price: 'The Price Differential payment is the amount by which the cost of a replacement dwelling exceeds the acquisition cost of the displacement dwelling.' When the time came for the second analysis, Caltrans found that due to the nature of the market, no nearby homes were available at or below the acquisition price. Rather than using the nearby comparable homes as it is required to do, instead, in order to avoid paying what is known as the 'Price Differential,' Caltrans searched for homes at the very edge of La Mesa, in inferior neighborhoods, and, without adjusting the value for the very significant differences between those homes and the Reichelt home. Caltrans then used those homes to 'prove' that the Reichelts could relocate for at or below the purchase price. Lacking Caltrans's cooperation and assistance, the Reichelts were forced to find a new home in a different area. They worked to find a home that at least duplicated the school quality and privacy that they had originally valued in their La Mesa home. Mrs. Reichelt is farther from work and the children have had to adjust to new schools. Even given these concessions, the Reichelts paid $89,000 more for this new home than Caltrans paid them to acquire their former home. Caltrans refused, and continues to refuse, to conduct an accurate market analysis, which analysis would result in proper compensation to the Reichelt family. The Reichelts were advised in August 2004 of their eligibility for post-acquisition Price Differential compensation. They thereafter received a letter of entitlement, which letter denied any such compensation. They appealed that omission on November 29, 2004. The appeal was heard on January 20, 2005 and the subsequent ruling, issued on March 14, 2005, denied the Reichelts' appeal. The intention of the Reichelts, by this writ of mandate, is to obtain a Superior Court ruling ordering Caltrans to provide appropriate Price Differential compensation.

Plaintiff's Contentions, Allegations:
Plaintiffs challenged Caltrans's failure to follow its own internal procedures in calculating relocation compensation.

Injuries and/or Damages:
Plaintiffs' damages constituted the $89,000 difference in the original and replacement home values.

Defense:
Defendant denied the non-compliance and argued that Plaintiffs had had the opportunity to present their case to the Caltrans Board and that the Board's findings were fair and supported by substantial evidence.

Settlement Amounts: $89,000.00

Attorney for client: Partner Vincent J Bartolotta, Jr and associate Karen Frostrom

Attorney for defendant:
Glenn Mueller, CalTrans/Legal Division, 610 W Ash St #805, San Diego, CA 92101, (619) 645-2412

Individual Defendants:
An $89,000.00 price differential settlement on a writ of mandamus action resolving an issue where our client was relocated to an inferior neighborhood by CalTrans. Lead attorney partner Vincent J. Bartolotta with associate Karen Frostrom

Thorsnes Bartolotta McGuire
2550 Fifth Ave., 11th Floor, San Diego, CA 92103, 619-236-9363