Varjabedian v. City of Madera

Michael and Judith Varjabedian (plaintiffs) purchased a vineyard in Madera County and moved into a home on the property with their three children. The following year, the City of Madera (defendant) began operating a sewage plant within 600 feet of the Varjabedians’ property. The Varjabedians immediately noticed septic smells and began reporting the problems to city officials. The city told the Varjabedians corrective actions were being taken and the sewage plant would soon be operating with no odors. The Varjabedians endured this situation for approximately one year before filing a lawsuit against the city. The lawsuit alleged the maintenance of nuisance and inverse condemnation, among other claims. The city filed a motion for judgment on the pleading regarding these two claims. The trial court denied the motion as to the nuisance claim and granted the motion as to the inverse-condemnation claim, which was then dismissed. The trial court ruled that an inverse-condemnation claim required physical damage to the land. During trial, the Varjabedians sought damages for loss in value of their property and for additional damages and costs related to the expected loss of a Cal-Vet loan due to moving off the property. The trial court instructed the jury that damages could include the difference, if any, between the present fair market value of the property without the sewage plant constructed and the fair market value of the property with the sewage plant as constructed. The jury found in favor of the Varjabedians and awarded damages of $32,000 for loss of market value and $30,000 related to the Cal-Vet loan. The city appealed.