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Plaintiff Los Angeles County Metropolitan Transportation

Authority (MTA) sued defendant Yum Yum Donut Shops, Inc.

(Yum Yum) in eminent domain to take1 one of Yum Yum’s donut

shops that was in the path of a proposed rail line. Yum Yum

sought compensation for the loss of goodwill resulting from that

taking under Code of Civil Procedure section 1263.510

(section 1263.510).2 Under that statute, a condemnee must

establish in a court trial entitlement to goodwill, including

whether the loss of goodwill cannot be prevented by relocating or

making other reasonable mitigation efforts. It is that condition to

entitlement that is the subject of this appeal. If the condemnee

meets the entitlement threshold in section 1263.510,

section 1263.510 further provides for a jury trial to determine

the value of the loss of goodwill.

The trial court concluded Yum Yum was not entitled to

compensation for goodwill because Yum Yum unreasonably



1 A taking occurs “[w]hen the state exercises its power

of eminent domain over a parcel of land.” (People ex rel. Dept.

of Transportation v. Dry Canyon Enterprises, LLC (2012)

211 Cal.App.4th 486, 489 (Dry Canyon).)

2 Section 1263.510, subdivision (a) provides: “The owner of

a business conducted on the property taken . . . shall be

compensated for loss of goodwill if the owner proves all of the

following: [¶] (1) The loss is caused by the taking of the

property or the injury to the remainder. [¶] (2) The loss cannot

reasonably be prevented by a relocation of the business or by

taking steps and adopting procedures that a reasonably prudent

person would take and adopt in preserving the goodwill. [¶]

(3) Compensation for the loss will not be included in

payments under Section 7262 of the Government Code. [¶]

(4) Compensation for the loss will not be duplicated in the

compensation otherwise awarded to the owner.”

3

refused to relocate the shop to one of three sites MTA proposed

at the entitlement trial. The undisputed expert testimony

elicited at trial, however, established Yum Yum would lose some

of the donut shop’s goodwill even if Yum Yum relocated the shop

to one of those sites.

Accordingly, the question here is whether a condemnee is

entitled to compensation for lost goodwill if any portion of that

loss is unavoidable. We answer that question in the affirmative

based on the statute’s legislative history, accompanying

Law Review Commission Comments, case law, and the general

principles governing mitigation of damages. Under these

authorities, a condemnee need only prove some or any

unavoidable loss of goodwill to satisfy the condemnee’s burden to

demonstrate entitlement to compensation for goodwill under

section 1263.510.

We conclude the trial court erred in finding that

Yum Yum’s failure to mitigate some of its loss of goodwill

precluded compensation for any loss of goodwill, reverse, and

remand for a jury trial on the value of Yum Yum’s lost goodwill.

FACTUAL AND PROCEDURAL BACKGROUND

Yum Yum operates a chain of donut shops, including one

located at 3642 Crenshaw Boulevard in Los Angeles, which

facility Yum Yum leased and identified as Store 58. Yum Yum

operated Store 58 for over 30 years until December 4, 2013, and

had a “longterm lease.” Yum Yum believed Store 58 benefitted

from its location3 according to Yum Yum’s criteria for selecting

shop locations.



3 Specifically, Store 58 occupied a 1,232-square-foot

freestanding building that fronted the side of the street that

4

Those criteria were: “(a) Located on the morning traffic

side of the street. [¶] (b) Located on a heavily trafficked street

leading to a freeway. [¶] (c) Easy access for ingress, parking,

and egress. [¶] (d) Visible shop with visible convenient front end

parking located near the shop’s entrance. [¶] (e) Free-standing

building or, at minimum, a visible endcap space fronting directly

on the street so as not to be blocked by other center tenants. [¶]

(f) Located at or near a signalized intersection. [¶] (g) Suitable,

visible pole sign available. [¶] (h) Enjoys a one-mile trade

radius. [¶] (i) Building signs available with visibility from

multiple directions. [¶] (j) Located in a densely populated area.

[¶] (k) Located in a neighborhood with favorable demographics:

a lower to middle income community. [¶] (l) Occupying a 1,200-

square-foot to 1,700-square-foot space.”

MTA sought to condemn Store 58 because it was in or

appurtenant to the proposed path of a dual-track light rail line—

the Crenshaw/LAX Transit Corridor Project—that MTA

was planning to construct. MTA commenced eminent domain

proceedings against Yum Yum in the trial court, and obtained

an order for prejudgment possession of Store 58. Yum Yum



carried heavy morning traffic toward Interstate 10, and “[d]onut

shops thrive on morning business.” The shop’s two driveways

made ingress and egress convenient because they allowed drivers

to turn right into the shop’s parking lot and then turn right to

return to the street. Just south of the shop was a signalized

intersection that slowed traffic, thus making the shop more

visible and convenient to enter and exit. The shop’s “pole sign”

occupied the highest, largest place on the pole. The shop had, in

total, three building signs visible from three directions: north,

south, and west. The shop had a “one-mile trade radius” within a

densely populated neighborhood with demographics (lower-tomiddle

income) that were favorable to Yum Yum’s business.

5

then evaluated three potential sites to relocate Store 58, which

sites MTA had proposed, and concluded those locations each

failed to satisfy some of the aforementioned criteria.4

Subsequently, the parties appeared at a bench trial on

whether Yum Yum was entitled to compensation for the loss of

goodwill resulting from MTA’s taking of Store 58.

MTA’s expert on goodwill, Aaron Amster, a business

appraiser, testified that the value of Store 58’s goodwill was

$620,000. Amster further testified that if Yum Yum relocated to

one of MTA’s three proposed sites, Yum Yum would recapture

$202,000, $138,000, or $340,000 in goodwill, respectively.

Amster opined, “some goodwill could have been preserved at all

three of these potential relocation sites.” On cross-examination,

Amster stated his opinion’s corollary: “There would have been a

loss of goodwill” if Yum Yum “had relocated [the shop] to one of

these three locations.” Further, Amster answered in the

affirmative when Yum Yum’s counsel asked him, “there still

would have been a loss of goodwill had [the shop] relocated

according to your opinion?” In closing, Yum Yum argued it was

entitled to compensation for the value of lost goodwill under

section 1263.510 because Amster conceded Yum Yum would lose

some goodwill even if it relocated the shop to one of the three

potential relocation sites. Yum Yum further argued it was

entitled to a jury trial under section 1263.510 to determine that

value.



4 Yum Yum also rejected at least seven other potential

relocation sites MTA proposed. We do not address those sites

because MTA only contends Yum Yum acted unreasonably in

rejecting the three sites noted above.

6

MTA argued that Yum Yum applied overly strict location

selection criteria and unreasonably rejected the three potential

relocation sites, thus precluding Yum Yum from seeking

compensation for any lost goodwill under section 1263.510,

subdivision (a)(2).

In its statement of decision, the trial court interpreted

section 1263.510 as follows: “Where the condemnee cannot

establish the facts showing it took reasonable steps to preserve

its goodwill, it will not be entitled to any compensation for alleged

loss of goodwill” and, if a business can retain some goodwill by

relocating, it must do so. (Italics added.) The trial court cited

section 1263.510, subdivision (b), 11 Miller & Starr, California

Real Estate (3d ed. 2011) section 30A:45, pages 108-112 and

1 Matteoni & Veit, Condemnation Practice in California

(Cont.Ed.Bar 3d ed. 2011) section 4:71, page 117 as authority for

these propositions.

The trial court found Yum Yum acted unreasonably in

applying overly strict location selection criteria and rejecting the

three potential relocation sites based on Amster’s testimony.5

Thus, the trial court found Yum Yum was not entitled to a

jury trial on the value of the compensation for any lost goodwill

resulting from the taking of the shop because Yum Yum

unreasonably failed to preserve some of the shop’s goodwill and

could have done so.6 The trial court never held a jury trial on the



5 The trial court also found Yum Yum was uncooperative

with MTA’s relocation agent, placed an inexperienced individual

in charge of its relocation efforts, and failed to investigate

relocation assistance benefits.

6 MTA did not argue, and the trial court did not find

Yum Yum failed to prove the taking caused a loss of goodwill or

7

value of Yum Yum’s lost goodwill, and entered a final judgment

in MTA’s favor. Yum Yum timely appealed.

STANDARD OF REVIEW

“A trial court’s finding that a business owner has not

established entitlement to compensation for a loss of goodwill is

generally reviewed under the substantial evidence standard.

(See Dry Canyon, supra, 211 Cal.App.4th at p. 493.) To the

extent the [trial] court’s conclusion is premised on the

interpretation of the requirements of a statute, . . . we review

de novo. (Id. at p. 491.)” (People ex rel. Dept. of Transportation v.

Presidio Performing Arts Foundation (2016) 5 Cal.App.5th 190,

200 (Presidio).) Substantial evidence is evidence that is “ ‘of

“ponderable legal significance.” It must be “reasonable in nature,

credible, and of solid value.” ’ ” (County of Riverside v. City of

Murrieta (1998) 65 Cal.App.4th 616, 627.)

DISCUSSION

A. The Legislative History Of Section 1263.510 Indicates

The Statute Is To Be Construed Liberally In Favor Of

Providing A Remedy To Condemnees For Loss Of

Goodwill Resulting From A Taking

Section 1263.5107 provides for compensation for the

loss of goodwill resulting from a taking.8 Section 1263.510,



that compensation for the lost goodwill would be duplicative of

any other compensation for the taking, such as lost property

value and relocation expenses. (See § 1263.510, subd. (a)(1), (3),

(4).) Having not raised these other grounds below, MTA has

forfeited them. (Keyes v. Bowen (2010) 189 Cal.App.4th 647, 655.)

7 Ante, footnote 2.

8

subdivision (b) defines goodwill as “the benefits that accrue to a

business as a result of its location, reputation for dependability,

skill or quality, and any other circumstances resulting in

probable retention of old or acquisition of new patronage.”

“[T]he Legislature enacted section 1263.510 in 1975 as part

of a comprehensive revision of eminent domain law.” (Chhour v.

Community Redevelopment Agency (1996) 46 Cal.App.4th 273,

278 (Chhour).) Previously, only constitutional provisions9

governed “ ‘the form of property . . . requiring just

compensation,’ ” and courts did not view those provisions as

providing for goodwill as a compensable form of property.

(Chhour, supra, 46 Cal.App.4th at p. 278, citing Community

Redevelopment Agency v. Abrams (1975) 15 Cal.3d 813, 819

(Abrams), Oakland v. Pacific Coast Lumber etc. Co. (1915)

171 Cal. 392, 398.)

“This judicial stinginess was displaced by the passage of

Code of Civil Procedure section 1263.510.” (Chhour, supra,

46 Cal.App.4th at p. 278.) “The section was enacted in

response to widespread criticism of the injustice wrought by

the . . . historic refusal to compensate condemnees whose ongoing

businesses were diminished in value by a forced relocation.”

(People ex rel. Dept. of Transportation v. Muller (1984) 36 Cal.3d



8 Ante, footnote 1.

9 MTA brought this action under Article I, section 19 of the

California Constitution, which section provides in relevant part:

“Private property may be taken or damaged for a public use and

only when just compensation, ascertained by a jury unless

waived, has first been paid to, or into court for, the owner.”

(See Community Redevelopment Agency v. Abrams (1975)

15 Cal.3d 813, 816, fn. 2.)

9

263, 270 (Muller), citing Abrams, supra, 15 Cal.3d at p. 831.)

Thus, section 1263.510 is a remedial statute that is “ ‘to be

liberally construed, with a view to effect its objects and to

promote justice.’ ” (Muller, supra, 36 Cal.3d at p. 270.) We

are mindful of this legislative history as we interpret

section 1263.510.

B. Section 1263.510 Operates By A Two-Step Process:

(1) The Court Determines The Condemnee’s

Entitlement To Compensation For Lost Goodwill,

And (2) A Jury Determines That Goodwill’s Value

Determining liability for loss of goodwill under

section 1263.510 involves a two-step process. “First, the court

determines entitlement: that is, whether the party seeking

compensation has presented sufficient evidence of the conditions

for compensation set forth in subdivision (a)—causation,

unavoidability, and no double recovery—such that the party is

entitled to some compensation. If the party meets this burden,

the matter proceeds to a second step, in which a jury (unless

waived) determines the amount of the loss.” (Presidio, supra,

5 Cal.App.5th at p. 201.) Thus, if that party meets certain

“ ‘qualifying conditions for such compensation,’ ” it has a right to

a jury trial on the amount of compensation due. (Dry Canyon,

supra, 211 Cal.App.4th at p. 491.)

Here, as set forth above, in the first phase, the trial court

hinged its decision that Yum Yum was not entitled to

compensation on the qualifying condition that Presidio described

as “unavoidability.” (Presidio, supra, 5 Cal.App.5th at p. 201.)

Section 1263.510, subdivision (a)(2) sets forth that condition as

follows: “The loss cannot reasonably be prevented by a relocation

of the business or by taking steps and adopting procedures that a

10

reasonably prudent person would take and adopt in preserving

the goodwill.” Thus, we interpret section 1263.510,

subdivision (a)(2) according to the canons of statutory

construction in the following subsection. (See Dry Canyon,

supra, 211 Cal.App.4th at p. 492.)

C. Entitlement Under Section 1263.510,

Subdivision (a)(2) Exists Where The Condemnee

Would Lose Goodwill That Could Not Be Avoided By

Relocating Or Taking Other Reasonable Steps

As MTA argues, the language of section 1263.510 is

unambiguous. The statute’s unambiguous plain language

provides that a condemnee must show it cannot prevent a loss of

goodwill by relocating or otherwise taking reasonable steps to

prevent that loss to be entitled to a jury trial on the amount of

that unavoidable loss. A fortiori, if the condemnee would lose

goodwill—even if it relocated its business or otherwise reasonably

mitigated the loss—the condemnee satisfies its threshold burden.

Nothing in section 1263.510’s language provides that the

condemnee is entitled to no compensation at all for lost goodwill

if the condemnee fails to mitigate a portion of that loss. We

believe the statute’s legislative history, the Law Review

Commission Comments, and case law applying the statute

support this interpretation. The legislative history recounted

above establishes that the statute is remedial, and thus to be

construed liberally in favor of compensating business owners for

lost goodwill. (Muller, supra, 36 Cal.3d at p. 270.)

“ ‘We give the California Law Revision Commission

comments “substantial weight” in construing’ ” statutes.

(City of Corona v. Liston Brick Co. (2012) 208 Cal.App.4th 536,

545 [referring to Evidence Code].) A Law Revision Commission

11

Comment to section 1263.510 provides, “Goodwill loss is

recoverable under Section 1263.510 only to the extent it cannot

reasonably be prevented by relocation or other efforts by the

owner to mitigate.” (Italics added.) Nowhere does the

Commission state that the unreasonable failure to mitigate some

loss of goodwill precludes recovery of compensation for any loss of

goodwill that could not be avoided despite the exercise of

reasonable mitigation efforts. To conclude otherwise would be to

ignore the Commission’s juxtaposition of “to the extent” close to

“cannot reasonably be prevented.”

Our interpretation of section 1263.510 is not without

precedent. For example, in Presidio, the First District reversed

the trial court’s finding that the condemnee had failed to

establish entitlement to goodwill compensation because the

trial court disagreed with the condemnee’s method of calculating

lost goodwill. (Presidio, supra, 5 Cal.App.5th at p. 204.) There,

the trial court had found, “[a]though it was ‘clear that Caltrans’

taking caused the Foundation to suffer a loss of goodwill,’ ” the

Foundation had “failed to prove ‘the quantitative . . . loss of

goodwill.’ ” (Id. at p. 199.)

In reversing the trial court, the Presidio court first

described the condemnee’s initial burden during the entitlement

phase: “In the entitlement stage of the proceeding, the party

seeking compensation must show that it has suffered a ‘loss

of goodwill.’ [Citations.] The precise amount of the lost goodwill,

however, is an issue for the jury in the second phase of the

proceeding. [Citation.] Accordingly, in the entitlement phase,

the party seeking compensation need only show that there was

some loss of the benefit that the business was enjoying before the

taking due to its location, reputation, and the like, without

12

necessarily having to quantify its precise value.” (Presidio,

supra, 5 Cal.App.5th at p. 204.)

To underscore that the purpose of the entitlement phase is

to discern whether the condemnee suffered “some” loss of

goodwill, the court then analyzed whether the condemnee’s

method of valuing loss of goodwill was “doomed from the start”:

“[I]f the trial court erred in concluding that the party had not

established some loss of goodwill in the entitlement phase, the

error would be harmless if the party could never prove the

amount of that loss anyway.” (Presidio, supra, 5 Cal.App.5th

at pp. 204, 205.)

In its analysis, Presidio cited with approval the

Fourth District’s opinion in Redevelopment Agency v.

Metropolitan Theatres Corp. (1989) 215 Cal.App.3d 808, 811

& footnotes 3–4 (Metropolitan Theatres). (Presidio, supra,

5 Cal.App.5th at p. 204.) In Metropolitan Theatres, the parties

stipulated “Metropolitan was entitled to be compensated for a

loss of goodwill.” (Metropolitan Theatres, at p. 810.) The

appellate court affirmed the trial court’s refusal to instruct the

jury that the condemnee bore the burden of proving the amount

of goodwill loss. “While it is true that the existence of a loss [of

goodwill] cannot be established without showing that a loss [of

goodwill] occurred in some amount or another (which is nothing

more than a semantic tautology), merely showing that a loss

occurred is not logically tantamount to establishing by a

particular standard of proof what the precise amount of the loss

in question is.” (Id. at p. 811, fn. 3.) By differentiating the

fact of a loss from establishing the amount of the loss, the

Metropolitan Theatres court reinforces our own conclusion that

at the entitlement phase, a condemnee only need demonstrate

13

loss of some goodwill to proceed to a jury trial on the amount of

compensable lost goodwill.

Similarly, our colleagues in Division Six have observed “a

business owner is entitled to a jury trial on the amount of

goodwill lost by a taking only if he or she first establishes, as a

threshold matter, that the business had goodwill to lose.”

(Dry Canyon, supra, 211 Cal.App.4th at p. 491.) The corollary of

that holding is that once a condemnee has established it has

suffered a loss of goodwill, it is entitled to have a jury determine

the amount of lost goodwill.

Finally, the general rule of mitigation of tort damages is

instructive. Specifically, this general rule provides, “ ‘a party

must make reasonable efforts to mitigate damages, and

recovery will not be allowed for damages that a party . . . could

have avoided by reasonable effort.’ ” (State Dept. of Health

Services v. Superior Court (2003) 31 Cal.4th 1026, 1049

(Health Services) [recognizing that the defense of mitigation of

damages applies to “many different sorts of legal claims”

including statutory sexual harassment claims]; Rest.2d Torts,

§ 918, com. b, p. 502 [if party fails to mitigate, damages are

reduced to value of efforts party should have made or amount of

expense party should have incurred].) Tort law does not preclude

a plaintiff from recovering damages altogether simply because a

plaintiff has failed to mitigate some of its damages. (See, e.g.,

Health Services, at pp. 1043, 1049 [plaintiff claiming damages for

sexual harassment could have prevented “at least some” damages

by using employer’s internal remedies].) At oral argument,

Yum Yum’s counsel conceded that at the jury trial phase, MTA

may assert an offset for the portion of loss of goodwill that could

have been avoided by reasonable mitigation efforts.

14

D. The Trial Court’s Authorities Are Inapposite Because

They Do Not Address Mitigation Or Whether The

Condemnee Had Any Goodwill To Lose In The First

Place

As noted earlier, the trial court’s ruling turned on its

following reasoning: “Where the condemnee cannot establish the

facts showing it took reasonable steps to preserve its goodwill, it

will not be entitled to any compensation for alleged loss of

goodwill,” and “[u]ltimately, ‘ . . . if a business can retain some

goodwill value at a new location by serving new customers, it

must do so, even if it loses many of its old patrons.’ ” We

respectfully observe those statements of law are inaccurate.

The trial court cited 11 Miller & Starr, supra,

section 30A:45, pages 108–11210 and 1 Matteoni & Veit,

supra, section 4:71, page 117 in support of its conclusions. The

eight cases cited by these treatises do not support the statements

of law that the trial court endorsed.



10 We set forth the text from the current edition of the

treatise, which is the same as the text cited by the trial court:

“In order to recover goodwill damages, the condemnee has the

burden of proof in showing that the loss is caused by the taking of

the property or the injury to the remainder, and that the loss

cannot reasonably be prevented by relocating the business or by

taking steps and adopting procedures that a reasonably prudent

person would take for the purpose of preserving goodwill. Where

the condemnee cannot establish these facts, it will not be entitled

to any compensation for alleged loss of goodwill. The right to

compensation for lost goodwill is a question for the court, not the

jury. If the court finds that the condemnee has met his or her

burden of proof, the question of the amount of goodwill loss will

be presented to the jury.” (7 Miller & Starr, Cal. Real Estate

(4th ed. 2018) § 24:45, p. 119, fn. and italics omitted.)

15

First, they do not address the pivotal issue here, and

“ ‘[c]ases are not authority for propositions not considered.’ ”

(Emeryville Redevelopment Agency v. Harcros Pigments, Inc.

(2002) 101 Cal.App.4th 1083, 1102 (Emeryville).) Specifically,

seven of those cases do not turn on the threshold issue of

mitigation under section 1263.510. (City of Santa Clarita v. NTS

Technical Systems (2006) 137 Cal.App.4th 264, 269–270

[taking did not cause loss of goodwill and court determines

such causation, not jury]; Emeryville, at pp. 1116–1120 [loss of

goodwill not caused by taking but by inevitable transition of

environmentally unsound property to better use; additionally,

compensation for post-remediation value of property duplicative

of compensation for lost goodwill]; Muller, supra, 36 Cal.3d

at pp. 270–272 [loss of cheap rent constituted compensable loss

of goodwill where taking caused condemnee to pay higher rent

at nearby location to maintain patronage and profits];

Los Angeles Unified School Dist. v. Casasola (2010)

187 Cal.App.4th 189, 201–202, 210 [claimed mitigation

expenses not compensable if they constitute relocation expenses];

Redevelopment Agency v. Arvey Corp. (1992) 3 Cal.App.4th 1357,

1362 [expenses payable as relocation assistance under

Government Code section 7262 not goodwill under

section 1263.510]; Albers v. County of Los Angeles (1965)

62 Cal.2d 250 [pre-section-1263.510 case interpreting

constitutional “ ‘just compensation’ ” requirement]; Abrams,

supra, 15 Cal.3d 813, 817 [goodwill not compensable under

constitutional “ ‘just compensation’ ” clauses; section 1263.510

inapplicable because eminent domain proceedings commenced

pre-enactment].)

16

MTA argues Yum Yum was required to relocate the shop

and relies on the same authority the trial court cited: 1 Matteoni

& Veit, supra, section 4:71, page 117. Specifically, that treatise

states, “It is therefore conceivable that if a business can retain

some goodwill value at a new location serving new customers,

it must do so, even if it loses many of its old patrons.” (Id.

at pp. 117–118.) The treatise cites no authority for this

proposition.

At the bench trial, Yum Yum argued that it would have to

invest $250,000 to $300,000 to relocate Store 58 and most of

those expenses would not have been reimbursable under the

Relocation Act (Gov. Code, § 7262, subd. (a), Cal. Code Regs.,

tit. 25, §§ 6090, subds. (a), (b) & (i), 6094). We are aware of

no authority compelling a condemnee to relocate when the

investment required to relocate would make it diseconomic to do

so. Indeed, the authority is to the contrary. (Unocal California

Pipeline Co. v. Conway (1994) 23 Cal.App.4th 331, 336 (Unocal)

[“We are not deciding whether loss of goodwill is an appropriate

item of damages here. What we are deciding is that relocation

is not a requirement to be eligible for such damages.”].) As

Division 6 explained in Unocal: “In order to recover for loss of

goodwill the owner is required to show ‘ [t]he loss cannot

reasonably be prevented by a relocation of the business . . . .’ If

anything, that language indicates loss will be compensated where

there is no relocation.” (Ibid.)

The only case involving the threshold issue of mitigation

that the treatises cite is Regents of University of California v.

Sheily (2004) 122 Cal.App.4th 824 (Sheily). Sheily did not

consider whether a condemnee loses all entitlement to goodwill

damages if the condemnee failed to mitigate only some of its loss

17

of goodwill. Instead, Sheily addressed whether substantial

evidence supported the trial court’s finding of the absence of any

effort to mitigate. In addition, as set forth below, MTA’s own

uncontroverted evidence supported the existence of loss of some

goodwill that could not have been reasonably mitigated.

E. Yum Yum Established Entitlement To Goodwill

Damages Because MTA’s Uncontradicted Expert

Testimony Established That Yum Yum Would Lose

Goodwill Even If It Relocated The Shop

MTA’s expert on goodwill, Amster, conceded Yum Yum

would have lost some of Store 58’s goodwill even if Yum Yum had

relocated the shop to one of MTA’s three proposed relocation

sites. Specifically, Amster stated Yum Yum could have preserved

only $202,000, $138,000, or $340,000 of the shop’s preexisting

$620,000 of goodwill, depending on where Yum Yum could have

relocated the shop.

11 Then on cross-examination, Amster

affirmatively stated Yum Yum would have lost goodwill even if it

relocated the shop. Neither party disputed these opinions.

MTA focuses almost exclusively on the existence of

substantial evidence to support the trial court’s finding that

Yum Yum failed to mitigate damages. The trial court based its

finding, however, on an erroneous legal assumption that if

Yum Yum failed to mitigate as to some of its loss of goodwill, it



11 MTA asserts Amster’s testimony only proves Yum Yum

could have preserved some goodwill. MTA’s assertion ignores the

obvious corollary: If Yum Yum could have preserved some

portion of the shop’s goodwill, Yum Yum necessarily would lose

some other portion of that goodwill. Moreover, as set forth below,

Yum Yum’s counsel elicited that corollary from Amster on crossexamination.

18

was not entitled to any compensation for goodwill. It was

uncontroverted that Yum Yum would have lost quantifiable

goodwill even if it had relocated to any of the three locations MTA

proposed. We thus cannot conclude that the trial court’s

erroneous interpretation of the law was harmless.

The judgment is reversed, and the matter remanded with instructions to (1) enter an order that Yum Yum established its entitlement to compensation for goodwill resulting from the taking of the shop, and (2) hold a jury trial to determine the value of that loss. Yum Yum is awarded its costs on appeal.