N.D. Dep't of Transportation v. Schmitz
N.D. Dep't of Transportation v. Schmitz
Opinion
*877 [¶ 1] G. John Schmitz appeals a judgment awarding fees and costs after a jury verdict in his favor in an eminent domain action. Schmitz argues the district court abused its discretion by arbitrarily reducing attorney fees, expert fees and litigation costs. We affirm the judgment in part, reverse it in part, and remand.
I
[¶ 2] The North Dakota Department of Transportation (the "DOT") took Schmitz's property through an eminent domain quick-take action. The DOT deposited $973,380.00 with the Williams County Clerk of Court for the taking. Schmitz disputed the amount and timely served a notice of appeal. In September and October of 2014, the parties attempted unsuccessfully to reach a settlement. Jury trial was set for September 30, 2015. Schmitz had trouble locating expert witnesses and asked for a continuance. The parties stipulated to the continuance, and the court reset trial for January 24, 2017. Schmitz located three expert witnesses before trial: Scott Bechtle, an architect, provided Schmitz with hypothetical development concepts for the property; Robert Strachota, a Minneapolis-based appraiser, offered opinions of land value and severance damages; and Dan Leirness, a Fargo-based appraiser, offered an opinion of land values.
[¶ 3] Schmitz made several motions in limine shortly before trial. The DOT asked for a continuance. The district court reset trial for June 19, 2017. The trial was conducted as scheduled, and Strachota testified the property value and severance damages totaled over $4.6 million. Leirness testified the property was worth $4.7 million. Bechtle did not testify and his designs were not presented at trial. The jury awarded Schmitz $659,547.00 more than the DOT's deposited amount.
[¶ 4] After trial Schmitz requested $263,866.97 in attorney fees, $154,172.12 in expert fees and $17,224.31 in litigation costs for a total of $567,317.36. The DOT contested the fees and costs. The district court awarded $137,347.50 in attorney fees, $35,930.96 in expert fees and $8,027.38 in litigation costs for a total of $181,305.84. Schmitz appeals.
II
[¶ 5] Schmitz claims attorney and expert fees under N.D.C.C. § 32-15-32 :
"The court may in its discretion award to the defendant reasonable actual or statutory costs or both, which may include interest from the time of taking except interest on the amount of a deposit which is available for withdrawal without prejudice to right of appeal, costs on appeal, and reasonable attorney's fees for all judicial proceedings."
We review awards of attorney and expert fees for abuse of discretion. " Section 32-15-32, N.D.C.C., authorizes the court, in its discretion, to award a defendant reasonable attorneys fees for all judicial proceedings in an eminent domain action. We review a trial court's decision on attorneys fees under the abuse of discretion standard."
City of Medora v. Golberg
,
III
[¶ 6] Schmitz argues the district court abused its discretion in reducing his requested attorney fees. This Court has held:
"[I]n determining a reasonable fee the trial judge must first determine the number of hours expended. Whenever possible his findings should be made upon contemporaneous records, and when such records are not available, then upon reasonable reconstruction or estimates of time amounts. The trial judge must then assign specific hourly rates based upon the attorney's experience and reputation which will constitute the 'lodestar.' The hourly rate can be adjusted upwards or downwards on the basis of objective evaluation of the complexity and novelty of the litigation and the corresponding degree of skills displayed by the attorney.
"The trial court or judge should also consider the character of the services rendered, the results which the attorney obtained, and the customary fee charged in the locality for such services, as well as the ability and skill of the attorney. The court should not rely on any single item in determining reasonable attorney fees. The number of hours spent in total and the rate per hour are the predominant factors in determining reasonable attorney fees."
City of Bismarck v. Thom
,
[¶ 7] Here, Schmitz based his request for attorney fees on a contingent fee agreement. The district court declined to award Schmitz's requested one-third contingent fee of $263,866.97, explaining:
"[T]he Court must determine the number of hours an attorney has expended and then determine a specific hourly rate normally charged for similar work by attorneys of like skill in the area. The hourly rate may be adjusted based on an objective evaluation of the complexity and novelty of the litigation and the degree and skill displayed by the lawyer. The Court may also consider the character of services rendered, the results obtained, the customary fees charged and the locality for the services, as well as the attorney's skill and ability. No single item is determinative. The ultimate predominant factors are time spent and hourly rate."
See
Thom
,
[¶ 8] The district court awarded $114,840.00 for Biersdorf's attorney fees based on 267.9 hours before trial, 50.0 hours during trial, and a deduction of 30.8 hours of travel time (discussed in greater detail below) for 287.1 hours total. The district court found affidavits from North Dakota attorneys supported Biersdorf's $400.00 per hour rate in light of the character of his legal services, the results obtained, and his skill and ability.
See
Thom
,
[¶ 9] Schmitz argues the district court abused its discretion by arbitrarily lowering Simatic's hourly rate to $150.00 without any evidence. Schmitz cites
Whitmire v. Whitmire
,
[¶ 10] Schmitz argues the district court abused its discretion by declining to award attorney fees incurred in making the application for attorney fees and costs, a.k.a. fee-shifting motion. Schmitz cites no authority supporting a
mandatory
award for preparation of a fee-shifting motion; rather, he cites sources from outside this jurisdiction
allowing
courts to award such attorney fees.
See
El-Tabech v. Clarke
,
IV
[¶ 11] Schmitz argues the district court abused its discretion in reducing the award of expert witness fees. A prevailing party in a civil action generally can recover certain fees and expenses:
"In all actions and special proceedings, the clerk of district court shall tax as a part of the judgment in favor of the prevailing party the following necessary disbursements:
....
5. The fees of expert witnesses. The fees must be reasonable fees as determined by the court, plus actual expenses. The following are nevertheless in the sole discretion of the trial court:
a. The number of expert witnesses who are allowed fees or expenses;
*880 b. The amount of fees to be paid such allowed expert witnesses, including an amount for time expended in preparation for trial; and
c. The amount of costs for actual expenses to be paid the allowed expert witnesses."
N.D.C.C. § 28-26-06. Section 28-26-10, N.D.C.C., allows discretionary awards of other costs. The general expert witness fee provisions in ch. 28-26 function alongside § 32-15-32. District courts have seven non-exclusive factors to consider when awarding reasonable expert witness fees:
"(1) the common-law area of expertise;
(2) education and training that is required to provide expert insight that is sought;
(3) prevailing rates of other comparably respected available experts;
(4) nature, quality, and complexity of discovery responses provided;
(5) the fee actually being charged to the party who retains the expert;
(6) fees traditionally charged by the expert on related matters; and
(7) any other factor likely to be of assistance to the court in balancing the interests implicated."
Wahl v. Northern Improvement Co.
,
"Although an award of expert witness fees under Section 32-15-32, N.D.C.C., does not constitute an abuse of discretion merely because it is for a sum substantially less than requested, we conclude that the district court abused its discretion in this case when it awarded a substantially reduced amount of expert witness fees from those requested without providing any explanation or rationale for doing so ."
Arneson v. City of Fargo
,
[¶ 12] Here, Schmitz argues that the district court abused its discretion by declining to award fees for Bechtle's work on hypothetical developments of the subject land. Schmitz asserts
Pratt v. Heartview Found.
,
[¶ 13] Schmitz asserts the district court acted arbitrarily in reducing expert fees and expenses by seventy-five percent without citing any of the seven
Wahl
factors.
See
[¶ 14] Schmitz asserts the DOT was responsible for his experts' travel expenses by failing to attempt a settlement. Section 32-15-06.1, N.D.C.C., requires a condemnor to "make every reasonable and diligent effort to acquire property by negotiation" before exercising its power of eminent domain. While judicial policy always encourages efforts to settle disputes, the statute does not require the condemnor to engage in settlement negotiations after a landowner appeals from a quick-take eminent domain deposit. Schmitz does not claim the DOT breached a statutory or common-law duty, and the district court did not rule on the issue such that we may review on appeal.
V
[¶ 15] Schmitz argues the district court misinterpreted N.D.C.C. § 32-15-32 by ruling certain litigation costs were not taxable. The district court listed the costs in its order:
"The Defendant seeks other litigation costs in the amount of $17,224.31, which includes: postage ($12.37), photocopy costs ($2,915.20), color copies ($21.50), mileage ($1,177.00), air fare ($1,015.68), Federal Express ($52.55), Westlaw ($198.03), long distance ($12.86), conference calls ($30.56), hotel expenses ($2,083.35), car rental expenses ($330.87), meals ($662.78), sales tax ($228.33), trial materials ($12.53), and pro hac vice admission ($443.32)."
Generally, "[a] prevailing party attorney's expenses incurred during trips to court cannot be taxed as costs. Attorney travel and meal expenses are normally reimbursed by the client and not assessed as disbursements."
Braunberger v. Interstate Eng'g, Inc.
,
[¶ 16] Here, the district court declined to award travel expenses of $1,477.00 for mileage, $1,015.68 for airfare, $330.87 for car rentals, and $662.78 for meals, stating, "None of these items are taxable under N.D.C.C. § 32-15-32 as costs and disbursements, nor are they provided for under N.D.C.C. § 28-26-06 or § 28-26-10." This was a misapplication of the law. Section 28-26-06 provides a list of disbursements to be taxed in judgment. Section 28-26-10 gives the district court discretion to award other costs, though attorney travel expenses are excluded under this section.
See
Uren
,
*882 [¶ 17] The remaining expenses (postage $12.37; photocopy costs $2,915.20; color copies $21.50; Federal Express $52.55; Westlaw $198.03; long distance $12.86; conference calls $30.56; sales tax $228.33; trial materials $12.53; and pro hac vice admission $443.32) may be awarded under § 32-15-32 as "actual costs." While a district court generally may award or decline to award these costs, it is an abuse of discretion to exclude them as a matter of law. We remand to the district court for findings consistent with N.D.C.C. § 32-15-32.
VI
[¶ 18] The district court did not abuse its discretion in reducing Schmitz's attorney or expert fees, and we affirm the judgment regarding those awards. The district court abused its discretion in reducing and eliminating certain litigation costs. We reverse the judgment regarding those litigation costs and remand for findings consistent with this opinion.
[¶ 19] Daniel J. Crothers
Lisa Fair McEvers
Jon J. Jensen
Jerod E. Tufte
Gerald W. VandeWalle, C.J.
Reference
- Full Case Name
- NORTH DAKOTA DEPARTMENT OF TRANSPORTATION, Plaintiff and Appellee v. G. John SCHMITZ, Defendant and Appellant
- Cited By
- 7 cases
- Status
- Published