N. Dakota Dep't of Transp. v. Rosie Glow, LLC

911 N.W.2d 334

NORTH DAKOTA DEPARTMENT OF TRANSPORTATION, Plaintiff and Appellee

v.ROSIE GLOW, LLC, an Oregon Limited Liability Company, Defendant and Appellant

No. 20170248

Supreme Court of North Dakota.

Filed May 14, 2018

Scott K. Porsborg, Special Assistant Attorney General, Bismarck, ND, for plaintiff and appellee.

R. Daniel Lindahl (argued), John R. Osburn (on brief), Portland, OR, and John C. Hughes (on brief), Minneapolis, MN, for defendant and appellant.

Crothers, Justice.

[¶ 1] Rosie Glow, LLC appeals a district court judgment in an eminent domain action awarding attorney fees of $32,400.00 and expert fees and litigation costs of $11,236.41. We affirm the district court’s judgment in part, reverse in part, and remand for further proceedings.

I

[¶ 2] The North Dakota Department of Transportation ("the DOT") took Rosie Glow’s property through an eminent domain quick-take action. The DOT deposited $2,296,000.00 for the land and $940,860.00 for severance damages. Rosie Glow and the DOT disputed the value of the property taken. Rosie Glow’s appraiser estimated the total compensation owed to Rosie Glow was $4,899,000.00, consisting of $3,788,400.00 for the land and $1,110,600.00 for severance damages. The jury awarded Rosie Glow $2,296,000.00 for property taken and $1,240,860.00 in severance damages, totaling $300,000.00 more than the DOT deposited.

[¶ 3] Under N.D.C.C. § 32–15–32, Rosie Glow requested attorney fees of $159,180.33 for John Osburn’s work and $18,277.00 for John Hughes’ work. The district court concluded the case was not particularly unique or factually difficult and found the appropriate rate was $300.00 per hour for both attorneys. The district court awarded $30,000.00 for Osburn’s fees, reducing his billed time from 361 hours to 100 hours. The district court awarded $2,400.00 for Hughes’ fees, for a total of $32,400.00 in attorney fees.

[¶ 4] Rosie Glow requested $54,243.26 in costs, predominantly expert witness fees and travel expenses. The district court awarded $11,236.41, including $5,625.00 for expert witness Everett Strand’s market appraisal and $2,000.00 for a portion of Strand’s time attending trial.

[¶ 5] The district court entered a judgment awarding Rosie Glow severance damages of $300,000.00, attorney fees of $32,400.00, and costs of $11,236.41 for a total of $343,636.41 plus interest. Rosie Glow appeals.

II

[¶ 6] Rosie Glow argues the district court abused its discretion in reducing the attorney hours awarded and the costs awarded for Strand’s fees. The statute providing for recovery of attorney fees and costs in eminent domain cases provides:

"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."

N.D.C.C. § 32–15–32.

[¶ 7] 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 , 1997 ND 190, ¶ 18, 569 N.W.2d 257 (citation omitted). "A trial court’s decision on fees and costs ... will not be overturned on appeal unless an abuse of discretion is shown." Lemer v. Campbell , 1999 ND 223, ¶ 6, 602 N.W.2d 686. "A trial court abuses its discretion if it acts in an arbitrary, unreasonable, or unconscionable manner, if its decision is not the product of a rational mental process leading to a reasoned determination, or if it misinterprets or misapplies the law." Thompson v. Schmitz , 2011 ND 70, ¶ 18, 795 N.W.2d 913 (citation and quotation marks omitted).

III

[¶ 8] Rosie Glow argues the district court abused its discretion by inadequately explaining its reason for reducing the fees awarded for both attorneys. Rosie Glow does not challenge the district court’s decision to reduce the hourly fee amount to $300.00.

[¶ 9] The DOT cites United Dev. Corp. v. State Highway. Dep’t , 133 N.W.2d 439, 446 (N.D. 1965), superseded by statute on other grounds , Pratt v. Heartview Found. , 512 N.W.2d 675 (N.D. 1994), to argue the district court may consider only one attorney’s fees when a prevailing party has been represented by multiple attorneys. In United Dev. Corp. , the State Highway Department appealed an award of costs and fees to a landowner. Id. at 442. This Court acknowledged the prevailing landowner in the eminent domain action was represented by a number of attorneys, and the district court awarded a contingent amount of attorney fees agreed to by the landowner. Id. at 446.

[¶ 10] In United Dev. Corp. this Court did not rule on whether a district court could award fees for multiple attorneys. Id. Nor did we say that fees for multiple attorneys could not be recovered. Rather, in United Dev. Corp. we held that the client was entitled to recover reasonable attorney fees. Id. We leave it to the district court’s sound discretion to award reasonable attorney fees, regardless of whether a party hires one or multiple attorneys. See generally Golberg , 1997 ND 190, ¶ 18, 569 N.W.2d 257 (concluding the district court has discretion to award a defendant reasonable attorney fees for all judicial proceedings in eminent domain actions). We reject the DOT’s argument that a landowner may not recover fees for more than one attorney.

A

[¶ 11] Rosie Glow argues the district court did not identify specific examples of excessive time spent on the case and arbitrarily awarded only one hundred hours for Attorney Osburn’s time.

"[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 , 261 N.W.2d 640, 646 (N.D. 1977). The Thom factors "should be fairly weighed together." City of Devils Lake v. Davis , 480 N.W.2d 720, 727 (N.D. 1992). "[I]t is essential that the prevailing party, and the court, if need be, exclude any hours that are excessive, redundant, or otherwise unnecessary." Golberg , 1997 ND 190, ¶ 22, 569 N.W.2d 257 (citing Duchscherer v. W.W. Wallwork, Inc. , 534 N.W.2d 13, 19 (N.D.1995) ). "It is not necessary for the trial court to receive additional evidence in support of the motion where it presided at the trial and heard evidence on the question of reasonable attorney’s fee[s] at the end of the trial. The court is an expert on what is a reasonable fee." Morton Cty. Bd. of Park Comm’rs v. Wetsch , 142 N.W.2d 751, 753 (N.D. 1966) (citations omitted).

[¶ 12] A drastic reduction in an award of attorney fees may merit remand to the district court for consideration of relevant Thom factors. Davis , 480 N.W.2d at 727. In Davis , the district court reduced the landowner’s request of $18,580.78 in attorney fees to $10,756.78. Id. at 726. The district court determined: (1) the attorney’s expertise should have reduced his preparation time, (2) the trial lasted two days and was not complicated, (3) the jury award was only $17,000 more than the deposited amount and the landowner requested $118,000 more than the deposited amount, (4) in a different complex case, the district court awarded significantly less than the landowner’s requested attorney fees. Id. This Court concluded the district court in Davis reduced the attorney fees "for lack of significant results obtained." Id. at 727. We remanded the award of attorney fees for reconsideration and directed the district court to include "a more understandable explanation of what work was deemed unreasonable and why it was." Id.

[¶ 13] Here, the district court considered the Thom factors and concluded:

"After a careful review of the billing statements, the Court notes there was an excessive amount of time spent on almost every aspect of the case including finding an expert, time was included for filing pro hac vice motions, time for calling co-counsel, an excessive amount of time was spent on discovery—both producing and reviewing, and time spent for travel to depositions and trial was included. Attorney Osburn indicated he was experienced in eminent domain law. The Court will not include 361 hours for an experienced attorney to try a three day jury trial. That amount of time is not reasonable. The Court will allow 100 hours of time, which is likely on the outer edge of reasonable and the most time this Court has awarded."

The district court noted the trial lasted eighteen hours and found one hundred hours were reasonable for Osburn’s attorney fees. The district court found 361 hours were not "reasonable, considering this case was not that complicated." The district court also found the efforts between Osburn and Hughes were not duplicative except for days spent in trial and several hours of phone calls between them.

[¶ 14] Like in Davis , the district...