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North Dakota Department of Transportation v. Schmitz

Supreme Court of North Dakota

May 8, 2018

North Dakota Department of Transportation, Plaintiff and Appellee
v.
G. John Schmitz, Defendant and Appellant

          Appeal from the District Court of Williams County, Northwest Judicial District, the Honorable Paul W. Jacobson, Judge.

          Howard D. Swanson (argued), Special Assistant Attorney General, for plaintiff and appellee.

          Ryan Simatic (argued) and Dan Biersdorf (on brief), and Cathy Lynn Howe Schmitz (appeared), for defendant and appellant.

          OPINION

          Crothers, Justice.

         [¶ 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, 1997 ND 190, ¶ 18, 569 N.W.2d 257 (citation omitted). Schmitz also claims expert fees and costs under N.D.C.C. § 28-26-06. "A trial court's decision on fees and costs under N.D.C.C. § 28-26-06 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

         [¶ 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 ...

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