Opinion
No. 2774 C.D. 2010 No. 2775 C.D. 2010 No. 41 C.D. 2011 No. 90 C.D. 2011
02-22-2013
In Re: Condemnation by the Redevelopment Authority of Lawrence County, Pennsylvania, in Fee Simple, Absolute Title, of Land of David C. Hamilton, situate in Neshannock Township, Lawrence County, Pennsylvania, being Parcel I.D. #25-168200, for the Millennium Park Redevelopment Project Appeal of: Redevelopment Authority of Lawrence County In Re: Condemnation by the Redevelopment Authority of Lawrence County, Pennsylvania, in Fee Simple, Absolute Title, of Land of Thomas R. and Christy L. Whittaker, situate in Neshannock Township, Lawrence County, Pennsylvania, being Parcel I.D. #25-168201 and 25-438301, for the Millennium Park Redevelopment Project Appeal of: Redevelopment Authority of Lawrence County In Re: Condemnation by the Redevelopment Authority of Lawrence County, Pennsylvania in Fee Simple, Absolute Title, of Land of David C. Hamilton, situate in Neshannock Township, Lawrence County, Pennsylvania, being Parcel I.D. #25-168200, for the Millennium Park Redevelopment Project Appeal of: Edna J. Hamilton, Executrix, Estate of David C. Hamilton In Re: Condemnation by the Redevelopment Authority of Lawrence County, Pennsylvania in Fee Simple, Absolute Title, of Land of Thomas R. and Christy L. Whittaker, situate in Neshannock Township, Lawrence County, Pennsylvania, being Parcel I.D. #25-168201 and 25-438301, for the Millennium Park Redevelopment Project Appeal of: Thomas R. Whittaker and Christy L. Whittaker
BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE BONNIE BRIGANCE LEADBETTER, Judge HONORABLE RENÉE COHN JUBELIRER, Judge HONORABLE ROBERT SIMPSON, Judge HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ANNE E. COVEY, Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE McCULLOUGH
In these consolidated cases, the Redevelopment Authority of Lawrence County (Authority) and the Estate of David C. Hamilton (Hamilton) and Thomas R. and Christy L. Whittaker (the Whittakers) (collectively, Condemnees) cross-appeal from the December 17, 2010, orders of the Court of Common Pleas of Lawrence County (trial court) awarding the Whittakers $604,441.56 and counsel for Hamilton $54,591.95 for fees, costs, and expenses incurred during condemnation proceedings pursuant to the Eminent Domain Code (Code), and denying Condemnees' motion to direct the Authority to post bond pursuant to the Code. We affirm.
The fees, costs, and expenses in the instant matter were initially incurred before the consolidation of the Code in 2006. See 26 Pa. C.S. §§101-1106. Therefore, the Act of June 22, 1964, Sp. Sess., P.L. 84, as amended, formerly 26 P.S. §§1-101 - 1-903, repealed by the Act of May 4, 2006, P.L. 112, applies in this case and all citations herein will be to that Act. Gehris v. Department of Transportation, 471 Pa. 210, 215-16, 369 A.2d 1271, 1273 (1977); In re DeFacto Condemnation and Taking of Lands of WBF Associates, L.P., 972 A.2d 576, 580 n.2 (Pa. Cmwlth.), appeal denied, 603 Pa. 677, 982 A.2d 66 (2009); In re Condemnation by County of Berks, 914 A.2d 962, 963 n.1 (Pa. Cmwlth. 2007).
Section 406(e) of the Code stated, in pertinent part, that "[i]f preliminary objections are finally sustained, which have the effect of finally terminating the condemnation, the condemnee shall be entitled to damages as if the condemnation had been revoked under section 408, to be assessed as therein provided...." 26 P.S. §1406(e) (repealed). In turn, section 408 provided, in pertinent part:
[T]he condemnee shall be reimbursed by the condemnor for reasonable appraisal, attorney and engineering fees and other costs and expenses actually incurred because of the condemnation proceedings. Such damages shall be assessed by the court, or the court may refer the matter to viewers to ascertain and assess the damages sustained by the condemnee, whose award shall be subject to appeal as provided in this act....26 P.S. §1-408 (repealed).
We also note that such fees could be obtained under section 609 of the Code, 26 P.S. §1-609 (repealed), relating to a condemnee's costs where no declaration of taking was filed. However, section 610, 26 P.S. §1-610 (repealed), provided for a limited reimbursement of appraisal, attorney, and engineering fees (not more than $500.00) where they could not be obtained under sections 406(e), 408, or 609 of the Code.
Section 403(a) and (c) of the Code stated:
(a) Bond. Except as hereinafter provided, every condemnor shall give security to effect the condemnation by filing with the declaration of taking its bond, without surety, to the Commonwealth of Pennsylvania for the use of the owner or owners of the property interests condemned, the condition of which shall be that the condemnor shall pay such damages as shall be determined by law.26 P.S. §1-403(a), (c) (repealed).
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(c) Insufficient Security. The court, upon preliminary objections of the condemnee under and within the time set forth in section 406(a), may require the condemnor to give such bond and security as the court deems proper, if it shall appear to the court that the bond or power of taxation of the condemnor is not sufficient security.
Lawrence County established the Authority in March, 2003. In 2004, the Authority filed separate declarations of taking to condemn Condemnees' properties to develop a business park.
The detailed factual history of this matter was recounted in a prior opinion of this Court as follows:
In September of 2004, [the Authority] filed separate declarations of taking, pursuant to the authority provided under the Urban Redevelopment Law (URL)[, Act of May 24, 1945, P.L. 991, as amended, 35 P.S. §§1701-1719.1], condemning the Hamilton and the Whittaker properties for the purpose of developing a high technology business park. At the time of the condemnation, David Hamilton owned 2.5 acres, on which he maintained a structure used for both residential and industrial purposes, and the Whittakers owned approximately 84 acres, where they lived with their children in a home constructed in 2002. These two properties are located within an approximately 530-acre area, identified as a prime location for industrial development, and labeled "Millenium Park," by the Lawrence County Economic Development Corporation (LCEDC), a private non-profit corporation formed by the County to reverse a loss of its industrial tax base.
In March of 2003, the County created the [Authority], which then undertook in conjunction with the County Planning Commission and the County Commissioners, pursuant to the provisions in the URL, to designate a portion of the Millenium Park acreage as a "Redevelopment Area" and to draft a "Redevelopment Area Plan" for what is known as "Millenium Park Phase II." The May 2004-certification of the Millenium Park Phase II (MPII) acreage encompassed six properties, four of which had already been purchased by the LCEDC between August of 2003 and March of 2004, and the improvements on those four properties had been razed. Consequently, at the time the Planning Commission found the Area to be blighted only the two properties owned by condemnees remained to be acquired.
Meanwhile, [the Authority] and the LCEDC executed a written agreement calling for properties in the redevelopment area condemned by [the Authority] to be conveyed to LCEDC and for LCEDC to cover [the Authority]'s expenses. Subsequently, asserting that condemnees' properties, inasmuch as they were maintained in economically undesirable uses and, therefore, qualified as blighted under provisions of the URL, [the Authority] exercised its power of eminent domain under the URL to condemn the properties. [The Authority] filed its declaration of taking, citing Section 9 of the URL.
Condemnees filed preliminary objections contending (1) that the procedures required under the URL were not followed, (2) that their properties are neither individually blighted nor in a blighted redevelopment area, (3) that the taking violated the constitutions of the United States and Pennsylvania insofar as [the Authority], in declaring the properties blighted, acted pretextually with an intent to facilitate private commercial/industrial development by the LCEDC, a private entity, and (4) that [the Authority] filed an insufficient bond with the declaration of taking. Following a twelve-day hearing, [the trial court] overruled the preliminary objections challenging the legality of the taking and sustained the objection to the sufficiency of the bond.
Prior to filing the declarations of taking, the Authority filed an equity action in the trial court seeking a right of entry onto Condemnees' property. In addition, prior to the filing of the declarations of taking, Condemnees filed civil rights actions in federal court under 42 U.S.C. §1983 seeking injunctive, declaratory, and monetary relief. See Whittaker v. County of Lawrence, 674 F. Supp. 2d 668 (W.D. Pa. 2009), aff'd, 437 F. App'x 105 (3d Cir. 2011).
Section 409 of the Code stated, in pertinent part:
Prior to the filing of the declaration of taking, the condemnor or its employes or agents, shall have the right to enter upon any land or improvement which it has the power to condemn, in order to make studies, surveys, tests, soundings and appraisals.... Any actual damages sustained by the owner of a property interest in the property entered upon by the condemnor shall be paid by the condemnor and shall be assessed by the court or viewers in the same manner as provided in section 408.26 P.S. §1-409 (repealed).
Condemnees hired Michael K. Parrish, Esq. and his firm to represent them in the condemnation and associated proceedings. The Whittakers hired Parrish on an hourly basis while Hamilton hired Parrish on a contingent fee basis. Condemnees filed preliminary objections to the declarations of taking and to the sufficiency of the bond posted by the Authority. The trial court conducted a number of hearings on the preliminary objections.
The Whittakers' fee agreement stated the following, in relevant part:
We would propose to work on an hourly rate basis for any matters undertaken on your behalf, both prior to the filing of a declaration of taking and after the filing of a declaration of taking up through and including the payment of estimated just compensation. This initial representation will include, but is not limited to, negotiations, reviewing and preparing documentation, meetings, correspondence, and any other work necessary to assist you in this matter. Each of our partners, associates, paralegals, and law clerks has a rate based upon the individual's experience, reputation, and ability. These rates are adjusted from time to time commensurate with the hourly rates customarily charged in the Pittsburgh area. Currently, our rates range from $75 per hour for law clerks to $250 per hour for the most experienced attorneys. My current hourly rate is $225.00 per hour....(R.R. at 824a.)
Hamilton's contingent fee agreement stated the following, in pertinent part:
It is hereby understood and agreed that our attorneys shall receive forty (40) percent of the difference between (a) the gross sum recovered by way of settlement or other disposition, and (b) the sum of $150,000.00.(R.R. at 827a.)
It is understood that our attorneys shall be entitled to receive and pay from the residue before turning over the balance any costs, witness fees and other expenses (i.e., costs for expert reports, expert testimony fees and depositions) which may have been incurred incident to the preparation for or conduct of litigation, said costs only subject to reimbursement upon recovery by way of verdict or settlement. In the absence of recovery by way of verdict or settlement, the undersigned is not obligated to pay costs.
Section 406(a) of the Code stated, in pertinent part:
(a) Within thirty days after being served with notice of condemnation, the condemnee may file preliminary objections to the declaration of taking.... Preliminary objections shall be limited to and shall be the exclusive method of challenging (1) the power or right of the condemnor to appropriate the condemned property... ; (2) the sufficiency of the security; (3) any other procedure followed by the condemnor; or (4) the declaration of taking. Failure to raise these matters by preliminary objections shall constitute a waiver thereof.26 P.S. §1-406(a) (repealed). As this Court has explained:
Preliminary objections in the context of eminent domain actions serve a different purpose than preliminary objections filed in other civil actions. Not only are the Rules of Civil Procedure not applicable to eminent domain proceedings, but preliminary objections filed pursuant to Section 406 of the [Code] serve a very different purpose than those filed under the rules of Civil Procedure. In eminent domain cases, preliminary objections are intended as a procedure to resolve expeditiously the factual and legal challenges to a declaration of taking before the parties proceed to determine damages....
On June 18, 2007, the trial court overruled Condemnees' preliminary objections challenging the legality of the taking, but sustained the preliminary objection regarding the sufficiency of the bond. On appeal, this Court reversed the trial court's order overruling the preliminary objections regarding the legality of the taking and sustained those objections, and vacated the order sustaining the objection regarding the sufficiency of the bond and dismissed that objection as moot. See In re Condemnation of the Land of Hamilton, 962 A.2d at 1265.
Specifically, we held that the public purpose underlying the condemnation of Condemnees' property was not present in this case explaining, "[i]nasmuch as the properties in the Redevelopment Area cannot be considered blighted due to the economic undesirability of the present uses and where no physical conditions of blight exist, the public purpose, i.e., elimination of blight is absent and the condemnation is not justified...." In re Condemnation of the Land of Hamilton, 962 A.2d at 1265.
In July and August of 2009, Condemnees filed the instant motions for fees and costs. In an amended affidavit in support of their motion, the Whittakers sought $806,096.01 for fees and costs incurred from the inception of the action to June 30, 2010, and Hamilton sought $323,459.73 for fees and costs for the same period. On July 30, 2009, the Whittakers filed a motion asking the trial court to compel the Authority to post a $650,000.00 bond. The trial court held three hearings on the motions wherein the parties presented expert testimony and submitted numerous exhibits detailing the hours expended by Condemnees' attorneys throughout these proceedings.
At the same time, Condemnees filed motions to revest title to the property in Condemnees. The trial court granted the motions to revest title by orders dated October 5, 2009.
The total amount was composed of $635,768.56 in fees and costs associated with this eminent domain action and $170,327.45 for the related civil rights action filed in federal court.
The total amount was composed of $273,718.96 in fees and costs associated with this eminent domain action and $49,740.77 for the related the civil rights action filed in federal court.
By orders dated December 17, 2010, the trial court denied the Whittakers' motion to compel the Authority to post bond and granted Condemnees' motions for fees and costs. The trial court reduced the amount Condemnees requested by unrelated or unreasonable fees, ultimately awarding the Whittakers $604,441.56, and awarding Hamilton's attorney $54,591.95. Condemnees and the Authority then filed the instant cross-appeals of the trial court's orders.
By order dated March 9, 2011, this Court consolidated the cross-appeals and designated Condemnees as appellants and the Authority as appellee.
In their appeal, Condemnees claim that the trial court erred in determining that the Authority was not required to post bond because the Code's bond requirement relates to all damages, including fees and costs, and not only to just compensation for the taking. Condemnees also claim that the trial court erred in calculating the attorney fees and costs awarded to Hamilton's attorney.
Our scope of review in eminent domain cases is limited to determining whether the trial court abused its discretion or committed an error of law and whether findings of fact are supported by substantial evidence. Appeal of Department of Transportation, 605 A.2d 1286, 1289 (Pa. Cmwlth. 1992). An abuse of discretion is not merely an error of judgment; discretion is abused if, in reaching a conclusion, the law is overridden or misapplied, or the judgment exercised is manifestly unreasonable or the result of partiality, prejudice, bias, or ill will, as shown by the evidence of record. Supplee v. Department of Transportation, 524 A.2d 1002, 1003 (Pa. Cmwlth.), appeal denied, 515 Pa. 626, 531 A.2d 433 (1987). In addition, the trial court as fact-finder must resolve evidentiary conflicts and its findings of fact will not be disturbed if they are supported by substantial evidence. In re Condemnation by Department of Transportation, 827 A.2d 544, 547 n.4 (Pa. Cmwlth. 2003), appeal denied, 577 Pa. 737, 848 A.2d 930 (2004). Substantial evidence is such relevant evidence that a reasonable mind might consider adequate to support a conclusion and requires more than a mere scintilla of evidence or suspicion of the existence of a fact to be established. Department of Transportation v. Agricultural Lands Condemnation Approval Board, 5 A.3d 821, 830 (Pa. Cmwlth. 2010).
In its cross-appeal, the Authority claims that the trial court erred in awarding any fees and costs to Hamilton's attorney because Parrish's representation was based on a contingent fee agreement and therefore no fees and costs were actually incurred. The Authority also claims that the trial court erred in awarding fees and costs to the Whittakers because: (1) the fees and costs relating to the fee petition case were patently unreasonable due to non-compensable items and an exorbitant witness fee, and Condemnees' counsel engaged in dilatory, obdurate, and vexatious conduct; (2) the fees and costs relating to the equity action cannot be awarded under the Code; (3) the fees and costs relating to the proceedings on the sufficiency of the bond cannot be awarded under the Code, the proceedings were unnecessary, and there is not sufficient evidence supporting their amount; (4) the fees and costs relating to the condemnation action are excessive because they include the cost of expert witnesses who did not testify, the valuation of the property, and an unnecessary motion to revest title; and (5) the amount awarded violates the Code requirement that the amount of fees and costs awarded be reasonable.
As a corollary to this claim, the Authority also asserts that the trial court erred in awarding fees and costs directly to Hamilton's attorney because fees and costs can only be awarded to a condemnee under the Code. However, the Authority fails to set forth in its brief where this additional claim was raised or preserved for our review as required by Pa.R.A.P. Rule 2117(c). Our review of the certified record demonstrates that this assertion has been waived based on the Authority's failure to raise this issue in the concise statement of matters complained of on appeal that was filed in the trial court. Pa.R.A.P. 1925(b)(4)(vii); Lang v. Department of Transportation, 13 A.3d 1043, 1049 (Pa. Cmwlth. 2011); Borough of Walnutport v. Dennis, 13 A.3d 541, 548 (Pa. Cmwlth. 2010), appeal denied, ___ Pa. ___, 34 A.3d 84 (2012).
Condemnees' appeal
Condemnees first claim that the trial court erred in determining that the Authority was not required to post bond because the Code's bond requirement relates to all damages, including fees and costs, and not only to just compensation for the taking. We do not agree.
Section 403(a) of the Code stated, in relevant part, that "[e]very condemnor shall give security to effect the condemnation by filing with the declaration of taking its bond, without surety, to the Commonwealth ... for the use of the owner or owners of the property interests condemned, the condition of which shall be that the condemnor shall pay such damages as shall be determined by law." 26 P.S. §1-403(a) (repealed). Thus, adequate surety of the just compensation due for any taking under the Code had to be posted by the condemnor at the filing of the notice of condemnation in order to secure the taking. Appeal of Perry, 461 A.2d 916, 917 (Pa. Cmwlth. 1983).
Section 601 of the Code stated that "[t]he condemnee shall be entitled to just compensation for the taking, injury or destruction of his property, determined as set forth in this article." 26 P.S. §1-601 (repealed).
Accordingly, in the prior appeal in this case, we vacated the trial court's order sustaining Condemnees' preliminary objection regarding the sufficiency of the bond that the Authority posted under section 403(a), and dismissed that objection as moot, when we reversed the trial court's order overruling the preliminary objections regarding the legality of the taking and sustained those objections. In re Condemnation of the Land of Hamilton, 962 A.2d at 1265.
In contrast, no similar provisions of the Code required security to be posted with respect to the fees and costs recoverable under section 406(e). Section 406(e) of the Code provided that where "[p]reliminary objections are finally sustained, which have the effect of finally terminating the condemnation, the condemnee shall be entitled to damages as if the condemnation had been revoked under section 408, to be assessed as therein provided...." 26 P.S. §1-406(e) (repealed). In turn, section 408 provided that "[t]he condemnee shall be reimbursed by the condemnor for reasonable ... attorney ... fees and other costs and expenses actually incurred because of the condemnation proceedings...", and that "[s]uch damages shall be assessed by the court...." 26 P.S. §1-408 (repealed).
As this Court has explained:
[I]f a timely declaration of relinquishment is filed, then the condemned property may be relinquished and, where relinquishment occurs, according to Section 408, a condemnee is entitled to reimbursement from a condemnor for reasonable appraisal, attorney and engineering fees, and
for other costs and expenses actually incurred due to the condemnation proceedings. However, where a declaration of relinquishment is not filed within the statutorily mandated one-year period, no relinquishment may properly occur, and, pursuant to Section 407 of the Code, 26 P.S. §1-407, just compensation is due from a condemnor to the condemnee for the taking.Alexander v. Snow Shoe Township, 798 A.2d 809, 813 (Pa. Cmwlth. 2002) (emphasis in original and footnote omitted). Thus, "[w]hen determining statutory costs and expenses to be awarded a condemnee, the trial court may not apply just compensation requirements." In re Condemnation by Department of Transportation, 709 A.2d 939, 943 (Pa. Cmwlth. 1998) (citation omitted). As a result, the trial court did not err in denying Condemnees' motion to compel the Authority to post bond as required by section 403(a) of the Code requiring a surety of just compensation in the instant proceedings seeking reimbursement under the provisions of sections 406(e) and 408.
Section 407(a) of the Code established the requirements for a court to enter a writ of possession in the condemnor before ruling on the preliminary objections to a declaration of taking. 26 P.S. §1-407(a) (repealed). Section 407(b) provided that a condemnee could deliver possession to the condemnor and receive the condemnor's estimate of just compensation within 60 days of the filing of the declaration of taking. 26 P.S. §1-407(b) (repealed). Section 407(c) provided that the compensation paid under subsections (a) and (b) was "[w]ithout prejudice to the rights of either the condemnor or the condemnee to proceed to a final determination of the just compensation ...." 26 P.S. §1-407(c) (repealed).
As this Court has previously noted:
Section 408 allows condemnees to recover costs and expenses incurred by them "because of the condemnation proceedings." 26 P.S. § 1-408. Courts are not to award such costs and expenses based on just compensation requirements. [In re Condemnation by Department of Transportation]. "[R]eimbursable costs or expenses are allowed by statute only and ... are not included or embraced within just compensation for land taken for eminent domain purposes." Id. at 943. Thus, section 408 of the [Code] does not require that a condemnee be made whole. Id.
In denying Condemnees' motion, the trial court stated:
[T]he Condemnees renewed their request for a posting of bond ... in connection with their Motion for Fees and Costs. In their Motion to Compel Posting of Bond, the Condemnees did not cite any law to support their request. They failed to offer any new factual arguments or evidence justifying their request. They also made no request for a hearing to present such evidence. Instead, the Condemnees repeated the arguments made during the preliminary objections stage of the proceedings.... Furthermore, the Condemnees did not appear to consider that the bond necessary to secure the interests of the Condemnees at the preliminary objection stage would most likely be different from the bond required at this stage of the proceedings. [At the time of filing the motion], the Condemnees were also not aware of what amount would ultimately be awarded by the Court, making their combined request of $925,000.00 now seem excessive. As a result, the Court denied the Condemnees' Motion to Compel Posting of Bond as it was presented.3/1/11 Trial Court Opinion at 4. Based on the foregoing discussion, we discern no error in the trial court's determination in this regard.
Condemnees next claim that the trial court erred in calculating the attorney fees and costs awarded to Hamilton's attorney. More specifically, Condemnees claim that the trial court erred in failing to use time records and hourly rates in calculating the fees and costs as this is the preferred method in determining the fees and costs to be awarded, and it is the method by which the trial court awarded fees and costs to the Whittakers.
At common law, costs were not recoverable by either party to the action and the right to recover such costs is purely statutory. Tunison v. Commonwealth, 347 Pa. 76, 77-78, 31 A.2d 521, 522 (1943); Rush v. Allegheny County, 48 A.2d 46, 47 (Pa. Super. 1946). The provisions in the Eminent Domain Code providing for the award of costs should be liberally interpreted to justly compensate parties that have incurred necessary expenses in defending against unjust or unlawful claims. Tunison, 347 Pa. at 79, 31 A.2d at 523; Rush, 48 A.2d at 47.
As noted above, section 406(e) stated that if condemnation proceedings are finally terminated by way of preliminary objections, "[t]he condemnee shall be entitled to damages as if the condemnation had been revoked under section 408, to be assessed as therein provided...", and section 408 stated that "[t]he condemnee shall be reimbursed by the condemnor for reasonable ... attorney ... fees ... actually incurred because of the condemnation proceedings....". 26 P.S. §§1-406(e), 1-408 (repealed). The order of this Court in the prior appeal that sustained Condemnees' preliminary objections regarding the legality of the Authority's taking finally terminated the instant condemnation as required for Condemnees to recover attorney fees, costs, and expenses under section 408 of the Code. In re Condemnation by Department of Transportation, 709 A.2d at 943.
The Comment to section 408 stated:
Where the condemnation is abandoned, the condemnee should be compensated for any damages which he has sustained since his land has been "tied up".... In the Reinbold [v. Commonwealth, 319 Pa. 33, 179 A. 571 (1935)], the court at page 46, stated that the condemnee is entitled to "the amount of costs, expenses and damages expended and suffered by (him) by reason of the intended condemnation of his land...." In Long v. Commonwealth, 37 D. & C. 702 (1940), the court allowed the condemnee expenses incurred for plans, photographs, real estate experts and attorney's fees. Expenses incurred for these items would of course, be recoverable as damages under this section.26 P.S. §1-408 cmt. (repealed).
In In re Condemnation by Urban Redevelopment Authority, 452 A.2d 1113, 1116-17 (Pa. Cmwlth. 1982), we considered the manner of calculating attorney fees awarded under section 609 of the Code, 26 P.S. §1-609 (repealed), and explained:
Section 609 stated that "[w]here proceedings are instituted ... under section 502(e), a judgment awarding compensation ... shall include reimbursement of reasonable appraisal, attorney and engineering fees and other costs and expenses actually incurred." 26 P.S. §1-609 (repealed). Thus, section 609 limited condemnees to the same category of costs and expenses that were recoverable under section 408. Gross, 741 A.2d at 241.
[T]he Authority argues that the trial judge simply looked to the contingent fee agreement, and that such a method was not the proper means of determining a reasonable attorney fee under Section 609 of the Code. According to the Authority, the court should have based its fee award on an hourly rate of compensation for services rendered.
The important consideration in this appeal is the trial judge's statement that the fee award was based on "all the circumstances" of the case. It should be noted that, prior to the lower court's order fixing the attorney fee, almost seven years of litigation had transpired.
The reasonableness of an attorney fee is a matter for the sound discretion of the trial court and can be disturbed by an appellate court only when there is a clear abuse of discretion. LaRocca Estate, 431 Pa. 542, 246 A.2d 337 (1968); Thompson Estate, 426 Pa. 270, 232 A.2d 625
(1967). The trial court's judgment brings with it a presumption of correctness. Baughman's Estate, 281 Pa. 23, 126 A. 58 (1924). The Authority has not demonstrated that the trial court abused its discretion relative to the attorney fee awarded. Absent such a showing, it would not be appropriate for us to interfere with the award.
In LaRocca Estate, our Supreme Court explained:
The amount of fees to be allowed to counsel, always a subject of delicacy if not difficulty, is one peculiarly within the discretion of the court of first instance. Its opportunities of judging the exact amount of labor, skill and responsibility involved, as well as its knowledge of the rate of professional compensation usual at the time and place, are necessarily greater than ours, and its judgment should not be interfered with except for plain error. The allowance or disallowance of counsel fees rests generally in the judgment of the court of first instance and its decision will not be interfered with except for palpable error.
In awarding reasonable attorney fees in this case, the trial court looked to the period of time that this case had been pending; Hamilton's attorney's testimony regarding the extent of his representation of Hamilton in these consolidated proceedings and the complexities of the issues involved; the approximate value of the property involved as asserted by Hamilton; and the amount of attorney fees that might have been awarded under the contingent fee agreement if the matter had proceeded to the award of just compensation of that amount. 12/17/10 Trial Court Opinion at 8-11. Specifically, the trial court stated, "Considering the terms of the Hamiltons' fee agreement, the approximate value of their property, the estimated compensation they would have received had their property been successfully condemned, and the significance of the Whittaker representation in comparison to the Hamilton representation, the Court finds $50,000.00 to be a reasonable fee award...." Id. at 11. All of the foregoing factors employed by the trial court are appropriate considerations in fashioning a fair and reasonable attorney fee. LaRocca Estate; In re Condemnation by Urban Redevelopment Authority. Accordingly, Condemnees have not demonstrated that the trial court abused its discretion in awarding attorney fees to Hamilton's attorney and absent such a showing, it is not appropriate for this Court to interfere with the award. Id.
Authority's appeal
The Authority first claims that the trial court erred in awarding the fees and costs to Hamilton's attorney because Parrish's representation was based on a contingent fee agreement and therefore no fees and costs were actually incurred. The Authority argues that because the condemnation proceedings terminated without a monetary award, the contingent fee agreement did not obligate Hamilton to pay any fees, costs, or expenses; therefore, Hamilton did not actually incur any fees, costs, or expenses as required by section 408 for the award of attorney's fees.
As indicated above, this Court has affirmed the award of fees and costs to condemnees who were represented on a contingent fee basis in de facto condemnation cases initiated under section 502(e) of the Code, 26 P.S. §1-502(e) (repealed). See Gross; In re Condemnation by Urban Redevelopment Authority. In Gross, the condemnee entered into an agreement with counsel for a 40% contingency fee. The condemnee sought fees and costs under section 609 following a jury verdict of $6,500,000.00 just compensation. The trial court awarded $193,378.40 in attorney fees based upon the hours submitted by the attorney rather than the 40% contingent fee. On appeal, the condemnee challenged the award arguing that the trial court erred in basing the award on an hourly rate rather than the provisions of the contingency fee agreement. In rejecting this assertion, we explained:
Section 502(e) stated that "[i]f there has been a compensable injury suffered and no declaration of taking therefor has been filed, a condemnee may file a petition for the appointment of viewers...." Section 609 stated that "[w]here proceedings are instituted ... under section 502(e), a judgment awarding compensation ... shall include reimbursement of reasonable appraisal, attorney and engineering fees and other costs and expenses actually incurred." 26 P.S. §1-609 (repealed).
[A]warding attorney fees based on the attorney's hourly rate, the hours submitted by the attorney and credible expert testimony is reasonable and is not an abuse of discretion.17Gross, 741 A.2d at 240 (emphasis in original). Thus, this Court specifically determined that a trial court may reject the provisions of a contingent fee agreement in awarding reasonable attorney fees under 609 of the Code which provided for the same category of costs and expenses that were recoverable under section 408. Id. at 241.
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17. It is true, as [condemnee] asserts, that a trial court may base a section 609 attorney fee award on a contingent fee agreement where such an award would be reasonable under all of the circumstances. Matter of Condemnation by Urban Redevelopment Authority of Pittsburgh of Certain Lands in Twenty-First Ward of City, [451 A.2d 1071, 1072-73 (Pa. Cmwlth. 1982)] (stating that there is nothing that automatically precludes a contingent-fee percentage from producing a circumstantially reasonable amount). However, a trial court is not obligated to do so. The trial court is required only to include reimbursement of reasonable attorney fees in the compensation award....
This Court has yet to address the precise issue of whether the Code provides for the award of attorney fees under a contingent fee agreement when the successful outcome does not result in a monetary recovery. However, our Superior Court has persuasively opined that an award of such fees is not statutorily predicated upon a client's obligation to pay them. In Gardner v. Clark, 503 A.2d 8, 9 (Pa. Super. 1986), the Superior Court considered the issue in light of section 407(b) of the Loan Interest and Protection Law (Act 6), which provides that "[a]ny debtor who prevails in any action to remove, suspend or enforce a judgment entered by confession shall be entitled to recover reasonable attorney's fees and costs as determined by the court", and section 503(a) of Act 6 which provides, in relevant part:
Act of January 30, 1974, P.L. 13, as amended, 41 P.S. §407(b).
(a) If a borrower or debtor ... prevails in an action arising under this act, he shall recover the aggregate amount of costs and expenses determined by the court to have been reasonably incurred on his behalf in connection with the prosecution of such action, together with a reasonable amount for attorney's fee.41 P.S. §503(a).
With respect to these provisions of Act 6, the Superior Court noted that "[t]he legislature has not made an award of reasonable counsel fees contingent upon an obligation to pay counsel fees by the prevailing party. Thus, it is not a bar to an award of counsel fees that the prevailing party in this case was represented by Community Legal Services, Inc., which charged appellees no fee." Gardner, 503 A.2d at 10 (emphasis added). See also 7 Am.Jur.2d Attorneys at Law §240 (2012) ("The creation of the relation of attorney and client by contract, express or implied, is essential to the right of an attorney to recover compensation for services.... Unless circumstances show that services were intended to be gratuitous, a party's acceptance of, or acquiescence in, the services rendered by an attorney will raise an implied promise to pay for the services....") (footnotes omitted).
Thus, our appellate courts have repeatedly affirmed the award of reasonable attorney fees for services performed where liability under a contingent fee agreement has not occurred. See, e.g., Powers v. Rich, 184 Pa. 325, 333, 39 A. 62 (1898) (holding that where a client enters into a contingent fee agreement with an attorney and subsequently discharges the attorney and hires another, the former can recover the reasonable value of his services up to the time of his discharge); Mager v. Bultena, 797 A.2d 948, 958 (Pa. Super.), appeal denied, 572 Pa. 725, 814 A.2d 678 (2002) ("While the termination of the contract by [the client] created an immediate right in [the law firm] to compensation for all work performed and costs incurred pursuant to that contract, that right included only quantum meruit compensation...."); Dorsett v. Hughes, 509 A.2d 369, 371 (Pa. Super. 1986) ("[A]ppellants claim a legal fee of over $18,000.00 based solely on an alleged agreement by the executor to pay a fee consisting of a percentage of the gross value of the estate. Such an agreement, even if made, would not be enforceable. Attorney's fees in an estate are based on the reasonable value of the service rendered and subject to the approval of the Orphans' Court....") (footnote omitted); Sundheim v. Beaver County Building and Loan Association, 14 A.2d 349, 351 (Pa. Super. 1940) ("[A] client may terminate his relation with an attorney at any time, notwithstanding a contract for fees, but if he does so, thus making the performance of the contract impossible, the attorney is not deprived of his right to recover on a quantum meruit a proper amount for the services which he has rendered.") (citations omitted). See also Novinger v. E.I. DuPont de Nemours & Co., Inc., 809 F.2d 212, 218 (3rd Cir.), cert. denied, 481 U.S. 1069 (1987) (holding that when a client terminates a contingent fee agreement, the original attorney formerly employed under the agreement can recover reasonable compensation up to the time he was discharged).
As noted above, the agreement in this case provided for an attorney fee of 40% "[o]f the difference between (a) the gross sum recovered by way of settlement or other disposition, and (b) the sum of $150,000.00...", and that costs, witness fees, and other expenses were "[o]nly subject to reimbursement upon recovery by way of verdict or settlement. In the absence of recovery by way of verdict or settlement, [Hamilton] is not obligated to pay costs." (R.R. at 827a.) Nevertheless, in this case, Hamilton obtained a favorable recovery in this Court by way of preliminary objections due to Parrish's professional services. We conclude that, under these circumstances, the trial court reasonably interpreted sections 406(e) and 408 of the Code to specifically provide for the award of reasonable attorney fees in such a case where fees were incurred even though the contingency triggering liability for fees under a contingent fee agreement did not occur.
Moreover, a trial court's discretion includes the authority to determine the amount of reasonable fees to award. See McMullen v. Kutz, 603 Pa. 602, 614-15, 985 A.2d 769, 776-77 (2009) (holding that where a contractual provision provides for a breaching party to pay the attorney's fees of the prevailing party in a breach of contract case, the trial court may consider whether the fees claimed to be incurred are reasonable and to reduce the fees claimed if appropriate); Mountain View Condominium Association v. Bomersbach, 734 A.2d 468, 470-71 (Pa. Cmwlth. 1999), appeal dismissed, 564 Pa. 433, 768 A.2d 1104 (2001) (holding that the trial court did not abuse its discretion in awarding a condominium association $46,549.00 in attorney fees in its action to collect a $1,200.00 delinquent assessment based on the lengthy and contentious proceedings underlying the claim involving legal "trench warfare" tactics). Thus, the fact that the amount of fees and costs may not have been readily ascertainable under the provisions of the contingent fee agreement in this case did not affect the trial court's ability to award such fees. In addition, the trial court's exercise of its discretion in the award of the instant fees carries a presumption of correctness. More important, as outlined above, the amount of fees the trial court awarded was reasonable and does not constitute an abuse of that discretion. Accordingly, the Authority's allegation of error in this regard is without merit.
The Authority's remaining allegations of error relate to the attorney fees awarded to the Whittakers. However, the trial court properly and correctly analyzed these issues and this matter was ably disposed of in the comprehensive and well-reasoned opinion of the Honorable Thomas M. Piccione. Accordingly, we affirm on the basis of his opinion in In re: Condemnation by the Redevelopment Authority of Lawrence County, Pennsylvania in Fee Simple, Absolute Title, of Land of Thomas R. and Christy L. Whittaker, situate in Neshannock Township, Lawrence County, Pennsylvania, being Parcel I.D. No. 25-168201 and No. 25-438301, for the Millennium Park Redevelopment Project and In re: Condemnation by the Redevelopment Authority of Lawrence County, Pennsylvania in Fee Simple, Absolute Title, of Land of David C. Hamilton, situate in Neshannock Township, Lawrence County, Pennsylvania, being Parcel I.D. No. 25-168200, for the Millennium Park Redevelopment Project, (Nos. 70083 and 70082 of 2004, filed December 17, 2010).
/s/_________
PATRICIA A. McCULLOUGH, Judge ORDER
AND NOW, this 22nd day of February, 2013, the December 17, 2010, orders of the Court of Common Pleas of Lawrence County are affirmed.
/s/_________
PATRICIA A. McCULLOUGH, Judge BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE BONNIE BRIGANCE LEADBETTER, Judge HONORABLE RENÉE COHN JUBELIRER, Judge HONORABLE ROBERT SIMPSON, Judge HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ANNE E. COVEY, Judge OPINION NOT REPORTED
DISSENTING OPINION BY JUDGE LEADBETTER
I agree and join in most of the thoughtful analysis of the majority. I must respectfully dissent from that portion of the opinion affirming the award of fees to Hamilton's attorney. I fully agree with the majority and the trial court that the fees were reasonable. However, the right to recover such fees is based solely on the provisions of the Eminent Domain Code, and the provision applicable here requires both that the fees be reasonable and that they be actually incurred. Had the General Assembly intended to allow an award simply for reasonable fees, it surely would have said so as it has done in many other statutes. I do not believe we are free to ignore clear language imposing an additional requirement here. Because Hamilton actually incurred no fees and costs under her agreement with counsel in this case, I do not believe any fees, however reasonable, may be awarded against the Authority.
Most of the cases relied upon by the majority to affirm the award were based on statutes which had no similar limitation. The only two which arose under the Eminent Domain Code, Gross v. City of Pittsburgh, 741 A.2d 234 (Pa. Cmwlth. 1999) and In re Condemnation by Urban Redevelopment Authority, 452 A.2d 1113 (Pa. Cmwlth. 1982), were cases in which fees were actually incurred and the question was whether the awards, neither of which exceeded the amounts incurred, were reasonable. In Gross, the trial court refused to award the full amount of the agreed upon contingent fee, but allowed only the reasonable hourly rates. This Court noted that:
It is true ... that a trial court may base a section 609 attorney fee award on a contingent fee agreement where such an award would be reasonable under all of the circumstances.741 A.2d at 240 n.17. (citations omitted; emphasis in original). In Urban Redevelopment Authority, the agreed upon contingent fee was awarded and upheld as reasonable. Accordingly, these cases do not support an award of fees in this case. --------
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However, a trial court is not obligated to do so. The trial court is required only to include reimbursement of reasonable attorney fees in the compensation award.
/s/_________
BONNIE BRIGANCE LEADBETTER,
Judge President Judge Pellegrini and Judge Cohn Jubelirer join in this dissenting opinion.
In re Condemnation of the Land of Hamilton, 962 A.2d 1257, 1258-59 (Pa. Cmwlth. 2008), appeal denied, 601 Pa. 705, 973 A.2d 1008 (2009) (footnotes omitted).
In re Condemnation by the City of Coatesville, 822 A.2d 846, 849-50 (Pa. Cmwlth.), appeal denied, 576 Pa. 715, 839 A.2d 353 (2003) (citations and footnote omitted).
Gross v. City of Pittsburgh, 741 A.2d 234, 241 (Pa. Cmwlth. 1999), appeal denied, 563 Pa. 632, 758 A.2d 664 (2000) (footnote omitted).
LaRocca Estate, 431 Pa. at 548-549, 246 A.2d at 340.
The court further instructed that, in determining whether attorney's fees are reasonable, a trial court must consider numerous factors, including the following:
the amount of work performed; the character of the services rendered; the difficulty of the problems involved; the importance of the litigation; ... the degree of responsibility incurred; ... the professional skill and standing of the attorney in his profession; the result he was able to obtain; and, very importantly, the amount of money or the value of property in question.Id., 431 Pa. at 546, 246 A.2d at 339.