Opinion
No. X04-CV 94-0124630 S
October 7, 2003
MEMORANDUM OF DECISION RE OBJECTION TO BILL OF COSTS
In this condemnation case appealing the statement of compensation for the mill complex known as Windham Mills and located in Willimantic, the contested Bill of Costs primarily seeks to determine what reasonable appraisers' fees are allowable pursuant to Connecticut General Statutes § 8-133. On February 14, 2003, after remand from the Supreme Court in Northeast CT Economic Alliance, Inc. v. ATC Partnership, 256 Conn. 813, 776 A.2d 1068 (2001), a judgment awarding the defendant $1,721,165.00 entered, which judgment was later clarified to be in the amount of $1,752,365.00 (McLachlan, J.). The judgment awarded the defendant costs as well as statutory costs pursuant to § 8-133. For the reasons set forth in detail below, the court concludes that the fees for all appraisers are reasonable and therefore allowable. The court's determination is made after consideration of the complex questions of valuation discussed and analyzed by the Supreme Court in Northeast CT Economic Alliance, Inc. v. ATC Partnership, supra. Evidence about these valuation issues was presented at the trial and used by the court in arriving at its conclusions concerning the value of the real estate. Such questions included the economic viability of American Thread as a continuing company, the public funds available for the environmental remediation costs as well as the environmental issues the site posed. This court, in ruling on the Bill of Costs has also reviewed and considered the applicable statutes. The court grants the defendant's Bill of Costs in part and denies it in part.
Connecticut General Statutes § 8-133 provides: "If, as the result of any review under the provisions of Section 8-134, the applicant obtains an award from the court greater than the amount determined as compensation by the redevelopment agency, costs of court, including such appraisal fees as the court determines to be reasonable, shall be awarded to the applicant and taxed against the redevelopment agency in addition to the amount fixed by the judgment." (Emphasis added.) The policy behind these fee-shifting provisions is to encourage the condemning entity to make reasonable compensation awards when exercising its condemnation authority.
Northeast CT Economic Alliance, Inc. v. ATC Partnership Northeast, 2003 Ct.Sp. 2188, NO. X04-CV 94-0124630S, Superior Court, Complex Litigation Docket, judicial district of New London at Norwich, February, 14, 2003 and 2003 Ct. Sup. 4567, April 16, 2003 (McLachlan, J.). References in the text are to the February 14, 2003 decision.
While ordinarily the trial judge would pass on the question of the reasonableness of the expenses, Judge McLachlan was appointed to the Connecticut Appellate Court before the matter could be heard.
I. DISCUSSION A. Reasonable Appraisal Expenses CT Page 1668
At the hearing held on the motion and the objection, as a preliminary matter, the plaintiff claimed not only that the hearing was premature, but that the matter was not yet ripe for adjudication since a defendant may only recover fees under § 8-133 "if the applicant obtains an award from the court greater than the amount determined as compensation by the redevelopment agency." The plaintiff argues that until all avenues of appeal are exhausted, it may be that the judgment will be overturned and that the applicant will not be entitled to such costs. Such an interpretation would require needless judicial resources to administer since the hearing on the bill of costs, if contested, would be held at a time far removed from the actual trial. In addition, if an appellate court overturns the trial court's decision, it is a simple matter to disallow the costs as well. The court finds no law of substance or procedure to support the plaintiff's novel position. Indeed, the court could well imagine the arguments concerning res judicata that could be raised if this proposed procedure were followed. The court concludes that the matter is ripe for adjudication.
Plaintiff claimed that argument on the bill of costs was premature until taxation of costs had been disallowed by the Clerk of the Court. The court found at the hearing, in accord with French v. Clinton, 215 Conn. 197, 204-05, 575 A.2d 686 (1990), that "the trial court shall award costs of court . . . as the court determines to be reasonable. The question of what constitutes a reasonable amount is an issue of fact for the trial court."
As reasonable appraisal costs, the defendant claims the expenses of three individuals who had testified at the retrial of the case as well as for the deposition costs of a fourth expert, who had been retained by the plaintiff. The plaintiff challenged all of the appraisers' expenses, but most particularly those of Mr. Mulready and Mr. Coyne, since neither gave an opinion concerning the dollar value of the real estate in question. As to the costs of the Pinecrest deposition, the plaintiff argued that the expert did not testify at trial and that the deposition expense was not allowable either under § 8-133 or Connecticut General Statues § 52-257, the generally recoverable costs awarded to a prevailing party.
What appraisal fees may the court consider pursuant to § 8-133? The case of French v. Clinton, 215 Conn. 197, 204-05, 575 A.2d 686 (1990), is instructive. There, the court considered the losing party's claim that the trial court's failure to award full reimbursement of engineering fees in a condemnation case was error. The trial court had concluded that $5,000 of the engineering fees of $48,933 should be awarded. The court held that "[t]he question of what constitutes a reasonable amount is an issue of fact for the trial court." In its discussion of the facts, the court noted that the trial could have reasonably concluded that the work was not necessary for the court's determination of the value of the taken property or it could have decided it was excessive in light of the appraiser's fee in that case. The Supreme Court upheld the trial court's determination.
The decision also makes reference to General Statutes § 52-257, the general taxation of costs statute. What is apparent is that "[i]t is a settled principle of our common law that parties are required to bear their own litigation expenses, except as otherwise provided by statute . . . Furthermore because costs are a creature of statute . . . unless the statute clearly provides for them, courts cannot tax them." DeMatteo Construction Co. v. New London, 236 Conn. 710, 715, 674 A.2d 845 (1996). In DeMatteo, the statute provided for costs, but did not expressly identify appraisal reports as a type of cost allowable. In not permitting such costs to be taxed, the Supreme Court noted that where, such as in § 8-133, the legislature specifically intended a prevailing party to recover appraisal fees, it so stated. For the same reasoning regarding allowable costs, see also Arnone v. Enfield, 79 Conn. App. 501 (2003). The court concludes, therefore, and the plaintiff did not seriously contest, that appraisal expenses are generally recoverable in this case pursuant to § 8-133, provided the court finds them reasonable.
Turning now to the details of those expenses the court will analyze each group of claimed costs individually. In total, they are as follows:
1. Robert J. Nocera, Certified Appraiser $ 9,800.00
2. J.F. Mulready, Appraiser $12,660.00
3. Charles E. Coyne, A.S.A. $ 5,762.50
4. Pinecrest Environmental $ 1,554.25
A) Nocera Appraisal
Exhibit 246 is entitled "Retrospective Appraisal of 322 Main Street, Windham, Connecticut" and sets forth in writing the detailed methodology of valuation used by the Nocera firm. Mr. Nocera also testified at trial concerning his appraisal and his conclusions. His qualifications indicate that he is a State of Connecticut Certified General Appraiser as well as Accredited Senior Appraiser of the American Society of Appraisers. While the entitlement to his fees was only cursorily challenged, the court in its decision approved his appraisal and opinion:
The valuation and analysis set forth by the defendant's appraiser, Robert Nocera, is more persuasive. The court accepts the methodology set forth by Mr. Nocera. It does what the Supreme Court directed, namely, sets forth what the appraiser believes the fair value of the properties would be and then subtracts the costs of remediation, rehabilitation and repair (stabilization) in arriving at his values in a comparable sale method approach. It sets forth the estimated cost for the remediation, rehabilitation and repair (stabilization) on the basis that these costs are factors which would be considered in arriving at fair market value.
Northeast CT Economic Alliance, Inc. v. ATC Partnership, 2003 Ct.Sp. 2188 at page 2196. The court concludes that the Nocera appraisal costs are reasonable, in light of the work expended and the valuation issues in this case, his testimony at trial and the court's reliance on the evidence presented.
B) J.F. Mulready Company, LLC
The expenses claimed for Mr. Mulready are for time for preparation of his opinion, for preparing to testify and for the time he spent at trial. He prepared an extensive analysis and testified at court. Plaintiff counters that Mr. Mulready gave no opinion as to dollar value. What Mr. Mulready did provide was his opinion as to the availability of public funding for environmental remediation expenses. In this condemnation matter, the availability of those funds had a direct impact upon the valuation of the real estate. And the trial court concluded in its decision on remand that the right to seek such reimbursement of remediation costs belongs to a non-governmental owner and such rights "run with the land" Northeast CT Economic Alliance, Inc. v. ATC Partnership, supra at page 2200.
Mr. Mulready's qualifications are described in exhibit 245A. He is a certified general real estate appraiser in Connecticut, Maine and Massachusetts and a certified State of Connecticut assessor with more than twenty years experience in the field. He is an associate member of the Appraisal Institute. The court concludes that his testimony as an appraiser need not expressly be limited to expressions of a stated dollar value of the condemned property. As the Supreme Court noted in Northeast CT Economic Alliance, Inc. v. ATC Partnership, 256 Conn. 813, 828, 776 A.2d 1068 (2001):
We have stated repeatedly that [t]he amount that constitutes just compensation is the market value of the condemned property when put to its highest and best use at the time of the taking. In determining market value, it is proper to consider all those elements which an owner or a prospective purchaser could reasonably urge as affecting the fair price of the land . . . The fair market value is the price that a willing buyer would pay a willing seller based on the highest and best possible use of the land assuming, of course, that a market exists for such optimum use. The highest and best use concept, chiefly employed as a starting point in estimating the value of real estate by appraisers, has to do with the use which will most likely produce the highest market value, greatest financial return, or the most profit from the use of a particular piece of real estate. In determining its highest and best use, the trial referee must consider whether there was a reasonable probability that the subject property would be put to that use in the reasonably near future, and what effect such a prospective use may have had on the property's market value at the time of the taking. (Internal quotations marks and citations omitted, emphasis added.)
The costs claimed for Mulready include the same components as the costs claimed for the Nocera appraisal, with the exception of a written report. This court concludes, in light of the complexity of the case and the issues raised, that the evidence was required for a proper determination of value by the trial court on remand and finds the total fees of $12,660 reasonable under the facts and circumstances of this case.
C) Charles E. Coyne, ASA, Valuation Strategies, LLC
Mr. Coyne testified as to the economic viability of the previous owner of the property, American Thread, from whom the defendant had the right to seek contribution for the environmental remediation costs, a central element in the case which the Supreme Court had directed the court on retrial to consider in its formulation of value. Mr. Coyne, like Mr. Mulready and Mr. Nocera, is a member of the American Society of Appraisers. He is also a member of the Institute of Business Appraisers. The trial court on remand found that "b) American Thread had assumed liability for environmental cleanup to the extent required . . . and, in 1994, its successor company had sales of 3.4 billion and . . . earnings of $390 million and was paying a dividend." Northeast CT Economic Alliance, Inc. v. ATC Partnership, supra at page 2199. This court concludes, therefore, that the evidence presented was necessary and important for a determination of value by the court.
The expenses claimed by Charles E. Coyne are for the time in preparation and testifying in court. This court finds that they are reasonable appraisal costs and allows them in the full amount of $5,762.50.
D) Pinecrest Environmental
This company was designated as an expert by the Northeast Connecticut Economic Alliance, Inc. and the Town of Windham. The expert was not called to testify at trial nor did the trial court on remand consider any evidence from Pinecrest. The amount claimed is $1,554.25, which are the costs of the expert to testify at a deposition called by the defendant. These costs are the most troublesome of the appraisal costs claimed by the defendant in this case. Nonetheless, considering all the issues in this case, the court considers the expenses reasonable, even though the expert did not testify in court.
As an initial proposition, the court notes that the fee-shifting provisions of § 8-133 are in derogation of the common law and indicate the fundamental policy of the statute to encourage entities which possess condemnation powers to make reasonable awards of compensation. When such entities are determined to have made inadequate awards after court hearing, they then become obligated for these statutory costs in addition to those limited costs recoverable under § 52-257. In this instance, it was not within the defendant's control as to whether or not the plaintiff would, in the first instance, call the expert. Proper preparation in this highly litigated and contested case entailed taking the deposition testimony of the expert in the event the expert was called. Such a cost is in the nature of trial preparation fees, which the court has approved as to the defendant's experts. This court has previously found that environmental remediation expenses and public funds for them were properly part of the issues surrounding valuation in this case. The court can see no reason to distinguish in terms of the policy behind the cost-shifting aspects of § 8-133 between such costs and these expenses. The court concludes, in the context of this case, that the deposition expenses of Pinecrest Environmental are reasonable appraisal expenses.
The court is aware that there was no testimony by this expert at trial and that the defendant filed a motion in limine to preclude such testimony at trial, which motion was overruled in part and granted in part. (McLachlan, J.)
B. Copy costs, deposition costs and service fees.
The defendant's Bill of Costs also claims the following total expenses, which the court concludes are recoverable only if allowable under § 52-257, see DeMatteo Construction Co. v. New London, 236 Conn. 715, supra:
Copies: $2,561.02
Depositions $450.00
Sheriff's Fees $203.00
A) Copies
As to the copies, § 52-257(b)(5) provides "for maps, plans, mechanical drawings and photographs, necessary or convenient in the trial of any action, a reasonable sum." Defendant states that the copies claimed were of exhibits and many records of the Department of Environmental Protection. Plaintiff argues that the statute provides no basis for their recovery unless they were used in court. The court notes that the statute states "necessary or convenient" and concludes that the availability of the copies in court, to be used if needed, satisfies the meaning of the statutory requirement that they be "convenient." If the copies were not used at trial and the statute only permitted "necessary" copies, then the plaintiff's view would be justified. One important tenet of statutory construction is that each word is to be given effect, and not construed in such a way as to read it out of the statute. "We presume that the legislature had a purpose for each sentence, clause or phrase in a legislative enactment, and that it did not intend to enact meaningless provisions." Turner v. Turner, 219 Conn. 703, 713, 595 A.2d 297 (1991). "Each word used by the legislature should be given effect . . ." (Internal quotation marks omitted.) Ganim v. Roberts, 204 Conn. 760, 763, 529 A.2d 194 (1987). The court concludes that the copies were "convenient" for trial and permits these costs.
B) Depositions
The costs claimed for depositions are three for a total of $90.00 for those for this trial and eleven for the previous court trial conducted in 1997 for the balance of the amount claimed. The statute provides for $30 for each in-state deposition. The court concludes nothing within the statutory framework for the recovery of costs permits it to tax costs for depositions for the previously held trial. The court therefore permits only $90 of the deposition costs at $30 for each such deposition.
C) Marshal Fees
A total of $203 is claimed for marshal fees, all incurred in 2002. Two sections of the statute apply: § 52-257(b)(1), "For each witness attending court, the witness' legal fee and mileage," and § 52-257(b)(7), "for the signing and service of process, the legal fees payable therefor." While there was inadequate documentation originally presented, the court continued the hearing for the requested documentation. Having reviewed each invoice and the amounts charged, the court finds that the marshals' fees are covered by these provisions of the statute and allows them as costs.
ORDER
The following amounts are allowed as costs in this matter:
1) Reasonable appraisal expenses of $29,776.75
2) Copy Fees of $2,561.02
3) Marshal fees of $203.00
4) Deposition costs of $90.00
BY THE COURT
BARBARA M. QUINN, Judge