Opinion ID: 1419385
Heading Depth: 1
Heading Rank: 1

Heading: the appeal of the state of hawaii

Text: As a general rule, attorneys' fees are not taxable against the losing party in the absence of statutory authorization or agreement of the parties. Brown v. Tokuda, 49 Haw. 311, 312, 417 P.2d 636, 637 (1966). This rule has been followed in denying attorneys' fees in condemnation cases in other states. Housing Authority of the City of Long Branch v. Valentino, 47 N.J. 265, 268, 220 A.2d 196, 198 (1966); Frost v. Cedar County Board of Supervisors, 163 N.W.2d 432, 434 (Iowa 1968); 9.88 Acres of Land v. State, 274 A.2d 139, 140 (Del. 1971); City of Buffalo v. J.W. Clement Company, 28 N.Y.2d 241, 262-263, 321 N.Y.S.2d 345, 364, 269 N.E.2d 895, 908 (1971); Bowers v. Fulton County, 227 Ga. 814, 183 S.E.2d 347, 348 (1971). The eminent domain law, HRS ch. 101, is devoid of any grant of authority to require payment of attorneys' fees or costs except under HRS § 101-27, [3] which provides that defendants in condemnation actions shall be entitled to recover litigation costs and attorneys' fees in the event that eminent domain proceedings are abandoned or discontinued or the property not finally taken for public use. This appears to manifest a legislative intent to preclude such recovery if the property concerned is finally taken for public use. See County of Los Angeles v. Ortiz, 6 Cal.3d 141, 98 Cal. Rptr. 454, 456, 490 P.2d 1142, 1144 (1971). The defendants argue, however, that HRS § 607-24, which provides in pertinent part that [i]n all cases in which a final judgment or decree is obtained against the State ..., any and all deposits for costs made by the prevailing party shall be returned to him, and he shall be reimbursed by the State ... all actual disbursements, not including attorney's fees or commissions, made by him and approved by the court, entitles them at least to an award of costs and expenses, including expert witness' fees. We are unable to agree. Under HRS § 607-24, one is not a prevailing party unless he obtains a final judgment against the state. It is clear from HRS § 101-27, however, that judgment in an eminent domain proceeding is not to be deemed in favor of the defendant and against the plaintiff unless the property sought to be condemned is not finally taken for public use. [4] Therefore, when the state is successful in condemning the property in question, the condemnee cannot be considered the prevailing party and cannot recover for all actual disbursements ... approved by the court under HRS § 607-24. Nevertheless, the defendants urge that attorneys' fees, expert witness' fees, costs and expenses should be included within the measure of just compensation under the United States and Hawaii Constitutions, [5] independent of any express statutory authorization. [6] In Hawaii Housing Authority v. Rodrigues, 43 Haw. 195, 197 (1959), this court adopted the measure of compensation for land taken by the power of eminent domain contained in 4 Nichols, Eminent Domain §§ 12.2 and 12.2[1] (3d ed.): It is well settled that, when a parcel of land is taken for public use by the exercise of the power of eminent domain, the measure of compensation is the fair market value of the land. [Citation omitted.] By fair market value is meant the amount of money which a purchaser willing but not obliged to buy the property would pay to an owner willing but not obliged to sell it, taking into consideration all uses to which the land was adapted and might in reason be applied. [Citations omitted.] This definition of just compensation contains no reference to attorneys' fees or litigation costs. We hold in accordance with the overwhelming weight of authority that attorneys' fees and expenses, including expert witness' fees, are not embraced within the meaning of just compensation for purposes of article I, section 18 of the Hawaii Constitution, Dohany v. Rogers, 281 U.S. 362, 368, 50 S.Ct. 299, 74 L.Ed. 904 (1930); City of Muskegon v. Slater, 379 Mich. 466, 470-471, 152 N.W.2d 652, 654 (1967); Leadville Water Company v. Parkville Water District, 164 Colo. 362, 365-366, 436 P.2d 659, 660 (1967); Lamar v. Urban Renewal Agency of City of Reno, 84 Nev. 580, 581, 445 P.2d 869, 870 (1968); 9.88 Acres of Land v. State, supra, 274 A.2d at 140; Bowers v. Fulton County, supra, 227 Ga. at 815, 183 S.E.2d at 348; County of Los Angeles v. Ortiz, supra, 6 Cal.3d at 148, 98 Cal. Rptr. at 459, 490 P.2d at 1147; 4A Nichols, Eminent Domain, §§ 14.249 [3] and 14.249 [4] (3d ed. 1971). Contra, Dade County v. Brigham, 47 So.2d 602, 604-605 (Fla. 1950). In so holding, we adopt the reasoning of the Supreme Court of Delaware in 9.88 Acres of Land v. State, supra, 274 A.2d at 140: The argument is that the owner is deprived of just compensation when it must expend a substantial portion of the award, founded upon fair market value of the property, for the necessary services of counsel and experts; and this is especially so, says the owner, when the final offer of the condemnor is greatly less than the value ultimately established. The argument appeals to the sense of fairness, but it has no tenable basis in constitutional law... . ... . [A]uthorities propound the rationale of fairness that may motivate legislative relief in this area; but they cast no doubt upon the force and effect of the general rule of constitutional law we here endorse: in the absence of statute, there is no right to counsel fees [and litigation costs] in condemnation cases, and the deprivation of such fees does not violate any constitutional right. If an adjustment in the law of eminent domain is dictated by fairness in this connection, it is a matter for consideration and action by the [legislature].
In Civil No. 17381, Don R. Cowell, the defendants' expert real estate consultant and appraiser, testified that as of August 13, 1965, the date of the taking, the highest and best use of a portion of the Campbell Estate lands situated along the Farrington Highway would be as a subdivision of one-acre farm lots. He further testified that as a result of the taking the remainder property had suffered severance damages in the amount of $255,170, attributable to loss of access to Farrington Highway and the water main running along it and to the unavailability for highest and best use of that remainder land on which a replacement access road would have to be built. These development costs, made necessary by the taking, would have the effect of depressing the market value of the tract as a whole, because [o]bviously, a purchaser buying this acreage to develop it to one-acre farm lots cannot afford to pay as much if he's got to install a road to serve his lots, as when if he had subdivided it right off the highway. Cowell testified that 94% of his severance damage estimate reflected the cost of constructing an access road, a figure which he obtained from an engineer, who was neither identified nor called upon to testify. Counsel for the state objected to the above line of questioning on the grounds that it called for the use of inadmissible hearsay and that it required implementation of the subdivision approach to severance damages, which this court disapproved in Hawaii Housing Authority v. Rodrigues, supra . The circuit court permitted the testimony and denied the state's subsequent motion to strike. Whatever its other defects, Cowell's testimony did not run afoul of the Rodrigues case. In arriving at a measure of severance damage, he merely testified concerning the effect of the taking upon the market value of the remainder property for its highest and best use. In Rodrigues, supra, 43 Haw. at 198, we quoted with approval from State v. Tedesco, 4 Utah 2d 248, 291 P.2d 1028 (1956) as follows: The test is not what the lots will bring when and if ... willing buyers [for each] come alone, but what the tract, as a unit, and as is, platted or not, and in whatever state of completion, will bring from a willing buyer of the whole tract. In State v. Chang, 50 Haw. 195, 436 P.2d 3 (1967), we permitted evidence of a condemnee's development costs to show enhancement of fair market value. There is no reason why we should not permit the use of such testimony to show diminution of fair market value. The fact that the development costs have not yet been incurred and that the subdivision has not been begun are immaterial, since [m]arket value is not limited to the value for the use to which the land is actually devoted, but it may have a potential use value. Hawaii Housing Authority v. Rodrigues, supra, 43 Haw. at 197 (emphasis added). The fact, however, that the defendants could properly introduce evidence relating to potential development costs is not dispositive of the state's claim that the circuit court erroneously permitted Cowell to rely upon the hearsay opinion of an anonymous engineer for 94% of his own opinion concerning severance damages. It is true that `witnesses having the necessary qualifications may give their opinions as to the value of property' and that the extent of such a witness' knowledge goes to the weight to be given such testimony rather than its admissibility. Territory v. Adelmeyer, 45 Haw. 144, 148, 363 P.2d 979, 982-983 (1961); State by Kobayashi v. Heirs of Halemano Kapahi, 48 Haw. 101, 114, 395 P.2d 932, 940 (1964). An expert witness may not, however, serve as a mere conduit for the hearsay opinion, the factual basis of which is not established through evidence, of another expert who does not testify when the expert who does testify lacks the requisite qualifications to render the opinion in his own right. State v. Wineberg, 74 Wash.2d 372, 383-384, 444 P.2d 787, 794 (1968); Dennis v. Prisock, 221 So.2d 706, 711 (Miss. 1969); Arkansas State Highway Commission v. Mahan, 249 Ark. 1022, 1023-1025, 463 S.W.2d 98, 99-100 (1971). [7] To permit Cowell to rely on an engineer's hearsay opinion as to the cost of constructing an access road would violate the rule that an expert's opinion cannot be elicited to supply the substantive facts necessary to support the conclusion. Hubbard v. Quality Oil Company of Statesville, Inc., 268 N.C. 489, 494, 151 S.E.2d 71, 76 (1966); Butcher v. Main, 426 S.W.2d 356, 359 (Mo. 1968). [8] We therefore hold that it was error to permit Cowell's testimony over the state's objection.