Opinion ID: 157699
Heading Depth: 2
Heading Rank: 2

Heading: Landowners’ Cross-Appeal

Text: Not content with one recovery, in their cross-appeal the landowners first challenge the district court’s ruling on summary judgment that the fair rental value of the Simpson formation was the proper measure of damages for both their trespass and their unjust enrichment claims. Instead, the landowners argue, they were entitled to a recovery on each claim. We review de novo the legal determinations made by the district court. See Paradis v. Montrose Mem’l Hosp. , - 12 - 157 F.3d 815, 817 (10th Cir. 1998). In Kansas, a plaintiff is limited to one recovery for a wrong. See York v. InTrust Bank , 962 P.2d 405, 432 (Kan. 1998). “The basic principle of damages is to make a party whole by putting him or her back in the same position as if the injury had not occurred, not to grant a windfall.” Short v. Wise , 718 P.2d 604, 609 (Kan. 1986). To the extent that the landowners claim an entitlement to double the fair rental value, it is foreclosed by the above principle that a plaintiff is limited to one recovery for a wrong, which in this case was Northern’s failure to pay a fair rental for the use of the Simpson formation. However, the landowners argue that Northern was also liable for profits gained as a result of the use of the formation. In support of this claim, they cite Short v. Wise , where Short, the plaintiff, was awarded one-half of the income that Wise, the defendant, received from disposal haulers in breach of the contract between Short and Wise. But for Wise’s actions, these funds would have gone to Short, and the Kansas Supreme Court affirmed the trial court’s determination that Wise had profited unjustly at the expense of Short, and that Wise must restore to Short “that which in equity and good conscience belong[ed] to him.” Id. at 608. In contrast, in this case there is no indication that, but for Northern’s actions of storing gas in the Simpson formation, profits gained as a result would have gone to the landowners. The district court stated that the landowners “offer[ed] - 13 - nothing to show that the profits earned by Northern could reasonably be considered a benefit conferred upon Northern by them.” Aple. Brief, app. A at 18-19. We agree. The benefit that Northern received from the landowners was the use of the Simpson formation without payment of rent, for which the proper measure of damages was, as the district court found, fair rental value.
The landowners next contend that the district court erred in calculating attorney fees based on the lodestar method rather than on their contingency fee contract. As the prevailing party, the landowners were entitled to reasonable attorney fees under Kan. Stat. Ann. § 55-1210(c)(3). In determining the fees, the district court considered, among other factors from Rule 1.5 of the Model Rules of Professional Responsibility, the landowners’ contingency fee contract with their attorneys. However, given the likelihood of success in the suit, the absence of a showing that counsel was precluded from other employment, and the lack of unique time limitations in the case, the court decided that the lodestar method (based on counsel’s time records and hourly rates) was more appropriate. We agree. In Kansas, “[t]he reasonable value of attorney fees lies within the sound discretion of the district court.” Hawkins v. Dennis , 905 P.2d 678, 692 (Kan. - 14 - 1995). The trial judge is an expert in determining the value of legal services, and in so doing may draw on his own knowledge and experience. See City of Wichita v. Chapman , 521 P.2d 589, 599 (Kan. 1974). There is authority for the suggestion that a contingent fee contract should not be considered in determining reasonable attorney fees, except “to establish the employment of counsel and the purpose for which counsel were employed.” Wolf v. Mutual Benefit Health & Accident Ass’n , 366 P.2d 219, 234 (Kan. 1961); see Board of County Comm’rs v. Willard J. Kiser Living Trust , 825 P.2d 130, 146 (Kan. 1992); In re Estate of Robinson , 690 P.2d 1383, 1389 (Kan. 1984). However, other cases from Kansas indicate that, although a contingency fee contract cannot be the only criteria for determining a reasonable fee, it may be considered as one of several factors. See Hawkins , 905 P.2d at 691-92; Farmco, Inc. v. Explosive Specialists, Inc. , 684 P.2d 436, 444 (Kan. App. 1984). Here, the district court considered the landowners’ contingency fee contract among other factors and determined that the lodestar method was more appropriate given the nature of this case. We are unable to say that the court abused its discretion.
The landowners finally argue that the district court abused its discretion both by not allowing the landowners to claim interest as an element of damages - 15 - and in failing to award prejudgment interest on the damages recovered by the landowners. We review the district court’s decision as to prejudgment interest for an abuse of discretion. See Neustrom v. Union Pac. R.R. Co. , 156 F.3d 1057, 1067 (10th Cir. 1998). Although prejudgment interest is not generally allowed on a claim for unliquidated damages, in Lightcap v. Mobil Oil Corp. , 562 P.2d 1, 16 (Kan. 1977), the Kansas Supreme Court carved out an exception to this rule in which the court may, in its discretion, award interest or its equivalent as an element of damages where necessary to arrive at fair compensation. See also Farmers State Bank v. Production Credit Ass’n , 755 P.2d 518, 528 (Kan. 1988). In its ruling on the landowners’ claim for prejudgment interest, the district court stated: Clearly, the general rule is that prejudgment interest is only available where the damages are liquidated. There is no dispute here that the damages were unliquidated. Insofar as plaintiffs’ claim for unjust enrichment is concerned, however, the court concludes that it has some discretion in determining whether or not to award prejudgment interest. After considering the facts of this case, the court concludes that plaintiffs are not entitled to an award of prejudgment interest. For one thing, the court finds that Northern’s conduct in this case was neither willful nor so egregious as to weigh in favor of such an award. In this regard, the court notes there was no evidence to suggest that the initial migration of gas onto plaintiffs’ property was anything other than accidental. Moreover, the court concludes that the jury’s award in this case adequately compensates plaintiffs for the injury suffered and that prejudgment interest is not required to make them whole. Aple. Brief, app. B at 5-6 (citations omitted). Under the abuse of discretion - 16 - standard, the district court will be reversed only if it “made a clear error of judgment or exceeded the bounds of permissible choice in the circumstances.” Skaggs v. Otis Elevator Co. , 164 F.3d 511, 514 (10th Cir. 1998) (quotation omitted). Not only did the court not abuse its discretion in not allowing the landowners to claim interest as an element of damages and in not awarding prejudgment interest, its rulings were eminently reasonable and just. AFFIRMED. - 17 -