Court Opinion

ID: 9705142
Source: CourtListenerOpinion
Date Created: 2023-08-26 00:57:54.356731+00
Date Added: 2024-06-11T18:22:08.276163
License: Public Domain

VOGEL, Justice,
dissenting.
I dissent. The majority, in the guise of applying the law of previous cases, is reversing those cases and making new law, which I think is bad law. The purpose of the statute allowing attorney fees in eminent-domain actions was to make certain that the landowner received the full “just compensation” for his land, without diminution by attorney fees. The majority opinion will leave landowners with less than just compensation.
The trial court in the present case did precisely what it was instructed to do by our previous cases. It considered all the “standards, guidelines, and factors to be considered” set out in United Development Corporation v. State Highway Department, 133 N.W.2d 439 (N.D.1965); Morton County Board of Park Commissioners v. Wetsch [first case], 136 N.W.2d 158 (N.D.1965); Morton County Board of Park Commissioners v. Wetsch [second case], 142 N.W.2d 751 (N.D.1966); Municipal Airport Authority of the City of Fargo v. Stockman, 198 N.W.2d 212 (N.D.1972); and Sauvageau v. Hjelle, 213 N.W.2d 381 (N.D.1973). Those cases require the trial court to consider “the character of the services rendered by the attorney, the results which the attorney obtained for his client, the customary fee charged for such services, and the ability and skill of the attorney rendering the services.”
The trial court in the case now before us held that the fee of $71,213.13 “is a reasonable and proper fee in the light of the litigation, the preparation therefor, the skill of the presentation, the results obtained, and the diligence shown by counsel for the defendant owners.” It mentioned, also in the memorandum opinion, that counsel for the defendants “handled the testimony of the expert witness of the plaintiff with skill and dexterity based upon the pretrial work *648they had accomplished in the case.”1 In the court’s order it stated that it had “been shown to the Court that counsel for the defendants entered into a contingent fee contract, providing for one-third of the increase, between the original offer and the verdict of the jury, the contingent fee contract being the kind in general use in North Dakota in similar cases, . . . ” and that the jury verdict in the case caused a settlement to be made in another case involving the City of Bismarck.
The majority of this court now reverses the holdings of those prior cases, tells the trial court that it considered the wrong elements, and sets up new standards to be followed in the future in similar cases. The majority now holds that the trial judge must “assign specific hourly rates based upon the attorney’s experience and reputation” which “can be adjusted upwards or downwards on the basis of objective evaluation of the complexity and novelty of the litigation and the corresponding degree of skills displayed by the attorney.” This is new, and it effectively reverses all of our prior cases on the subject, and will deprive some landowners of part of the just compensation to which they are entitled.
I disagree with those parts of the majority opinion which say that in Stockman, supra, the court “erroneously included ‘contingent fee’ . . . as a standard, factor, element, and guideline in determining reasonable attorney fees.” The court in that case, and in all other cases, properly considered the contingent fee, as I will demonstrate shortly.
The impression “that in determining reasonable attorney fees the contingency fee arrangement could be considered” was not “erroneous,” as the majority says, but correct according to prior law.
The briefs in the prior cases show that in the United Development case the contract of the landowners with the attorneys was for a $1,000 retainer fee, plus a ten percent contingent fee to one firm of attorneys and a three percent contingent fee to another. The trial court, in its order as to the attorney fees, noted that the minimum-fee schedule of the State Bar Association in effect at that time listed nine relevant factors to be taken into consideration in determining fees. One of those factors was “the contingency or the certainty of the compensation.” The court noted that the contingent fee pursuant to the agreement came to $4,650 and that counsel testified that they thought their clients, when presented a detailed billing of the work involved, would pay additional attorney fees. The trial court said, “However, the Court cannot speculate on what this fee may be or whether the clients will agree to pay any additional fee, nor can the Court, in my opinion, award as a reasonable attorney’s fee any amount over and above the actual attorneys’ fees as agreed upon between the parties to the lawsuit.” The court therefore ordered the payment of $4,650 as a reasonable fee, and this court affirmed it. This shows that both courts considered the contingency of the fee, and both determined that contingent fees werej in that case reasonable.
The same can be said of the two Wetsch cases. In the first of those cases time records were filed and fees computed on an hourly basis, totaling $1,489, and yet the trial court made and this court affirmed the award of $3,967, based upon the contingent fee agreement between client and attorney — about 2½ times the hourly fee. How, then, can it be said, as the majority opinion says, that the term “customary fee charged,” as interpreted by Justice Strutz and other members of this court, “has reference to the hourly rate or its equivalent rather than a contingency fee arrangement”? In all of the prior cases the contingent fee was recognized as the customary fee. How can the majority say that “The number of hours spent in total and the rate per hour are the predominant factors in determining reasonable attorney fees”? *649The hours spent were irrelevant or unimportant in all of our prior cases. How can it be said “that an erroneous impression was left that in determining reasonable attorney fees the contingency fee arrangement could be considered . . . ”? In all of the prior cases it was considered, and correctly so.
In the Stockman case, supra, the district judge, who had represented the United States Government in eminent-domain cases, said:
“Contingent fees have the approval of the courts and the legal profession. The percentage of 33½ over the offer which was fixed by the contract between the client and counsel in this case, is that very same percentage suggested for eminent domain cases in the recent fee schedule published by the North Dakota State Bar Association. My own experience confirms that this type of fee and the percentage here employed is usual and customary in eminent domain cases.”
This court affirmed the award.
In the Sauvageau ease, the State did not even contest the reasonableness of the attorney fee of one-third as a general proposition, but only argued, without success, that it should not be applied in that ease because the State had revised its appraisal upward before the trial commenced.
In all of these cases the trial court obviously considered the contingent fee agreed upon between attorney and client, and considered that fee to be a customary fee, and determined that it was proper. In every case this court approved the fee as determined by the trial court.
The district court in the case now before us went through exactly the same process as the district courts in all of our prior cases cited, and came to the same result: that the contingent fee was customary, that it should be considered, and that it was reasonable.
Now a majority of this court, in the face of all of these prior holdings, says that “customary fee” does not mean what it previously has been held to mean, but means something else. It holds that the starting point in arriving at a “reasonable fee” is not the customary contingent fee, but an hourly fee basis; and that “reasonable fee” is not the fee as determined in the previous cases, but is a fee determined under entirely new guidelines, taken partly from antitrust cases, partly from crime reparation cases, partly from guidelines for attorney fees in criminal cases where attorneys are appointed to work on an hourly basis, and partly on mere assertion, but not from our own five previous decisions.
We have held many times that trial judges themselves are experts on what is a reasonable attorney fee. Wetsch, supra, 142 N.W.2d at 753; Stockman, supra, 198 N.W.2d at 215; Schollmeyer v. Saxowsky, 211 N.W.2d 377, 388 (N.D.1973). We should respect that expertise and affirm the award in this case as we did in the earlier cases cited. Similarly, members of this court have some familiarity with eminent-domain actions and attorney fees. I am compelled to say that I believe I have tried more such cases than any other person in North Dakota, both for taking agencies and landowners, and both in Federal court and State court. In some of them the late Justice Strutz was also attorney. I can say with assurance that for the past 25 years more than 90 percent, and perhaps 100 percent, of fee arrangements between landowners and their attorneys in eminent-domain actions have been based upon a contingent fee. Since lawyers must be paid one way or another, it is impossible for us to say that contingent fees are unreasonable per se, since clients almost invariably choose to pay their attorneys that way. I think we must conclude that a contingent fee is presumptively reasonable. This court on prior occasions has come to that conclusion, but the present majority apparently disagrees. No one can say that contingent fees are not customary in this State, but the majority now says that “customary fee” doesn’t mean what is customary between the client and the attorney, but means something else. I don’t know what else it can mean.
*650The majority fails to give the expertise of the district judge in fixing attorney fees a decent respect. It gives no respect to Rule 52(a) or our own precedents, which should compel us to sustain and affirm the finding that the fee awarded by the district court was reasonable,
A fundamental objection to the majority opinion arises from its easy assumption that a reasonable fee is necessarily based upon an hourly rate.2 Any lawyer of experience can recite instances where lawyers earned fees of thousands of dollars by only a few letters or phone calls, taking only a few hours. But any lawyer who can earn fees that way does so only because he has acquired by experience over many years, involving thousands of uncompensated or poorly compensated hours of work, the expertise required to earn a large fee in a short period of time. Lawyers may spend a lifetime preparing for one magnificent hour. When that hour arrives, they deserve more than piecework rates.
Finally, the unfairness of the majority’s holding is illustrated by the sentence in the opinion which says:
. . under § 32-15-32, NDCC, once the recovery is greater than the amount offered from which the appeal is taken reasonable attorney fees are allowable without regard to the amount recovered in excess of the offer.”
In plain language, the statute, together with the remainder of the holding of the majority, means that if the landowner is unsuccessful in getting an award of more than the offer of the taking agency, he gets no attorney fees, while if he is successful, he gets attorney fees based primarily upon hourly rates. In other words, he gets the worst of both worlds, and so does his attorney. The attorney fee is contingent upon getting as much as the offer, says the majority, but it cannot be contingent upon getting a percentage of the increase. The majority should either allow contingent fees in all cases, in which instance the attorney and client would get the benefit of a large increase and take the risk of no increase or a small increase, or it should require the payment by the taking agency of attorney fees in all instances, successful or unsuccessful. When the law forbids the award of any attorney fees to unsuccessful landowner litigants, this court should in all fairness permit those who take that risk to make contracts for contingent fees in the hope that substantially higher awards will be obtained. This is a case of heads, the State wins, and tails, the landowner loses.
I would affirm the order of the district court.

. The appraisal expert of the City was a nationally known expert. The undersigned knows, from personal experience, that effective cross-examination of him requires considerable preparation and skill.

. As we said in Hughes v. North Dakota Crime Victims Reparations Board, 246 N.W.2d 774, 111 (N.D.1976), “If court-awarded attorney fees are to be based primarily upon time spent in preparation, the result would be that the most competent, experienced lawyer would receive the lowest award.”