City of Minnetonka v. Carlson, No. 47916

• Citation: 265 N.W.2d 205
• Decision Date: 14 April 1978
• Docket Number: No. 47916
• Parties: CITY OF MINNETONKA, Respondent, v. Clarence Dwight CARLSON et al., Appellants.
• Court: Supreme Court of Minnesota (US)

Page 205

265 N.W.2d 205

CITY OF MINNETONKA, Respondent, v. Clarence Dwight CARLSON et al., Appellants.

No. 47916.

Supreme Court of Minnesota.

April 14, 1978.

Syllabus by the Court

Where landowners facing condemnation proceedings employ an attorney under a contingent fee arrangement based on the commissioners' award, but the condemnation proceeding is later abandoned, the landowners may recover under Minn.St. 117.195 the reasonable value of their attorneys' services up to the time condemnation was abandoned.

Mastor & Bale, Richard J. Gunn, David R. Knodell and John D. Flanery, Minneapolis, for appellants.

Deborah Hedlund, City Atty., Minnetonka, for respondent.

Heard before PETERSON, KELLY, and IRVINE, JJ., and considered and decided by the court en banc.

PETERSON, Justice.

Following the City of Minnetonka's abandonment of condemnation proceedings against land owned by appellants, the district court granted appellants' motion pursuant to Minn.St. 117.195 for appraisers' fees but denied that part of appellants' motion seeking attorneys fees. On appeal from the district court's order, we reverse that portion which concerns attorneys fees.

Appellants own three parcels of land which the City of Minnetonka wished to obtain for park and recreational purposes. The city obtained two separate appraisals of the three parcels, one appraisal valuing them at $264,000, the other at $240,000. On the basis of these appraisals the city began condemnation proceedings in district court. Appellants retained Attorney John Flanery to represent them under a contingent fee agreement which provided that Flanery would receive one-third of the amount by which the condemnation awards exceeded $150,000.

The city's petition to condemn was granted and three commissioners were appointed pursuant to Minn.St. c. 117 to determine an award. The commissioners returned awards for the three parcels totaling $668,475, more than $400,000 greater than the highest of the two private appraisals. Because of the size of the awards the city decided to abandon the condemnation.

At that point Mr. Flanery associated the law firm of Mastor & Mattson, Ltd. (now Mastor & Bale, Ltd.), to assist him in contesting the legality of the city's abandonment. A hearing was held and the district court ruled that the city could abandon the condemnation proceeding. No appeal was taken from that order and no issue concerning the legality of the abandonment is before us now.

Following the unsuccessful challenge to the abandonment, appellants moved for an order pursuant to Minn.St. 117.195 ¹ directing the city to pay their reasonable costs and expenses, including attorneys fees. The district court ordered the city to pay appellants $1,500 for appraisal expenses but denied appellants any recovery of attorneys fees on the ground that they could show no out-of-pocket payment of attorneys fees. On appeal from that order, appellants seek reasonable attorneys fees in three distinct categories: (1) legal services up to the time condemnation was abandoned; (2) legal services in contesting the abandonment before the district court; (3) legal services in bringing this appeal.

In our view the award of fees for services up to the time condemnation was abandoned is governed by State, by Head v. Paulson, 290 Minn. 371, 188 N.W.2d 424 (1971). That case is closely analogous to the present case. In Paulson the landowners had retained counsel under a contingent fee arrangement based on the expected commissioners' award, but when the commissioners returned a higher-than-expected award the condemnation proceedings were abandoned. We held that under Minn.St.1969, § 117.16, the predecessor to the present statute, the landowners were entitled to recover the reasonable value of their attorneys' services. We went on to state that the contingent fee arrangement was only one of the factors which should be considered in determining reasonable value:

" * * * (W)hat constitutes the reasonable value of the legal services is a question of fact to be determined by the evidence submitted, the facts disclosed by the record of the proceedings, and the court's own knowledge of the case. * * * Absent any statutory limitations, allowances should be made with due regard for all relevant circumstances, including the time and labor required; the nature and difficulty of the responsibility assumed; the amount...