State v. Davis

• Decision Date: 20 July 1972
• Docket Number: 5125,Nos. 5124,5126,s. 5124
• Citation: 499 P.2d 663,53 Haw. 582
• Court: Hawaii Supreme Court
• Parties: STATE of Hawaii, Plaintiff-Appellant, v. Alan Sanford DAVIS et al., Trustees under the Will and of the Estate of James Campbell, Deceased, et al., Defendant-Appellees. STATE of Hawaii, Plaintiff-Appellant, Cross-Appellee, v. AMERICAN SECURITY BANK et al., Defendants-Appellees, Cross-Appellants. & 5127.

Page 663

499 P.2d 663

53 Haw. 582

STATE of Hawaii, Plaintiff-Appellant, v. Alan Sanford DAVIS et al., Trustees under the Will and of

the Estate of James Campbell, Deceased, et al.,

Defendant-Appellees.

STATE of Hawaii, Plaintiff-Appellant, Cross-Appellee, v. AMERICAN SECURITY BANK et al., Defendants-Appellees, Cross-Appellants.

Nos. 5124, 5125, 5126 & 5127.

Supreme Court of Hawai'i.

July 20, 1972.

Syllabus by the Court

1. HRS § 101-27, 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, appears to manifest a legislative intent to preclude such recovery if the property concerned is finally taken for public use.

2. If 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.

3. In the absence of statute, there is no right to counsel fees and litigation costs in condemnation cases, and the deprivation of such fees and costs does not violate the constitutional right to 'just compensation.'

4. Evidence of the cost of developing a subdivision is admissible to show diminution of the fair market value of a condemnee's land for its highest and best use and the fact that the development costs have not yet been incurred or the subdivision begun is immaterial.

5. An expert witness may not 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.

6. The mere fear of contingent injury which may never occur, and the happening of which is speculative and uncertain, is not a showing of damage.

Johnson Wong and Warren H. Higa, Deputy Attys. Gen., Honolulu (George Pai, Atty. Gen., and Richard Y. C. Au, Deputy Atty. Gen., on the briefs), for appellant.

Charles B. Dwight, III, Honolulu (Ashford & Wriston, Honolulu, of counsel), for appellee.

Before RICHARDSON, C. J., and MARUMOTO, ABE and LEVINSON, JJ., and Circuit Judge MENOR in place of KOBAYASHI, J., disqualified.

LEVINSON, Justice.

In 1965, the state of Hawaii commenced four eminent domain proceedings under HRS ch. 101 (then RLH 1955, ch. 8, as amended) against certain parcels of land belonging to the Campbell Estate, for the public purpose of constructing portions of the H-1 Interstate Highway from the Palailai interchange to the Kunia interchange (Civil Nos. 17197 and 17295), Kunia Road (Civil No. 17380), and Farrington Highway from Barber's Point Road to Piliokoe Gulch, at Honouliuli, Ewa, Oahu (Civil No. 17381). ¹ Jury verdicts were returned in favor of the defendants, the trustees of the Campbell Estate, for just compensation in the amounts of $52,250, $608,000 (including severance damages of $23,039), $39,000, and $382,717 (including severance damages of $200,000), respectively. ² In addition, the court allowed the defendants as part of just compensation attorneys' fees, expert witness' fees, costs and expenses in the total amount of $120,238.93. This additional allowance was error.

The four proceedings have been consolidated for purposes of appeal. The state of Hawaii, the appellant and cross-appellee herein, argues 1) that the circuit court erred in awarding the defendants attorneys' fees, expert witness' fees, costs and expenses, and 2) that the circuit court erred in permitting testimony relating to the effect of the taking in the event that the defendants should elect to develop certain remainder lands for their highest and best use. The defendant trustees, the appellees and cross-appellants herein, urge that the circuit court erred in refusing to admit testimony relating to severance damages which the defendants would allegedly suffer continent upon certain possible future economic conditions.

I. THE APPEAL OF THE STATE OF HAWAII

A. Attorneys' Fees, Expert Witnesses' Fees, Costs, and Expenses in Eminent Domain Proceedings

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. 229, 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; 4 A 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).

B. Cost of Developing Remainder Lands for Highest and Best Use

In Civil No. 17381, Don R. Cowell, the defendants'...