Board of County Com'rs of Jefferson County v. Auslaender, 85SC394

• Decision Date: 02 November 1987
• Docket Number: No. 85SC394,85SC394
• Citation: 745 P.2d 999
• Parties: BOARD OF COUNTY COMMISSIONERS OF the COUNTY OF JEFFERSON, State of Colorado, Petitioner, v. Fay AUSLAENDER and Bennett A. Auslaender, and Donald E. Couch, as Treasurer of Jefferson County, Respondents.
• Court: Colorado Supreme Court

Page 999

745 P.2d 999

BOARD OF COUNTY COMMISSIONERS OF the COUNTY OF JEFFERSON State of Colorado, Petitioner, v. Fay AUSLAENDER and Bennett A. Auslaender, and Donald E Couch, as Treasurer of Jefferson County, Respondents.

No. 85SC394.

Supreme Court of Colorado,

En Banc.

Nov. 2, 1987.

As Modified on Denial of Rehearing

Nov. 30, 1987.

Patrick R. Mahan, Co. Atty., H. Lawrence Hoyt, Gay B. Ummel, Asst. Co. Attys., Golden, for petitioner.

Hill & Robbins, David W. Robbins, Ronald L. Wilcox, Denver, for respondents.

QUINN, Chief Justice.

We granted certiorari to review the decision of the court of appeals in Board of County Commissioners v. Auslaender, 710 P.2d 1180 (Colo.App.1985). In reversing the trial court's denial of Fay and Bennett Auslaender's motion for an award of attorney fees, the court of appeals held that, due to the failure of the Jefferson County Board of County Commissioners [county] to engage in good faith negotiations prior to commencing the action, the county's initiation of a condemnation proceeding against the Auslaenders was devoid of a reasonable basis in fact or law and was frivolous, and that the Auslaenders were accordingly entitled to an award of attorney fees. We conclude that the court of appeals reached its decision without the benefit of an adequately developed evidentiary record on the legitimacy of the county's condemnation proceeding, and we thus reverse the judgment and remand the case for further proceedings on the Auslaenders' motion for attorney fees.

This case arises out of a long history of litigation over the use of a road segment which once was part of U.S. Highway 285, abandoned by the State Highway Commission in 1958. In January 1980 Fay Auslaender, who had acquired property adjacent to the north half of old Highway 285, obtained a quiet title decree to the north half of what had been the highway, and in October 1982 Bennett Auslaender, who owned the property adjacent to the south half, obtained a quiet title decree to the south half of old Highway 285. By letter to the county, Bennett Auslaender offered the county a 30-foot wide public easement across the property for $200 and the county's assurance that it would not condemn an additional interest in his or Fay Auslaender's portion of the old roadway. The letter further asserted that he "has every intention to totally resist any condemnation of his property by Jefferson County."

In December 1982 the county authorized an appraisal of the Auslaenders' properties, and on June 30, 1983, passed a resolution directing the county to "carry on negotiations in good faith to attempt to acquire said parcels without resort to eminent domain." The county sent letters of purchase offers, dated June 29, 1983, to each of the Auslaenders. ¹ On July 5, 1983, the county instituted an action in condemnation against the Auslaenders, and on August 18, 1983, passed a resolution attempting to retroactively ratify the filing of that action.

The Auslaenders filed a motion to dismiss on the basis that the county had the duty to engage in good faith negotiations and that its failure to do so deprived the court of jurisdiction over the condemnation action. The district court granted the Auslaenders' motion to dismiss the condemnation petition on two grounds: (1) since failure to agree upon compensation is a prerequisite to the commencement of a condemnation proceeding, see § 38-1-102, 16A C.R.S. (1982), the time between the county's mailing of the letter containing the offer to purchase the property and the filing of the petition did not allow the Auslaenders sufficient time to respond to the county's offer; and (2) that the county's resolution of August 18, 1983, did not effectively ratify the prior filing of the condemnation action.

The Auslaenders then filed a motion for an award of attorney fees pursuant to section 13-16-121, 6 C.R.S. (1983 Supp.), on the basis that the county had no reasonable basis for commencing the condemnation action. ² The county filed a memorandum in opposition to the Auslaenders' motion and requested the court to set the matter for hearing. The court denied the Auslaenders' request for attorney fees without a hearing. It ruled that since the county "has authority to initiate condemnation actions" and since the property sought to be condemned "would appear to be a reasonable subject for condemnation," the dismissal of the county's condemnation action due to "procedural problems" did not rise to the level of a frivolous action.

The Auslaenders appealed the district court's order denying their motion for attorney fees. In reversing the district court's order, the court of appeals held that, while the county might be relieved of its duty to negotiate in circumstances where negotiation would be futile, the county in this case did not provide the Auslaenders with any reasonable opportunity for negotiations. Consequently, in the court of appeals' view, the county's petition in condemnation was without a reasonable basis in fact or law and, in addition, was frivolous and thus subject to an assessment of attorney fees in favor of the Auslaenders. We thereafter granted the county's petition for certiorari to consider the court of appeals' resolution of this matter.

As pertinent here, section 13-16-121, 6 C.R.S. (1983 Supp.), permits a defendant prevailing against a public entity to recover reasonable attorney fees "if the court determines that said action is without reasonable basis or is frivolous." For purposes of section 13-16-121, 6 C.R.S. (1983 Supp.), the term "without reasonable basis" is equivalent to a "groundless" claim or defense. On the basis of our decision in Western United Realty, Inc. v. Isaacs, 679 P.2d 1063 (Colo.1984), a claim or defense is groundless if the allegations of the complaint or answer, while sufficient to survive a motion to dismiss for failure to state a claim or a motion to strike for failure to state a legal defense, "are not supported by any credible evidence at trial." Id. at 1069. "This test assumes that the proponent has a valid legal theory but can offer little or nothing in the way of evidence to support the claim or defense." Id. A claim or defense is frivolous "if the proponent can present no rational argument based on the evidence or law in support of that claim or defense." Id. This standard of frivolousness is not intended to apply to unsuccessful but legitimate efforts to establish a new theory of law or good faith efforts to extend, modify, or reverse existing law. Id. ³

A party filing a motion for an award of attorney fees bears the burden of proving by a preponderance of evidence its entitlement to such an award. See § 13-25-127, 6 C.R.S. (1973) (burden of proof in civil action, except claim for exemplary damages or body execution, "shall be by a preponderance of the evidence"). The party against whom the motion is directed must be given appropriate notice and an opportunity to controvert the motion. See Mission Denver Co. v. Pierson, 674 P.2d 363 (Colo.1984). If the motion for attorney fees is predicated on the lack of a factual basis for an asserted claim for relief or defense, the trial court is obliged to make findings that will permit meaningful appellate review of its disposition of the motion.

Our prior cases hold that a condemning authority must engage in reasonable good faith efforts to negotiate as a jurisdictional prerequisite to the filing of a condemnation action. E.g., City of Thornton v. Farmers Reservoir, 194 Colo. 526, 575 P.2d 382 (1978); Stalford v. Board of County Comm'rs, 128 Colo. 441, 263 P.2d 436 (1953). However, we have never addressed whether the condemning authority is relieved of such obligations when efforts at reasonable good faith negotiations would be futile, see State v. Hurliman, 230 Or. 98, 368 P.2d 724, 731 (1962); 6 Nichols' Eminent Domain § 24.14, at 24-242 (3d ed. 1986), and we do not resolve that question here. What is critical to the instant case is that, although the court of appeals acknowledged in its holding that the county's defense to the Auslaenders' motion for an award of attorney fees was that a governmental entity need not negotiate prior to filing a petition in condemnation when to do so would be futile, 710 P.2d at 1182, the district court never considered whether there was a factual basis, or for that matter a basis in law, for the county's asserted defense to the Auslaenders' request for attorney fees. Notwithstanding this deficiency, the court of appeals ordered an award of attorney fees against the county. In so doing, the court of appeals implicitly determined a critical matter never addressed by the district court, namely, that it would not have been futile for the county to have engaged in negotiations with the Auslaenders prior to commencing the condemnation action and that, therefore, the county's condemnation action was frivolous. ⁴

It is axiomatic that an appellate court "cannot substitute itself as a finder of fact." Gebhardt v. Gebhardt, 198 Colo. 28, 30, 595 P.2d 1048, 1050 (1979). It was the prerogative of the district court to determine in the first instance whether the county's condemnation action was or was not "without reasonable basis" or "frivolous" because of the county's failure to engage in reasonable negotiations with the Auslaenders. The district court, however, failed to provide both the Auslaenders and the county an evidentiary hearing on this factual question. In the absence of an adequately developed record, including findings of fact and conclusions of law on the claim for attorney fees, there is simply no basis in fact or in law to support the court of appeals' determination that the Auslaenders were entitled to attorney fees.

The judgment of the court of appeals is reversed and the case is remanded to that court with directions to return the case to the district court for further proceedings...