City of Harrisburg v. Leigh

• Decision Date: 16 January 2013
• Docket Number: A144466.,082737
• Parties: CITY OF HARRISBURG, an Oregon municipal corporation, Plaintiff–Respondent, v. Ellen LEIGH, Defendant–Appellant.
• Court: Oregon Court of Appeals

254 Or.App. 558

295 P.3d 138

CITY OF HARRISBURG, an Oregon municipal corporation, Plaintiff–Respondent,

v.Ellen LEIGH, Defendant–Appellant.

082737; A144466.

Court of Appeals of Oregon.

Argued and Submitted Oct. 20, 2011.

Decided Jan. 16, 2013.

Adam R. Kelly, Portland, argued the cause for appellant. With him on the briefs were Cynthia M. Fraser and Garvey Schubert Barer.

Andrew P. Noonan argued the cause for respondent. With him on the brief was Long, Delapoer, Healy, McCann & Noonan, P.C.

Before ORTEGA, Presiding Judge, and SERCOMBE, Judge, and HADLOCK, Judge.

SERCOMBE, J.

Defendant appeals a general judgment that condemns real property that she owns, vests title to that property with the City of Harrisburg, and awards her compensation for the taking, and from a supplemental judgment that allows an award of part of her attorney fees and costs. Defendant contends that the trial court erred in awarding just compensation for only the fair market value of the land that was acquired, as opposed to compensating her for the value of the land and improvements to the property. She also contends that the court erred in reducing the amount of her allowed attorney fees because she did not obtain a larger amount of compensation. We agree with both of defendant's contentions. Accordingly, we reverse and remand.

The relevant facts are undisputed. Defendant owned a small parcel of land in Harrisburg. In 1996, mistakenly believing that it owned the parcel, the city constructed a municipal water well and waterworks on the property without defendant's knowledge. Since that time, the city has used the well and waterworks to supply its water utility. After the mistake was discovered in 2007, the city filed claims for adverse possession and easement by prescription, and defendant filed a counterclaim for ejectment. In July 2008, a judgment was entered in defendant's favor. That judgment provided that

“ plaintiff has no right, title, or interest in the Property, is wrongfully withholding possession of the Property and shall relinquish possession of the Property, including, but not limited to, decommissioning the well it constructed on the Property, to defendant before September 1, 2008.”

(Emphasis added.) However, the city failed to relinquish possession of the property or decommission the well prior to September 1, 2008. Instead, on August 27, 2008, the city declared by resolution that the property was needed for public use. SeeORS 35.235(1) (requiring condemnor to declare by resolution or ordinance the need to acquire property for a particular purpose). The next day, the city offered defendant $7,425 as just compensation for the property. Defendant did not accept the city's offer, and, on September 2, 2008—one day after the ejection deadline imposed by the judgment—the city filed this condemnation action. That same day, the city served notice of immediate possession and deposited $7,425 with the court. SeeORS 35.265(1) (immediate possession of the property requires condemner to deposit amount estimated to be just compensation with the court).

At the condemnation trial, defendant asserted that the ejectment judgment conclusively established that she was the owner of the property, including its improvements, and that, accordingly, she was entitled to compensation for the value of the property as improved. Defendant also argued that the city had abandoned any interest it may have had in the well by failing to decommission it by September 1, 2008. The city responded that it owned the well and that defendant was therefore not entitled to compensation for its value. The trial court agreed with the city, concluding as follows:

“As both parties know, the well was constructed on Defendant's property by mistake some years before any controversy arose. After the mistake was discovered, Plaintiff filed a claim for adverse possession and Defendant filed a counterclaim for ejectment. That case was decided in favor of the Defendant landowner. Of particular note was the specific language used in the judgment. After finding that the landowner was entitled to ‘exclusive possession of the property’ and that the city had no ‘right, title, or interest in the property,’ the court ordered the city to ‘relinquish possession of the property, including, but not limited to, decommissioning the well it constructed on the property, to defendant before September 1, 2008.’ * * * From this language, Defendant asserts that since the city did not in fact decommission the well and relinquish possession of the property, that Defendant then became owner of the well and other improvements. From the unambiguous language of the judgment, the city had the right to ‘decommission’ the well. That process includes removing the pump, fencing, etc and cementing the well shaft. If the court had contemplated a ‘forfeiture,’ it could and should have so ordered. By ‘decommissioning’ the well the city would necessarily have the right to remove items like the pump for their use. As it turned out, the city filed a condemnation suit on the first legal day after September 1, 2008. I do not find that the pump, well equipment, fencing, etc was forfeited to Defendant by operation of the court's order in the prior case.”

(Boldface in original.) The court concluded that the value of the unimproved property was $11,000. Accordingly, in a general judgment, the court credited defendant with receiving $7,425, which she had withdrawn from the court, and ordered the city to tender the remaining $3,575 “to the defendant by and through her attorney.”

The court also determined that defendant was entitled to attorney fees. SeeORS 35.346(7)(a) (a defendant is entitled to reasonable attorney fees where the compensation awarded at trial is greater than the condemner's highest written offer of settlement prior to the condemnation action). Defendant requested $63,225.75 in attorney fees. After a hearing, the court entered a supplemental judgment awarding defendant $45,000 in attorney fees and $9,045.35 in costs. In doing so, the court explained that it was

“troubled by the claim that the entire well, pump, enclosure, fence, etc. would be forfeited to Defendant because the City did not vacate by the time set out in the prior court order. I do not feel that this is a reasonable interpretation of the order and I question whether time expended on that issue by Defendant's counsel was reasonable. * * * It is difficult to tell what amount of time was expended on this part of the case. I also note that I felt that the land value claimed by Defendant was substantially inflated. This certainly doesn't mean that the Defendant doesn't get to claim attorney fees, because the statute specifically grants the same but when the verdict is slightly over the offer made by Plaintiff ($7,500 compared to $11,000) and the demand from the landowner ($115,000, down from $150,000) is roughly ten times the value determined, it raises questions about the ‘value’ of attorney services dedicated to proving the inflated amount.”

Defendant filed a satisfaction of general judgment and supplemental judgment, acknowledging that she had received $3,575 in compensation (in addition to the $7,425 that she had withdrawn from the court) and $54,045.35 for attorney fees and costs.

On appeal, defendant reiterates her argument from below that the court erred in concluding that she was not entitled to compensation for the property as improved. She argues that the ejectment judgment “established that [she] was entitled to title and possession of the property and well improvements on the date of condemnation.” In defendant's view, “the only right provided plaintiff in the ejectment judgment is the right, and obligation, to relinquish possession of the property and decommission the well by a specified date (which presumably included removing whatever parts of the well improvement could be removed).” Additionally, defendant contends that the court erred as a matter of law in reducing her attorney fee award.

The city responds, first, that defendant waived her right to appeal both the general and supplemental judgments by acceptingthe award of $3,575 in additional compensation ¹ and the award of $54,045.35 in attorney fees and costs. On the merits, the city argues that the ejectment judgment did not establish defendant's ownership of the well and that the court did not err in reducing the attorney fee award.

We first address the city's contention that defendant waived her right to appeal. The city argues that ORS 35.365² precludes defendant from appealing both judgments and that, even if it does not, defendant waived her right to appeal under the common law by accepting the benefits of both judgments. Defendant responds that ORS 35.365 applies only when a defendant withdraws compensation that has been deposited with the court. She asserts that she did not waive her right to appeal the general judgment awarding compensation because she did not “withdraw[ ] the compensation” from the court; rather, the city tendered compensation to defendant directly through her attorney. Defendant further asserts that she did not waive her right to appeal the supplemental judgment because ORS 35.365applies only to an award of compensation and not to an award of attorney fees and costs. Finally, defendant argues that she did not otherwise waive her right to appeal under the common law because her “appeal is not inconsistent with the acceptance of the benefits.”

Whether ORS 35.365 precludes defendant from appealing either judgment is a question of statutory interpretation. When construing a statute, we examine the text of the statute in context, along with any relevant legislative history, to discern the legislature's intent. State v. Gaines, 346 Or. 160, 171–72, 206 P.3d 1042 (2009).

As noted, ORS 35.365 provides, in part, that,

“[i]f the defendant withdraws the compensation awarded by the court or jury, the defendant waives the right of appeal; and, if ...