Joseph B. Doerr Trust v. Cent. Fla. Expressway Auth.

• Decision Date: 05 November 2015
• Docket Number: No. SC14–1007.,SC14–1007.
• Citation: 177 So.3d 1209
• Parties: JOSEPH B. DOERR TRUST, et al., Petitioners, v. CENTRAL FLORIDA EXPRESSWAY AUTHORITY, et al., Respondents.
• Court: Florida Supreme Court

177 So.3d 1209

JOSEPH B. DOERR TRUST, et al., Petitioners,

v.CENTRAL FLORIDA EXPRESSWAY AUTHORITY, et al., Respondents.

No. SC14–1007.

Supreme Court of Florida.

Nov. 5, 2015.

Craig B. Willis and Joe W. Fixel of Fixel & Willis, Tallahassee, FL; and Major Best Harding of Ausley & McMullen, P.A., Tallahassee, FL, for Petitioners.

Beverly A. Pohl of Broad and Cassel, Fort Lauderdale, FL; Richard Nash Milian and Edgar Lopez of Broad and Cassel, Orlando, FL, for Respondents.

LEWIS, J.

This case is before the Court for review of the decision of the Fifth District Court of Appeal in Orlando/Orange County Expressway v. Tuscan Ridge, LLC (Tuscan Ridge II), 137 So.3d 1154 (Fla. 5th DCA 2014). In the decision, the district court ruled upon a question that it certified to be of great public importance. We have jurisdiction. Art. V, § 3(b)(4), Fla. Const.

FACTS AND BACKGROUND INFORMATION

Introduction

Article X, section 6, of the Florida Constitution governs eminent domain. Subsection (a) of that provision states that "[n]o private property shall be taken except for a public purpose and with full compensation therefor paid to each owner or secured by deposit in the registry of the court and available to the owner."

This case involves an award of attorney's fees in an eminent domain proceeding. The award of such fees is governed by section 73.092, Florida Statutes (2014),¹ which provides, in pertinent part:

(1) Except as otherwise provided in this section and s.73.015, the court, in eminent domain proceedings, shall award attorney's fees based solely on the benefits achieved for the client.

(a) As used in this section, the term "benefits" means the difference, exclusive of interest, between the final judgment or settlement and the last written offer made by the condemning authority before the defendant hires an attorney. If no written offer is made by the condemning authority before the defendant hires an attorney, benefits must be measured from the first written offer after the attorney is hired.

....

(b) The court may also consider nonmonetary benefits obtained for the client through the efforts of the attorney, to the extent such nonmonetary benefits are specifically identified by the court and can, within a reasonable degree of certainty, be quantified.

(c) Attorney's fees based on benefits achieved shall be awarded in accordance with the following schedule:

1. Thirty-three percent of any benefit up to $250,000; plus

2. Twenty-five percent of any portion of the benefit between $250,000 and $1 million; plus

3. Twenty percent of any portion of the benefit exceeding $1 million.

(2) In assessing attorney's fees incurred in defeating an order of taking, or for apportionment, or other supplemental proceedings, when not otherwise provided for, the court shall consider:

(a) The novelty, difficulty, and importance of the questions involved.

(b) The skill employed by the attorney in conducting the cause.

(c) The amount of money involved.

(d) The responsibility incurred and fulfilled by the attorney.

(e) The attorney's time and labor reasonably required adequately to represent the client in relation to the benefits resulting to the client.

(f) The fee, or rate of fee, customarily charged for legal services of a comparable or similar nature.

(g) Any attorney's fee award made under subsection (1).

(3) In determining the amount of attorney's fees to be paid by the petitioner under subsection (2), the court shall be guided by the fees the defendant would ordinarily be expected to pay for these services if the petitioner were not responsible for the payment of those fees.

Tuscan Ridge I

The Orlando–Orange County Expressway Authority, now the Central Florida Expressway Authority (the Authority),² began a condemnation proceeding to acquire 9.81 acres of land identified as Parcel 406. Orlando/Orange Cnty. Expressway Auth. v. Tuscan Ridge, LLC (Tuscan Ridge I ), 84 So.3d 410, 411 (Fla. 5th DCA 2012). Parcel 406 was owned by Joseph B. Doerr, as Trustee of The Joseph B. Doerr Revocable Living Trust dated 9/9/94 (Doerr). Id. In December 2005, Doerr conveyed fifteen percent of the Trust's interest in the land to Ministry Systems, Inc. (Ministry), but the transfer was not recorded until July 31, 2006. Id.

On June 5, 2006, the Authority submitted to Doerr a presuit written offer to purchase Parcel 406 for $4,914,221. Id. Doerr rejected the offer, and in August 2006, the Authority filed an action to condemn the property. Id.³ In February 2008, a jury trial was held to determine the value of Parcel 406. Id. at 412. The jury found that the land had a fair market value of $5,744,830. Id.

Thereafter, Doerr and Ministry (collectively the Landowners) filed a motion for attorney's fees. Id. The Authority sought to limit the fees to the benefits achieved formula under section 73.092(1), which generated an award of $227,652.25. Id. On the other hand, the Landowners asserted that they were entitled to attorney's fees under section 73.092(2), which requires a trial court to consider qualitative and quantitative factors in determining the amount of a fee award. Id. The trial court awarded fees under subsection (2) because it concluded that the Authority's presuit written offer was insufficient to calculate the benefits achieved by each Landowner in the final judgment so as to permit a fee award under subsection (1). Id. at 414. Applying the factors listed in section 73.092(2), the trial court awarded the Landowners $816,000 in attorney's fees for the proceedings that involved the valuation of Parcel 406. Id. at 412–13.

The Fifth District Court of Appeal reversed. Id. at 411. The district court concluded that the presuit offer was not so indefinite that the benefits achieved by the Landowners could not be determined. Id. at 416. In its decision, the Fifth District noted that this case had been over-litigated, and the parties blamed each other for the significant attorney's fees incurred:

For the valuation proceedings, [the Landowners' law firm] claimed it was entitled to be paid for 2,700.3 attorney hours at the rate of $350 or $375 per hour, and 460 paralegal hours at the rate of $120 per hour. Nearly 2,000 of the attorney hours pertained to services performed by [the] Landowners' lead counsel.... The fees collected by [the Authority's] attorneys were similarly sizable. [n.5]

[N.5.] For the valuation proceedings alone, [the Authority] incurred 2,888 attorney hours and 1,005 paralegal hours, for which it compensated its attorneys a total of $672,000. It was also paid $150,000 for the cost phase of the trial.

Id. at 413. Although the Fifth District concluded that the attorney's fees for the valuation proceedings were limited to those allowed by section 73.092(1), it remanded to the trial court for consideration of the Landowners' claim that the application of the benefits achieved formula violated their constitutional right to full compensation because the Authority caused excessive litigation.Id. at 418–19.

Tuscan Ridge II

On remand from the Fifth District, the trial court found that the Authority had engaged in a "clear pattern" of excessive litigation. The first source of excessive litigation was described as follows:

Early on in these proceedings, after the Order of Taking was entered in August of 2006, [the Authority] made a decision to aggressively litigate this case to the potential detriment of [the Landowners'] right to full compensation. Previously, the parties had agreed as to the highest and best use of the property, each side had a real estate appraiser to value the property as though vacant, and had agreed to try the case in early 2007. [The Authority] retained an economist, Henry Fishkind. [The Authority] then submitted Fishkind's report in late November of 2006.

In his November 2006 report, Fishkind employed an economic development approach to value the Doerr property based upon a hypothetical redevelopment of the property, although the property had been appraised by both parties' property appraisers as though vacant. Using the development approach, Fishkind made 16 assumptions (e.g., the maximum square footage of buildings that could be built on the Doerr property; the cost of constructing such buildings; rental rates for buildings; vacancy rates for such buildings; insurance costs for such buildings; utility costs for such buildings; and real estate taxes for such buildings). The most important assumption was that 56,800 square feet of improvements was the maximum amount of building space that could be built on the property. Fishkind relied on other sources as well in making his assumptions which formed the predicate underlying his analysis.

To competently represent [the Landowners], it was necessary for [their] attorneys to determine and then rebut any faulty assumptions of Fishkind. In order to do so it was necessary for [the Landowners] to retain additional expert witnesses and request further services of previously retained experts to challenge Fishkind's faulty assumptions. Challenging Fishkind's assumptions greatly increased the number of hours [the Landowners'] attorneys spent on the case.

[The Landowners'] efforts to have Fishkind stricken as a witness throughout the pre-trial period to avoid unnecessary excessive litigation were vigorously contested by [the Authority]. Fishkind was ultimately not allowed to testify before the jury due to a ruling made by the Court.

The trial court also found that the Authority caused excessive litigation by spending twice as much time deposing the Landowners' experts as the Landowners spent deposing the Authority's experts.

The trial court noted that all of the attorney's fees expert witnesses who testified as to what would constitute a reasonable fee, including the Authority's expert, agreed that it would be unreasonable, given the circumstances of this case, to limit the Landowners to the $227,652.25 capped fee that the benefits achieved formula in section 73.092(1) generated.⁴ The court explained:

Applying this Court's conclusion that

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