Oklahoma Turnpike Authority v. New Life Pentecostal Church of Jenks

• Court: Oklahoma Supreme Court
• Writing for the Court: OPALA; HARGRAVE; HODGES; HODGES
• Citation: Oklahoma Turnpike Authority v. New Life Pentecostal Church of Jenks, 870 P.2d 762, 1994 OK 9 (Okla. 1994)
• Decision Date: 18 January 1994
• Docket Number: No. 79185,79185
• Parties: The OKLAHOMA TURNPIKE AUTHORITY, Plaintiff-Appellant and Counter-Appellee, v. NEW LIFE PENTECOSTAL CHURCH OF JENKS; Freddie Young, in his individual capacity and as Trustee of the Church; Earl Howard, in his individual capacity and as Trustee of the Church; Frank Jones, in his individual capacity and as Trustee of the Church; Hayden Barger, in his individual capacity and as Trustee of the Church; Ray E. Bauman and Jessie Bauman; Board of County Commissioners of Tulsa County; and John F. Cantrell, County Treasurer of the County of Tulsa, State of Oklahoma, Defendants-Appellees and Counter-Appellants.

Page 762

870 P.2d 762

1994 OK 9

The OKLAHOMA TURNPIKE AUTHORITY, Plaintiff-Appellant and Counter-Appellee, v. NEW LIFE PENTECOSTAL CHURCH OF JENKS; Freddie Young, in his individual capacity and as Trustee of the Church; Earl Howard, in his individual capacity and as Trustee of the Church; Frank Jones, in his individual capacity and as Trustee of the Church; Hayden Barger, in his individual capacity and as Trustee of the Church; Ray E. Bauman and Jessie Bauman; Board of County Commissioners of Tulsa County; and John F. Cantrell, County Treasurer of the County of Tulsa, State of Oklahoma, Defendants-Appellees and Counter-Appellants.

No. 79185.

Supreme Court of Oklahoma.

Jan. 18, 1994.

Rehearing Denied March 9, 1994.

On Appeal to the District Court, Tulsa County; Donald C. Lane, Judge.

In a condemnation proceeding by the Oklahoma Turnpike Authority, the jury award exceeded the court-appointed commissioners' award by more than 10%. The trial court awarded (a) attorney's fees based on the landowner's contingent-fee agreement; (b) expert witness fees; and (c) court costs with some litigation expenses. Other litigation expenses were denied. The Turnpike Authority's appeal assigns error in awarding the landowner an attorney's fee based on a 40% contingent-fee agreement, and in awarding expert witness and jury fees with expenses. By its counter-appeal the landowner seeks relief from the trial court's refusal to allow certain litigation expenses.

THE TRIAL COURT'S POST-CONDEMNATION-AWARD ORDER IS AFFIRMED IN PART AND REVERSED IN PART AND THE CAUSE REMANDED FOR FURTHER PROCEEDINGS NOT INCONSISTENT WITH THIS PRONOUNCEMENT.

Richard W. Gable, Gable & Gotwals, and Thomas G. Hilborne, Jr., Hilborne & Weidman, and Randall S. Pickard, Pickard, Miller & Gray, Tulsa, for plaintiff-appellant.

Robert J. Nichols, John L. Boyd, Boyd & Nichols, Tulsa, for defendants-appellees.

OPALA, Justice.

Two issues are tendered by the condemnor, Oklahoma Turnpike Authority [Authority]: Did the trial court err in assessing against the condemnor attorney's, expert witness, jury, and court reporter fees as well as a witness' travel expense? and If an attorney's fee may be allowed, is the landowner's contract for a 40% contingency interest reasonable? We answer the first question in the negative as for the attorney's, expert witness and jury fees, and in the affirmative as to the court reporter fee and witness' travel expense. We respond to the second question in the affirmative. The landowner's counter-appeal presents an additional question: Are the nisi prius rejected litigation expenses allowable against the Authority? Our answer is in the negative.

The Oklahoma Turnpike Authority [Authority] brought this condemnation action to acquire a tract of land owned in fee simple by New Life Pentecostal Church of Jenks [landowner]. The property is necessary for the construction of the Tulsa South Bypass known as the Creek Turnpike. The Authority sought to condemn the property when the landowner declined its $350,000.00 offer. The landowner retained legal counsel on a contingent-fee basis. The court-appointed commissioners determined the land to be valued at $471,000.00. The verdict was in the amount of $535,400.00. The landowner then pressed for an attorney's fee of $77,275.18 based on its obligation to the lawyer under the contingent-fee contract. ¹ Also sought was $20,315.26 in costs and litigation expenses. The trial court awarded the landowner $77,275.18 in attorney's fee and $12,771.20 in costs incurred for expert witness, jury and court reporter fees and a witness' travel expense. It rejected landowner's quest for litigation expenses of $3,483.06. The Authority assigns error in the trial court's award of an attorney's fee, expert witness fees and costs. If a counsel-fee award is the landowner's due, the Authority challenges the reasonableness of the 40% contingent-fee contract. The landowner's counter-appeal is for corrective relief from the disallowance of litigation fees.

I THE TEACHINGS OF NEW

The trial court approved an assessment against the condemnor for expert witness fees ($12,000), jury fee ($70), court reporter fee ($691.20) and a witness' travel expense ($10.00); it disallowed $3,483.06 for copies, exhibit enlargements and mounting, photographs, model of church building, trial supplies, enlargements and maps.

Oklahoma Turnpike Authority v. New ² settles a similar issue. New teaches that in condemnation proceedings the Authority qua condemnor is subject to an assessment of attorney's, appraisal, and engineering fees (27 O.S.1991 §§ 9, 11), ³ expert witness fees (66 O.S.1991 §§ 55, 57) ⁴ and of court costs (66 O.S.1991 §§ 55, 56). ⁵ But New rejects the allowability of other litigation expenses--i.e., copying, mileage, telephone and telefax expenses, and postage. The latter items constitute components of the lawyer's overhead. ⁶

Applying the teachings of New to today's case, we hold that the trial court was correct in (a) awarding against the Authority counsel fee, expert witness fees and a jury fee and (b) disallowing the claimed litigation expenses. Because there is no warrant in our statutory or decisional law for assessing against a condemnor (1) court reporter fee [$691.20] and (2) a witness' travel expense [$10.00], we reverse the trial court's allowance of these items of expense.

II REASONABLE ATTORNEY'S FEES IN CONDEMNATION PROCEEDINGS

The Authority asserts the landowner's 40% contingent-fee agreement with the lawyer is unreasonable. Our first task is to determine the extent of the landowner's contractual obligation to its counsel in the event the jury award exceeds the condemnor's initial offer by the statutorily mandated minimum of 10%.

A.

The Employment Agreement Obligated The Landowner To a 40%

Attorney's fee

If an ambiguity arises from language used in a contract for the employment of legal counsel, which is not caused by extrinsic facts, construction of a provision presents a question of law for initial resolution of the nisi prius court. ⁷ Based on our four-corners' examination of the disputed document, we hold that its terms are clear and unambiguous.

The pertinent text of the agreement provides that if the case goes to a verdict, the landowner is obligated to pay an attorney's fee based on a formula of "forty ... per cent of the difference between the amount of the verdict [$535,400] plus interest less costs [$7,787.94] and the amount of the final offer of the condemnor [$350,000] before suit was filed." ⁸ The trial court's award of $77,275.18 to the landowner for its counsel-fee obligation is based on this formula.

The Authority asserts that the landowner's counsel-fee obligation is governed by another provision in the contract which states that "[i]n no event will ... [the landowner] owe more than fifteen ... per cent of the difference between the Court appointed Commissioner's award [$471,000] and the offer [$350,000] in addition to any fee awarded by the court to be paid by the Condemnor." ⁹ We deem the quoted provision inapposite here. When read in conjunction with the entire paragraph in which it is found, the pertinent text is applicable only if, during the period between the date of the agreement and the jury award, two events should occur: (a) there is a "change in interpretation" of the court-awarded fees or (b) a "change in legislation." Neither of these events has occurred in this case. Moreover, assuming the contested contract provision were invocable here, we must construe its terms to mean that if the court-awarded fee is less than 40% (computed according to the prescribed formula), the landowner is obligated to supply the deficit up to 15%.

We hence conclude that the dispositive issue is whether the trial court's 40% award for landowner's counsel-fee obligation--set for the only amount that could fully relieve the landowner of its contractual duty to its lawyer--is in fact or in law excessive. If so, the landowner may then legitimately be expected to supply a part of the fee out of its own recovery.

B. The KAMO-Liability Standard For Attorney's Fees

Root v. KAMO Elec. Coop., Inc. ¹⁰ teaches that in condemnation proceedings a landowner's quest for an attorney's fee to be awarded against the condemnor is measured by the extent of the landowner's obligation to its lawyer unless, of course, the obligation is excessive. ¹¹ When there is any doubt as to the quantum of the fee we look to the limits on reasonableness or excessiveness of the owner-incurred obligation. If the fee obligation is not excessive, the landowner must be relieved of counsel-fee liability and its burden may be shifted to the defeated condemnor.

This court should never be unmindful that a landowner is entitled to be compensated fully when its property is taken by the government in the exercise of the eminent domain power. Art. 2, § 24, Okl. Const. ¹² The constitution's mandate, both state and federal, ¹³ strongly supports full indemnification by just or fair compensation. The command requires that the owner be placed as fully as possible in the same position as that before the government's taking.

C. The 40% Award Is Not Excessive

Unless otherwise provided by statute or contract, the prevailing party in litigation is not generally entitled to an attorney's fee. ¹⁴ Counsel-fee awards are authorized in condemnation proceedings by 66 O.S.1991 § 55(D) ¹⁵ if the jury verdict exceeds the award of the court-appointed commissioners by at least 10%. The condemnee may be allowed a reasonable attorney's fee and certain expenses "actually incurred." ¹⁶ The statutory scheme in force recognizes as valid a contingent-fee contract of 50% or less. 5 O.S.1991 § 7. ¹⁷ A condemnor has the burden of showing that the contingent-fee provision is legally offensive or otherwise avoidable for excessiveness. ¹⁸

There is a dearth of Oklahoma authority on the allowable quantum for legal services in condemnation proceedings performed under a...