S.C. Dep't of Transp. v. Revels, 27469.

• Decision Date: 10 December 2014
• Docket Number: No. 27469.,27469.
• Court: South Carolina Supreme Court
• Parties: SOUTH CAROLINA DEPARTMENT OF TRANSPORTATION, Respondent, v. Janell P. REVELS and R.J. Poston, Jr., Landowners, and John Doe and Mary Roe, representing all unknown persons having or claiming to have any right, title or interest in or to, or lien on the lands described herein, including all unknown heirs of Reamer J. Poston, Sr. a/k/a/ R.J. Poston Sr., deceased, Unknown Claimants, Of whom Janell P. Revels and R.J. Poston are, Petitioners. Appellate Case No. 2012–213378.

411 S.C. 1

766 S.E.2d 700

SOUTH CAROLINA DEPARTMENT OF TRANSPORTATION, Respondent

v. Janell P. REVELS and R.J. Poston, Jr., Landowners, and John Doe and Mary Roe, representing all unknown persons having or claiming to have any right, title or interest in or to, or lien on the lands described herein, including all unknown heirs of Reamer J. Poston, Sr. a/k/a/ R.J. Poston Sr., deceased, Unknown ClaimantsOf whom Janell P. Revels and R.J. Poston are, Petitioners.Appellate Case No. 2012–213378.

No. 27469.

Supreme Court of South Carolina.

Heard Oct. 9, 2014.

Decided Dec. 10, 2014.

Gene McCain Connell, Jr., of Kelaher Connell & Connor, PC, of Surfside Beach, for Petitioners.

Beacham O. Brooker, Jr., of Columbia, for Respondent.

Opinion

Justice BEATTY.

After prevailing in a condemnation action, landowners (“Petitioners”) moved for an award of attorneys' fees pursuant to section 28–2–510(B)(1) of the Eminent Domain Procedure Act (the “Act”).¹ Contrary to Petitioners' view, the circuit court determined attorneys' fees should be awarded based on an hourly rate via a lodestar calculation² rather than the contingency fee agreement between Petitioners and their attorney. The Court of Appeals affirmed. S.C. Dep't of Transp. v. Revels, 399 S.C. 423, 731 S.E.2d 897 (Ct.App.2012). This Court granted Petitioners' request for a writ of certiorari to review the decision of the Court of Appeals. We affirm in part, reverse in part, and remand this matter to the circuit court for further proceedings consistent with this opinion.

I. Factual/Procedural History

On August 6, 2007, the South Carolina Department of Transportation (the “SCDOT”) filed a Notice of Condemnation against Petitioners in which it sought to acquire .314 acres of Petitioners' Marion County property for the construction of the U.S. Highway 378 relocation. Following a two-day trial, a jury returned a verdict in favor of Petitioners in the amount of $125,000.

Subsequently, Petitioners timely filed an application for attorneys' fees and costs pursuant to section 28–2–510(B)(1) in which they sought $28,233.33 in attorneys' fees based on a contingency fee agreement with their counsel. The agreement provided that counsel would represent Petitioners on a contingency fee basis of one-third of the gross amount recovered, less the original $40,300 offered by SCDOT.³ In order to determine a reasonable attorney's fee, the circuit court requested that Petitioners provide an affidavit outlining the factors identified in Jackson v. Speed, 326 S.C. 289, 486 S.E.2d 750 (1997).⁴

During a hearing before the circuit court, Petitioners asserted the attorney's fee set by their contingency fee agreement was a reasonable award as it complied with the Act and Jackson. Therefore, Petitioners claimed the court must first determine whether or not the contingency fee agreement was reasonable before requiring them to provide anything more. In response, SCDOT maintained that attorneys' fees should not be calculated based on a percentage of the jury verdict but, rather, a lodestar analysis as required by Layman v. State, 376 S.C. 434, 658 S.E.2d 320 (2008), wherein this Court analyzed an award of attorneys' fees under the state action statute as codified in section 15–77–300⁵ of the South Carolina Code.⁶

Based on the lodestar doctrine, SCDOT moved for Petitioners' counsel to provide the court with an itemized statement that identified an hourly rate and the actual number of hours counsel worked on the case.

Citing Layman, the circuit court found Petitioners were entitled to an award of attorneys' fees based on an hourly rate rather than the contingency fee agreement. The court awarded Petitioners attorneys' fees in the amount of $16,290, which was based on an hourly rate of $300 per hour for 54.3 hours.⁷

In their motion for reconsideration, Petitioners asserted the court failed to: (1) rule on whether the requested attorneys' fees were reasonable under section 282–510(B); (2) consider the case of Vick v. South Carolina Department of Transportation, 347 S.C. 470, 556 S.E.2d 693 (Ct.App.2001), wherein the Court of Appeals approved the use of a contingency fee agreement in a condemnation action; (3) address any of the factors identified in Jackson ; and (4) apply a lodestar analysis as it “simply ordered a flat rate of $300.00 per hour.” The court denied the motion, ruling that: (1) Petitioners' request for a reasonableness determination regarding contingency fees was not applicable in light of Layman; (2) Vick was not applicable based on Layman; (3) the factors identified in Jackson were not applicable; and (4) the court properly applied a lodestar analysis in awarding attorneys' fees of $300 per hour.

On appeal, the Court of Appeals affirmed. S.C. Dep't of Transp. v. Revels, 399 S.C. 423, 731 S.E.2d 897 (Ct.App.2012). In so ruling, the court found Layman controlled as “section 28–2–510, like section 15–77–300, shifts the source of the prevailing party's attorney's fees to the losing party, the State.” Id. at 430, 731 S.E.2d at 900. Based on Layman, the court found “it is improper to award a percentage-of-the-recovery under a statute that explicitly requires an attorney to state his hours.” Id. Additionally, contrary to Petitioners' view, the court found “the circuit court was not required to first make a determination regarding the reasonableness of the contingency fee agreement” pursuant to Jackson. Id. at 433, 731 S.E.2d at 902. The court emphasized that “South Carolina law specifically rejects the notion that a contingency fee contract controls a court's determination of reasonable attorneys' fees due to a plaintiff pursuant to a statute mandating the award of attorney's fees.” Id. (quoting Sauders v. S.C. Pub. Serv. Auth., C.A. Nos. 2:93–3077–23, 2011 WL 1236163, at *5 (D.S.C.2011) ).

Following the denial of Petitioners' petition for rehearing, this Court granted a writ of certiorari to review the decision of the Court of Appeals.

II. Standard of Review

“The decision to award or deny attorneys' fees under a state statute will not be disturbed on appeal absent an abuse of discretion.” Kiriakides v. Sch. Dist. of Greenville Cnty., 382 S.C. 8, 20, 675 S.E.2d 439, 445 (2009). “An abuse of discretion occurs when the conclusions of the trial court are either controlled by an error of law or are based on unsupported factual conclusions.” Id. (citation omitted). “Similarly, the specific amount of attorneys' fees awarded pursuant to a statute authorizing reasonable attorneys' fees is left to the discretion of the trial judge and will not be disturbed absent an abuse of discretion.” Id. However, where the issue of the amount of attorneys' fees awarded depends on the Court's interpretation of “reasonable” attorneys' fees as contained in the Act, the interpretation of the statute is a question of law that the Court reviews de novo. See Layman v. State, 376 S.C. 434, 444, 658 S.E.2d 320, 325 (2008) (recognizing that where the issue of the amount of the attorneys' fees awarded hinged on the Court's interpretation of “reasonable” attorneys' fees as contained in the state action statute, the Court would review the interpretation of the statute de novo as it presented a question of law).

III. Discussion

A. Arguments

Petitioners raise seven arguments to support their sole contention that the Court of Appeals erred in affirming an award of attorneys' fees that was calculated based on a lodestar method rather than their contingency fee agreement. We consolidated these arguments since Petitioners essentially assert the Court of Appeals erred in: (1) finding Layman controlled as section 28–2–510 rather than section 15–77–300 is the exclusive remedy in awarding attorneys' fees to landowners who prevail in an eminent domain proceeding; and (2) declining to find that Jackson requires a court to initially determine whether a contingency fee agreement is reasonable.

B. Analysis

1. Entitlement to Reasonable Attorneys' Fees

“Under the ‘American Rule,’ the parties to a lawsuit generally bear the responsibility of paying their own attorneys' fees.” Layman, 376 S.C. at 451–52, 658 S.E.2d at 329 (citing Pennsylvania v. Del. Valley Citizens' Council for Clean Air, 478 U.S. 546, 561, 106 S.Ct. 3088, 92 L.Ed.2d 439 (1986) ). “This Court and others recognize numerous exceptions to this rule, including the award of attorneys' fees pursuant to a statute.” Id. (citing Jackson, 326 S.C. at 307, 486 S.E.2d at 759 ).

“At common law, neither party to an eminent domain proceeding can recover costs and attorney's fees; costs and attorney's fees in such proceedings are generally deemed to be matters for statutory regulation.” 2 Robert L. Rossi, Attorneys' Fees § 11:35 (3d ed.2001). Accordingly, because the “[a]llowance of attorney's fees is a matter of policy to be determined by the legislature, ... the legislature may enact reasonable provisions to govern an award of attorney's fees in condemnation actions.” 29A C.J.S. Eminent Domain § 551 (Supp.2014) ; see 11A Eugene McQuillin, The Law of Municipal Corporations § 32:116 (3d ed. 2000 & Supp.2014) (“Although noting that it would perhaps be fair or efficient to compensate a landowner for all the costs incurred as a result of a condemnation action, the United States Supreme Court has nevertheless declared that such compensation is a matter of legislative grace rather than constitutional command.”). “A statutory award of attorneys' fees is typically authorized under what is known as a fee-shifting statute, which permits a prevailing party to recover attorneys' fees from the losing party.” Layman, 376 S.C. at 452, 658 S.E.2d at 329 (citing Blum v. Stenson, 465 U.S. 886, 893, 104 S.Ct. 1541, 79 L.Ed.2d 891 (1984) ).

2. Fee–Shifting Statute

Here, the General Assembly enacted section 28–2–510, a fee-shifting statute, as part of the Act to authorize landowners who prevail in an eminent domain action to recover reasonable litigation expenses. S.C.Code Ann. § 28–2–510 (2007). Without question section 28–2–510 governs...