State, ex rel. Dept. of Tran. v. Amer. Bank

• Decision Date: 29 October 2008
• Docket Number: No. DA 06-0733.,DA 06-0733.
• Citation: 195 P.3d 844,2008 MT 362
• Parties: The STATE of Montana, acting by and through the MONTANA DEPARTMENT OF TRANSPORTATION, Plaintiff and Appellant, v. AMERICAN BANK OF MONTANA, a Montana corporation, Defendant and Appellee.
• Court: Montana Supreme Court

195 P.3d 844

2008 MT 362

The STATE of Montana, acting by and through the MONTANA DEPARTMENT OF TRANSPORTATION, Plaintiff and Appellant, v. AMERICAN BANK OF MONTANA, a Montana corporation, Defendant and Appellee.

No. DA 06-0733.

Supreme Court of Montana.

Submitted on Briefs August 9, 2007.

Decided October 29, 2008.

For Appellant: Edward G. Beaudette, Lyle Manley, Timothy W. Reardon; Montana Department of Transportation, Helena, Montana.

For Appellee: A. Clifford Edwards, Triel D. Culver; Edwards, Frickle, Anner-Hughes & Culver, Billings, Montana.

Chief Justice KARLA M. GRAY delivered the Opinion of the Court.

¶ 1 The State of Montana, acting by and through the Montana Department of Transportation (MDOT), appeals from the post-judgment order entered by the Eleventh Judicial District Court, Flathead County, awarding American Bank of Montana (American Bank) $116,739.53 in "necessary expenses of litigation," including attorney fees. We reverse and remand.

¶ 2 The restated issue on appeal is whether the District Court erred by applying jurisprudential factors, rather than the plain language of § 70-30-306(2), MCA, in determining reasonable and necessary attorney fees in this condemnation case.

BACKGROUND

¶ 3 In July of 2004, MDOT initiated a condemnation action regarding a portion of American Bank's real property. After a hearing in 2005, the District Court dismissed MDOT's complaint with prejudice and awarded American Bank all necessary expenses of litigation. It ordered American Bank to submit a request for reasonable and necessary attorney fees, expert witness fees, exhibit costs, and court costs.

¶ 4 American Bank did not submit a request, but filed affidavits of two of its attorneys "in support of award of attorney fees and necessary expenses of litigation." Triel D. Culver's affidavit stated, among other things, that a reasonable hourly rate for his work and that of attorney Cliff Edwards was $250, and a reasonable hourly rate for work performed by attorney Lori Armstrong was $125. Edwards' affidavit stated his hourly rate was $450, but he lowered it to $250 to be consistent with what other lawyers were charging in eminent domain cases in Flathead County. Edwards attached copies of the affidavits of local attorneys Frank B. Morrison, Jr., and Dale L. McGarvey regarding attorney fees for Wade J. Dahood's services in another Flathead County eminent domain case. Those affidavits addressed the affiants' hourly rates and Dahood's experience, skill and background.

¶ 5 MDOT filed a motion to retax costs, objecting to American Bank's requested attorney fees. Relying on § 70-30-306(2), MCA, MDOT asserted American Bank's requested hourly rates exceeded the "customary hourly rates" for an attorney's services in Flathead County, which MDOT posited were $150 or $175. In support, MDOT submitted affidavits of local attorneys Marshall Murray and Richard DeJana. American Bank opposed MDOT's motion, and submitted the affidavits of Douglas Wold and Sean Frampton—also attorneys in Flathead County—addressing the complexity of the case and Edwards' and Culver's respective experience and skill, as well as the City of Whitefish's stipulation to a $250 hourly rate in a different condemnation case. MDOT replied.

¶ 6 The District Court held a hearing, at which DeJana and Murray testified in support of a $150 hourly rate. No other witnesses testified. The District Court subsequently entered an order stating that—absent any challenge to the number of hours at issue, the hourly rates for Armstrong's work or any costs—the sole issue in MDOT's challenge to American Bank's requested $250 hourly rate for work by Edwards and Culver was the meaning of the phrase "customary hourly rates" in § 70-30-306(2), MCA. Rejecting MDOT's argument that § 70-30-306(2), MCA, sets forth a unique standard, the District Court applied jurisprudential factors and awarded fees based on hourly rates of $250 for Edwards, $200 for Culver, and $125 for Armstrong. MDOT appeals.

STANDARD OF REVIEW

¶ 7 We review a district court's interpretation and application of a statute for correctness. See Polasek v. Omura, 2006 MT 103, ¶ 8, 332 Mont. 157, ¶ 8, 136 P.3d 519, ¶ 8 (citation omitted).

DISCUSSION

¶ 8 Did the District Court err in applying jurisprudential factors, rather than the plain language of § 70-30-306(2), MCA, in determining reasonable and necessary attorney fees in a condemnation case?

¶ 9 In various types of cases, non-exclusive factors apply in determining the amount of "reasonable" attorney fees. These factors include the amount and character of the legal services rendered; the labor, time and trouble involved; the character and importance of the litigation; the amount of money or the value of the property to be affected; the professional skill and experience called for; the attorney's character and standing in the profession; and the results secured. See e.g. James Talcott Constr., Inc. v. P & D, 2006 MT 188, ¶ 63, 333 Mont. 107, ¶ 63, 141 P.3d 1200, ¶ 63 (citation omitted); Chase v. Bearpaw Ranch Assn., 2006 MT 67, ¶ 38, 331 Mont. 421, ¶ 38, 133 P.3d 190, ¶ 38 (citations omitted).

¶ 10 These jurisprudential factors derive from Forrester & MacGinniss v. B & M Co., 29 Mont. 397, 409, 74 P. 1088, 1093 (1904), as reflected in Crncevich v. Georgetown Recreation Corp., 168 Mont. 113, 119-20, 541 P.2d 56, 59 (1975), and First Security Bank of Bozeman v. Tholkes, 169 Mont. 422, 429-30, 547 P.2d 1328, 1332 (1976). Several cases setting forth the factors cite to Crncevich, Tholkes or both. See e.g. Plath v. Schonrock, 2003 MT 21, ¶ 36, 314 Mont. 101, ¶ 36, 64 P.3d 984, ¶ 36; Weinberg v. Farmers State Bank, 231 Mont. 10, 35, 752 P.2d 719, 735 (1988).

¶ 11 Article II, Section 29, of the Montana Constitution and § 70-30-305(2), MCA, provide that a prevailing private property owner in condemnation litigation must be awarded "necessary expenses of litigation." "Necessary expenses of litigation ... mean reasonable and necessary attorney fees, expert witness fees, exhibit costs, and court costs." Section 70-30-306(1), MCA. "Reasonable and necessary attorney fees are the customary hourly rates for an attorney's services in the county in which the trial is held. Reasonable and necessary attorney fees must be computed on an hourly basis and may not be computed on the basis of any contingent fee contract." Section 70-30-306(2), MCA. The 1977 Legislature enacted the precursor to § 70-30-306(2), MCA, and the statute has been amended only once in a manner not relevant here. Sec. 1, Ch. 48, L.1977; Sec. 71, Ch. 125, L.2001.

¶ 12 This Court cited to Crncevich or Tholkes in relation to the Forrester factors in two eminent domain cases decided after the 1977 enactment of § 70-30-306(2), MCA. Both State v. Schumacher, 180 Mont. 329, 590 P.2d 1110 (1979), and Rauser v. Toston Irrigation Dist., 172 Mont. 530, 565 P.2d 632 (1977), arose prior to the July 1, 1977 effective date of the 1977 statute. In Rauser, 172 Mont. at 543-44, 565 P.2d at 640, we merely noted the 1977 statute's existence and applicability to future cases. In Schumacher, 180 Mont. at 338-39, 590 P.2d at 1116, we did not mention the 1977 statute in our discussion of attorney fees. Accordingly, we conclude those cases have no bearing on the issue presently before us.

¶ 13 Having so concluded, we address as an issue of first impression the standard for determining "reasonable and necessary attorney fees" in condemnation litigation pursuant to § 70-30-306(2), MCA. MDOT argues this statutory provision for eminent domain cases is unique in that it specifically defines the basis for an attorney fee award vis-à-vis its "customary hourly rates for an attorney's services in the county in which the trial is held" language. Advancing dictionary definitions, MDOT further asserts that "reasonable and necessary attorney fees" under § 70-30-306(2), MCA, are based on the usual hourly rates for any attorney in the county. MDOT's argument apparently is not, however, that attorney fees in an eminent domain case must be based on one randomly-selected attorney's rates—or, in other words, a "pick an attorney, any attorney" approach. Nor, as mentioned above, does MDOT challenge the number of hours at issue here. MDOT's argument is that the District Court erred in interpreting § 70-30-306(2), MCA, to require consideration of the jurisprudential Forrester factors, including the character of the litigation and the skill and reputation of the attorney.

¶ 14 In construing a statute, the office of the judge is simply to ascertain and declare what is in terms or substance contained therein, not to insert what has been omitted or to omit what has been inserted. Section 1-2-101, MCA; In re Montana License, 2008 MT 165, ¶ 32, 343 Mont. 331, ¶ 32, 184 P.3d 324, ¶ 32 (citations omitted). We conclude the plain "customary hourly rates" language of § 70-30-306(2), MCA, means that "reasonable and necessary attorney fees" are to be computed in a condemnation case based on hourly rates typical or common for a non-specific attorney's services in the county in which the trial is held. Thus, we further conclude the District Court erred in applying the Forrester factors.

¶ 15 We acknowledge, in this regard, the District Court's extensive analysis leading to its conclusion that the Forrester factors apply in eminent domain cases. First, construing the "customary hourly rates" language of § 70-30-306(2), MCA, the court determined that language was intended merely "to legislate the basis for fees to be awarded (hourly) and the locale for the determination of those fees (the county in which the trial is held)." We must presume the Legislature would not pass useless or meaningless legislation. Mont. Sports Shooting Assn. v. Dept. of FWP, 2008 MT 190, ¶ 15, 344 Mont. 1, ¶ 15, 185 P.3d 1003, ¶ 15 (citation omitted). Thus, we reject the District Court's interpretation, because it would render the statutory term "customary" meaningless, and it would...