On February 02, 2016 a Judgment was filed involving a dispute between County Of Hennepin, and 917 West 66Th Street Land Trust, A-1 Vacuum Solutions, Abc And Toy Zone, Academy Of Holy Angels, Ace Cash Express, Ace Minnesota Corp, Afc Enterprises Inc, All Commercial Services Llc, Allina Health, Allina Health System, Allstate Insurance: Jacob Group Agency, Alside Supply, American Dental Partners Of Minnesota Llc, American Equity Mortgage Inc, American Pie, Anchor Bank, Anchor Bank Na, Angel'S Beauty Supply And Hair Braiding, Anturio Flowers Llc, Armstrong Subway Inc, Associated Materials Llc, Atlas Staffing Inc, At&T, Autozone Development Corporation #3084-01-01, Auturio Flowers Llc, Bank Of America Na, Beck, Evelyn, Benson, Andrea J, Berg, Paul, Bernal, Cassondra C, Bernie'S Montessori School Inc, Best Buy Stores Lp, Birch, Mae L, Blake, Mary Christine, Bmo Harris Bank Na, Bmo Harris Bank National Association, Bp Products North America Inc, B-R-Ad Inc, Brixmor Spe 1 Llc, Brown, Dottie, Buffets Inc, Builders Development And Finance Inc, Bwpenn66 Llc, Bw Property Management Llc, Capital One Bank Usa Na, Carlberg Radiator, Carrousel Travel, Carrousel Travel Inc, Cedar Point Dentistry Pa, Center For Diagnostic Imaging, Center For Energy And Environment, Centerpoint Energy Resources Corp, Central Baptist Theological Seminary Of Minneapolis, Champps Operating Corporation, Christofersen Meats Co, Chuck'S Body Shop Inc, Citizen'S Independent Bank, City Of Edina, City Of Richfield, City Of Richfield Housing And Redevelopment Authority, Cnr International Inc, Comcast Of Arkansas Florida Louisiana Minnesota Mississippi Tennessee Inc, Comfort Massage & Spa, Consignment Ventures Inc, Corazalla, Edward, Corazalla, Nancy, Cornershone Mortgage Company, Cotton, Jac, County Of Hennepin, Courage Kenny Sports & Physical Therapy, Credit Suisse Financial Corporation, Crest Auto Inc, Crown Bank, Custom-Rx Compounding Pharmacy, Custom Rx Llc, Dahl, Owen G, Daniel S Miller Pa, Davita, De Paul Lettering, Deutsche Bank National Trust Company, Dick'S Barber Shop, Dingilian, Martha Kaufman, Dingilian, Robert, Dingle, Helen A, Dino'S Gyros Of Edina Inc, Ditech.Com, Doll, Kathy Ann, Donath, Mark, Dorothy'S Cup Llc, Dq Training Restaurants Llc, Dq Training Restaurants, Llc, Drfc Southdale Square Llc, Dunn Brothers Coffee, El Tejaban Mexican Restaurant Llc, Esperanza Para Families Llc, Exl Llc, Faith Group Llc, Falk, Martin, Fannie Mae, Fantastic Sam'S, Fdg C39Gl Mn Richfield Llc, Fedex Corporate Services Inc, Fingerman, Arlene L, Fingerman, Gerald A, First Business Capital Corp, First Business Capital Corporation, First Care Pregnancy Center, First National Bank Of The Lakes, Flagstar Bank Fsb, Flick, Sharon, Flick, William C, Frenchman'S Pub Inc, Frost, George, Fw Properties Llc, Gateway Bank, Gci Capital Inc, Genworth Life Insurance Company, Gerry, Jane, Gerry, Mark, Gmac Mortgage Corporation, Golfsmith Usa Llc, Grand St Paul Cvs Llc, Great Southern Bank, Green Industries Llc, Gy Associates, H2P Enterprises Inc, Hagen, Robert, Hane, Alice M, Harry Green Llc, Havefunbiking.Com, H Brooks And Company Llc, Heartbreaker Southdale Square, Helling Services Corporation, Hernandez-Trejo, Samuel, Holtan Holdings Inc, Home Federal Bank, Hot Comics & Collectables, Houlihan'S Restaurant And Bar, Housing And Redevelopment Authority In And For The City Of Richfield, Howg And Anderson Law Office, H&R Block Enterprises Inc, Hucek, Matthew Craig, Hulp Llc, Iconic Images 1 Llc, Ir, Irepair Wireless Llc, Isaacson, Bradley S, Isaacson, Jaclyn L, Jared The Gallaria Of Jewelry, Jbb Properties Llc, Jdf Real Properties Llc, J Erickson Distributing Company, Jimmy John'S, Jjl Properties Llc, Johnson, Michael B, Johnson, Pamela Anne, Jpmorgan, Jpmorgan Chase Bank, Jpmorgan Chase Bank Na, Jpmorgan Chase Bank Successor To Bank One National Association, Kaufman, Richard, Kaufman, Suzanne M, Kidney Specialists, Kim'S Nail Spa, Kim'S Nails Spa 1 Inc, La Fayette Melssen & Plath Ltd, Lake Shore Drive Condominum Association, Leckas, Alecia M, Leckas, Ioannis J, Lee, John, Lewis, Magnolia, Life Balance Chiropractic & Wellness Llc, Ll Q2-14 Llc, Lovely, Forrest T, Lovely, Linda C, L&P Holdings Inc, Lunden, Jeanne B, Lunden, Wallace E, Lvnv Funding Llc, Market Plaza Housing Limited Partnership, Maser Amundson Boggio & Hendricks Pa, Mb Financial Bank Na, Mckasy, Joseph G, Metro Dental, Metro Dentalcare Specialty, Midland Funding Llc, Midwest Cellular Inc, Minnesota Interactive Inc, Mora, Fernando Amigon, Morgan Tire And Auto Inc, Mortgage Electronic Registration Systems Inc, M Russ Lowthian, Munos, Sergio Rivera, Murdoch, Hugh John, National Cremation Society, Nationstar Mortgage Llc, Neptune Management Corporation, New Century Mortgage Corporation, New Life Family Services, Nfb Llc, Nguyen, Mai B, Nielsen Foods Inc, Noodles & Company, Northern States Indoor Tan Llc, Northern States Power Company, Northstar Wireless Llc, Ohana Hairtenders, Olsen Agency, Omah District Commander Us Army Corps Of Engineers, One Stop Mail Shoppe, O'Reilly Auto Enterprises Llc, Origins Eye Clinic, Owner Of Residential And Parking Garage Parcels, Palm Beach Tan, Papa Murphy'S Take And Bank Pizza, Parikh, Amish, Parikh, Ashish, Patrick'S Bakery & Bistro, Patrick'S French Bakery Inc, Paul A Schmitt Music Company, Paul Deutsch, Payless Shoesource Inc #2501, Penn Avenue Properties Llc, Penn Avenue Properties, Llc, Peoples Bank Of Commerce, Perez Chiropractic Ltd, Perez-Frost, Antonia, Petco Aminal Supplies Stores Inc, Phan, Hung C, Pier 1 Imports Us Inc, Pines Investment Llc, Pizza Luce Vii Inc, Plaisted, Allen, Plaisted, Kathryn, Poague, Dallas Q, Popeye'S Louisiana Kitchen Inc, Portfolio Recovery Associates Llc, Premier Bank, Professional Services Tax Network Llc, Pylka, David J, Quantix Corporation, Quella, Kathryn, Qwest Communications, Qwest Corporation, Qwest Corporation Dba Centurylink Qc, Radio Shack Corp, Rae Homeowner Association, Rait Partnership Lp, Red Nails & Spa, Red Pepper Chinese & Vietnamese Restaurant, Reliastar Life Insurance Company, Repair Rite Llc, Richfield Bloomington Credit Union, Richfield Chamber Of Commerce, Richfield Flowers And Events Inc, Richfield Shoppes Llc, Richfield State Insurance, Rincon, Marcus, Rochester Home Loan Mortgage Inc, Rosario, Amy L, Rosario, David S, Ruiz-Cordova, Daniel, Ruiz-Cordova, Vanessa, Salisbury, Tai, Samaratunga, Piyumika, Samaratunga, Priyantha, Sanchez, Oliver Bernal, Sbm Loan Servicing Llc, Schamber, Colleen, Schmitt Music, Schramm, Matthew S, Schramm, Sharon R, Signature Bank, Ski Adventures, Smith, Bryan Richard, Soo Line Railway Company, Sosa, Andres, State Of Minnesota, Sterling Jewelers Inc, Stonebridge Chiropractic, Strauch, Charles M, Jr., Subway, Summit Mortgage Corporation, Super Express Taxi & Limo Llc, Swain, Cynthia, Swanson, Lorrell Lynn, Tan Line Of Richfield, Tastea Inc, Tax Services Of America Inc, Tca Holdings Llc, T & D Properties Llc, The Jacob Group Inc, The Oaks Llc, Thomas, James, Thou, Henry O, Tires Plus, Tkda, T-Mobile Central Llc, Toltz King Duvall, Toy Zone Inc, Transform Minnesota The Evangical Network, Triangle Services Inc, Turnstyle Consignment, Tutewohl, Jeffrey John, Twin Cities Auto Spot, United States Of America, United States Small Business Association, Unknown Spouse Of Samuel Hernandez-Trejo, Us Bank National Association Nd, Venture Bank, Venture Photograph, Vincent Court Realty Llp, Vitelli, Carlos A, Vps Minnesota Uptown Pizza Llc, V Spa Nails Inc, Washington County Bank Na, Weaver, Mark, Wells Fargo Bank Na, Wells Fargo Bank Northwest National Association, Willard L Olsen, Williams, Henrietta B, Williams, William Louis, Wolfson, Blair, Woodlake Orthodontics, Woodlake Partners Llc, Woodlake Point Condominium Association, Wood Lake Village Homeowners Association, Working Women Clothing Co, Xfinity Home, Xtreme Electronix Inc, Zan, Jackie, Zhong Xing Llc, Z-Ultimate Self Defense Studios, for Condemnation in the District Court of Hennepin County.
For full print and download access, please subscribe at https://www.trellis.law/.
Please wait a moment while we load this page.
Preview
27-CV-16-1421 Filed in District Court State of Minnesota 12/26/2019 12:26 PM STATE OF MINNESOTA DISTRICT COURT COUNTY OF HENNEPIN CIVIL COURT DIVISION County of Hennepin, ORDER FOR ATTORNEYS’ FEES Plaintiff, Court File No. 27-CV-16-1421 v. Judge Kristin A. Siegesmund GY Associates, Academy of Holy Angels, et al, Case Type: Condemnation Defendants. This case arises out of condemnation proceeding regarding an upgrade of 66th St. in Richfield. As a result a portion of some property owned by the Academy of Holy Angles (“Holy Angels”) was condemned and the parties disagreed about the value of the property taken. The Commissioners awarded an amount in excess of what the county had offered, entitling Holy Angels to reasonable attorney fees and costs. A hearing was held on October 1, 2019 on Holy Angels request for costs and attorney’s fees. 1 Louis Robards appeared for the County. Howard Roston appeared for Holy Angels. Based on the proceedings and files of record the court makes the following: FINDINGS 1. Holy Angels owns an approximately 22.04 acre property which it uses for its school campus. The county was upgrading the roads near the intersection of 66th St. and Nicollet and condemned a small portion of Holy Angels’ property along the northern border on 66th, and a slightly larger area at the corner for a permanent highway easement, leaving Holy Angels with 21.91 acres. Some temporary construction easements were also necessary. 2 The condemnation proceeding began in early 2016 and concluded with a hearing in May 2019. The parties contested the value of the property taken. 1 At the hearing Holy Angels withdrew its motion to strike the County’s papers as untimely. 2 Other properties were also partially condemned for the project but these are not part of this motion. 27-CV-16-1421 Filed in District Court State of Minnesota 12/26/2019 12:26 PM 2. The county initially offered $154,000, and eventually made a final offer of $225,000.3 The County submitted an appraisal at the contested hearing that the taking was worth $122,800.4 The county appraiser found the highest and best use to be its continued use as a private school. 3. Holy Angels argued that the highest and best use included using some of the excess land for retail. In 2013, Holy Angels created a Master Development Plan which imagined retail development on the front lawn of the school. In 2013 Shenehon Company appraised the 82,000 square feet in the front lawn that could potentially be sold for retail development. In 2014, Holy Angles signed a purchase agreement with Semper Development for Semper to purchase 85,000 square feet along Nicollet. 5 Semper wanted to construct a building for Walgreens and one or two other tenants. However, that part of Holy Angels’ parcel is not zoned commercial. In 2014, when Holy Angels proposed the Walgreens, there was not support in the community or the City Council for a zoning change. Semper did not continue with the sale because of the difficulty in getting government approval. Commercial development at the northeast corner continued to meet with resistance in 2019. 6 4. After the property was condemned, Shenehon conducted a new appraisal in 2016 to determine the market value before and after the condemnation. The report was released on April 12, 2019. 7 Despite the fact that the property was not zoned for retail and had been unable to get approval for retail in 2014, the appraisal report contended that the highest and best use was to use part of the property for commercial development along with the school. 8 The 2016 Shenehon appraisal concluded that the estimated market value of the property before the taking on June 1, 2016 was $24 million, and after June 1, 3 Savin Aff. Ex. A Revised Offer letter of January 26, 2016. 4 Savin Ex. C. 5 The purchase agreement anticipated a price of $66.76 a square foot, or a total of $5,675,000. 6 Savin Ex C p 23, 7 Rosten Aff. Ex. A 8 The 2016 appraisal notes that the strip along 66th is zoned for commercial but that the majority of the property, which would include the area for potential retail development, is zoned single family residential. The appraisal mentioned nothing about the possibility of getting this single family zoning changed. It acknowledged the fact that there was not approval for such a project was a problem because the appraisal stated that comparable sales of retail properties which did have approval should be discounted. Apparently, engineering experts Mr. Dahlke and Mr. Swing concluded that the property could physically be subdivided for commercial use, but there is no discussion and the record reflects no attempt by Mr. Dahlke or Swing to approach the city about the feasibility of such an idea. See Rosten Ex. A p. 117. 27-CV-16-1421 Filed in District Court State of Minnesota 12/26/2019 12:26 PM 2016 was $23 million. In addition to the $1 million in diminution in market value, Shenehon also concluded that the value of the temporary construction easement was $122,570.9 Thus, according to Shenehon, the cost of the taking was $1,122,570. 5. Based primarily on the Shenehon 2016 appraisal comparing the value of the property before and after the taking, Holy Angels at trial asked for $1,122,570. 10 The vast majority of the appraised decrease in value was due to an alleged decrease in value of possible retail development. 6. In reaching its conclusion that the value of the site was $24 million before the taking, the Shenehon 2016 appraisal used a variety of methods to value the school site and the excess land which it concluded could be used for retail. The various methods concluded that the school site could be valued at $19,700,00011, $18,651,80512 and $19,000,000 13. The 2016 appraisal concluded that before the taking there was 119,962 square feet of land available for retail with market value of $4,800, 000. 14 The appraisal combined the $4,800,000 value for the retail land with the various estimates for the school land and then reached a middle ground of $24 million for the value of the entire parcel before the taking on June 1, 2016. 7. The Shenehon 2016 appraisal argued that after the taking the potential retail land would have a market value of $4 million, 15 a decrease of $800,000. The 2016 appraisal again used a variety of methods to value the school portion after the taking and arrived at $19,450,00016, $18,450,000 17, and $18,800,000. 18 Combining the $4 million value for the retail land with the various estimates for the school land, the appraisal reached a middle 9 Rosten Aff. Ex. A p 4. 10 Savin Aff. Ex. B. 11 Rosten Aff. Ex. A p 80. Cost Approach 12 Rosten Aff. Ex. A p 89 Sales Comparison Approach 13 Rosten Aff. Ex A. p 94, Income Capitalization Approach 14 Rosten Aff. Ex. A p 74. The appraisal found that the market value for the retail land was $40 per square foot. 15 Rosten Aff. Ex. A p 118. The report argued that the property taken would reduce the amount of available retail space and that the cost to build a new driveway to access the retail would be $293,185. 16 Rosten Aff. Ex A. p.124, Cost Approach, note the pre-taking cost approach value was $19,700,000, a difference of $250,000 17 Rosten Aff. Ex. A p. 132, Sales Comparison Approach. Note the pre-taking sales comparison approach was $18,651,805 a difference of $200,000. 18 Rosten Aff. Ex. A p. 138. Direct Income Capitalization Approach. Note the pre-taking direct income capitalization approach was $19,000,000, a difference of $200,000. 27-CV-16-1421 Filed in District Court State of Minnesota 12/26/2019 12:26 PM ground of $23 million for the value of the entire parcel after the taking on June 1, 2016, 19 a decrease of $1 million. 8. Thus of the $1 million diminution in value for the site, $800,000 of that is due to the alleged diminution in the retail value of the property from $4.8 million to $4 million assuming that retail was to be allowed. Less than ¼ of the alleged decrease, $200,000 to possibly $250,000, is due to the diminution in value to the school. 9. Shenehon valued the temporary 43 month easement at $122,570, which also included an assumption that some of the temporary easement was on what might have been retail land. 20 10. The Commissioners awarded $519,500. 21 The award provides no explanation for how the Commissioners reached this result. The county has paid the award plus interest. 11. Holy Angels is seeking a total of $342,488.25 in attorney fees and costs including $84,522.68 for appraiser Robert Strachota of Shenehon Company , 22 $8,600 for Vernon Swing, traffic engineer for Swing Traffic Solutions, 23 $20,770.40 for civil engineer Scott Dahlke of Civil Engineering Site Design, LLC,24 $6,298.72 for an arborist Heritage Shade and Tree, 25 and $222,296.45 for attorney’s fees and costs. 26 12. Holy Angels engaged Fredrikson and Byron, P.A. primarily on a contingent fee basis. The agreement called for 28% of any amount awarded over the County’s final offer of $225,000 with a minimum payment of $5,000.27 In the instant case, under this agreement, Fredrikson would have been entitled to $519,500 - $225,000 = $294,500 x 28% = $82,460. 13. Holy Angels’ fee arrangement is less than the customary fee arrangements in condemnation proceedings. As set forth in Mr. Robards affidavit, the customary fee arrangement in condemnation proceedings is a contingency fee agreement to pay 1/3 of the additional amount recovered over the acquiring authority’s offer made before the 19 Rosten Aff. Ex. A p 139. 20 Rosten Aff. Ex.A p 140. 21 Savin Ex. D. 22 Savin Aff. Ex. E. 23 Swing Traffic Solutions Savin Ex F. 24 Savin Ex. G. 25 Heritage Shade and Tree Savin Ex H. 26 Savin Aff. para. 22, 23. Holy Angels is not seeking $16,295 of fees incurred prior to March 10, 2016 and deleted $7,353 in time that Mr. Savin believed could be considered duplicative or inefficient. Savin Aff. para 19. 27 Savin Ex I. May 9, 2016 retainer. The contingent fee would be higher if Holy Angels appealed. 27-CV-16-1421 Filed in District Court State of Minnesota 12/26/2019 12:26 PM condemnation proceeding was commenced. 28 The attorney for Holy Angels, Mr. Roston, agrees that a 1/3 contingent fee of the sums over the last offer is “normal, customary and reasonable” in condemnation matters. 29 The court finds that the customary fee in condemnation cases is a 1/3 contingent fee of the sums over the last offer made before the condemnation proceedings began. 14. The County argues that the court should impose this customary fee and therefore the attorneys’ fees should be $121,833 which is 1/3 of the $365,000 difference between what Holy Angles received and the $154,000 original offer before the condemnation proceedings began. (This would be a nearly 50% increase over the fees that would have been paid under Holy Angels’ arrangement with Fredrikson.) The county argues that the appraiser Robert Strachota should get $14,845 rather than the $84,522.68 requested; that civil engineer Steve Dahlke should get $10,000 rather than the $20,770.40 requested; and the traffic engineer Vernon Swing should get $6,000 rather than the $8,600 requested. The county does not object to $6,298.72 for the arborist Heritage Shade and Tree. 15. The County primarily objects to fees associated with pursuing values associated with commercial development which was not permitted by current zoning and for which it was not likely to be permitted given the attempt in 2014. ANALYSIS There is no dispute that because Holy Angels was awarded more than 40% of what the county offered they are entitled to reasonable attorney fees and costs. Minn. Stat. § 117 .031. provides in relevant part: (a) If the final judgment or award for damages, as determined at any level in the eminent domain process, is more than 40 percent greater than the last written offer of compensation made by the condemning authority prior to the filing of the petition, the court shall award the owner reasonable attorney fees, litigation expenses, appraisal fees, other experts fees, and other related costs in addition to other compensation and fees authorized by this chapter. 28 Robards Aff. para. 5. 29 See Ex 2 to Hennepin County’s Memorandum in Opposition (Affidavit of Howard Roston in 27-CV-06-16489 dated August 30, 2007.) 27-CV-16-1421 Filed in District Court State of Minnesota 12/26/2019 12:26 PM Minn. Stat. § 117 .031 (a) (emphasis added). Thus the question for the court is what are the reasonable fees and costs. The term “reasonable attorney fees” is not defined by statute. But recently, our supreme court “conclude[d] that the lodestar approach governs the determination of the reasonableness of an award of attorney fees under Minn. Stat. §117.031(a)." Cnty. of Dakota v. Cameron, 839 N.W.2d 700, 711(Minn. 2013). Under the lodestar method, a district court must first determine the number of hours reasonably expended on the litigation and multiply that number by a reasonable hourly rate. Id. The district court must then evaluate the overall reasonableness of the award by considering: (1) the time and labor required; (2) the nature and difficulty of the responsibility assumed; (3) the amount involved and the results obtained; (4) the fees customarily charged for similar legal services; (5) the experience, reputation, and ability of counsel; and (6) the fee arrangement existing between counsel and the client. Id. (quoting State v. Paulson, 188 N.W.2d 424,426 (1971)). The product of reasonable hours multiplied by a reasonable hourly rate does not end the inquiry. There remain other considerations that may lead the district court to adjust the fee upward or downward. Cameron, 839 N.W. 2d at 711 (quoting Hensley v. Eckerhard, 461 U.S. 434, 434 (1983)). Reasonable hours expended by reasonable hourly rate. The lodestar analysis begins by determining the number of reasonable hours and multiplying by a reasonable hourly rate. As noted by some courts, this analysis necessarily overlaps with the analysis of the six factors. See State by Commissioner of Transportation v. Krause, 925 N.W.2d 30, 34 (Minn. 2019). In this situation it is reasonable the court looks first to the hours that Holy Angels claims were expended and the rate at which they were billed. Mark Savin submitted billing records that his firm spent 551.80 hours which totaled $217,311.50 at the firm’s normal hourly rate for work done by Mark Savin, Howard Rosten and Lynn Linne on the file. He also submitted a breakdown of the $4,989.95 on costs spent on the file. See Ex. J to Savin Aff. Thus Holy Angels is requesting $222,296.45 for attorney’s fees and costs based on these hours and normal hourly rates. There is no suggestion that these hours were not spent. Whether all of that time needed to be spent is one of the factors to be discussed later. The hours on the invoice are multiplied by Fredikson’s typical hourly rate for attorneys Savin, Roston and Linne. During the course of this litigation, Mark Savin’s hourly rate started in 2016 at $525 an hour and in 2019 is now $565 an hour. Howard Rosten started at $495 an hour and 27-CV-16-1421 Filed in District Court State of Minnesota 12/26/2019 12:26 PM is now $545 an hour. Lynn Linne started at $250 an hour and is now $390. 30 Mr. Savin stated that “based on his experience” these are fair and reasonable rates in the local legal marketplace for similar attorneys and time keepers with similar experience. However, other than his statement there was no other evidence presented such as market studies or affidavits from lawyers in other law firms. The County has not directly challenged these rates. Although there is no reason to doubt that when Fredrikson bills on an hourly basis, the rates quoted are their hourly rates, the issue of reasonableness in this particular situation requires discussion of the other lodestar factors. The county has not challenged the $4,990 in costs and the court will allow that. Invoices were also supplied for the experts: including $84,522.68 for appraiser Robert Strachota of Shenehon Company, 31 $8,600 for Vernon Swing traffic engineer for Swing Traffic Solutions, 32 $20,770.40 for civil engineer Scott Dahlke of Civil Engineering Site Design, LLC, 33 $6,298.72 for an arborist Heritage Shade and Tree. 34 No one has challenged that the experts performed the services in their invoices. The County has no objection to the $6,298.72 for the arborist, and that will be allowed. The question of whether the other expert costs are reasonable require discussion of the lodestar factors. Thus the court will start with the amounts requested by Holy Angels and discuss the lodestar factors. The nature and difficulty of the responsibility assumed. Holy Angels argues that this case required a lot of analysis about the possible impacts on the site and response to the County’s experts, plus lots of time talking to the board members of the school about options. Because the site was used a private school there were issues of safety for the children, the image of the school including its landscaping, and long range planning for the site, especially for a large section not currently being used for the school buildings. The court acknowledges that there were complexities to the condemnation, but there are complexities to many 30 Savin Aff. para 15. Savin’s affidavit listed the hourly billing rate for other staff but none of these are reflected on invoice Ex. J. Benjamin Tozer started at $320 an hour and is now $400. Alicia Jones started at $240 an hour and is now $270. Bonnie O’Malley started at $300 an hour and is now $335. Barbara Fritz started at $210 an hour and is now $240. Jenelle Beitz started at $180 an hour and is now $200. 31 Savin Aff. Ex. E. 32 Swing Traffic Solutions Savin Ex F. 33 Savin Ex. G. 34 Heritage Shade and Tree Savin Ex H. 27-CV-16-1421 Filed in District Court State of Minnesota 12/26/2019 12:26 PM valuations regarding ongoing businesses and their land. The court finds that the complexity and responsibility does not merit either an upward or downward deviation in the fees or costs. The amount involved and the results obtained. Holy Angels asked for $1,122,570 and was offered $225,000 by the County. Thus there was about $900,000 difference between the two proposals. Holy Angels was awarded $519,500, which was more than twice what was offered, but less than half (46%) of what Holy Angels demanded. It was an increase of $294,500 over the County’s final offer, and therefore was 1/3 of the $900,000 difference between the two proposals. Although the litigation benefitted Holy Angels, 2/3 of the difference that Holy Angels was requesting was not accepted by the Commissioners. The difficulty is that the Commissioners gave no indication of which arguments they accepted and which they rejected. If they had, the court could more easily address whether time spent on losing arguments was reasonable. The County argues that all of the time spent on arguing for retail development was unreasonable because the needed land was not zoned for such a project, as a similar project was unable to get a zoning change just two years before in 2014, and there was no basis to believe that such a zoning change would be forthcoming. At least $800,000 of the requested $1,122,570 relied on this possible retail development. The County argues that the court should allow no fees or expenses related to this retail development. The problem with this argument is that the Commissioners awarded over $500,000, an amount in excess of anyone’s estimate of the diminution in value to the school alone without any consideration of any retail development. Although the Commissioners obviously rejected a large part of Holy Angels’ argument regarding potential retail development, they did not completely agree with the County that the sole consideration should be the effect on the school value. Based on the record before the court, the court cannot conclude that arguments about the retail development were unreasonable and had no effect on the final outcome. Thus there is not a basis to exclude all work performed on the retail concept. However, because the Commissioners rejected 2/3 of the amounts that Holy Angels said it was entitled to over the County’s last offer, the court concludes that there may have been too much time invested on the retail issue and that the results obtained warrant a downward deviation in the attorney fees and expert fees. The time and labor required 27-CV-16-1421 Filed in District Court State of Minnesota 12/26/2019 12:26 PM This factor is very much related to the previous discussion. Because of the lack of clarity for the basis of the Commission’s decision, we know they did not accept the county’s position that only the diminution in the school portion of the land was a factor. If they had agreed with that, then under the evidence given to them they would have awarded less than $400,000. Thus the court concludes that some effort by the attorneys and experts was warranted in pursuing the concept that the land might one day be available for retail. However, because the Commissioners rejected 2/3 of the amounts that Holy Angels said it was entitled to over the County’s last offer, the court concludes that there may have been too much time invested on the retail issue and that the results obtained warrant a downward deviation in the attorney fees and expert fees. The fees customarily charged for similar legal services The question here is not whether any attorneys charge hourly rates at this level but whether the requested fees in this case are customarily charged for similar legal services. The court finds that in eminent domain proceedings the common practice is a contingency fee arrangement of 33.33% of the difference between the judgment and last offer made before the condemnation proceedings.35 Thus the customary attorneys’ fees would be $121,833, which is 1/3 of the $365,000 difference between what Holy Angles received and the $154,000 original offer before the condemnation proceedings began. When compared to the $217,311.50 requested by Holy Angels based on an hourly rate calculation, this would be equivalent to a nearly 60% contingency fee. This is greatly in excess of the customary fee for similar legal services. This factor merits a decrease in what Holy Angels is requesting. No evidence was presented by either party as to customary fees paid to experts in eminent domain proceedings. The County asks the court to consider what it paid its own expert as evidence of a reasonable or customary charge. The County paid their expert Darren Browen a total of $14,875 for his appraisals and testimony in comparison to the $84,522.68 paid to Holy Angels’ appraiser. The County argues that Strachota should get no more than what the County paid its own expert. The County provides no basis for a “customary fee” regarding the engineer or the traffic engineer. The court agrees that the amount paid by the County is not by itself a fair estimate of customary 35 Holy Angels has provided no basis that the hourly rates requested are customary in these cases. To the contrary, in a case cited by Holy Angels, decided in 2014, an attorney with 30 years of experience had a billing rate of $275 an hour. State of Minn. v. Great River Resources, LLC, A14-0302 (Minn. App 2014). The court in that case did not award fees at even $275 an hour but instead granted an award somewhat greater than the contingency agreement that the parties had entered into. 27-CV-16-1421 Filed in District Court State of Minnesota 12/26/2019 12:26 PM costs, especially in this circumstance where many parcels were being condemned and the county might have had the advantage of duplication. This factor, in regards to the experts, is neutral. The experience, reputation and ability of counsel. Mark Savin is an experienced lawyer with his principle focus over 30 years on eminent domain litigation. He is well regarded as evidenced by his speaking on the topic of eminent domain at local and national seminars, teaching the subject at local law schools and publications. 36 Howard Rosten is also an experienced lawyer in the area of eminent domain with 20 years of experience. Ms. Linne has six years of experience in estate tax and condemnation at Fredikson and Byron. This factor is neutral if viewed against the hourly request but if viewed against the customary rate might weigh for slight increase from the customary fee. No one has questioned the credentials of the experts so this factor is neutral. The fee arrangement between counsel and the client. Holy Angels engaged Fredrikson and Byron, P.A. primarily on a contingent fee basis. The agreement called for 28% of any amount awarded over the County’s final offer of $225,000 with a minimum payment of $5,000. 37 In the instant case, under this agreement, Fredrikson would have been entitled to $519,500 - $225,000 = $294,500 x 28% = $82,460. This fee arrangement would have resulted in attorneys’ fees only 2/3 of the customary fee of $121,833. And this fee arrangement would have resulted in attorney’s fees of only 38% of the fees requested. Holy Angels has provided no explanation for why a fee so greatly above what they agreed to pay is warranted here. At the time the fee agreement was entered, all the facts and hurdles were known. The parties knew of the Master Plan to try to put retail on the property, they knew of the resistance to zoning, they knew the special nature of the school regarding safety and aesthetics, and they knew that the decision makers were the school board. Presumably all this was factored into the agreement. This factor weighs in favor of decreasing the attorney’s fees which from the requested level. Summary Attorney fees $121,833: Considering all the lodestar factors that court finds that the reasonable attorneys’ fees in this instance are the customary fees charged in these types of cases, which would be $121,833. This is a significant, about 50%, increase over what Fredrikson would 36 Savin Aff. para 1. 37 Savin Ex I. May 9, 2016 retainer. The contingent fee would be higher if Holy Angels appealed. 27-CV-16-1421 Filed in District Court State of Minnesota 12/26/2019 12:26 PM have received under its fee arrangement. Although less than the amount calculated based on hours and Fredrikson’s hourly rate, that amount—so much greater than the customary fees—cannot be justified here when Holy Angels got less than half of what it requested, and only 1/3 of the difference between what it requested and the last offer. Holy Angels has failed to justify that so much time was necessary to achieve the result. Costs $4,990: No objection was raised to costs. Expert Arborist $6,299: No objection was raised to other experts Expert Traffic Consultant $6,000: The County concedes that $6,000 is reasonable. The court finds that a decrease from the $8,600 to $6,000 is warranted because some of the work related to retail, and Holy Angels got less than 50% of what they requested and only 1/3 of the difference between the final offer and their request. Other Experts Dahlke and Strachota $52,646.50: Considering the lodestar factors, that court finds that the other expert costs should be cut by 50% because so much of the work was devoted to establishing a value for retail, and that argument was mostly rejected by the Commissioners. Holy Angels got less than 50% of what it requested. Holy Angels has failed to persuade the court that the experts needed to devote this degree of effort in order to achieve the result. Thus the $84,522.68 charged by Strachota and the $20,770.40 charged by Dahlke, totally, $105,293 should be reduced to $52,646.50 Total attorneys’ fees, expert fees and costs: $191,768.50 ORDER Defendant Holy Angels’ motion for attorney’s fees and costs is granted. Defendant is awarded $191,768.50 in reasonable attorneys’ fees, expert fees and costs and disbursements against Plaintiff Hennepin County. LET JUDGMENT BE ENTERED ACCORDINGLY. DATED: December 26, 2019 BY THE COURT: Siegesmund, Kristin 2019.12.26 12:11:11 Filed in District Court State of Minnesota -06'00' ____________________________________ Dec 27, 2019 7:57 am The Honorable Kristin A. Siegesmund Judge of District Court JUDGMENT I Hereby Certify that the above Order Constitutes the Entry of Judgment of the Court Sarah Lindahl-Pfieffer, Court Administrator By_____________________________________ Dec 27, 2019 _______________________________________