filed in the office of the state of north dakota · pdf fileno. 20170248 in the supreme court...
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No. 20170248
IN THE SUPREME COURT OF THE
STATE OF NORTH DAKOTA
North Dakota Department of Transportation,
Plaintiff-Appellee,
v.
Rosie Glow, LLC,
an Oregon Limited Liability Company,
Defendant-Appellant.
Appeal from the May 3, 2017 judgment of the
District Court, Northwest Judicial District,
McKenzie County, North Dakota
The Honorable Robin A. Schmidt
Civil No. 27-2013-CV-00191
APPELLANT’S REPLY BRIEF
R. Daniel Lindahl
ND ID No. P01905
Admitted pro hac vice
John R. Osburn
ND ID No. P01312
Admitted pro hac vice
Bullivant Houser Bailey PC
888 S.W. Fifth Avenue, #300
Portland, Oregon 97204
Telephone: 503-228-6351
Attorneys for Appellant
John C. Hughes, #06001
Meagher & Geer, PLLP
1900 Burnt Boat Drive
Suite 101
Bismarck, North Dakota 58503
Telephone: 701-222-1315
Attorneys for Appellant
FILED IN THE OFFICE OF THE CLERK OF SUPREME COURT FEBRUARY 2, 2018 STATE OF NORTH DAKOTA
20170248
i
TABLE OF CONTENTS
Paragraph
I. STATEMENT OF FACTS ............................................................. 1
II. REPLY ARGUMENT .................................................................. 2
A. NDDOT presents an incomplete discussion of the
standards for setting attorney’s fees ............................. 2
B. There is no prohibition against awarding attorney
fees to more than one law firm ...................................... 4
C. Unpublished, unexplained trial court decisions
have no persuasive value ............................................. 11
D. There is no understandable explanation for the
drastic reduction of Rosie Glow’s fee petition ............. 13
E. NDDOT has misunderstood the appeal regarding
costs and not responded to the central issues in
that appeal ................................................................... 22
III. CONCLUSION ......................................................................... 27
ii
TABLE OF AUTHORITIES
Paragraph(s)
CASES
City of Bismarck v. Thom,
261 N.W.2d 640 (N.D. 1977) ........................................................ 2
City of Devils Lake v. Davis,
480 N.W.2d 720 (N.D. 1992) .................................................. 3, 14
United Development Corp. v. State Highway Dept.,
133 N.W.2d 439 (N.D. 1965) .................................. 4, 5, 7, 8, 9, 10
1
I. STATEMENT OF FACTS
[¶ 1] Although NDDOT presents its own statement of facts, it
does not dispute the accuracy of anything in Rosie Glow’s
statement of facts.
II. REPLY ARGUMENT
A. NDDOT presents an incomplete discussion of the standards for setting attorney’s fees.
[¶ 2] NDDOT discusses the factors relevant to setting the amount
of a fee award. (NDDOT Brief at ¶ 16.) NDDOT’s discussion is
inaccurate because it does not acknowledge that “[t]he number of
hours spent in total and the rate per hour are the predominant
factors in determining reasonable hourly fees.” City of Bismarck v.
Thom, 261 N.W.2d 640, 646 (N.D. 1977). Instead, NDDOT focuses
on other, secondary factors. Although those factors are relevant,
they are not the “predominant factors” in the analysis.
[¶ 3] NDDOT’s discussion of the governing principles is also
flawed by its failure to even acknowledge, much less address, this
Court’s admonition that a trial court that drastically reduces a fee
request must provide “an understandable explanation of what
work was deemed unreasonable and why it was.” City of Devils
2
Lake v. Davis, 480 N.W.2d 720, 727 (N.D. 1992). NDDOT’s failure
to address this central point in Rosie Glow’s brief is a tacit
admission that the trial court’s decision does not meet this
standard.
B. There is no prohibition against awarding attorney fees to more than one law firm.
[¶ 4] NDDOT cites United Development Corp. v. State Highway
Dept., 133 N.W.2d 439 (N.D. 1965) for the proposition that a trial
court may never award attorney fees to more than one attorney.
That is not the holding of United Development.
[¶ 5] United Development was an eminent-domain case. After
prevailing, the property owner petitioned for more than $9,000 in
attorney’s fees. The trial court awarded $4,650, which was the
amount the landowner had agreed to pay its attorneys under a
contingent fee agreement. The Highway Department appealed,
arguing the fee award was excessive. The landowner did not
appeal. This Court affirmed the fee award.
[¶ 6] This Court’s opinion contains these sentences quoted in
NDDOT’s brief:
3
It is the prerogative of any litigant to
have any number of attorneys
represent him. He may also change
attorneys as often as he desires. But,
where a prevailing party does hire a
number of attorneys, and where the
statute permits ‘reasonable attorney’s
fee,’ he may tax but one attorney’s fee
for the litigation.
[¶ 7] This is dicta. United Development presented no issue about a
landowner’s ability to recover fees for more than one attorney. It is
unclear why the opinion included these comments, which were not
necessary to the decision.
[¶ 8] United Development has no holding that a successful
landowner cannot recover fees for more than one attorney or law
firm. Instead, the case’s holding was to affirm the trial court’s fee
award (rather than reduce it further, as the Highway Department
urged).
[¶ 9] Finally, in United Development the landowner had
terminated one law firm and then hired a second, entirely
different firm. Replacing one firm with another could lead to
duplication of efforts. That did not happen here. In this case, Rosie
Glow had two law firms. One firm did the bulk of the work. The
4
trial court noted the absence of duplicative work, other than time
spent in one deposition and at trial.
[¶ 10] For all these reasons, United Development is unpersuasive.
C. Unpublished, unexplained trial court decisions have no persuasive value.
[¶ 11] NDDOT says the fee award in this case “is well in line
with” fee awards in other quick-take eminent domain cases.
(NDDOT Brief at ¶ 24.) NDDOT supports that assertion with
citations to three unpublished trial court decisions. NDDOT does
not include any of the three decisions in an appendix to its brief.
NDDOT also does not discuss the facts and issues in any of the
cases. For example, NDDOT does not discuss the nature of the
legal and factual issues, the amount at issue, the outcome
achieved, or the amount of fees requested.
[¶ 12] There is no basis for concluding that those unpublished and
nonprecedential trial court decisions provide useful guidance in
this case involving four distinct parcels totaling 130.64 acres.
5
D. There is no understandable explanation for the drastic reduction of Rosie Glow’s fee petition.
[¶ 13] Rosie Glow sought fees for 533.80 hours worked. The trial
court awarded fees for 108 hours worked. Thus, the trial court
reduced the fee request by more than 425 hours, resulting in an
award of a paltry 20 percent of the hours requested.
[¶ 14] The trial court failed to provide an “understandable
explanation of what work was deemed unreasonable and why it
was.” Davis, 480 N.W.2d at 727. NDDOT has done no better.
[¶ 15] NDDOT’s defense of the trial court’s decision focuses on
two categories of time entries mentioned in the trial court’s order:
(1) communications between the two law firms, and (2) attorney
Osburn’s travel time.
[¶ 16] NDDOT purports to have found 20 hours of time billed to
communications with attorney Hughes at the Meagher law firm.
(NDDOT Brief at ¶ 25.) And NDDOT purports to have found
another 70 hours of travel time.1 (NDDOT Brief at ¶ 26.)
1 NDDOT also notes that Rosie Glow’s petition for costs requested
expenses related to attorney Osburn’s travel. It is unclear why
NDDOT mentions that item of costs since Rosie Glow does not
raise that as an issue on appeal.
6
[¶ 17] NDDOT’s argument fortifies Rosie Glow’s position. Even if
Rosie Glow conceded that all 90 of those hours were properly
deducted (which it does not), that leaves more than 335 hours
unaccounted for by the trial court’s order. Neither the trial court
nor NDDOT have identified even one other specific time entry or
category of work that justifies the draconian reduction applied by
the trial court.
[¶ 18] NDDOT also argues that the verdict justifies the reduced
fee award. Although Rosie Glow did not get everything it sought,
it recovered much more than NDDOT offered. Although $300,000
is apparently not a lot of money to NDDOT, it is to most people,
including Rosie Glow.
[¶ 19] NDDOT deposited an inadequate amount as just
compensation for the property. Rosie Glow had no desire to
litigate with NDDOT, but NDDOT’s inadequate deposit forced
Rosie Glow into a prolonged, expensive dispute with NDDOT. At
trial, Rosie Glow was vindicated by recovering $300,000 more
than NDDOT’s deposit. Rosie Glow achieved a substantial victory,
and the fee award should reflect that fact.
7
[¶ 20] It is noteworthy that NDDOT substantially contributed to
causing this prolonged fight because of its unwillingness to engage
in settlement discussions. Rosie Glow repeatedly attempted to
resolve the case by mutual agreement and without trial. (App. 46-
47, ¶¶ 10-12.) NDDOT ignored all of Rosie Glow’s settlement
offers until shortly before trial, when it made an offer far below
what Rosie Glow ultimately recovered. (App. 47, ¶ 12.) NDDOT
should not be heard to complain about the cost of litigation it
fostered.
[¶ 21] Rosie Glow acknowledges that the amount of a fee award is
a matter within the trial court’s discretion. But that discretion is
not unbounded. The hours worked and hourly rate charged are the
predominant factors in setting a fee award. Here, those factors
produced a fee request for more than $164,000. Without adequate
explanation or basis, the trial court awarded only $32,400. That
was an abuse of discretion.
8
E. NDDOT has misunderstood the appeal regarding costs and not responded to the central issues in that appeal.
[¶ 22] NDDOT thoroughly misunderstands Rosie Glow’s appeal
regarding the trial court’s award of costs. Consequently, NDDOT’s
discussion of those issues is unhelpful.
[¶ 23] Rosie Glow’s brief explains that it is challenging only three
items of costs: (1) the trial court’s award of only $5,625 of the
$7,500 Strand charged for his appraisal of the taken property; (2)
the trial court’s refusal to award anything for the $2,500 Strand
charged for a review of NDDOT’s appraisal; and (3) the trial
court’s refusal to award anything for Strand’s time (11 hours)
spent preparing for and attending his deposition. (Rosie Glow’s
Opening Brief at 29-30.) These three items total $7,125.
[¶ 24] All of this was made clear in Rosie Glow’s brief. Yet
NDDOT somehow has misunderstood the scope of Rosie Glow’s
appeal regarding costs, and contends Rosie Glow is challenging
$25,250 in disallowed expert-witness expenses. (NDDOT Brief at
10.) Having misunderstood Rosie Glow’s position, NDDOT’s brief
9
is almost exclusively devoted to matters not at issue and fails to
address most of the matters that are at issue.
[¶ 25] With regard to Strand’s $2,500 expense for reviewing
NDDOT’s appraisal and the $2,750 expense for preparation and
attendance at Strand’s deposition, Rosie Glow’s brief noted that in
the trial court NDDOT had not objected to either item. Similarly,
on appeal NDDOT addresses neither item despite the fact they are
two of only three specific items of costs raised by Rosie Glow’s
appeal. NDDOT has not offered any reason why the trial court’s
refusal to award these items was not an abuse of discretion.
[¶ 26] NDDOT does attempt to justify the trial court’s decision to
award only $5,625 of the $7,500 Strand charged for preparing his
appraisal of the four parcels. The parties have presented their
competing positions about that issue, and it warrants no further
discussion.
III. CONCLUSION
[¶ 27] This Court should rule that the district court’s attorney-fee
and expert-witness-fee awards were the product of an abuse of
discretion, and remand the case for reconsideration.
10
DATED: February 2, 2018.
R. Daniel Lindahl
ND ID No.P01905
Admitted pro hac vice
John R. Osburn
ND ID No. P01312
Admitted pro hac vice
BULLIVANT HOUSER BAILEY PC
By s/ R. Daniel Lindahl
R. Daniel Lindahl
Attorneys for Appellant
John C. Hughes, 06001
MEAGHER & GEER, PLLP
By s/ John C. Hughes
John C. Hughes
Attorneys for Appellant
1
CERTIFICATE OF SERVICE
I hereby certify that on February 2, 2018, I served
Appellant’s Reply Brief on Scott K. Porsborg, Special Assistant
Attorney General and counsel for Plaintiff-Appellee North Dakota
Department of Transportation by sending the documents via e-
mail to [email protected].
s/ R. Daniel Lindahl
R. Daniel Lindahl, ND ID No. P01905
Admitted pro hac vice