Here’s the latest case on our (second) favorite subject, recovery of attorneys’ fees.
First, let’s be frank: in our experience, many courts don’t really care all that much for requests for fees and costs, for whatever reason. Maybe it’s because the merits have already been decided and these requests are collateral “tails.” Maybe it’s because they don’t think that the applying parties deserve to be reimbursed. Maybe it’s because many judges do not come from a private practice background and therefore are not fully appreciative of the cost of private representation. Maybe it’s because the evidentiary details required to support these requests can be … unexciting. Who can say.
And, as we’ve mentioned previously here, assembling a request for attorneys fees can be a slog. Does anyone really like going through their time entries and bills, redacting stuff, tracking down costs, gathering testimony that fees are “reasonable,” and the like? Not really, but we all do it.
With that background, let’s get to the Nebraska Supreme Court’s decision in TransCanada Keystone Pipeline, LP v. Nicholas Family Ltd. P’ship, No. S-17-116 (Mar. 9, 2018). Unfortunately, it wasn’t good news for the property owners who sought recover their fees after TransCanada dismissed without prejudice several of its condemnation proceedings to take their land. The trial court awarded fees under Nebraska’s eminent domain fee-shifting statute:
(1) The court having jurisdiction of a proceeding instituted by an agency as defined in section 76-1217 to acquire real property by condemnation shall award the owner of any right, title, or interest in such real property such sum as will, in the opinion of the court, reimburse such owner for his or her reasonable costs, disbursements, and expenses, including reasonable attorney’s, appraisal, and engineering fees, actually incurred because of the condemnation proceedings if (a) the final judgment is that the agency cannot acquire the real property by condemnation or (b) the proceeding is abandoned by the agency. If a settlement is effected, the court may award to the plaintiff reasonable expenses, fees, and costs.
Neb. Rev. Stat. § 76-726.
But the Nebraska Supreme Court reversed, concluding that the owners were not entitled to recover reasonable fees and costs. The reason why the court rejected the claims is instructive, because it was bothered that the record lacked details, even though the opinion noted that the property owners’ requests “were accompanied by affidavits from (1) the individual landowners, (2) counsel for the landowners, and (3) other attorneys attesting to the reasonableness of the attorney fees charged.” Slip op. at 279. That general description seems about right for a fee motion. But there was more.
First, however, the court rejected TransCanada’s claim that the affidavits in support of the requests were inadmissible hearsay, and thus could not be considered. The court made short work of the argument, concluding that this is motion practice, which under a separate Nebraska statute allows things like affidavits to be admissible for “preliminary, collateral, and interlocutory matters.” This qualified, and indeed, submitting evidence by affidavit is “a preferred method” in these type of proceedings. No surprise there at all.
Next, on the merits of the attorneys’ fees and costs claim, the court also rejected TransCanada’s argument that the statute only allows for reimbursement of fees and costs actually paid the lawyers for the property owners. The term the statute uses is “actually incurred,” and this, in the court’s view, means obligated to pay, even if not actually paid. The court correctly noted that many if not most fee-shifting statutes talk in terms of a reasonable fees and costs, and do not require that those fees and costs be incurred. But even though Nebraska’s statute is different, it doesn’t go so far as to require that the fees have been actually paid:
The plain language of § 76-726, then, requires only that the landowners be indebted to counsel for services rendered and that the attorney fees charged be reasonable. There is no support in that language for the conclusion that the fees and costs must have already been paid for by the landowner.
Slip op. at 286.
The court next noted that there wasn’t a dispute between the parties whether the fees incurred by the property owners were reasonable. Id.
So far, so good.
But, where it broke down for the court was in the details. The remainder of the opinion concluded that, in one form or another, the affidavits and evidence offered to support the owners’ requests for fees and costs were not adequate to show that the fees and costs were actually incurred. Examples of what the court found lacking: no copies of written fee agreements, the affidavits did not say how much that the clients paid or owed, and many of the affidavits were conclusory. The evidence was “not specific as to any individual landowner — with respect to work done and fees charged — [and several of the affidavits] were virtually identical to one another, including seeking payment for the same amount of money based upon the same number of hours for work.” Slip op. at 287. When an opinion notes that “these affidavits raised more questions than they answered,” id., you can guess where the court is going to end up.
Thus, the court concluded. “[b]ecause the landowners’ affidavits did not allege the amount each had actually incurred, and because there was no other evidence sufficient to support the award of attorney fees, we find that the county courts’ awards were in error.” Slip op. at 288.
That alone would not necessarily be a bad thing, because we might anticipate that the court would vacate the trial court’s order granting fees, and remand the case back for consideration of the owners’ fee applications in accordance with that standard. But the court did not do that. Instead, it reversed the judgment and remanded with instructions to vacate the awards of fees. Which in our read means that the owners won’t get a chance to submit the details for what everyone acknowledges are reasonable fees, even though the condemnor dismissed the takings. The bottom line is that the court understood the condemnor failed to take the properties, yet was okay with it being off the hook for the reasonable fees incurred by the owners.
See, we told you that courts don’t like these things.
More on the decision here: “Court: TransCanada doesn’t have to pay landowner attorneys” (MarketBeat).
Speaking of affidavits, we’re done with this post, so how many of you remember this:
FURTHER YOUR AFFIANT SAYETH NAUGHT.
TransCanada Keystone Pipline, LP v. Nicholas Family Ltd. P’ship, No. S-17-116 (Neb. Mar. 9, 2018)