A Minnesota state statute pertaining to the recovery of attorney fees and costs for property owners undergoing eminent domain was passed in 2006. The statute allows for property owners to recover their attorney’s fees and costs if the final judgment or award of damages is more than 40 percent greater than the last written offer made by the condemning authority. If the final judgment or award is at least 20 percent, but no more than 40 percent greater than the last written offer, the court may award attorneys fees and costs. (MN ST § 117.031)
In May 2010, the MN Court of Appeals filed a decision involving the first case concerning the attorney fee recovery statue. The particulars of this case were fairly unique and revealed very little in regards to how MN courts will interpret the language of the statute.
The question that remains unanswered is how MN Courts will define “reasonable attorney fees, litigation expenses, appraisal fees, other expert’s fees, and other related costs.” Minnesota Courts will hopefully interpret the language of the attorney fee recovery statue similar to how neighboring state Wisconsin has interpreted its own attorney fee recovery statute. Wisconsin Courts have consistently interpreted their statute liberally in favor of property owners. A Wisconsin appellate court has held:
The legislative intent in drafting their attorney fee recovery statute was (1.) to discourage the condemnor from making inequitably low jurisdictional offers, and (2) to force the condemnor to indemnify the condemnee for attorney’s fee incurred by an appeal. Standard Theatres, Inc. v. Department of Transportation, 118 Wis.2d 730, 741, 349 N.W.2d 661, 668 (1984). In allowing condemnee to recover litigation expenses, the legislator sought to provide just compensation by ensuring that part of the award would not have to be used to pay for litigation expenses. Green Bay Redevelopment Authority v. Bee Frank, Inc, 120 Wis.2d 402, 412, 355 N.W.2d 240, 245 (1984).
Wisconsin courts not only liberally construe the statue on behalf of property owners, they also are mindful of the statute’s purpose, which is to make a property owner ‘whole’ by compensating the owner for the value of the land taken and for attorneys fees incurred in pursuing the land owners constitutional right for just compensation. Standard Theatres, 349 N.W.2d at 670.
Moreover, the US Supreme Court has consistently held in condemnation cases, that the government’s obligation is to “put the owner in as good a position pecuniary as if the use of their property had not been taken” Monongahela Nav. Co. v United States, 148 U.S. 312 (1893); Phelps v. United States, 274 U.S. 341 (1927); Olson v. United States, 292 U.S. 296 (1934). That is, property owners should receive fair and just compensation and not be at any financial loss resulting from the government’s action to seize their property. We believe that in order for this to be possible, property owners should be entitled to quality legal representation at the expense of the condemning authority if the difference between the condemning authority’s offer and the final award falls within the statutory threshold.
When the government acts to condemn property, legal representation is often required to ensure owners actually receive the fair and just compensation they are entitled to under the law. Without attorney fee recovery, property owners with smaller claims who hire an attorney on an hourly basis will see little financial gain, or perhaps be at a loss after fighting in court and paying for appraisals and attorney fees. Additionally, for larger cases where attorneys are hired on a contingent fee basis, where the typical fee is 1/3 the difference, property owners lose 1/3 of their additional damages compensation if fees are not paid by the government.
While this Minnesota law concerning attorney fee recovery, and the recent improvements to this law concerning public utility companies, are welcome, the Courts need to follow the intent of the law in protecting property owners’ rights. By including the option of recovering fees on a contingent fee or hourly basis in the definition of reasonable attorney fees, and by ruling liberally within the discretionary threshold amount of 20-39%, Minnesota would go a long way in leveling the playing field between the property owner and the government in eminent domain proceedings.
Learn more about the eminent domain process in Minnesota and Wisconsin, or in your own state.
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