TransCanada Keystone Pipeline v. Nicholas Family ( 2018 )

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
03/16/2018 08:11 AM CDT
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Nebraska Supreme Court A dvance Sheets
299 Nebraska R eports
TRANSCANADA KEYSTONE PIPELINE v. NICHOLAS FAMILY
Cite as 299 Neb. 276
TransCanada K eystone Pipeline, LP, appellant and
cross-appellee, v. Nicholas Family Limited Partnership
et al., appellees and cross-appellants.
TransCanada K eystone Pipeline, LP, appellant and
cross-appellee, v. William F. Dunavan et al.,
appellees and cross-appellants.
TransCanada K eystone Pipeline, LP, appellant,
v. Bartels Farms I nc., appellee.
TransCanada K eystone Pipeline, LP, appellant,
v. John F. Small et al., appellees.
____ N.W.2d ___
Filed March 9, 2018. Nos. S-17-116 through S-17-134, S-17-366, S-17-367,
S-17-369, S-17-424, S-17-741 through S-17-745, S-17-747, S-17-748,
S-17-750, S-17-751, and S-17-753 through S-17-760.
1. Statutes: Appeal and Error. Statutory interpretation presents a ques-
tion of law, on which an appellate court has an obligation to reach an
independent conclusion irrespective of the decision made by the court
below.
2. Attorney Fees: Appeal and Error. On appeal, a trial court’s decision
awarding or denying attorney fees will be upheld absent an abuse of
discretion.
3. Rules of Evidence: Hearsay: Appeal and Error. Apart from rul-
ings under the residual hearsay exception, an appellate court reviews
for clear error the factual findings underpinning a trial court’s hear-
say ruling and reviews de novo the court’s ultimate determination to
admit evidence over a hearsay objection or exclude evidence on hear-
say grounds.
4. Hearsay: Words and Phrases. Hearsay is defined as a statement, other
than one made by the declarant while testifying at the trial or hearing,
offered in evidence to prove the truth of the matter asserted.
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Nebraska Supreme Court A dvance Sheets
299 Nebraska R eports
TRANSCANADA KEYSTONE PIPELINE v. NICHOLAS FAMILY
Cite as 299 Neb. 276
5. Rules of Evidence: Affidavits. An affidavit is admissible in certain
enumerated situations, including motion practice, which includes the use
of affidavits relating to preliminary, collateral, and interlocutory matters.
6. Attorney Fees: Pleadings. A motion for attorney fees under Neb. Rev.
Stat. § 76-726 (Reissue 2009) is a collateral and independent request
from the underlying merits of the case between the parties.
Appeals from the District Court for Holt County, M ark D.
Kozisek, Judge, on appeal thereto from the County Court for
Holt County, A lan L. Brodbeck, Judge.
Appeals from the District Court for York County, M ary C.
Gilbride, Judge, on appeal thereto from the County Court for
York County, Linda S. Caster Senff, Judge.
Appeal from the District Court for Saline County, Vicky L.
Johnson, Judge, on appeal thereto from the County Court for
Saline County, Linda A. Bauer, Judge.
Appeals from the District Courts for Nance, Boone, and
Polk Counties, R achel A. Daugherty, Judge, on appeal thereto
from the County Courts for Nance, Boone, and Polk Counties,
Stephen R.W. Twiss, Judge.
Judgments of District Courts reversed, and causes remanded
with directions.
James G. Powers and Patrick D. Pepper, of McGrath, North,
Mullin & Kratz, P.C., L.L.O., for appellant.
David A. Domina and Brian E. Jorde, of Domina Law
Group, P.C., L.L.O., for appellees.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, K elch, and
Funke, JJ.
Heavican, C.J.
INTRODUCTION
These 40 appeals have been consolidated into 4 for pur-
poses of appeal. At issue in each case is whether the individual
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TRANSCANADA KEYSTONE PIPELINE v. NICHOLAS FAMILY
Cite as 299 Neb. 276
landowners are entitled to an award of attorney fees under
Neb. Rev. Stat. § 76-726 (Reissue 2009). We conclude that the
landowners did not offer sufficient proof as to their entitlement
to an award of attorney costs and fees.
FACTUAL BACKGROUND
TransCanada Keystone Pipeline, LP (TransCanada), is
a limited partnership wishing to construct an oil pipeline,
Keystone XL, through the State of Nebraska. On January
20, 2015, and in connection with this proposed construction,
TransCanada filed a number of eminent domain proceedings
in various counties, seeking to acquire right-of-way and other
property interests.
On January 16, 2015, just prior to TransCanada’s initiation
of these proceedings, certain property owners (including some
of the same landowners involved in these eminent domain pro-
ceedings) filed, in York County District Court, a constitutional
challenge to the pipeline route as approved by Nebraska’s
Governor. As a result of this challenge, TransCanada and the
landowners agreed to stay the eminent domain proceedings
while the constitutional challenge was being litigated.
TransCanada dismissed its condemnation petitions on
October 1, 2015, except that the Holt County petitions were
dismissed on September 30, in order for TransCanada to
pursue approval of a pipeline route by the Public Service
Commission:
TransCanada . . . (“Keystone”) . . . hereby dismisses,
without prejudice, its Petition for Condemnation in this
matter. Keystone will be seeking route approval pursu-
ant to Neb. Rev. Stat. § 57-1401 et seq., also known as
the Major Oil Pipeline Siting Act. In the event the route
approval is granted, Keystone will reinstitute eminent
domain proceedings if necessary.
The landowners filed the motions for attorney fees and costs
at issue in these consolidated appeals on October 6, 2015,
except that the Holt County motions were filed on October 2.
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299 Nebraska R eports
TRANSCANADA KEYSTONE PIPELINE v. NICHOLAS FAMILY
Cite as 299 Neb. 276
The motions were brought pursuant to § 76-726 and requested
that the various county courts award to the landowners costs,
expenses, and attorney fees for work done in connection with
both the county court eminent domain proceedings and the
constitutional challenge. These requests were accompanied by
affidavits from (1) the individual landowners, (2) counsel for
the landowners, and (3) other attorneys attesting to the rea-
sonableness of the attorney fees charged. In each instance,
TransCanada objected to the landowner affidavits on the basis
of hearsay.
In each of these cases, the county court granted the requests
for attorney fees and TransCanada appealed. In the cases
docketed at Nos. S-17-116 through S-17-134 (Holt County
cases), the district court (1) found that the county court erred
in admitting the landowner affidavits because they were hear-
say, but that the admission was not reversible error because
TransCanada did not insist upon a ruling on its objection and
thus waived the objection; (2) found that the dismissals with-
out prejudice amounted to an abandonment of the condemna-
tion proceedings; and (3) reversed the awards of attorney fees
and costs, because there was no evidence that the landowners
actually incurred costs or fees as required by § 76-726, and
remanded the causes to the county court for redetermination.
In the case docketed at No. S-17-424 (Saline County case),
the district court found that (1) the county court did not err in
admitting the landowner affidavits and did not err in failing to
rule on TransCanada’s hearsay objection because TransCanada
did not insist upon a ruling and thus waived the objection, (2)
the dismissals without prejudice amounted to an abandonment
of the condemnation proceedings, and (3) the award of attor-
ney fees and costs was proper because the landowner affidavit
testimony showed an agreement to pay fees.
In the cases docketed at Nos. S-17-366, S-17-367, and
S-17-369 (York County cases), the district court found that (1)
the dismissals without prejudice amounted to an abandonment
of the condemnation proceedings and (2) the fees sought may
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TRANSCANADA KEYSTONE PIPELINE v. NICHOLAS FAMILY
Cite as 299 Neb. 276
be proved by affidavit, but the affidavits offered into evidence
did not allow the court to determine the amount actually
incurred, and thus, the award was reversed and the cause was
remanded for further proceedings.
Finally, in the cases docketed at Nos. S-17-741 through
S-17-745, S-17-747, S-17-748, S-17-750, S-17-751, and
S-17-753 through S-17-760 (Nance, Boone, and Polk County
cases), the district court found that (1) the dismissals without
prejudice amounted to an abandonment of the condemnation
proceedings and (2) the attorney fees sought may be proved
by affidavit and the award was proper because the landown-
ers’ affidavit testimony showed an agreement to pay attor-
ney fees.
ASSIGNMENTS OF ERROR
Cases Nos. S-17-116 through S-17-134.
In these appeals, TransCanada assigns that that district
court for Holt County erred in (1) finding that TransCanada
waived its hearsay objections to the landowners’ affidavits and
holding that the county court did not err in admitting those
affidavits and (2) remanding the causes to the county court for
further proceedings on the amount of attorney fees and costs
the landowners actually incurred.
On cross-appeal, the landowners assign that the district court
erred in (1) failing to affirm the county court’s award of attor-
ney fees, (2) finding there was insufficient evidence to show
that the landowners actually incurred the attorney fees awarded
by the county court, (3) finding that an application for attorney
fees under § 76-726 requires evidence of legal fees “actually
‘paid,’” and (4) finding that the landowners’ affidavit evidence
was hearsay.
Case No. S-17-424.
In this appeal, TransCanada assigns that the district court
for Saline County erred in (1) finding that the landowners’
affidavit evidence was admissible to prove attorney fees and
costs under § 76-726 and that TransCanada waived its hearsay
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TRANSCANADA KEYSTONE PIPELINE v. NICHOLAS FAMILY
Cite as 299 Neb. 276
objection and (2) affirming the county court’s award of attor-
ney fees and costs without proof of payment and without evi-
dence showing the amount of attorney fees actually charged or
how those fees were charged.
Cases Nos. S-17-366, S-17-367,
and S-17-369.
In these appeals, TransCanada assigns that the district court
for York County erred in (1) finding that the landowners’ affi-
davit evidence was admissible to prove attorney fees and costs
under § 76-726 and (2) construing § 76-726 to hold that reim-
bursement was allowed without proof of payment and accord-
ingly remanding the cause to the county court for a determina-
tion of the attorney fees actually incurred.
On cross-appeal, the landowners assign that the district court
erred in (1) failing to affirm the county court’s award of legal
fees and (2) finding there was insufficient evidence to show
that the landowners actually incurred the attorney fees awarded
by the county court.
Cases Nos. S-17-741 through S-17-745,
S-17-747, S-17-748, S-17-750,
S-17-751, and S-17-753
through S-17-760.
In these appeals, which by stipulation of the parties were
all heard in the Nance County District Court, TransCanada
assigns that the district court for Nance County erred in (1)
finding that the landowners’ affidavit evidence was admis-
sible to prove attorney fees and costs under § 76-726 and (2)
affirming the county court’s award of attorney fees and costs
without proof of payment and without evidence showing the
amount of attorney fees actually charged or how those fees
were charged.
STANDARD OF REVIEW
[1] Statutory interpretation presents a question of law,
on which an appellate court has an obligation to reach an
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TRANSCANADA KEYSTONE PIPELINE v. NICHOLAS FAMILY
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independent conclusion irrespective of the decision made by
the court below.1
[2] On appeal, a trial court’s decision awarding or denying
attorney fees will be upheld absent an abuse of discretion.2
[3] Apart from rulings under the residual hearsay excep-
tion, an appellate court reviews for clear error the fac-
tual findings underpinning a trial court’s hearsay ruling and
reviews de novo the court’s ultimate determination to admit
evidence over a hearsay objection or exclude evidence on
hearsay grounds.3
ANALYSIS
These appeals generally present three issues: (1) whether
TransCanada waived its hearsay objection, (2) whether the
affidavits were admissible, and (3) whether the proof in these
cases was sufficient.
Attorney fees in these cases were requested under the author-
ity of § 76-726, which provides in relevant part:
(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 attor-
ney’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 aban-
doned by the agency. If a settlement is effected, the court
may award to the plaintiff reasonable expenses, fees,
and costs.
1
Simon v. City of Omaha, 267 Neb. 718, 677 N.W.2d 129 (2004).
2
Id.
3
O’Brien v. Cessna Aircraft Co., 298 Neb. 109, 903 N.W.2d 432 (2017).
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Nebraska Supreme Court A dvance Sheets
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TRANSCANADA KEYSTONE PIPELINE v. NICHOLAS FAMILY
Cite as 299 Neb. 276
Waiver.
In its appeals in the Holt County and Saline County cases,
TransCanada assigns that the district court erred in finding
that it waived its hearsay objection by failing to insist upon
a ruling. We need not address the waiver issue as presented
by these cases, because, as is addressed in more detail below,
we reject the hearsay issue in the York County and Nance
County appeals.
Admissibility of Affidavits.
TransCanada next argues that the affidavits were inadmis-
sible, both because they consisted of hearsay and because
§ 76-726 requires a higher level of proof.
[4] We turn first to TransCanada’s hearsay contention.
Hearsay is defined as “a statement, other than one made by
the declarant while testifying at the trial or hearing, offered
in evidence to prove the truth of the matter asserted.”4 As
TransCanada correctly notes, it is “beyond question” that these
affidavits contain hearsay.5
[5] But as TransCanada also points out, under Neb. Rev.
Stat. § 25-1244 (Reissue 2016), an affidavit is admissible in
certain enumerated situations, including “motion practice,”
which includes the use of affidavits relating to preliminary,
collateral, and interlocutory matters.6 TransCanada sug-
gests, without authority, that a motion for attorney fees under
§ 76-726 fits under none of these categories; the landowners
argue that these types of motions are obviously collateral for
purposes of § 25-1244 motion practice.
[6] We have previously suggested, as the landowners now
contend, that a motion for attorney fees is a “collateral and
independent request from the underlying merits of the case
4
Neb. Rev. Stat. § 27-801(3) (Reissue 2016).
5
See, e.g., brief for appellant in cases Nos. S-17-116 through S-17-134
at 12.
6
Id.
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TRANSCANADA KEYSTONE PIPELINE v. NICHOLAS FAMILY
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between the parties.”7 This makes logical sense—without the
underlying action, there would be nothing for which to seek an
award of attorney fees.
In fact, we have suggested that affidavits are a preferred
method of introducing such evidence:
The best practice will always be to provide an affi-
davit or other evidence such as testimony or exhibits
as detailed above, and we certainly encourage doing so.
With such evidence, a party is assured that both the trial
court and the appellate court will not be required to scour
a record in an effort to support attorney fees in any par-
ticular case.
We will not absolutely require the filing of an affi-
davit. . . . But we emphasize that the filing of an affi-
davit or presentation of other evidence will always be
the preferable way to support the award of attorney
fees. Litigants who do not file an affidavit or present
other evidence risk the loss of attorney fees, because of
the difficulty of discerning such information from the
record alone.8
We hold accordingly in this case. Affidavits are generally
admissible in collateral matters, and a motion for attorney fees
under § 76-726 is such a collateral matter.
TransCanada also contends that affidavits are insufficient
under § 76-726 and that live testimony is required. It cites
no authority for this proposition. Having examined the lan-
guage of § 76-726, we find it to be without merit. We find
no error in the district court’s admission of the affidavits in
this case.
7
Kaminski v. Bass, 252 Neb. 760, 768, 567 N.W.2d 118, 123 (1997). See,
also, Central Neb. Pub. Power v. Jeffrey Lake Dev., 267 Neb. 997, 679
N.W.2d 235 (2004).
8
See Garza v. Garza, 288 Neb. 213, 221, 846 N.W.2d 626, 633 (2014). See,
also, ACI Worldwide Corp. v. Baldwin Hackett & Meeks, 296 Neb. 818,
896 N.W.2d 156 (2017).
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TRANSCANADA KEYSTONE PIPELINE v. NICHOLAS FAMILY
Cite as 299 Neb. 276
Sufficiency of Proof.
TransCanada next contends that there was insufficient proof
to support the award of attorney fees and costs for two rea-
sons: (1) The landowners were only entitled to an award
of attorney fees actually paid by them to counsel, and the
affidavits did not establish that any funds had been paid out
by the individual landowners to counsel, and (2) the record,
even including the challenged affidavits, was insufficient to
establish that any individual landowner was actually indebted
to counsel.
We turn to TransCanada’s argument that under § 76-726,
the landowners were only entitled to an award of attorney fees
actually paid by them to counsel. In making this assertion,
TransCanada notes that § 76-726 is different from other attor-
ney fees statutes because it provides for reimbursement.
We agree with TransCanada insofar as it notes that this
attorney fees statute is different from most other statutes allow-
ing for an award of attorney fees. Most other statutes simply
provide, where relevant, that reasonable attorney fees may be
awarded.9 But § 76-726(1) provides for “reimburse[ment of]
costs, disbursements, and expenses . . . actually incurred.”
But just because § 76-726 is a “reimbursement” statute, it
does not follow that the landowners must have actually paid
counsel in order to be entitled to an award of attorney fees.
Merriam Webster defines “reimburse” as meaning “to pay
back . . . someone[,] repay.”10 Black’s Law Dictionary defines
“incur” as a verb meaning “[t]o suffer or bring on oneself (a
liability or expense).”11 And “actual” is defined as “[e]xisting
in fact; real.”12 This is supported by this court’s prior case
9
See, e.g., Neb. Rev. Stat. §§ 25-21,108, 29-3004, and 30-4017 (Reissue
2016) and 59-821 (Reissue 2010).
10
Webster’s Third New International Dictionary of the English Language,
Unabridged 1914 (1993).
11
Black’s Law Dictionary 885 (10th ed. 2014).
12
Id. at 42.
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law defining the phrase “actually incurred,” in a case involv-
ing the Nebraska Trust Deeds Act, as “a fee that is based on
serv­ices rendered.”13
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 sup-
port in that language for the conclusion that the fees and costs
must have already been paid for by the landowner.
As an initial matter, we observe that there is no dispute
over the reasonableness of attorney fees requested in this
case, and affidavits from other practicing attorneys attesting
to that reasonableness are part of our record. The conclu-
sion regarding reasonableness, though, has no bearing on
whether the landowners’ affidavits were sufficient to support
an award of attorney fees and costs. Accordingly, we turn to
that question.
In Holt County, the landowners in some affidavits only
generally averred that they were represented by counsel. A few
other Holt County affidavits included language stating that the
landowners “[were] indebted to [counsel] for the success they
achieved and agree that the fees they seek for services are the
landowners’ reasonable obligation. We want TransCanada to
be ordered to pay this sum, along with expenses incurred on
our behalf.” In York, Saline, and Nance Counties, the land-
owners averred that they
entered into a written fee agreement with [counsel] and
are indebted to them for legal services they provided and
expenses they advanced on our behalf. . . .
....
. . . We entered into [a] written engagement agreement
with [counsel] requiring us to pay for all legal services
and to reimburse [counsel] for expenses they expended
on our behalf.
13
Arizona Motor Speedway v. Hoppe, 244 Neb. 316, 323, 506 N.W.2d 699,
703 (1993).
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TRANSCANADA KEYSTONE PIPELINE v. NICHOLAS FAMILY
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....
. . . We are indebted to [counsel] for the success they
achieved and agree that the fees and expenses they seek
for services are reasonable and the landowners’ obliga-
tion. We want TransCanada to be ordered to pay the sums
requested, along with expenses incurred on our behalf
because this includes the money we have paid for legal
services and expenses and our debts incurred.
No written fee agreement or invoice for legal services was
offered as evidence in support of the motions for attorney fees
and costs. Nor did the landowners, in their affidavits, aver any
specific amount owed by them to counsel.
We observe that affidavits from one or both counsel of
record regarding the attorney fees actually incurred by the
landowners were offered and admitted as evidence before each
of the county courts. Under certain circumstances, such affida-
vits might supplement other evidence admitted at an attorney
fees hearing and support the award of fees.14
But in this case, these affidavits from counsel were not spe-
cific as to any individual landowner and—with respect to work
done and fees charged—were virtually identical to one another,
including seeking payment of the same amount of money
based upon the same number of hours of work. In fact, these
affidavits raised more questions than they answered, notably
about the nature of the fee agreement between the landowners
and counsel, whether any fee agreement was akin to a contin-
gency agreement, and the nature of how attorney fees sought
in these eminent domain proceedings might be related to the
York County constitutional challenge. As such, we conclude
that on these facts, these affidavits are insufficient to support
the award of attorney fees.
Because the landowners’ affidavits did not allege the amount
each had actually incurred, and because there was no other
14
See Garza v. Garza, supra note 8.
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evidence sufficient to support the award of attorney fees, we
find that the county courts’ awards were in error.
Resolution.
We conclude that none of the landowners established that
they were entitled to attorney fees. As such, we reverse the
decisions of the Saline and Nance County District Courts. We
remand the causes to those courts, with instructions for those
courts to remand the causes to the county courts, with direc-
tions for those courts to vacate the awards of attorney fees.
We observe that the Holt and York County District Courts
vacated the amount of the awards of attorney fees, but remanded
the causes for further proceedings. We agree with TransCanada
that such a remand was error. Accordingly, in those cases, we
reverse the district courts’ decisions remanding for further
proceedings.
CONCLUSION
For the reasons set forth above, the decisions of the dis-
trict courts are reversed and the causes are remanded with
directions.
R eversed and remanded with directions.
Wright, J., not participating.