Township of Millcreek v. A. Cres Trust of June 25, 1998 , 142 A.3d 948 ( 2016 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Township of Millcreek, :
:
v. : No. 1725 C.D. 2015
:
Angela Cres Trust of June 25, 1998 :
:
Appeal of: Angela Cres Trust of :
June 25, 1998 and Laurel A. Hirt :
as Trustee of the Angela Cres :
Trust of June 25, 1998 :
Township of Millcreek, :
Appellant :
:
v. : No. 1847 C.D. 2015
: Argued: April 12, 2016
Angela Cres Trust of June 25, 1998 :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE ROBERT SIMPSON, Judge
HONORABLE DAN PELLEGRINI, Senior Judge
OPINION
BY PRESIDENT JUDGE LEAVITT FILED: June 22, 2016
Millcreek Township (Township) and the Angela Cres Trust of June
25, 1998 (Trust) have challenged three orders of the Court of Common Pleas of
Erie County (trial court) awarding the Trust $517,868 in attorney fees and
expenses and $164,000 in expert fees and expenses that were incurred by the Trust
in a condemnation proceeding. The Township asserts that the Trust’s request for
reimbursement of its costs in successfully defending the condemnation was filed
untimely, depriving the trial court of jurisdiction. The Trust asserts that the trial
court’s award, which was far below what it requested, is unreasonable. We affirm
the trial court.
Background
In June 2005, the Township filed a declaration of taking of Trust
property pursuant to the Pennsylvania Eminent Domain Code,1 and this was
followed in January 2006 with an amended declaration of taking. The Township
initiated its condemnation of Trust land as part of its “Heidler Road Channel
Improvement Project,” which was undertaken to improve storm water
management. The Trust filed preliminary objections2 to the Township’s amended
declaration of taking. On December 16, 2009, after a hearing, the trial court
sustained the Trust’s preliminary objections, concluding that the Township lacked
authority under The Second Class Township Code3 to condemn property for the
purpose of creating a new water channel. This Court affirmed the decision of the
trial court. Township of Millcreek v. Angela Cres Trust of June 25, 1998, 25 A.3d
1
Act of June 22, 1964, Special Sess., P.L. 84, as amended, formerly 26 P.S. §§1–101 – 1–903,
repealed by Section 5 of the Act of May 4, 2006, P.L. 112. In 2006, the Eminent Domain Code
was consolidated at 26 Pa. C.S. §§101-1106. The trial court and the parties refer to the pre-
consolidated version of the Eminent Domain Code, which was in effect when the declaration of
taking of Trust property was filed. For consistency, this opinion also cites to the pre-
consolidated version of the Eminent Domain Code. Notably, the substantive provisions relevant
here have not changed; they have simply been reordered and renumbered in the current,
consolidated version of the Eminent Domain Code.
2
“Preliminary objections in the context of eminent domain actions serve a different purpose than
preliminary objections filed in other civil actions.” In re Condemnation of .036 Acres, More or
Less, of Land Owned by Wexford Plaza Associates, 674 A.2d 1204, 1207 (Pa. Cmwlth. 1996)
(citing North Penn Water Authority v. A Certain Parcel of Land, 650 A.2d 1197 (Pa. Cmwlth.
1994)). In eminent domain cases, preliminary objections are intended as a procedure to resolve
expeditiously the factual and legal challenges to a declaration of taking before the parties
proceed to determine damages. North Penn Water Authority, 650 A.2d at 1201.
3
Act of May 1, 1933, P.L. 103, as amended, 53 P.S. §§65101-68701.
2
1288 (Pa. Cmwlth. 2011), appeal denied, 49 A.3d 444 (Pa. 2012). On August 3,
2012, four days after the Township’s appeal to the Pennsylvania Supreme Court
was denied, the Township filed a Motion for Leave to File a Second Amended
Declaration of Taking. It was denied on October 12, 2012.
One year later, on October 23, 2013, the Trust filed a Petition for
Fees, Costs and Expenses (“Fee Petition”) seeking reimbursement of the
$3,359,900.33 it had spent to challenge the Township’s condemnation.
Specifically, the Fee Petition sought $2,278,431.75 for costs incurred in the
eminent domain proceeding; $822,471.00 for costs incurred in a related
Environmental Hearing Board proceeding; and $258,997.58 for costs incurred in
both the eminent domain and Environmental Hearing Board proceedings.
Reproduced Record at 960a (R.R. ___). On December 3, 2013, the Township filed
a response that, inter alia, asserted that the trial court lacked jurisdiction because
the Fee Petition was not timely filed.
While the Fee Petition was pending, on July 7, 2014, the Trust filed a
Petition for Decree Revesting Title of the Trust land in the Trust. The Township
did not oppose this petition.4 On July 16, 2014, the trial court granted the petition
and entered a decree revesting title in the Trust.
Thereafter, on July 30, 2014, the trial court rejected the Township’s
argument that the Trust’s Fee Petition was untimely filed and scheduled an
evidentiary hearing to determine the reasonableness of the Trust’s request.5 In
4
In its response, the Township noted that its action did not “constitute a waiver of [its] claim that
the [Fee Petition] is untimely.” R.R. 1598a.
5
The parties engaged in mediation to try to resolve the Fee Petition and several other matters.
After concluding that mediation had been unsuccessful, the trial court conducted hearings in
(Footnote continued on the next page . . .)
3
doing so, however, the trial court denied the Trust’s request for recovery of fees
and costs incurred in the Environmental Hearing Board proceeding.
On September 4, 2014, the Trust filed a Supplemental Petition
specifying that it sought $649,682.63 for its expert fees. When the Trust filed its
Fee Petition, it requested recovery of those expert fees, but the total was unknown.
Following hearings, on December 16, 2014, the trial court awarded
the Trust $517,868 in attorney fees, costs and expenses. On August 19, 2015,
following additional hearings, the trial court awarded the Trust $164,000 in expert
witness fees, costs and expenses.
On September 11, 2015, the Trust appealed the trial court’s orders of
July 30, 2014, December 16, 2014, and August 19, 2015. On September 23, 2015,
the Township cross-appealed.
Township Appeal
The Township argues on appeal6 that the trial court lacked jurisdiction
over the Trust’s Fee Petition. Relying on Section 5505 of the Judicial Code, 42 Pa.
C.S. §5505,7 the Township contends that the trial court’s jurisdiction to award fees
and costs did not extend beyond 30 days after the final order, which it argued was
(continued . . .)
2014 and 2015 on the Trust’s request for reimbursement of its costs to engage legal, appraisal
and engineering services.
6
On November 23, 2015, this Court consolidated the cross-appeals and designated the Township
as appellant.
7
Section 5505 states:
Except as otherwise provided or prescribed by law, a court upon notice to the
parties may modify or rescind any order within 30 days after its entry,
notwithstanding the prior termination of any term of court, if no appeal from such
order has been taken or allowed.
42 Pa. C.S. §5505.
4
the December 16, 2009, order sustaining the Trust’s preliminary objections.8
Because the Fee Petition was filed on October 23, 2013, the trial court lacked
jurisdiction to act upon the Trust’s Fee Petition.
In response, the Trust argues that the Eminent Domain Code provides
the complete and exclusive procedure on its Fee Petition, and it places no time
limit upon a condemnee’s request for recovery of its reasonable fees and expenses
8
In support of its jurisdictional argument, the Township points to this Court’s recent decision in
Ness v. York Township Board of Commissioners, 123 A.3d 1166 (Pa. Cmwlth. 2015). In that
case, Ness challenged the validity of an ordinance, which challenge was dismissed on December
17, 2013. Five months later, the township requested attorney fees, asserting that Ness’ conduct
had been arbitrary, vexatious and in bad faith. The trial court agreed and ordered Ness to pay the
township $3,892.70 pursuant to Section 2503(a) of the Judicial Code, 42 Pa. C.S. §2503(a).
Ness appealed.
Section 2503(a) authorizes the recovery of attorney fees in certain circumstances, such as
a litigant’s vexatious conduct. Section 2503(a) states:
The following participants shall be entitled to a reasonable counsel fee as
part of the taxable costs of the matter:
***
(9) Any participant who is awarded counsel fees because
the conduct of another party in commencing the matter or
otherwise was arbitrary, vexatious or in bad faith.
(10) Any other participant in such circumstances as may be
specified by statute heretofore or hereafter enacted.
42 Pa. C.S. §2503(a)(9), (10). In Ness, this Court did not reach the question of whether the
township had been the victim of vexatious conduct because we concluded that the township’s fee
petition had been untimely filed. In so holding, we relied upon Section 5505 of the Judicial
Code, which states:
Except as otherwise provided or prescribed by law, a court upon notice to
the parties may modify or rescind any order within 30 days after its entry,
notwithstanding the prior termination of any term of court, if no appeal
from such order has been taken or allowed.
42 Pa. C.S. §5505 (emphasis added). Because the township requested counsel fees on May 22,
2014, five months after the trial court’s December 17, 2013, order dismissing Ness’ petition, we
held that the trial court lacked jurisdiction to modify that order.
5
incurred in a condemnation proceeding. In support, it directs our attention to
McGaffic v. City of New Castle, 973 A.2d 1047 (Pa. Cmwlth. 2009).9
In reaching its decision, the trial court first examined the two relevant
provisions of the Eminent Domain Code. Former Section 406 states, in relevant
part, that where
preliminary objections are finally sustained, which have the
effect of finally terminating the condemnation, the condemnee
shall be entitled to damages as if the condemnation had been
revoked under section 408, to be assessed as therein provided.
26 P.S. §1-406(e) (repealed).10 In turn, former Section 408 provides that
9
In McGaffic, this Court considered when the statute of limitations for breach of contract
accrued against the city, which had assumed, by contract, the liabilities of a condemnor, the
redevelopment authority. This Court explained that in a de facto taking, damages included
attorney fees and reimbursement for costs and expenses of litigation through trial. Further, delay
damages up to the date of payment of the award were recoverable, and those damages could only
be ascertained at the end of the eminent domain proceedings. Thus, the plaintiffs’ breach of
contract suit against the city accrued, and the four-year statute of limitations began to run, when
they had notice of the specific damages amount at the end of their de facto taking litigation.
McGaffic is inapplicable because it did not address the time limit, if any, for seeking
reimbursement of costs under the Eminent Domain Code.
10
Former Section 406 of the Eminent Domain Code states, in full, as follows:
(a) Within thirty days after being served with notice of condemnation, the
condemnee may file preliminary objections to the declaration of taking. The court
upon cause shown may extend the time for filing preliminary objections.
Preliminary objections shall be limited to and shall be the exclusive method of
challenging (1) the power or right of the condemnor to appropriate the condemned
property unless the same has been previously adjudicated; (2) the sufficiency of
the security; (3) any other procedure followed by the condemnor; or (4) the
declaration of taking. Failure to raise these matters by preliminary objections shall
constitute a waiver thereof.
(b) Preliminary objections shall state specifically the grounds relied upon.
(c) All preliminary objections shall be raised at one time and in one pleading.
They may be inconsistent.
(Footnote continued on the next page . . .)
6
the condemnee shall be reimbursed by the condemnor for
reasonable appraisal, attorney and engineering fees and other
costs and expenses actually incurred because of the
condemnation proceedings. Such damages shall be assessed by
the court, or the court may refer the matter to viewers to
ascertain and assess the damages sustained by the condemnee,
which award shall be subject to appeal as provided in this
act….
26 P.S. §1-408 (repealed) (emphasis added in part and omitted in part).11 Neither
former Section 406 nor former Section 408 of the Eminent Domain Code
establishes a deadline for the condemnee’s request for reimbursement of attorney
and expert fees and costs.
The trial court also reasoned that the condemnation proceeding had
not yet concluded when the Trust filed its Fee Petition because the Township still
held title to the Trust property.12 When the trial court ordered title revested in the
(continued . . .)
(d) The condemnee shall serve a copy of the preliminary objections on the
condemnor within seventy-two hours after filing the same.
(e) The court shall determine promptly all preliminary objections and make
such preliminary and final orders and decrees as justice shall require, including
the revesting of title. If preliminary objections are finally sustained, which have
the effect of finally terminating the condemnation, the condemnee shall be
entitled to damages as if the condemnation had been revoked under section 408,
to be assessed as therein provided. If an issue of fact is raised, the court shall take
evidence by depositions or otherwise. The court may allow amendment or direct
the filing of a more specific declaration of taking.
26 P.S. §1-406 (repealed) (emphasis added). The above provision is now at 26 Pa. C.S. §306.
11
This language is now codified at 26 Pa. C.S. §306.
12
When a declaration of taking is filed in court, title passes to the condemnor on the date of such
filing. Former Section 402 of the Eminent Domain Code, 26 P.S. §1-402 (repealed; now
codified at 26 Pa. C.S. §302). The condemnor, upon filing its declaration of taking, shall record
notice thereof in the office of the recorder of deeds of the county in which the property is
located. Former Section 404 of the Eminent Domain Code, 26 P.S. §1-404 (repealed; now
codified at 26 Pa. C.S. §304). The notice shall be indexed in the deed indices showing the
(Footnote continued on the next page . . .)
7
Trust on July 16, 2014, the Township did not challenge the court’s jurisdiction to
enter that order. Accordingly, assuming that Section 5505 of the Judicial Code
applied to an eminent domain proceeding, the Trust’s Fee Petition was filed before
the trial court’s final order of July 16, 2014. Thus, the trial court concluded that
the Trust satisfied the 30-day deadline in Section 5505.
The Township contends that the trial court erred in two ways. First,
the trial court misread the Judicial Code. Section 2503(10) expressly applies to a
“reasonable counsel fee as part of the taxable cost ... as may be specified by statute
heretofore or hereafter enacted.” 42 Pa. C.S. §2503(10). It argues that the
Eminent Domain Code is such a statute. Second, the trial court’s order of July 16,
2014, simply corrected an error. As such, it cannot be treated as the final order in
the eminent domain proceeding. We reject the Township’s argument.
First, Section 102(a) of the Eminent Domain Code states that it is the
“complete and exclusive procedure and law” to be followed in condemnation
proceedings. 26 Pa. C.S. §102(a).13 This leaves no room for the other “procedure
(continued . . .)
condemnee as the grantor and the condemnor as the grantee. Id. After the preliminary
objections were granted, title did not automatically revest in the Trust. On July 16, 2014, the
trial court entered an order revesting title in the Trust.
13
Former Section 303 of the Code similarly provided:
It is intended by this act to provide a complete and exclusive procedure and law to
govern all condemnations of property for public purposes and the assessment of damages
therefor, except as provided in section 901: Provided, however, That nothing in this act
shall be deemed to affect, vary, alter or modify the jurisdiction or power of the Public
Utility Commission of the Commonwealth of Pennsylvania, the State Mining
Commission created under the act of June 1, 1933 (P.L. 1409), as reenacted and
amended, or any act providing for the assessment of benefits for public improvements on
the properties benefited. This act is not intended to enlarge or diminish the power of
condemnation given by law to any condemnor.
26 P.S. §1-303 (repealed) (emphasis added).
8
and law” set forth in Section 2503(10) of the Judicial Code. See In re Right of Way
for Legislative Route 1040 v. Pikur Enterprises, Inc., 596 A.2d 1253, 1260 (Pa.
Cmwlth. 1991) (stating that this Court “has continually determined that causes of
action, rules of procedure and pleadings which try to circumvent the [Eminent
Domain] Code are improper.”). Recovery of condemnation costs is not done by
modification of the order granting just compensation or sustaining preliminary
objections. It is a separate order. Section 5505 of the Judicial Code governs fee
awards that are entered by modification of the final order in the case.
Second, Section 5505 of the Judicial Code states that its 30-day time
limit applies “except as otherwise provided or prescribed by law.” 42 Pa. C.S.
§5505. It is “otherwise provided” in the Eminent Domain Code, which makes its
procedures “exclusive” and places no specific time limit upon a condemnee’s
request for fees incurred in defeating the condemnation. 26 Pa. C.S. §102.
Third, the type of costs that can be recovered under Section 2503(10)
of the Judicial Code does not match those that can be recovered under former
Section 408 of the Eminent Domain Code. Section 2503(10) of the Judicial Code
speaks only to “counsel” fees. By contrast, former Section 408 of the Eminent
Domain Code authorizes reimbursement “for reasonable appraisal, attorney and
engineering fees and expenses actually incurred because of the condemnation
proceedings.” 26 P.S. §1-408 (repealed; now codified at 26 Pa. C.S. §306)
(emphasis added). This lack of symmetry between the Judicial Code and the
Eminent Domain Code makes Section 5505 of the Judicial Code irrelevant to fee
petitions filed under the Eminent Domain Code.
In any case, we discern no error in the trial court’s holding that the
final order in the eminent domain proceeding was its July 16, 2014, order that the
9
deed, held by the Township, revest in the Trust.14 Further, the Township’s own
actions are inconsistent with its argument that the eminent domain proceeding
ended on December 16, 2009, because in August 2012, the Township sought leave
to file a Second Amended Declaration of Taking. This filing cannot be reconciled
with the Township’s position here that the trial court lacked jurisdiction as of
January 15, 2010.
We affirm the trial court’s order of July 30, 2014, holding that it had
jurisdiction over the Trust’s Fee Petition.
Trust Cross-Appeal
We turn to the Trust’s cross-appeal, which asserts that the trial court
erred by not awarding it the full amount of fees, costs and expenses that it incurred
in defeating the Township’s condemnation.15 The trial court held that the Trust did
not prove that its request for $3,359,900.33 in attorney fees, costs, and expenses
was reasonable. Instead, the trial court awarded the Trust $517,868 as reasonable
reimbursement for its attorney fees and $164,000 for the Trust’s engineering-
related fees and costs.
14
The Township argues that the trial court wrongly relied upon former Section 408 to find
jurisdiction and missed the distinction between “relinquishment” and “revesting” under the
Eminent Domain Code. According to the Township, there was no relinquishment in this case;
rather, there was vesting of title under former Section 406(e). Accordingly, the trial court erred
in characterizing the issue before it as a “relinquishment.” The Trust sought reimbursement of
costs under former Sections 406 and 408 of the Eminent Domain Code. The trial court examined
these provisions for a deadline and found none. The trial court’s use of the word
“relinquishment,” as opposed to “revested,” is simply irrelevant.
15
This Court’s review in eminent domain cases is limited to determining whether the trial court
abused its discretion or committed an error of law. Harborcreek Township v. Ring, 570 A.2d
1367, 1370 (Pa. Cmwlth. 1990).
10
We begin with a review of the legal principles applicable to a request
for fees filed under the Eminent Domain Code. Former Section 408 of the
Eminent Domain Code authorizes the recovery of costs incurred “because of the
condemnation proceedings.” 26 P.S. §1-408 (repealed; now codified at 26 Pa. C.S.
§306). This Court has explained that this statutory recovery is “not included or
embraced within just compensation for land taken for eminent domain purposes”
but is a separate recovery. In re: Condemnation by the Commonwealth,
Department of Transportation, of Right of Way for Legislative Route 1021, Section
1B, a Limited Access Highway, in the City of Pittsburgh, 709 A.2d 939, 943 (Pa.
Cmwlth. 1998). Further, the statute does not require that a condemnee be made
whole; rather, recovery is limited to reasonable attorney and expert fees and costs.
Id. at 944. The reasonableness of an award is a matter committed to the sound
discretion of the trial court and can be disturbed by an appellate court only upon a
clear abuse of discretion. Matter of Condemnation by Urban Redevelopment
Authority of Pittsburgh of Certain Lands in the Twenty-First Ward of the City of
Pittsburgh v. Kristoff, 451 A.2d 1071, 1072-73 (Pa. Cmwlth. 1982). The trial
court’s judgment comes to us with a presumption of correctness. Id. at 1073
(citing In re Baughman’s Estate, 126 A. 58 (Pa. 1924)).
With respect to the grant of attorney fees, our Supreme Court has
identified the specific factors to be considered by the trial court:
[T]he amount of work performed; the character of the services
rendered; the difficulty of the problems involved; the
importance of the litigation; the amount of money or value of
the property in question; the degree of responsibility incurred;
whether the fund involved was ‘created’ by the attorney; the
professional skill and standing of the attorney in his profession;
the results he was able to obtain; the ability of the client to pay
a reasonable fee for the services rendered; and, very
11
importantly, the amount of money or the value of property in
question.
In re LaRocca’s Trust Estate, 246 A.2d 337, 339 (Pa. 1968). Deference must be
afforded to the trial court’s decision when it applies the LaRocca factors:
[The trial court’s] opportunities of judging the exact amount of
labor, skill and responsibility involved, as well as its knowledge
of the rate of professional compensation usual at the time and
place, are necessarily greater than ours, and its judgment
should not be interfered with except for plain error.... [T]he
allowance or disallowance of counsel fees rests generally in the
judgment of the court of first instance and its decision will not
be interfered with except for palpable error.
Id. at 340 (internal quotation marks and citations omitted) (emphasis added).
In support of its request for legal fees, the Trust offered the testimony
of William P. Bresnahan16 and James T. Marnen.17 Bresnahan explained that he
did not review each individual time entry. Rather, he looked at a category of legal
activity; if the amount charged and time involved seemed reasonable, he accepted
it. Marnen likewise testified that he did not look at each invoice or assess the time
or activity recorded by each of the persons on the invoices. Instead, he based his
conclusions on a broad review.
In opposition, the Township offered the testimony of Arthur H.
Stroyd, Jr., who has extensive experience in reviewing legal billing practices. He
has trained young lawyers in proper billing practices; reviewed outside counsel
bills; and served as Special Master for the U.S. District Court for the Western
District of Pennsylvania in Erie, where he was responsible for assisting the court in
16
Bresnahan is an attorney at the law firm Hollinshead, Mendelson, Bresnahan & Nixon, P.C.,
whose practice focuses on Eminent Domain cases. R.R. 2513a.
17
Marnen is a retired attorney who specialized in complex, commercial litigation. Notes of
Testimony (N.T.), 10/28/2014, 79-81; R.R. 2058a-60a.
12
resolving a significant fee dispute. Stroyd reviewed each time entry made by the
Trust’s attorneys. He observed that more than $280,000 of the Trust’s attorney
fees was expended on other cases and that almost all of the Trust’s entries were
block billed. Accordingly, he could not assess the reasonableness of each
particular entry. He did opine there were more lawyers and hours spent on this
case than was reasonable.
The trial court found the testimony of Stroyd, the Township’s expert,
to be “considerably more compelling than that of either [of the experts] who
testified on behalf of the Trust.” Trial Court op., 12/16/2014, at 32.18 The trial
court found that “Mr. Stroyd meticulously reviewed the time and billing records
involved in the case, scrutinized each entry and methodically evaluated the
appropriateness of the fees being charged.” Id. at 34. Stroyd identified those
attorney fees that were not related to the condemnation or were excessive. Stroyd
also identified excessive charges for travel, photocopying and over-staffing. For
example, six lawyers and a paralegal charged $33,000 to attend a meeting that
may, or may not, have been about the condemnation, as opposed to one of the
other litigation matters. Accordingly, the trial court credited Stroyd’s testimony.
The trial court rejected the opinions of the Trust’s experts that all
attorney fees charged were reasonable. It found these opinions conclusory, at best,
because they were not based upon a line-by-line analysis of time entries, as was
Stroyd’s analysis.
18
On December 16, 2014, after three days of testimony and the receipt of numerous exhibits
totaling several thousand pages, the trial court issued a 46-page opinion and order. The trial
court made 47 findings of fact.
13
Given the deficiencies in the Trust’s case on legal fees, the trial court
“settle[d] on an outcome that reflect[ed] a reasonable degree of proportionality”
after it weighed “all the relevant factors” and considered “the limitations in the
evidentiary record.” Id. at 44. The trial court acknowledged that the Trust’s legal
team had done outstanding work and that the Trust was entitled to reasonable
reimbursement. To develop a reasonable fee award, the trial court began with the
Township expenditure of $258,934 on attorney fees, which the trial court found
reasonable. The court then doubled that amount to account for the vigorous and
successful efforts of the Trust’s attorneys. Id. at 44-45. This methodology
produced $517,868, which the trial court awarded the Trust as fair and reasonable.
Thereafter, on August 19, 2015, after several days of hearings, the
trial court issued a 34-page opinion and order that awarded the Trust $164,000 for
its expert fees, costs, and expenses incurred in defeating the condemnation. The
trial court reduced the Trust’s request for $649,682.63 by two-thirds.19 In its
opinion, the trial court explained that the reduction was done to account for
the duplication and redundancy of effort, the applicability of the
work to other lawsuits, and the limited role played in the
outcome by most of the work, as well as the character of the
work performed and the responsibility shouldered.
Trial Court op., 8/19/2015, at 32-33. Concluding that the Trust was “entitled to an
amount that reflects both the practical and equitable considerations that underlie
the LaRocca rationale,” the trial court awarded $164,000. Id.
19
One of the Trust’s experts, Christopher M. Hager, estimated the expert fees and costs spent by
the Township from 1998 through 2012 to be $310,462.27. N.T., 5/27/2015, at 148; R.R. 7020a.
14
On appeal, the Trust challenges the amounts of the trial court’s award.
Specifically, it raises the following issues:
(1) The trial court erred in excluding Environmental Hearing
Board Fees, Costs and Expenses from the Trust’s award;
(2) The trial court erred in reducing fees, costs and expenses
for legal and expert services in the condemnation case because
they were of potential use in other litigation;
(3) The trial court erred in its consideration and application of
the LaRocca factors;
(4) The trial court erred in applying a “proportionality”
standard to reduce the Trust’s award;
(5) The trial court erred by failing to identify specific findings
as a basis for calculating its award;
(6) The trial court erred by failing to consider the diminution
in the value of the Trust’s property resulting from the
condemnation;
(7) The trial court erred in finding that the amount of time
billed by the Trust’s attorneys and experts was unreasonable;
(8) The trial court erred in finding that the Trust’s retention of
Philadelphia counsel was unnecessary and that Philadelphia
counsel’s bill rates were not “normative”;
(9) The trial court erred by reducing the Trust’s fees based on
paralegal rates; and
(10) The trial court erred by reducing the Trust’s award due to
the use of block billing.
Trust’s Brief at pp. ii-iii. We address these issues seriatim.
In its first issue, the Trust argues that the trial court erred in excluding
the costs incurred by the Trust in the proceedings before the Environmental
Hearing Board that challenged the project permit sought by the Township. The
15
Trust argues that former Section 408 of the Eminent Domain Code allows
condemnees to recover costs and expenses incurred “because of the condemnation
proceedings.” 26 P.S. §1-408 (repealed; now codified at 26 Pa. C.S. §306). It
contends that its participation in the environmental proceeding was directly caused
by the Township’s declaration of taking. The Township rejects this reading of
former Section 408 as overbroad.
The trial court held that the condemnation of the Trust property bore
no relationship to the grant of a permit by the Department of Environmental
Protection (DEP). Trial Court op., 7/30/2014, at 6. As the trial court explained, “if
a township were to fail to obtain a permit pursuant to 53 [P.S.] §66513,[20] it does
not necessarily follow that condemned property would be relinquished under the
Eminent Domain [C]ode.” Id. The Township would simply seek an alternate
permit and address the relevant concerns, as it did when DEP denied its first permit
in January 2000. Intervening in the permit process was ancillary to the Trust’s
objections to the condemnation, which involved only a small part of the Heidler
Road Channel Improvement Project. The trial court also noted that the Trust
sought an award of its attorney fees and costs under the Clean Streams Law21 for
its success in the Environmental Hearing Board proceeding. This further
supported the trial court’s conclusion that the two proceedings were separate.
In its request for an award of fees under the Clean Streams Law, the
Trust argued that it was entitled to fees “because it was the substantially prevailing
party who successfully appealed this matter, resulting in the suspension of the
20
Section 1513 of The Second Class Township Code, added by the Act of November 9, 1995,
P.L. 350.
21
Act of June 22, 1937, P.L. 1987, as amended, 35 P.S. §§691.1-691.1001.
16
Permit, ultimately leading to the termination of the Permit.” R.R. 7693a. The
Trust stated that the “Clean Streams Law [wa]s the core statute providing the legal
authority for the Permit and is certainly the primary statute involved” and that it
incurred attorney fees and costs in a nearly seven-year proceeding “based upon the
legality of actions under the Clean Streams Law.” R.R. 7731a-7732a.
By contrast, in its preliminary objections to the Township’s
declaration of taking, the Trust argued that the Township lacked authority to
condemn under The Second Class Township Code; failed to comply with state and
federal law; and acted arbitrarily and capriciously. Ultimately, the Trust prevailed
because The Second Class Township Code did not authorize the Township to
create a new channel, as called for in the Heidler Road Channel Improvement
Project, but only to “widen and deepen watercourses.” Township of Millcreek v.
Angela Cres Trust of June 25, 1998, 25 A.3d 1288, 1291 (Pa. Cmwlth. 2011),
appeal denied, 49 A.3d 444 (Pa. 2012). Likewise, the Township’s “project would
construct a new system or facility for collecting surface water runoff, not improve
an existing system, as authorized by Section 2702 [of The Second Class Township
Code, 53 P.S. §67702, added by the Act of November 9, 1995, P.L. 350].” Id.
We agree with the trial court that the Environmental Hearing Board
proceeding was completely separate from the condemnation proceeding. Even had
the Township’s project been permitted by DEP, it did not necessarily follow that
the Trust property would have been condemned. The project may have been
configured differently in the course of DEP’s review. A condemnation may lead to
different sorts of ancillary litigation, but the language of former Section 408 of the
Eminent Domain Code is limited to those costs incurred “because of the
condemnation proceedings.” 26 P.S. §1-408 (repealed; now codified at 26 Pa. C.S.
17
§306). In short, the trial court did not err in denying the Trust’s request for costs
incurred in the Environmental Hearing Board proceeding.
In its second assertion of error, the Trust contends that the trial court
erred in denying its request for its costs that advanced related litigation. That
litigation included: (1) a lawsuit against the Township for violations of various
Pennsylvania storm water management statutes; (2) a professional negligence
action against Hill Engineering for designing a flawed storm water management
system on Heidler Road; (3) an action against Millcreek School District for
discharge of storm water onto the Trust property; and (4) an action against the
Township for violating the Sunshine Act.22 Trust’s Brief at 34. The trial court
found that this other litigation resulted in “more than $280,000 in attorney fees for
time expended on cases other than this case contrary to what was attested to in
support of the fee petition.” Trial Court op., 12/16/2014, at 23.
The Eminent Domain Code does not entitle a condemnee to recover
all fees, costs and expenses incurred in fighting a condemnation. Former Section
408 authorizes reimbursement of those costs “actually incurred because of the
condemnation proceedings.” 26 P.S. §1-408 (repealed; now codified at 26 Pa. C.S.
§306). As this Court has explained, condemnees are
entitled only to those costs and expenses actually incurred by
them due to the [] condemnation. They [are] not entitled to an
award for speculative damages, loss or injury or for any other
category of damages not expressly provided by statute.
In re Condemnation by the Commonwealth of Pennsylvania, 709 A.2d at 944
(emphasis added). The trial court did not err in excluding the Trust’s request for
22
65 Pa. C.S. §§701-716.
18
costs and expenses attributed to litigation that was separate from the condemnation
action, albeit motivated by the condemnation.
In its third issue, the Trust argues that the trial court erred in its
application of the principles established in LaRocca, 246 A.2d at 337, to evaluate
the reasonableness of attorney fees in a condemnation case. This produced error;
for example, the trial court improperly considered the Trustee’s ability to pay her
attorneys what they charged.
Our courts have used the LaRocca factors when fashioning a fair and
reasonable award of attorney fees in condemnation actions. See, e.g., In re
Condemnation by Redevelopment Authority of Lawrence County, (Pa. Cmwlth.,
Nos. 2774 C.D. 2010, 2775 C.D. 2010, 41 C.D. 2011, 90 C.D. 2011, filed February
22, 2013), slip op. at 15 (citing LaRocca, 246 A.2d at 337);23 In re Condemnation
by Urban Redevelopment Authority, 452 A.2d 1113 (Pa. Cmwlth. 1982)).
Accordingly, it was appropriate for the trial court to use the LaRocca factors to
evaluate the Trust’s request for attorney fees. Under LaRocca, the court should
consider “the difficulty of the problems involved[;] ... the ability of the client to
pay a reasonable fee for the services rendered; and, very importantly, the amount
of money or the value of property in question.” LaRocca, 246 A.2d at 339. There
is no merit to the Trust’s third assignment of error.
In its fourth issue, the Trust argues that the trial court’s methodology
for setting the award for attorney fees lacked a foundation. It contends that the
assessment of “attorney’s fees should be based on the efforts within the case” and
nothing else. Harborcreek Township v. Ring, 570 A.2d 1367, 1372 (Pa. Cmwlth.
23
Although an unreported opinion cannot be cited as binding precedent, we cite Lawrence
County for its persuasive value. See 210 Pa. Code §69.414(a).
19
1990) (citing Benkovitz Appeal, 452 A.2d 1113 (Pa. Cmwlth. 1982)). In its
exhaustive opinion, the trial court explained that it chose its methodology because
“the Trust has failed to prove the reasonableness of the fees, costs and expenses it
paid to its attorneys.” Trial Court op., 12/16/2014, at 43. In that vacuum, the trial
court looked to the Township’s costs for legal representation, which the trial court
found reasonable, and then doubled that amount to arrive at a fair and reasonable
award to the Trust. We cannot say this was “palpable error,” given the trial court’s
finding that the Trust did not prove the reasonableness of its request. LaRocca,
246 A.2d at 340.
In its fifth issue, the Trust contends that because it is not clear how the
trial court arrived at the amount of fees, costs, and expenses it awarded to the
Trust, it must be reversed.24 The trial court made numerous findings about the
excessiveness of the Trust’s request, to wit:
The number of billable hours expended by the [Trust’s
attorneys] was exceedingly high.… An unusually large amount
of time attributable to group meetings was billed to the Trust,
without sufficient justification in the record.… In October
2009 Ms. Hirt [the trustee of the Trust] paid another $33,000.00
for a meeting attended by six lawyers and one paralegal. At
that time of the October meeting there were no scheduled legal
proceedings in this case until December and briefing on
pending motions had been completed. With regard to those
meetings, three (3) attorneys billed over fourteen (14) hours
each per day.… An excessive amount, more than $45,000, was
spent on travel.... The amount requested for costs includes
more than $70,000 for making copies.
24
The Trust argues that the trial court must do a line-by-line excision of those fees that were
compensable. The trial court noted, however, that the Trust’s own experts did not undertake this
effort. Trial Court op., 12/16/2014, at 32-33.
20
Trial Court op., 12/16/2014, at 21-23. There is no requirement that a trial court do
a line-by-line analysis of a legal invoice to determine its reasonableness. See In re
Appeal of Silverman, 90 A.3d 771, 785 (Pa. Cmwlth. 2014) (“[W]e hold that the
[trial court] was not required to delineate with specificity to Counsel’s satisfaction
every reason for every disallowance of every aspect of the fee request. Instead, it
is sufficient that the [trial court] explain its decision in a manner sufficient for
appellate review.”). Here, the trial court presented, in clear terms, how it arrived at
a reasonable attorney fee award.
Regarding the award for the costs of engineering studies and reports,
the trial court explained that it found neither the Trust’s experts nor the Township’s
experts persuasive on what constituted a reasonable award of costs. The Trust
presented the testimony of three expert witnesses, Paul White, Gregory C. Newell,
and Christopher M. Hager, to testify regarding the work of the Trust’s experts and
the reasonableness of their fees. In opposition, the Township presented the
testimony of two experts: Clayton Fails and Jeffrey Wright. Fails testified about
the worked performed by Hill Engineering, the Township’s engineering firm;
Wright testified regarding the fees charged by the Trust’s engineering experts,
Cahill, Newell and Brickhouse, and described their fees as “significantly
unreasonable.” N.T., 5/27/2015, at 68-93 and N.T., 5/28/2015, at 8; R.R. 6019a-
44a, 6209a.
The trial court found that the question was not whether the engineers
did their job or whether the amount they charged fell within professional standards;
rather, the question was whether the services were required given the nature of the
litigation. What was lacking was “an analysis from a technical perspective, of the
role played by the Trust’s experts in the outcome of the condemnation case,”
21
which the trial court noted “could have been helpful.” Trial Court op., 8/19/2015,
at 19. The trial court reduced the amount requested for the engineers’ work
because much of their work applied “to other lawsuits” and played a limited role in
the outcome of the condemnation case. Id. at 32. Stated otherwise, the trial court
did not challenge the professional quality of the work of the engineers or find that
their charges were excessive. They were, however, largely irrelevant to the
outcome in the condemnation. Again, we cannot say that the trial court abused its
discretion in this regard.
The Trust argues the LaRocca factors have no application to an award
for engineering and geology fees. It contends that because all of its engineering
costs were reasonable, it should be reimbursed for all of those costs. First, this
argument overlooks the trial court’s observation that the “reasonableness” opinion
offered by the Trust’s experts was conclusory and somewhat subjective. Second,
the LaRocca factors, although developed for an evaluation of professional legal
services, are suitable for a review of the reasonableness of other professional
services, i.e., appraisal and engineering services. LaRocca provides a sensible
approach to an evaluation of the reasonableness of any professional’s fees. We
reject the Trust’s argument to the contrary.
In its sixth issue, the Trust argues that the trial court failed to consider
how the condemnation would have diminished the value of the Trust’s property as
a whole, even though the taking involved .618 acres valued at $9,000. This might
be compelling in a case where the condemnation was done for the purpose of
constructing, for example, a high-voltage transmission line or an unsightly cell
tower that would affect the value of surrounding property. That was not the case
here. Further, it is unlikely that a different approach on a single LaRocca factor
22
would have produced a materially different fee award. Again, we do not see a
palpable error.
In its seventh issue, the Trust contends that the trial court erred in
finding that the amount of time billed by the Trust’s attorneys and experts was
unreasonable. The trial court set forth its reasons for this finding:
a. Excessive group meetings totaling $234,401[] in attorney
fees.
b. A majority of work carried out by firm partners who
commanded the highest fees.
c. Pervasive duplication of effort, including such activities as
redundant document and pleading reviews, lawyer to
lawyer consultations and meetings, with multiple attorneys
and paralegals involved in the same matters without any
justification in the record.
d. Numerous time entries [that] were generalized and vague.
e. A substantial amount of time for which the activity was
redacted.
f. Charges of more than $40,000 to the Trust for time
expended on administrative tasks such as organizing file
boxes, creating document indexes and obtaining copies of
documents.
Trial Court op., 12/16/2014, at 23-24. The Eminent Domain Code does not require
that the condemnee be made whole. In re: Condemnation by the Commonwealth,
Department of Transportation, 709 A.2d at 944. We must give deference to the
trial court’s factual findings and judgment. LaRocca, 246 A.2d at 340. In short,
we conclude that the Trust’s argument lacks merit.
In its eighth issue, the Trust contends that the trial court improperly
reduced its reimbursement because the Trust engaged a Philadelphia law firm to
23
represent it. However, the trial court stated that it did not “challenge ... Ms. Hirt’s
right to secure legal counsel of her choosing….” Trial Court op., 12/16/2014, at
25. Rather, the trial court explained:
Other than pointing to the outcome and blaming [the Township]
for its vigorous defense of the Trust’s claims the record is
essentially silent as to any explanation why it was necessary and
therefore, reasonable to hire two separate law firms and have an
extraordinary number of attorneys and others involved on an
ongoing basis in a condemnation case of this nature…. In
general the Trust has failed to prove the reasonableness of the
fees, costs and expenses it paid to its attorneys.
Id. at 43 (emphasis added). It was the number of attorneys, not their hometowns,
that gave the trial court pause.
Regarding the billing rates of Philadelphia counsel, the trial court
noted that, “[w]ith the exception of the Trust’s own expert witness there is nothing
in the record to indicate what other practitioners in eminent domain cases outside
the Erie and Philadelphia areas charge for such work.” Trial Court op.,
12/16/2014, at 19. The choice of counsel belonged to the Trust. The problem was
that the Trust’s fee expert did not give “any serious consideration to the ability of
the Trust to shoulder the costs of its legal fees and expenses, a factor specifically
identified in Pennsylvania law as an important consideration.” Id. at 33. Nor did
the Trust show that only the proverbial Philadelphia lawyer had the expertise to
represent the Trust.
The trial court was present at the hearing and able to evaluate the
performance of all the attorneys. This is why our Supreme Court has directed that
we give great deference to the findings of the trial court. LaRocca, 246 A.2d at
340. We reject the Trust’s contrary contention on this issue.
24
In its ninth issue, the Trust contends that the trial court’s reduction of
the paralegal’s billing rate was against the clear weight of the evidence, arbitrary
and erroneous. The Trust provided testimony that the paralegal performed at the
level of an experienced associate attorney and that her billing rate was within the
range of paralegal rates charged in northwest Pennsylvania. In response, the
Township provided testimony and an affidavit that the hourly rates charged for
these paralegal services were outside the normative rates charged in northwest
Pennsylvania. The trial court decided to credit the Township’s evidence, which is
the prerogative of the fact finder. We reject this assignment of error.
In its final issue, the Trust challenges the trial court’s reduction of the
Trust’s fee award because its counsel used “block billing.” The Township’s
expert, Stroyd, explained that “most of the entries were block billed, so that to take
a look and to determine how much time [was] spent on that matter as opposed to
the other matters that are listed, is impossible.” N.T., 10/29/2014, at 160; R.R.
2380a. The trial court found that “[i]n the absence of explanatory testimony, the
use of block billing precludes an objectively accurate determination of the
reasonableness of time expended on particular tasks or the necessity of a particular
attorney related activity.” Trial Court op., 12/16/2014, at 21. The trial court’s
decision not to accept “block billing” did not constitute an abuse of discretion.
Conclusion
We reject the Township’s appeal that the Trust’s Fee Petition was
untimely filed. A condemnee’s recovery of attorney and expert fees is governed
solely by the Eminent Domain Code, and it does not set forth a deadline for
seeking recovery.
25
We reject the Trust’s appeal of the amount of the award. The Trust
decided to pursue any and all avenues of redress to prevent the Township from
pursuing the Heidler Road Channel Improvement Project, but only one involved
the actual condemnation. The Trust used the professional services of several law
firms and multiple technical experts. The Trust is entitled to pursue all means at
any cost to preserve its property, but it does not follow that all those fees, costs and
expenses were reasonable. The trial court’s findings support its decision; thus, we
will not interfere with the trial court’s award.
For the above-stated reasons, we affirm the decision of the trial court.
_____________________________________
MARY HANNAH LEAVITT, President Judge
26
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Township of Millcreek, :
:
v. : No. 1725 C.D. 2015
:
Angela Cres Trust of June 25, 1998 :
:
Appeal of: Angela Cres Trust of :
June 25, 1998 and Laurel A. Hirt :
as Trustee of the Angela Cres :
Trust of June 25, 1998 :
Township of Millcreek, :
Appellant :
:
v. : No. 1847 C.D. 2015
:
Angela Cres Trust of June 25, 1998 :
ORDER
AND NOW, this 22nd day of June, 2016, the order of the Court of
Common Pleas of Erie County dated August 19, 2015, in the above-captioned
matter is AFFIRMED.
_____________________________________
MARY HANNAH LEAVITT, President Judge