Shiv Aban, Inc. v. Georgia Department of Transportation

SECOND DIVISION
ANDREWS, P. J.,
MILLER, P. J., and BRANCH, J.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
http://www.gaappeals.us/rules
March 29, 2016
In the Court of Appeals of Georgia
A15A2013, A15A2014. SHIV ABAN, INC. v. GEORGIA
DEPARTMENT OF TRANSPORTATION, and vice versa.
BRANCH, Judge.
Shiv Aban, Inc., appeals a condemnation award in its favor on the ground that
the award failed to include prejudgment interest on part of the award. The Department
of Transportation (the “DOT”) cross appeals an award of attorney fees and litigation
expenses in favor of Shiv Aban. For the reasons that follow, we find that the trial
court erred by not awarding prejudgment interest, that the award of attorney fees was
proper, but that the award of litigation expenses must be vacated and remanded.
The parties agree to the essential facts. On September 12, 2013, the DOT
petitioned to condemn property of Shiv Aban and deposited $430,000 into the
registry of the Superior Court of Catoosa County as its estimate of just and adequate
compensation for the taking of the subject property. The DOT attached to its
complaint an affidavit of John Simshauser dated December 4, 2012, in support of the
estimate. In the affidavit, Simshauser states that he is giving his appraisal in
connection with the condemnation proceedings for the subject parcel and that “the
estimated just and adequate compensation” for the parcel is $430,000. Shiv Aban
timely filed a notice of appeal for a jury trial in the superior court and petitioned for
an interlocutory hearing before a board of assessors on the sufficiency of the amount
of compensation paid into court. Following a two-day hearing, the board of assessors
determined that Shiv Aban was entitled to total compensation of $1,700,000 as just
and adequate compensation for all property and rights taken by the DOT, and the
award was approved by an order of the trial court dated August 5, 2014. On August
12, 2014, the DOT therefore deposited into the registry of the court the balance due
of $1.27 million. Shiv Aban dismissed its notice of appeal for a jury trial and stated
its desire to accept the award of the assessors. The DOT likewise did not further
appeal the assessor’s award.
The DOT then moved that the assessors’ award be made the final judgment of
the court. Shiv Aban filed a cross-motion contending that it was entitled to
prejudgment interest on the $1.27 million payment from the date of the taking
2
through August 12, 2014, the date that sum was deposited into the registry of the
court. Following a hearing, the trial court entered an order and judgment granting
DOT’s motion for a final judgment and denying Shiv Aban’s cross motion for
prejudgment interest. In Case No. A15A2013, Shiv Aban appeals this ruling.
Shiv Aban also filed a motion for attorney fees and expenses of litigation in the
superior court, arguing that under OCGA § 9-15-14, it was entitled to fees and
expenses on the ground that the DOT’s only evidence offered at the assessors’
hearing — an appraisal prepared by Lamar Pinson showing a value of $1.25 million
as of the date of the taking — established that the subject property was worth at least
that amount, not $430,000, and that the DOT’s original estimate of value was not
supported by any evidence. In support, Shiv Aban produced evidence showing that
Simshauser’s affidavit of value was based on a determination of value as of May 20,
2012, approximately 16 months before the date of the taking, and that the valuation
was based on pictures of a tornado-damaged motel rather than the motel as
subsequently repaired at a cost of over $857,000 months prior to the condemnation.
Shiv Aban had engaged its attorneys on a contingent fee and expenses basis, and it
asked for its attorney fees and expenses relevant to the difference between what the
DOT initially offered and the amount the DOT’s own evidence showed as the value
3
of the subject property at the time of the taking, i.e., $1.25 million. Following a
hearing, the superior court found that “no credible explanation has been presented to
account for the discrepancy of $820,000.00 between the [DOT’s] deposit on the date
of taking . . . and that of [the DOT’s] only testifying witness, Lamar Pinson.” The
court further found that Shiv Aban’s claim for attorney fees was not rooted in a mere
difference of opinion among experts but rather that, under the circumstances, “it
could not reasonably be believed that a Court would accept the [DOT’s initial claim
of value.]” Accordingly, the court granted Shiv Aban’s request for attorney fees of
$236,879 and expenses in the amount of $24,016.19. In Case No. A15A2014, the
DOT cross-appeals this ruling.
A15A2013
1. Whether Shiv Aban was entitled to prejudgment interest on the $1.27 million
payment presents a question of statutory interpretation, which we review de novo.
Expedia, Inc. v. City of Columbus, 285 Ga. 684, 689 (4) (681 SE2d 122) (2009);
Wolfe v. Ga. Dept. of Driver Svcs., 330 Ga. App. 552, 553 (768 SE2d 528) (2015).
When interpreting statutes, “the courts shall look diligently for the intention of
the General Assembly, keeping in view at all times the old law, the evil, and the
remedy.” OCGA § 1-3-1 (a). Nevertheless, when construing a statute, “we must
4
presume that the General Assembly meant what it said and said what it meant.” Deal
v. Coleman, 294 Ga. 170, 172 (1) (a) (751 SE2d 337) (2013) (citation and punctuation
omitted). Thus if the language of the statute “is plain and unambiguous, judicial
construction is not only unnecessary but forbidden.” Six Flags Over Ga. v. Kull, 276
Ga. 210, 211 (576 SE2d 880) (2003) (citation omitted). Where terms of art are not
involved, we look to the common and customary usages of the words and their
context. Zaldivar v. Prickett, 297 Ga. 589, 591 (1) (774 SE2d 688) (2015). “For
context, we may look to other provisions of the same statute, the structure and history
of the whole statute, and the other law — constitutional, statutory, and common law
alike — that forms the legal background of the statutory provision in question.” Id.
(citation and punctuation omitted). Finally, eminent domain statutes must be strictly
construed in favor of the private land owner. Threatt v. Forsyth County, 250 Ga. App.
838, 840 (1) (a) (552 SE2d 123) (2001); see also Thomas v. City of Cairo, 206 Ga.
336, 337 (57 SE2d 192) (1950).
The context of Shiv Aban’s claim for interest includes the statutes governing
the DOT’s suit for condemnation. The DOT filed suit under OCGA §§ 32-3-4 through
32-3-20, thereby choosing the “declaration of taking” method of condemnation to
5
acquire the subject property, which is available when property is sought for public
roads or public transportation.1 The declaration-of-taking method
allows the government to take title immediately by filing a petition and
declaration of taking and paying into the court registry just and adequate
compensation as determined by its own appraisal. See OCGA §§ 32-3-6
to 32-3-7. There is no pre-taking notice or opportunity to be heard on the
compensation issue. See OCGA §§ 32-3-7 (a), 32-3-13 (a). The property
owner can, however, obtain a de novo determination [of the property’s
value] by a jury after the fact. See OCGA §§ 32-3-14, 32-3-16.
Windsor, 287 Ga. at 335, n. 1.2 Here, because Shiv Aban was dissatisfied with the
amount of compensation the DOT paid into court, Shiv Aban filed a notice of appeal
demanding a trial by jury and sought an interlocutory hearing under OCGA § 32-3-15
on the issue of whether the amount the DOT deposited into court as just and adequate
compensation was sufficient.
1
Two other methods of condemnation exist under Georgia law: the assessor
method, see OCGA §§ 22-2-1 to 22-2-86; and the special master method, see OCGA
§§ 22-2-100 to 22-2-114. Windsor v. City of Atlanta, 287 Ga. 334, 335 n. 1 (695 SE2d
576) (2010).
2
The declaration of taking method “is the only procedure that allows the taking
or damaging of private property before an evidentiary hearing has been held to fix the
amount of just and adequate compensation.” 1 Daniel F. Hinkel, Pindar’s Ga. Real
Estate Law & Procedure § 2:33 (7th ed.).
6
As required by OCGA § 32-3-15, which sets forth the rules for interlocutory
hearings, the court then appointed a board of assessors to determine whether the DOT
should “be required to deposit any additional amount as estimated compensation” and
to “make an interlocutory award based upon such determination.” OCGA § 32-3-15
(b). Once the court approved the interlocutory award, the court, as required, directed
that the DOT pay the additional amount into court. OCGA § 32-3-15 (c). Thus, the
DOT paid $1.27 million into the registry of the court on August 12, 2014, exactly 11
months after the DOT’s initial payment of $430,000.3 Now satisfied with the amount
3
OCGA § 32-3-15 (d) provides that the money in the court registry could have
been paid to Shiv Aban at any time after the interlocutory award if Shiv Aban had
posted a bond:
Upon the application of the party or parties in interest at any time
before a jury verdict on the appeal, the court shall order that the
additional money deposited in court be paid forthwith to the parties
found to be entitled thereto; provided, however, that any party or parties
receiving any payment of any amount paid into court pursuant to an
interlocutory award shall, before receiving such payment, file in the case
a bond in the amount of such payment conditioned for the repayment of
any amount so received by such party which may be in excess of the
amount awarded by the jury upon the trial of the appeal.
OCGA § 32-3-15 (d). As of the hearing held on November 10, 2014, the parties
agreed that the money remained in the registry of the court.
7
of the award of just and adequate compensation, Shiv Aban gave notice of intent to
dismiss its appeal for a jury trial in the superior court and stated its desire to “accept
the award of the Assessors.” Finally, the same statute provides that once Shiv Aban
notified the court of its intent to dismiss its appeal, the interlocutory award became
“the final judgment in the proceeding” and “[it] shall not be vacated or modified.”
OCGA § 32-3-15 (g).
The DOT and Shiv Aban both then requested a final judgment from the
superior court, and, relying on OCGA § 32-3-19 (c), Shiv Aban requested that the
judgment include seven percent interest on the $1.27 million payment from the date
of the taking to the date the DOT made that payment. That Code section provides in
relevant part:
After just and adequate compensation has been ascertained and
established by judgment, the judgment shall include, as part of the just
and adequate compensation awarded, interest from the date of taking to
the date of payment pursuant to final judgment at the rate of 7 percent
per annum on the amount awarded by final judgment as the value of the
property as of the date of taking[.]
8
OCGA § 32-3-19 (c) (emphasis supplied).4 On April 23, 2015, the trial court entered
a final judgment in the amount determined by the assessors, and it denied Shiv
Aban’s request for prejudgment interest. The court held that because OCGA §§ 32-3-
19 (a) and (b) specifically reference a “verdict of the jury,” OCGA § 32-3-19 (c) was
applicable only to a judgment following a jury verdict and not to a judgment
following an interlocutory award by the assessors. The court also relied on the fact
that OCGA § 32-3-15, the Code section dictating the procedure for an interlocutory
hearing, does not expressly provide for interest on a judgment rendered on an
assessors’ award when a condemnee is satisfied with that award and that because it
was amended more recently than OCGA § 32-3-19, OCGA § 32-3-15 constitutes the
legislature’s final say on the matter.
Several aspects of the procedure for a declaration of taking condemnation are
relevant to our analysis. First, in the event a condemnee does not appeal the
condemnor’s original estimate of the just and adequate compensation as paid into
4
Subsection (c) also provides that “interest shall not be allowed on so much [of
the judgment] as shall have been paid into the court and was subject to withdrawal
by the condemnee without the requirement of posting a bond as required by Code
Section 32-3-15.” OCGA § 32-3-19 (c). The remainder of subsection (c) contains
rules that address under and over payment by the condemnor relative to the final
judgment amount.
9
court, the superior court is required, upon payment of costs, to enter judgment in
favor of the condemnee for the sum of money deposited and the case shall be
“transferred . . . to the closed docket.” OCGA § 32-3-13 (b) & (c).5 This Code section
further provides that nothing contained therein “shall be construed as in any way
affecting the title acquired by the condemnor by virtue of the declaration of taking[.]”
5
OCGA § 32-3-13 (b) provides as follows:
If no appeal is filed as provided for in Code Section 32-3-14, the
condemnor shall, at the next term of the superior court convening not
earlier than 30 days subsequent to the date of service, as provided for in
Code Sections 32-3-8 and 32-3-9, or at any time thereafter, pay all
accrued court costs in the case to the clerk of the superior court in which
the same is pending, at which time the judge of the superior court shall
enter judgment in favor of the condemnee and against the condemnor for
the sum of money deposited by the condemnor with the declaration of
taking. If such sum has been withdrawn from the court by the
condemnee as provided for in Code Section 32-3-12, the clerk of the
superior court shall mark such judgment satisfied; and if the condemnee
has not withdrawn such sum the clerk shall immediately apply the same
to the payment of the judgment and either transmit the same to the
condemnee or cause the condemnee to be notified that he, the clerk,
holds the same subject to the demand of the condemnee.
OCGA § 32-3-13 (c) provides as follows:
In any event, the case shall be transferred, under the conditions set out
in this Code section, to the closed docket.
10
OCGA § 32-3-13 (d). This rule reiterates an underlying central theme to the
declaration-of-taking procedure whereby the government takes title immediately upon
payment of the estimated value of the property.
Next, we agree with the trial court that OCGA § 32-3-15, which states the
procedure for interlocutory hearings by assessors, does not expressly provide for
prejudgment interest. It also does not refer to OCGA § 32-3-19 (c), the interest
calculation provision at issue. Instead, OCGA § 32-3-15 (g) provides that in a case
such as the present case, where the condemnee is satisfied with the assessors’
decision, the assessors’ award “shall become the final judgment in the proceeding and
shall not be vacated or modified.” Nevertheless, OCGA § 32-3-15 does not include
the language found in OCGA § 32-3-13 (d) transferring the case to the closed docket
nor that nothing provided in that Code section shall affect the title acquired by the
condemnor.
Looking next at OCGA § 32-3-19 as a whole, it is clear that subsections (a) and
(b) of that Code section both expressly pertain only to jury verdicts: subsection (a)
11
generally pertains to the effect of a jury verdict on the property at issue6; subsection
(b) generally pertains to the entry of a judgment following a jury verdict.7 And
6
OCGA § 32-3-19 (a) provides as follows:
(a) The verdict of the jury shall have respect to the lands
described in the declaration of taking as set forth in Code Section
32-3-6, or such interest therein as may be described in said declaration,
or to any separate claim against the property or interest therein as may
be ordered and may be molded under the direction of the court so as to
do complete justice and avoid confusion of interest. The court shall give
such direction as to the disposition of the fund as shall be proper
according to the rights of the several respondents.
7
OCGA § 32-3-19 (b) provides as follows:
(b) After the verdict of the jury, the court shall, in instances where
no motion for new trial or notice of appeal is filed within the time
provided for by law or where such verdict has been affirmed by a proper
appellate court and the remittitur from such court has been made the
judgment of the superior court, enter judgment in favor of the
condemnee and against the condemnor in the amount of such verdict,
together with the accrued court costs, which judgment shall be
immediately credited with the sum of money deposited by the
condemnor with the declaration of taking and which shall bear interest
as provided in subsection (c) of this Code section; and, upon the failure
or refusal of the condemnor immediately to deposit such increase in
such sum into the registry of the court, as well as the accrued court
costs, it shall be the duty of said clerk to issue execution therefor.
12
subsection (b) is linked directly with subsection (c) in that it provides, as a part of
rendering a judgment, that the court “shall” award “interest as provided in subsection
(c) of this Code section.”8 OCGA § 32-3-19 (b). Thus, subsection (b) makes plain that
prejudgment interest under subsection (c) is to be awarded following jury verdicts,
which necessarily includes cases where the condemnee sought an interlocutory order
but, being dissatisfied with the result, maintained its appeal and sought a jury trial.
Even so, subsection (c) states that it applies “[a]fter just and adequate compensation
has been ascertained and established by judgment.” (Emphasis supplied). And OCGA
§ 32-3-15 provides that such a judgment is to be entered following an interlocutory
award accepted by the condemnee. Thus, on its face, OCGA § 32-3-19 (c) pertains
to all judgments establishing just and adequate compensation, i.e., judgments
following interlocutory awards as well as judgments following jury awards.
Furthermore, as in OCGA § 32-3-13 but unlike OCGA § 32-3-15, the final
subsections of OCGA § 32-3-19 provide that once a final judgment with interest has
been entered “the case shall be transferred . . . to the closed docket” and that nothing
8
Subsection (b) also includes a provision allowing the clerk to issue an
execution if the condemnor fails to pay prejudgment interest awarded by the court.
OCGA § 32-3-19 (b).
13
provided therein shall affect the title acquired by the condemnor. See OCGA § 32-3-19.
Based on a plain reading of all pertinent statutes, which must be construed
together,9 we hold that OCGA § 32-3-19 (c) is applicable in a case such as this where
a condemnee accepts an interlocutory ruling by the assessors and the superior court
enters a final judgment following a condemnee’s dismissal of an appeal for a jury trial
under OCGA § 32-3-15. First, OCGA § 32-3-19 (c), unlike subsections (a) and (b),
does not expressly limit itself to final judgments following a jury verdict. And OCGA
§ 32-3-15 is one method available for establishing such a judgment. Second, although
OCGA § 32-3-13 and 32-3-19 provide for a case to be transferred to the closed
docket, OCGA § 32-3-15 does not. Similarly, although OCGA § 32-3-13 and 32-3-19
include language regarding a judgment’s affect on the title acquired by the
condemnor by virtue of the declaration of taking, OCGA § 32-3-15 does not. Thus,
both OCGA § 32-3-13 and 32-3-19 are the only means provided by the legislature
under the declaration-of-taking method of condemnation that provide for transfer of
the case to the closed docket. So, even when a condemnee, such as Shiv Aban, elects
to accept the assessors’ award and a final judgment is accordingly entered under
9
Statutes that are “in pari materia,” i.e., those that relate to the same subject
matter, must be construed together. Snyder v. State, 283 Ga. 211, 214 (3) (657 SE2d
834) (2008).
14
OCGA § 32-3-15, the case is not ready to be sent to the closed docket or for the
warning about the effect of any proceedings on the condemnor’s title. Rather, OCGA
§ 32-3-19 (c), (d) and (e) are still applicable to the termination of a case that has
reached final judgment under OCGA § 32-3-15.
The trial court and the DOT contend that the fact that the legislature did not
include an express provision for prejudgment interest in OCGA § 32-3-15 as
amended in 1998 shows that the legislature did not intend for interest to be awarded
on interlocutory orders that become final judgments under that Code section. But the
fact that the current OCGA § 32-3-15 was modified after OCGA § 32-3-19 was
enacted only reinforces the conclusions we reach above. See 1998 Ga. Laws, p. 1539,
§ 12 (amending Code Section 32-3-15 in its entirety); compare 1973 Ga. Laws, p.
947, § 1 (original enactment of chapter pertaining to declaration-of-taking method of
condemnation). It is true that “[w]here there is a conflict between legislative acts, the
later in time will control as it is presumed to be the last expression of legislative will.”
Patrick v. Head, 262 Ga. 654, 654 (3) (424 SE2d 615) (1993) (citation omitted). But
here, we find no conflict between OCGA § 32-3-15 as amended and OCGA § 32-3-19
once we apply the presumption that the legislature is presumed to act with full
knowledge of the existing state of the law:
15
[A] statute is presumed to be enacted by the legislature with full
knowledge of the existing condition of the law and with reference to it.
It is therefore to be construed in connection and in harmony with the
existing law, and as a part of a general and uniform system of
jurisprudence, and its meaning and effect is to be determined in
connection, not only with the common law and the constitution, but also
with reference to other statutes and the decisions of the courts.
Retention Alternatives, Ltd. v. Hayward, 285 Ga. 437, 440 (2) (678 SE2d 877) (2009)
(citation omitted). In this case, at the time the current version of that statute was
enacted, OCGA § 32-3-19 (c) already stated that interest should be awarded “[a]fter
just and adequate compensation has been ascertained and established by judgment.”
(Emphasis supplied). And OCGA § 32-3-15 provides a procedure for establishing
such a judgment: an interlocutory hearing is held to determine whether “just and
adequate compensation is sufficient”; and, if the condemnee dismisses its appeal of
a jury trial, the interlocutory award becomes “the final judgment in the proceeding.”
Yet, upon amending OCGA § 32-3-15, the legislature did not amend OCGA § 32-3-
19 (c) to state that it only applied to judgments on jury verdicts. Further, at the time
that OCGA § 32-3-15 was amended, the legislature did not include the provisions
found in OCGA § 32-3-13 and 32-3-19 that provide for transferring the case to the
“closed docket” nor reiterate that such a judgment has no effect on title to the
16
property, thereby indicating that further proceedings were required, such as OCGA
§ 32-3-19 (c), (d), and (e). Thus, the amendment to OCGA § 32-3-15 dovetails with
the preexisting scheme of the entire declaration-of-taking procedure.
Also, the fact that OCGA § 32-3-15 (g) states that an “interlocutory award . .
. shall not be vacated or modified,” when read in context with the entire declaration-
of-taking condemnation procedure, simply shows that the interlocutory award on “just
and adequate compensation” may not be altered. Prejudgment interest, however, is
not part of the “just and adequate compensation” determined in a condemnation
proceeding but rather, an addition to that sum. Dept. of Transp. v. Consolidated
Equities Corp., 181 Ga. App. 672, 677 (353 SE2d 603) (1987) (holding that post-
judgment interest cannot be calculated on pre-judgment interest because pre-judgment
interest is not part of the just and adequate compensation awarded in a condemnation
case). Likewise, the DOT’s argument about the quick availability of funds awarded
in an interlocutory proceeding under OCGA § 32-3-15 is without merit. The DOT
argues that
[b]ecause the interlocutory funds are quickly and readily available to the
Condemnee, the legislature did not make any provision for payment of
interest on additional compensation awarded to a Condemnee by a
Board of Assessors.
17
But additional compensation awarded via the interlocutory procedure is available to
the condemnee regardless of whether it withdraws its appeal or proceeds with a jury
trial. See OCGA § 32-3-15 (d). And, as the DOT concedes, prejudgment interest is
available on jury trial awards. Thus the quick availability of funds awarded in an
interlocutory proceeding is not relevant to whether interest on that award is available.
The DOT also points to the clause of OCGA § 32-3-19 (c), emphasized below:
After just and adequate compensation has been ascertained and
established by judgment, the judgment shall include . . . interest from the
date of taking . . . ; but interest shall not be allowed on so much thereof
as shall have been paid into the court and was subject to withdrawal by
the condemnee without the requirement of posting a bond as required
by Code Section 32-3-15.
But again, this provision sheds no light on the fundamental question before us
because it is equally applicable to cases where the condemnee accepts the
interlocutory award and dismisses the appeal for a jury trial and cases where the
condemnee proceeds to a jury trial; nothing in OCGA § 32-3-15 provides that
deposited funds are available to only those who dismiss their appeal. Rather, in either
case, under the express terms of OCGA § 32-3-19 (c), the trial court must determine
whether the condemnee is not entitled to interest because the condemnee had access
18
to the funds “paid into court pursuant to an interlocutory award,” OCGA § 32-3-15
(d), without the requirement of posting a bond.10
Finally, our interpretation of the relevant statutes is consistent with a traditional
understanding of when interest should be awarded. Under the declaration-of-taking
method of condemnation, once the original payment is made, the taking has occurred.
OCGA § 32-3-7 (a).11 To the extent the condemnor has underestimated the true value
of the property, the condemnee has been deprived of a portion of the value of its
property starting that day. See Brooks v. Dept. of Transp., 254 Ga. 60, 61 (1) (a) (327
SE2d 175) (1985) (prejudgment interest compensates the condemnee for the use of
10
Here, Shiv Aban is not asking for any interest after the date the DOT
deposited the $1.27 million into court, i.e., the earliest date possible that the
additional funds became available to Shiv Aban.
11
OCGA § 32-3-7 (a) provides as follows:
Upon the filing of the declaration of taking and the deposit into
court, which deposit shall be made at the time the declaration of taking
is filed to the use of the persons entitled thereto, of the sum of money
estimated in the declaration by the condemning authority to be just
compensation, title to the property in fee simple absolute or such lesser
interest as is specified in the declaration shall vest in the condemnor; the
land shall be deemed to be condemned and taken for the use of the
condemnor; and the right to just compensation for the same shall vest in
the persons entitled thereto.
19
funds generated in a condemnation action). That is the case here. On September 12,
2013, the DOT took Shiv Aban’s property and placed only $430,000 into the registry
of the court. The proceedings ultimately showed that the DOT should have paid $1.7
million into court that day. Thus, from that day through the day the DOT paid the
balance due, Shiv Aban was deprived of $1.27 million of its property, upon which it
could have obtained interest in the open market. In short, there is nothing
unreasonable about our interpretation of the applicability of OCGA § 32-3-19 (c) to
the present case. See generally Brooks, 254 Ga. 60 at 61 (1) (b) (“The 7%
prejudgment interest rate is simply an incident of any condemnation action and
applies to all condemnees equally.”).
For the above reasons, we hold that the trial court erred by failing to award
prejudgment interest on $1.27 million from the date of the taking through the date
that amount was deposited into court. We therefore reverse the judgment in case No.
A15A2013 and remand with direction to reenter the judgment with prejudgment
interest consistent with this opinion.
Case No. A15A2014
2. In the cross appeal, the DOT contends the trial court erred by awarding
attorney fees and expenses in favor of Shiv Aban. The trial court found that Shiv
20
Aban was “entitled to recover under OCGA § 9-15-14 (a) and/or[12] OCGA § 9-15-14
(b).”
Subsection (a) of OCGA § 9-15-14 requires an award of attorney fees when a
party asserts “a claim, defense, or other position with respect to which there existed
such a complete absence of any justiciable issue of law or fact that it could not be
reasonably believed that a court would accept the asserted claim, defense, or other
position.” Subsection (b), among other things, gives discretion to a trial court to
award attorney fees when a party brings or defends an action “that lacked substantial
justification.” See also Fulton County Bd. of Tax Assessors v. Boyajian, 271 Ga. 881,
882 (2) (525 SE2d 687) (2000).We will “affirm an award under subsection (a) if there
is any evidence to support it, while we review subsection (b) awards for abuse of
discretion.” Fox v. City of Cumming, 298 Ga. App. 134, 135 (679 SE2d 365) (2009)
(footnote omitted).
The essential factual findings of the trial court regarding the fee award are that
although the DOT made its initial deposit of $430,000 on September 12, 2013, in
connection with its declaration of taking based on an appraisal of Shiv Aban’s
property by John Simshauser, a qualified and licensed real estate appraiser, that
12
The DOT does not challenge the wording of this award of attorney fees.
21
appraisal was fundamentally flawed. Shiv Aban’s property, a motel, was extensively
damaged by a tornado in April 2011 and the motel ceased doing business, but Shiv
Aban eventually spent approximately $857,000 restoring the property and the motel
reopened in June 2012, months before the condemnation. Yet Simshauser’s appraisal,
which allegedly provided a valuation as of May 2012, was in fact based on
photographs dated November 2011, all of which showed a tornado-damaged motel.
And Simshauser’s affidavit of value for the motel, based on the appraisal and filed
in support of the declaration of taking, was dated December 4, 2012, ten months
before the date of the taking.
Thus, the court concluded, the DOT’s basis for its original estimated value of
Shiv Aban’s property was not adjusted to the date of the taking. Although the DOT
presented a different appraisal by a different appraiser (Lamar Pinson) at the
interlocutory hearing on the adequacy of the DOT’s original estimate showing the
value as of the date of the taking to be $1.25 million, the DOT presented “no credible
explanation . . . to account for the discrepancy of $820,000.00 between the
Condemnor’s deposit on the date of taking . . . and that of [the DOT’s] only testifying
witness [at that hearing], Lamar Pinson.” The trial court therefore held,
22
Given the [DOT’s] failure to time adjust its estimate of fair, just, and
adequate compensation in its initial estimate of damages and to account
for [Shiv Aban’s] reconstruction of its storm damaged motel for
$857,000, [the DOT’s] deposit of $430,000 evidences a complete
absence of any justiciable issue of law or fact that it could not
reasonably be believed that a Court would accept the asserted claim or
position.
The court further concluded that Shiv Aban incurred reasonable and necessary
attorney fees and expenses of litigation in order “to achieve a recovery of fair, just
and adequate compensation.” The court therefore awarded fees and expenses to Shiv
Aban as stated above.
(a) The DOT first contends the trial court erred as a matter of law because it
relied on the DOT’s pre-litigation activities to authorize the award of fees. It contends
that because none of Simshauser’s actions regarding his appraisal of the property
occurred during the litigation, the trial court erred by basing its award on those
actions. The DOT further contends that under the circumstances, Shiv Aban’s avenue
for relief regarding Simshauser’s appraisal was OCGA § 32-3-11, which provides the
trial court with “the authority to set aside, vacate, and annul the declaration of taking,
together with any title acquired thereby” in instances of fraud; bad faith; improper
use, abuse, or misuse of the power of eminent domain; or certain other reasons not
23
applicable here. OCGA § 32-3-11 (a) & (b). And any such assertion must be brought
within 30 days following service of the declaration of taking, which Shiv Aban did
not do. OCGA § 32-3-11 (c).
The Supreme Court of Georgia has confirmed that OCGA § 9-15-14 applies to
condemnation proceedings. Dept. of Transp. v. Woods, 269 Ga. 53, 55 (1) (494 SE2d
507) (1998). But as this Court has held, OCGA § 9-15-14 does not apply to a
condemnor’s pre-litigation activities. Cobb County v. Sevani, 196 Ga. App. 247, 248-
249 (395 SE2d 572) (1990) (holding that the focus of OCGA § 9-15-14 is upon
actions undertaken during the legal proceedings, “not upon the pre-litigation actions
of one who only subsequently becomes a party to a legal proceeding.”).
We agree with Shiv Aban and the trial court that Shiv Aban does not complain
about the DOT’s pre-litigation activities nor about how Simshauser developed his
appraisal, which was a pre-litigation activity. Rather, Shiv Aban complains about
DOT’s use of a legally inapplicable appraisal in its declaration of taking, which
shows that it took a position in the litigation itself that was not factually or legally
supported, i.e., it based its condemnation action on a fundamentally flawed appraisal.
The Sevani case is distinguishable on the facts. The opinion in Sevani makes plain
that the condemnee sought fees under OCGA § 9-15-14 “relying entirely upon the
24
manner in which Condemnor had conducted the pre-acquisition appraisal and
negotiations.” Id. at 247. No further details are provided about the nature of those
alleged activities, and, importantly, the opinion does not state or suggest that
condemnor filed a legally flawed appraisal in the litigation in support of its estimate
of just and adequate consideration. Here, unlike in Sevani, the facts show that the
DOT filed a fundamentally flawed appraisal in support of the declaration of taking
and therefore took a baseless position in the present litigation. Thus Shiv Aban rightly
challenges litigation activities by the DOT, not pre-litigation activities barred by
Sevani.
We further agree with Shiv Aban that it did not waive its claim of fees under
OCGA § 9-15-14 by not attacking the taking under OCGA § 32-3-11. By its very
terms, OCGA § 32-3-11 (a) and (b) provide that the trial court may “set aside, vacate,
[or] annul a declaration of taking, together with any title acquired thereby.” But Shiv
Aban does not seek to set aside the taking. Compare Sevani, 196 Ga. App. at 249
(when condemnee believes condemnor’s pre-acquisition activities are abusive,
condemnee can move to set aside the taking under OCGA § 32-3-11). Rather, Shiv
Aban accepted the legitimacy of the taking and only contested the amount of
compensation. Its attack on the DOT’s initial estimate of just compensation is not an
25
attempt to set aside the taking but rather to recover fees incurred in response to an
initial estimate that was so flawed as to constitute a violation of OCGA § 9-15-14.
Sevani is distinguishable because, unlike the present case, the condemnee in Sevani
challenged the condemnor’s pre-litigation activities and here, Shiv Aban challenges
the condemnor’s litigation activities.13 Accordingly, the trial court correctly
concluded that Shiv Aban was authorized to seek fees under OCGA § 9-15-14 and
the DOT’s first enumeration of error is therefore without merit.
(b) The DOT next contends the trial court erred because Shiv Aban failed to
present any evidence of improper conduct, a lack of substantial justification, or an
intent to delay or harass on the part of the DOT during the course of the litigation. As
stated above, the trial court awarded fees under both OCGA § 9-15-14 (a), which we
will affirm if there is any evidence to support the award, and OCGA § 9-15-14 (b),
which we review for abuse of discretion.
13
Other cases cited by the DOT are inapposite or distinguishable. In Dept. of
Transp. v. Franco’s Pizza & Delicatessen, 164 Ga. App. 497 (297 SE2d 72) (1982),
which is physical precedent only, the condemnee alleged that the condemnor
improperly handled preacquisition negotiation with prospective condemnees pursuant
to inapplicable federal guidelines. Id. at 498 (Carley, concurring specially). The
condemnees did not contend that the condemnor filed a legally insufficient affidavit
in support of a declaration of taking. The case of Kitchens v. Ezell, 315 Ga. App. 444,
451 (2) (726 SE2d 461) (2012) (physical precedent only), involved bad faith
negotiations and actions during pre-litigation attempts to settle a claim.
26
Shiv Aban presented some evidence to show that the DOT’s initial estimate
was so flawed that it could not be reasonably believed that the trial court would
accept the position. Shiv Aban presented evidence to show that the initial estimate
was based on an appraisal conducted in May 2012 that stated the value of the
property as of May 20, 2012, approximately 16 months prior to the date of taking; the
appraisal was dated December 4, 2012, approximately nine months prior to the
taking; it was based on photographs taken of a storm damaged and non-operational
motel; and it failed to take into account that Shiv Aban spent approximately $857,000
to repair the hotel and that the hotel was operational months before the date of the
taking. Thus, the trial court did not err by finding that Shiv Aban was entitled to fees
under OCGA § 9-15-14 (a); compare Woods, 269 Ga. at 55 (2) (“[B]ecause DOT’s
initial deposit was based upon a valid estimate made by a qualified appraiser, it
cannot be said that its position was void of any justiciable fact, such that it could not
be reasonably believed that a court would accept it.”) (citation, punctuation and
footnote omitted).
It is true that the DOT’s original estimate is only that, an estimate and that the
declaration-of-taking procedure allows the DOT to present a different expert at the
interlocutory hearing. Morrison v. Dept. of Transp., 166 Ga. App. 144, 145 (303
27
SE2d 501) (1983) (“DOT was not bound by its original estimate but could present
evidence de novo as to fair market value and consequential damages”); Aiken v. Dept.
of Transp., 171 Ga. App. 154, 155 (1) (319 SE2d 58) (1984). Even so, a condemnor
is not allowed to file court pleadings that violate OCGA § 9-15-14’s standards.
Because the trial court’s award of fees is affirmed under OCGA § 9-15-14 (a),
we need not address whether the trial court abused its discretion by finding that the
DOT’s action lacked substantial justification under OCGA § 9-15-14 (b).
(c) Finally, the DOT contends the trial court erred as a matter of law in
determining the amount of the award. It argues that the trial court impermissibly
awarded attorney fees on a lump sum contingent fee basis and that it failed to
apportion the fees and expenses between sanctionable acts and those deemed proper.
“[A]n award of attorney fees is to be determined upon evidence of the
reasonable value of the professional services which underlie the claim for attorney
fees.” Ga. Dept. of Corrections v. Couch, 295 Ga. 469, 483 (3) (a) (759 SE2d 804)
(2014) (citation and punctuation omitted). In Couch, the Supreme Court held that a
court may award fees based on a contingent fee agreement, but “[e]vidence of the
existence of a contingent fee contract, without more, is not sufficient to support the
award of attorney fees.” Id. (citation omitted). The party must present “proof of the
28
value” of the services for which fees are sought. Id. Thus, although “[a] court may
consider a contingent fee agreement and the amount it would have generated as
evidence of usual and customary fees in determining both the reasonableness and the
amount of an award of attorney fees,” to do so
“the party must show that the contingency fee percentage was a usual or
customary fee for such case and that the contingency fee was a valid
indicator of the value of the professional services rendered. In addition,
the party seeking fees must also introduce evidence of hours, rates, or
some other indication of the value of the professional services actually
rendered.”
Id. (citation omitted)., quoting Brock Built, LLC v. Blake, 316 Ga. App. 710, 714-715
(2) (b) (730 SE2d 180) (2012). In addition, “the trial court must limit the fee[] award
to those fees incurred because of the sanctionable conduct.” The Gibson Law Firm
v. Miller Built Homes, 327 Ga. App. 688, 691 (761 SE2d 95) (2014) (punctuation
omitted) (failure to apportion award of fees based on the party’s sanctionable conduct
is error).
Here, the trial court heard evidence regarding the legal experience of the
attorneys and other employees of Shiv Aban’s counsel, including that lead counsel
had 50 years of experience handling condemnation litigation on behalf of condemnors
29
and condemnees; that the firm usually charged a flat rate of 40 percent of any award
that exceeded the highest offer obtained by the condemnee from the condemnor; that
most condemnees prefer a contingency fee basis and do not want to pay an hourly fee;
that in this case, counsel offered a contingency fee on a sliding scale that was less
than 40 percent14 as a result of negotiation with Shiv Aban; that the firm put in 510
to 515 total hours on the entire case through the day of the fee hearing; that the hourly
rates of the attorneys and other professionals ranged from $350 to $165 per hour; that
the rates were reasonable for the North Georgia area based on the experience and
services provided; that if the firm had billed Shiv Aban based on those rates, the bill
for attorney fees would have been approximately $124,000; that the firm incurred
$24,016.19 in litigation expenses associated with all their work; that Shiv Aban only
sought fees against the DOT based on the difference between the highest offer that
it received from the DOT and the DOT’s $1.25 million appraisal; that under the
contingent fee agreement, the amount of fees sought against the DOT was
approximately $236,000 plus the total amount of litigation expenses; that Shiv Aban
14
Shiv Aban had a contingent fee contract that provided a sliding scale
contingency of 40 percent of the first $250,000 recovered in excess of the DOT’s’
highest pre-taking offer of $503,684; 30 percent of the amount recovered in excess
of $753,684; and 25 percent of the amount recovered in excess of $1,003,684.
30
paid fees to its attorneys above and beyond $236,000 in accordance with the
contingency fee agreement; and that the firm risked having to try the case twice if the
DOT had appealed the assessors’ award.
In its order granting the motion for fees and expenses, the trial court held that
Shiv Aban had
self-limited its claim for attorney[ ] fees, and has not claimed attorney[
] fees and expenses of litigation based on its full recovery of
$1,700,000.00 . . . . Instead [Shiv Aban] asserts a claim for contingent
attorney[ ] fees only on sums in excess of $503,684 and less than
$1,250,000.
The court further found that Shiv Aban had negotiated a fee contract with its counsel
at a rate less than counsel’s standard, 40 percent flat rate; that counsel’s hourly rates
were reasonable; and that Shiv Aban’s counsel expended over 510 hours, “which
amounts to more than $123,500” at those rates. The court concluded as follows:
Considering all factors, the Court finds that a risk premium of two times
the hourly rate to be a reasonable parameter for this condemnation case.
As such, the Court finds . . . that the actual contingent fee claimed of
$236,879 (31 %) is reasonable.
With one exception, we hold that the DOT’s assertions of error with regard to the trial
court’s award are without merit.
31
First, as shown above, the trial court was authorized to make an award based
on a contingent fee agreement. Following Couch, the court received evidence
regarding the reasonableness of the fees, including that the contingent fee percentage
negotiated by Shiv Aban was less than that normally charged by Shiv Aban’s
attorneys for similar work. The court also held that the normal hourly rates that the
attorneys for Shiv Aban charged were reasonable based on the experience of each
person involved. The court then compared the limited contingency fee sought by Shiv
Aban to the fee that would have been incurred under hourly billing, and held that the
limited contingency fee was reasonable given the risks involved in taking a
contingency fee case. Thus the court evaluated the value of the services for which
contingency fees were sought based on information other than the contingency fee
agreement itself and therefore properly followed Couch in determining the amount
of the fee award. The DOT’s reliance on Gibson is misplaced. That case only found
fault with how a trial court failed to show that it apportioned its award to distinguish
fees incurred based on sanctionable conduct from fees incurred for other aspects of
the case; it did not prohibit fee awards based on contingent fee agreements. Gibson,
327 Ga. App. at 691 (3).
32
Second, the trial court apportioned the fees incurred between those associated
with the DOT’s improper conduct and those that were not. See Fedina v. Larichev,
322 Ga. App. 76, 81 (5) (744 SE2d 72, 77 (2013) (“in cases involving OCGA § 9-15-
14 (a) or (b), the trial court must limit the fees award to those fees incurred because
of the sanctionable conduct.”) (citation, punctuation and footnote omitted). Here, as
requested by Shiv Aban, the trial court limited its calculation of attorney fees to those
associated with the difference between the DOT’s highest pretrial offer and $1.25
million, the value of the property found by the DOT’s testifying appraiser. Thus, the
trial court did not simply award an unapportioned “lump sum” as the DOT suggests
and in fact apportioned the award as required by the above case law. Compare Brewer
v. Paulk, 296 Ga. App. 26, 31 (2) (673 SE2d 545) (2009) (“trial court failed to
apportion fees between those incurred in defending against the claims deemed
frivolous and any that were not”). In sum, we find no error in the trial court’s
calculation of the fee award.
With regard to litigation expenses, however, we find no evidence of any
apportionment. Unlike the attorney fee award, Shiv Aban was awarded all of the
litigation expenses incurred by its attorneys. Because the trial court failed to make
any apportionment whatsoever regarding those expenses, we vacate that portion of
33
the award and remand with direction to apportion those expenses and to award only
those associated with the DOT’s sanctionable conduct.
Judgment reversed in Case No. A15A2013 and case remanded with direction.
Judgment vacated in part in Case No. A15A2014, and case remanded with direction.
Andrews, P. J., and Miller, P. J., concur.
34