Redevelopment Commission of Hendersonville v. Hyder

201 S.E.2d 236 (1973) 20 N.C. App. 241

REDEVELOPMENT COMMISSION OF HENDERSONVILLE
v.
Margaret Hendrix HYDER (widow) et al.

No. 7329SC762.

Court of Appeals of North Carolina.

December 19, 1973.

W. Harley Stepp, Jr., and Edwin R. Groce, Hendersonville, for petitioner appellant.

Crowell & Crowell by O. B. Crowell, Jr., Hendersonville, and M. John DuBose, Asheville, for respondents appellees.

BALEY, Judge.

Petitioner, Redevelopment Commission of Hendersonville, takes the position that the attorney fees for property owners which were fixed by the court as a part of the costs in this case to be paid by the Commission are excessive and unreasonable. Petitioner contends that the findings of fact of the trial court are not supported by competent evidence and do not themselves justify the fees awarded.

In Hicks v. Albertson, N.C., 200 S.E.2d 40, we have this succinct statement of the law with respect to the award of attorney fees:

"``The general rule in this State is that, in the absence of statutory authority therefor, a court may not include an allowance of attorneys' fees as part of the costs recoverable by the successful party to an action or proceeding.' In re King, 281 N.C. 533, 540, 189 S.E.2d 158. ``Except as so provided by statute, attorneys' fees are not allowable.' Baxter v. Jones, 283 N.C. 327, 330, 196 S.E.2d 193, 196."

The statutory authority upon which the allowance of attorney fees in this case is based is G.S. § 160-456(10)(h)(3), which provides as follows:

"[I]f the power of eminent domain shall be exercised under the provisions of this Article, the property owner or owners or persons having an interest in property shall be entitled to be represented by counsel of their own selection and their reasonable counsel fees fixed by the court, taxed as a part of the costs and paid by the petitioners."

Eminent domain is the power of the sovereign to take private property for a public purpose on payment of just compensation. Redevelopment Commission v. Bank, 252 N.C. 595, 114 S.E.2d 688. The statute conferring this power upon Urban Redevelopment Commissions provides that the Commission pay counsel fees for the property owner when it is necessary to condemn his property. Such a provision grants more freedom to the property owner to contest condemnation proceedings as it permits him to receive the award for his property, even after legal action, without having it reduced by the payment of attorney fees. It helps to equalize the bargaining power of the property owner and the commission and prevent insofar as possible any undue economic pressures. There must be some control over the amount of the fee, however, and this is found in the requirement that such counsel fees are to be fixed by the court and are to be reasonable in amount. When a statute provides for attorney fees to be awarded as a part of the costs to be paid by the governmental authority which is appropriating the property, it is not a contingent fee, but an amount equal to the actual reasonable value of the attorney's services. Dumas v. King, 157 F.2d 463 (8th Cir. 1946); Henlopen Hotel Corp. v. Aetna Ins. Co., 251 F. Supp. 189 (D.Del.1966); Morton County Bd. of Park Comm'rs v. Wetsch, 136 N.W.2d 158 (N.D.1965); Merchants' Fire Ins. Co. v. McAdams, 88 Ark. 550, 115 S.W. 175 (1908).

Reasonable counsel fees may be determined in part by the amount of the verdict obtained in the condemnation proceeding in the light of the proposals made to the property owner prior to his employment of an attorney. The results obtained by an attorney are a legitimate consideration in determining the amount of his fee. Under G.S. § 160-456(10)(h)(3), however, there is no uncertainty about the payment of an attorney fee commensurate with the services performed. The use by the court in this case of the contingent fee as the sole guide for a determination of reasonable counsel fees when there is no possibility that the attorney fee may go unpaid does not meet the statutory standard. There are numerous factors for consideration in fixing reasonable attorney fees— the kind of case, the value of the properties in question, the complexity of the legal issues, the time and amount involved, fees customarily charged for similar services, the skill and experience of the attorney, the results obtained, whether the fee is fixed or contingent, all afford guidance in reaching the amount of a reasonable fee. See Canon 12, N.C. Canons of Professional Ethics (effective until 31 December 1973) and Disciplinary Rule 2-106(B) of the North Carolina State Bar Code of Professional Responsibility (effective 1 January 1974); Henlopen Hotel Corp. v. Aetna Ins. Co., supra; Morton County Bd. of Park Comm'rs v. Wetsch, supra; Annot., 56 A. L.R.2d 13, 20-50 (1957); Annot., 143 A.L. R. 672, 676-726 (1943).

In this case both the attorney at the first trial, O. B. Crowell, Jr., and the attorney at the second trial, M. John DuBose, had contingent fee contracts with the property owners which were based upon the amount received for the property to be taken in excess of the offer made by the Commission. These fee contracts were binding upon the parties who executed them but not upon the court which, under the statute, fixes the fees to be taxed against a third party, the Redevelopment Commission. Whatever liability the property owners may have to their attorneys under their respective fee contracts may be determined in other actions. Here the court is concerned with an allowance of an attorney fee authorized by statute. From the facts found by the court it seems clear that in fixing the attorney fees undue emphasis was placed upon the contingent fee factor without regard for other considerations when, in reality, there was no contingency involved. It is proper under the statute to consider the results obtained as one of the elements for guidance in reaching the amount of the attorney fee, but, whether there was any recovery or not, counsel for the property owner was entitled to a reasonable fee, and it should not be set upon the basis of a contingency which did not exist. The element of risk in connection with the contingent fee justifies a much larger fee when the litigation is successfully terminated, but here there was no such risk, and the court failed to take this lack of risk into account.

The provision of the judgment of the trial court relating to the award of attorney fees is reversed, and the cause is remanded for a determination of reasonable counsel fees.

Reversed and remanded.

BROCK, C. J., and CAMPBELL, J., concur.