Inverse Condemnation: Winning Litigant Awarded Only $45,039.10 In Fees/Costs Out Of Requested $414,103.49

Third District Sustains Fee Award Where Litigant Won Only $1,034 For a Temporary Taking.

     Code of Civil Procedure section 1036 requires a mandatory award of reasonable costs, disbursements, and expenses (including reasonable attorney, appraisal, and engineering fees) actually incurred to a prevailing party in a trial or an appellate inverse condemnation proceeding. Even under section 1036, the trial court begins with the lodestar touchstone—an examination of the time spent and reasonable hourly compensation of each attorney. (Ketchum v. Moses, 24 Cal.4^th 1122, 1131-1132, 1134-1135 (2001) [noting application of lodestar analysis in inverse condemnation cases].) The next case demonstrates that courts will not hesitate to award only a small portion of fees based on a litigant’s limited success in an inverse condemnation matter.

     In Hauselt v. County of Butte, Case No. C056502 (3d Dist. Mar. 24, 2009) (unpublished), plaintiff only recovered on one temporary taking claim to the tune of $1.034, after the trial court primarily adjudged that the County was entitled to immunity for certain storm work. Plaintiff sought $414,103.49 in fees and costs pursuant to section 1036—based on payments to five attorneys and six different expert witnesses. The trial court found that plaintiff had prevailed, but only had limited success on an “afterthought” type of claim, awarding him $10,000 in fees, $10,000 in expert witness fees, and other costs and expenses adding up to $45,039.10.

    

     Plaintiff did not convince the Third District, on appeal, that there had been any abuse of discretion by the trial court below.

     The primary reason is the appellate court’s agreement with the assessment of the lower court that plaintiff only had achieved limited success on a peripheral claim. Although arguing that all of the requested fees and costs were related to inextricably intertwined claims, the Court of Appeal disagreed, finding apportionment between successful and unsuccessful claims was in order and was sufficiently raised in an declaration by County’s counsel filed in support of a motion to tax costs. “Hauselt’s temporary claim was not based on the facts related to Hauselt’s broader permanent taking claim.” (Slip Opn., at p. 17, citing such decisions as Greater Westchester Homeowners Assn. v. City of Los Angeles, 26 Cal.3d 86, 103-104 (1979); City of Sacramento v. Drew, 207 Cal.App.3d 1287, 1303 (1989).)

     The appellate court also affirmed the trial court’s refusal to reimburse certain travel expenses and most expert witness fees. However, for those of you confronting the decision in Ferrell v. County of San Diego, 90 Cal.App.4^th 537, 543-544 (2001), there may be seeds of a suggestion in dicta in Hauselt (albeit unpublished) for a departure in thinking from the result reached in Ferrell. Ferrell concluded section 1036 does not allow a costs award broader than costs recoverable under Code of Civil Procedure section 1033.5. The Hauselt panel did cite to commentary suggesting Ferrell was wrongly decided (2 Matteoni & Veit, Condemnation Practice in California (Cont.Ed.Bar 3d ed. 2008) sec. 17.14, pp. 959-960) but refused to decide its correctness or whether a trial court also has discretion under section 1036 to award experts fees and other costs that are “reasonable” or “reasonably necessary” (also allowed under section 1033.5(c)(2)). Hauselt decided that the lower court determined that the travel and expert fees were not reasonable in nature, such that the determination below had to be affirmed. However, some ground was laid for practitioners to claim that Ferrell was wrongly decided.