Attorney Fee Issues In An Eminent Domain Case

This Article is written by Owner’s Counsel of America for general informational purposes only. It is intended to assist landowners in understanding some of the basic issues that relate to the issue of attorney fees in an eminent domain proceeding. This Article is not to be viewed as providing legal advice or to be considered as a substitute for the consulting with an experienced eminent domain lawyer on the matters covered herein.

Does the Condemning Authority Have to Pay My Attorney Fees? 

It depends. Every state is different in terms of how it addresses the issue of whether (and under what circumstances) a landowner may be entitled to recover attorney fees when faced with an eminent domain taking. Note that the operative word here is “recover,” since even in jurisdictions that offer some form of attorney fee relief in condemnation cases, a landowner’s attorney fees are typically not paid by the condemning authority as they are incurred, but rather at the very end of the proceeding. Below are three examples of how the issue of a landowner’s attorney fees in an eminent domain case may vary from state to state: 

Constitutional Rule. Some states allow a landowner to recover reasonable attorney fees based on language in that state’s constitution requiring the payment of ‘just compensation’ when property is taken, on the theory that in order to make the landowner whole the compensation must include out of pocket expenses like attorney fees. 

Statutory Rule. Other states have enacted specific statutes that allow landowners to recover all or some portion of their attorney fees if certain basic criteria (or benchmarks) are met. For instance, if the final compensation award is a certain amount above the last offer that was made to the owner by the condemning authority before filing the condemnation action, attorney fees may be awarded. 

American Rule. Still other states do not allow landowners to recover any of their attorney fees in eminent domain proceedings. These states unfortunately follow what is called the American Rule, a legal principle that states that each party in a lawsuit is responsible for payment of their own attorney fees, unless a statute specifically provides otherwise.

Because of the diverse approaches states take to attorney fee recovery in condemnation actions, landowners should engage with experienced eminent domain counsel early on to accurately assess their fee exposure in any condemnation dispute. You may also wish to take a look at the State by State laws in the Landowner’s Library and Resource Center, where you will find further information on attorney fee recovery laws.

What Are Some of the Factors that Could Impact the Amount of Attorney Fees I May be Charged in an Eminent Domain Case?

In an eminent domain proceeding there are too many factors that can impact the amount of attorney fees that a landowner may incur to identify and discuss all of them. However, below are a few factors to consider:

Negotiation vs. Litigation. Is the eminent domain case likely to be resolved through negotiations and settlement early on or is it more likely that the case will be dragged out and only resolved after extensive litigation has occurred, possibly even after a trial? Cases that go the distance before final resolution will be reflected in the amount of attorney fees charged for the time and effort of the attorney.

Nature, Scope and Type of Issues to be Litigated. The nature and extent of issues in dispute in an eminent domain proceeding can have a significant impact on the amount of attorney fees that are generated by both sides to address those issues. 

For instance, does the landowner want to mount a legal defense to the taking of the property or simply litigate the issue of how much compensation should be paid for the taking? In situations where the landowner seeks to litigate both the right to take the property, as well as the amount of just compensation to be paid if the taking is found to be lawful, the amount of attorney fees incurred will obviously reflect the breathe and scope of this expanded work and legal representation. 

Similarly, is the only compensation issue to be litigated at trial the value of the property being taken or will the landowner also seek to make a claim for damages to any remaining property. Typically, but not always, attorney fees are greater in cases where significant damage claims are being made by the landowner because such cases often require more time and attention to present and prove the damages being asserted.  Attorney fees are also made higher because condemning authorities will often mount a vigorous defense to a damage claim to avoid having to pay additional compensation, in which event  the landowner’s attorney will have to engage in the necessary work to respond to that defense. 

Motions in Limine. In many eminent domain cases involving contested issues that may impact the amount of just compensation to be paid, the condemning authority will file with the judge what are called Motions in Limine to preclude or restrict the landowner’s valuation evidence at trial. In such circumstances, a hearing before the judge (separate from the valuation trial) may be necessary to resolve such challenges. Motions in Limine can greatly expand the scope of the legal work that the landowner’s attorney must undertake in an eminent domain case and can sometimes lead to a significant increase in fees to account for that additional time and labor. 

What About A Contingency Fee Arrangement Where The Attorney Receives a Portion of the Compensation that is Recovered? 

Landowners who are concerned about whether they can afford to hire an attorney may wish to explore a contingency fee arrangement with the attorney they seek to retain. These fee agreements have become commonplace, particularly for clients who do not want to spend money upfront to hire an attorney.  The precise terms and conditions of contingent fee contracts vary, but in general they provide that a client does not have to pay an attorney any money for representing them until and unless the attorney obtains a settlement or secures a favorable verdict at trial. In that event, the attorney takes his fee out of the proceeds the client gets from their case. If an attorney is not able to settle the case and does not win at trial, then the client presumably owes the attorney no money for the attorney’s work, unless the contract indicates otherwise. Contingent fee agreements in eminent domain cases commonly provide that the attorney will be paid a percentage of the amount recovered above the initial offer prior to condemnation.

What About Situations Where the Eminent Domain Case is Abandoned or Dismissed?  

Once again, states differ on the issue of whether a landowner is entitled to be reimbursed attorney fees in situations where either the condemning authority abandons the condemnation case or the case is dismissed by a judge on the basis that the condemning authority cannot proceed. Some states allow for attorney fees to be recovered in either or both of these situations, while other states may not. Consultation with an experienced eminent domain lawyer to learn about the law in a particular state on this issue is advised. You may also wish to take a look at the State by State laws in the Landowner’s Library and Resource Center.