No. 80-60
I N THE SUPREME COURT OF THE STATE OF M N A A
OTN
1980
THE STATE OF MONTANA, ACTING BY AND
THROUGH THE DEPARTMENT OF HIGHWAYS
O F THE STATE OF MONTANA,
P l a i n t i f f and A p p e l l a n t ,
T O A HELEHAN,
H M S
D e f e n d a n t and R e s p o n d e n t .
Appeal from: D i s t r i c t C o u r t o f t h e Second J u d i c i a l D i s t r i c t ,
I n and f o r t h e County o f S i l v e r Bow.
H o n o r a b l e James F r e e b o u r n , J u d g e p r e s i d i n g .
C o u n s e l o f Record:
For Appellant:
D a n i e l J . S u l l i v a n , Highway L e g a l D e p a r t m e n t , H e l e n a ,
Montana
F o r Respondent:
D a n i e l s and M i z n e r , D e e r Lodge, Montana
S u b m i t t e d o n b r i e f s : May 2 7 , 1980
D e c i d e d : 0 ~ ~ u - c l - -- ,/ 9 a
J 2t 7
Filed: N 6 2 7 198.0
Clerk
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.
The State, through its Department of Highways, appeals
from a judgment of the Second Judicial District Court,
Silver Bow County, awarding expenses of litigation in an
eminent domain proceeding to Thomas Helehan.
The State's appeal is grounded on its contentions that:
(1) Helehan's cost bill was not timely filed, (2) witnesses
were not disclosed to the State prior to trial, (3) the
State was not given a chance to depose some witnesses before
trial, (4) there is no evidence to justify the attorney fees
granted for Joseph Engel, (5) it is unlawful to grant more
than one attorney f e e : in a condemnation case, and (6) the attorney
fees granted here are in excess of the evidence.
Timelv Filina of the "Cost Bill"
The condemnation case was tried by a jury from April
30, to May 3, 1979. A jury verdict in favor in the amount
of $5,000.00 was rendered on May 3, 1979. On May 14, 1979,
before the entry of judgment, Helehan's attorney filed a
motion for determination of necessary expenses of litigation
under section 70-30-306, MCA. On May 17, 1979, the State
filed a motion to retax costs claimed by Helehan, upon the
single ground that the cost bill was not timely filed.
Judgment on the cause was not entered until May 30,
1979. The judgment granted a total award and interest to
Helehan of $7,468.62, but stated that Helehan had withdrawn
from the deposit in the court beforehand the sum of $23,149.50
Therefore Helehan was required to pay to the State the
excess sum of $15,680.88, with interest at the rate of $2.57
per day until paid. Notice of entry of judgment was mailed
by the clerk of the court to each party on May 30, 1979.
The District Court overruled the objection to the time-
liness of the motion for necessary litigation costs upon the
ground that "time has never been of the essence of any
proceedings" in this condemnation matter. Thereupon the
court ordered payment by the State to Helehan of $3,450.00
for attorney Kermit Daniels, $2,052.00 for expert witness W.
J. Everly, $2,310.77 for expert witness Me1 Rowley, and
$1,500.00 for Helehan's attorney Joseph C. Engel, 111.
The State's position is that under State, By And Through
State Hwy. Com'n. v. Marsh (1978), 175 Mont. 460, 575 P.2d
38, the section which controls the timeliness of filing
bills of costs in condemnation cases is section 25-10-501,
MCA :
"The party in whose favor judgment is rendered and
who claims his costs must deliver to the clerk and
serve upon the adverse party, within 5 days after the
verdict or notice of the decision of the court or
referee or, if the entry of the judgment on the
verdict or decision be stayed, then before such entry
is made, a memorandum of the items of his costs and
necessary disbursements in the action or proceeding,
which memorandum must be verified by the oath of
the party, his attorney or agent, or the clerk of
his attorney, stating that to the best of his know-
ledge and belief the items are correct and that the
disbursements have been necessarily incurred in the
action or proceeding."
The State contends that it was too late for the filing
of Helehan's motion for necessary litigation costs under the
"5 days after the verdict" clause of the foregoing section.
In a prior case between these same parties, State, By
And Through Dept. of Highways v. Helehan (1977), 171 Mont.
473, 559 P.2d 817, the Highway Department appealed from a
default judgment against it taken in the District Court.
The default occurred because the Department had not appealed
from an assessment made by the Commissioners in the condemnation
case within the thirty days required by the then applicable
statute. The Department had in fact filed its appeal to
the District court thirty-fo,ur days following the Commissioners'
decision. This Court held that Rule 6 (a) and (e), M.R.Civ.P.
had to be given effect in determining the time for filing
the notice of appeal. Under those rules, a party required
to take some action by virtue of papers served upon him by
mail is granted three additional days to take the action,
and in computing the time, Saturdays, Sundays and legal
holidays are excluded under given circumstances. On that
basis, this Court set aside a default judgment of $87,742.04
against the State.
The same rule that saved the State's assets from a
default judgment in the prior case should apply to the other
party in this case. May 3, 1979 fell on a Thursday. By
excluding Saturdays and Sundays, and granting three additional
business days because of the service by mail, the final day
for service of Helehan's motion did not occur here until May
15, 1979. Therefore, his motion filed on May 14, 1979 was
timely, if we assume that section 25-10-501, MCA applies, as the
State contends.
Whether section 25-10-201, MCA is the statute governing
the time for filing a motion for necessary expenses of liti-
gation under section 70-30-306, MCA, is debatable. Attorney
fees are not ordinarily recoverable as costs, Callant v. ~ederal
Land Bank of Spokane (1979), Mon t . - 593 P.2d 1036, 1039,
,
36 St.Rep. 824, 829. With respect to witness fees, section
25-10-201, MCA, defining recoverable costs speaks of "legal
fees" of witnesses which of course, would delimit the fees
that might be paid to expert witnesses.to the statutory amounts.
The provisions of section 70-30-306, MCA, came about because
of the 1972 Mont. Const., Art. 11, S29, which requires
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"necessary expenses of litigation" to be awarded when the
private property owner prevails. Marsh, supra, should be
recognized for its limited application insofar as recovery
of such expenses of litigation is concerned. When the court
there said that a statutory procedure for hearing arguments
on claimed costs existed in section 25-10-501, MCA, it was
referring to the procedure for determining items of costs
other than attorney fees. 575 P.2d at 43. his Court was
merely suggesting a method of procedure for determining
necessary costs of litigation, which procedure is otherwise
unprovided for in our statutes and which after all is not
very different in aspect from any other factual dispute that
must be settled by a court upon hearing. If we were to
regard the motion in this case to determine the necessary
expenses of litigation to be a "bill of costs", then perforce
we would have to hold that the State here could not quarrel
as to any item of claimed costs because its motion to retax
the costs was limited simply to whether the filing of the
motion was timely. Gahagan v. Gugler (1935), 100 Mont. 599,
606, 52 P.2d 150, 154.
We note for the attention of the legislature that legi-
slation outlining procedures to be utilized in determining
necessary expenses of litigation under section 70-30-306,
MCA, would be helpful for the State and for private property
owners.
Rowley and Everly
Me1 Rowley, a draftsman and mining expert, was hired on
behalf of Helehan by his attorneys. He prepared exhibits
for use in the case but was never called as a witness. Rowley
presented his summary of time spent in consultation with
Helehan's counsel and in working on the case.
- 5-
ÿ he State's objection to Rowley's fee is that he never
testified as a witness, nor did he meet issues relating to
the case at the time of the trial, and that his name was not
disclosed through the ordinary discovery process as a witness.
Walter Everly is a consulting mining engineer in Butte.
His expertise was required by Helehan to prepare for cross-
examination of the State's witnesses, as well as to establish
the value of Helehanls claim. He also submitted at the fee
hearing, a summary statement showing the hours he had worked
on preparation of his testimony and his research in obtaining
records from the Highway Commission and the library at the
mining college in Butte. The State's objection to Everly's
fee is that although he was disclosed as a witness, the
State was not permitted to get his deposition prior to trial
or to discover what his opinions were prior to trial.
The District Court found that the fees billed to Helehan
by the expert witnesses were reasonable and ordered payment
by the State.
Of course, the reasonableness of the fees charged by expert
witnesses is a matter for determination in the discretion of
the District Court, and where substantial credible evidence
exists to support the findings of the District Court, they
may not be set aside by us unless clearly erroneous. Rule
52(a), M.R.Civ.P. We do not find any such abuse of discretion
here, nor do we find that the amounts awarded are clearly
erroneous.
As for the disclosure of witnesses, the record shows
that on April 30, 1979, a proposed pretrial order by ~elehan's
counsel was acknowledged by counsel for the Highway Department
wherein it appears that Helehan would offer three witnesses
at the upcoming trial, including Me1 Rowley. The record
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does not reflect any complaint of prejudice on the part of
the State by reason of the names of any witnesses supplied
to it nor does the State complain of surprise in the record
at or about the time of the jury trial, nor were any motions
for continuance made with respect to such witnesses.
It is not necessary that the expert actually testify in
order for the landowner to recover the cost of his expertise.
The 1972 Mont. Const., Art. 11, S29, contemplates full
reimbursement to the landowner of his cost of litigation,
and section 70-30-306, MCA, defining necessary expenses of
litigation, includes exhibit costs as a necessary expense.
Exhibit costs would certainly include the costs necessary to
produce the exhibit.
We find no error in the allowance of the expert witness
fees for Rowley and Everly to Helehan.
The Engel Fee
Joseph C. Engel 111, was Helehan's attorney in the
early stages of the condemnation proceedings, which originated
in 1965. Engel's contract with Helehan for his services was
on a contingent basis of one-third of the recovery. Engel
represented Helehan through the early pleadings stage,
through the Commissioners' hearing, and through the subsequent
appeal to this Court. After the Commissioners' award of
$87,742.00, Helehan withdrew $23,149.50 from the deposit by
the Highway Department in the District Court. Helehan paid
Engel approximately one-third of that amount, or $7,300.00.
Thereafter, Helehan and Engel fell into disagreement, and
Engel withdrew from the cause. It was at that point that M.
K. Daniels was substituted as counsel for Helehan in the
condemnation action.
Helehan claimed a s an i t e m of e x p e n s e , t h e $7,300.00
he had a l r e a d y p a i d t o Engel. No e v i d e n c e was adduced a t
t h e h e a r i n g b e f o r e t h e D i s t r i c t C o u r t a s t o a v a l u e of
Engel's services. The D i s t r i c t C o u r t awarded Helehan $1,500.00
a s a t t o r n e y f e e s f o r E n g e l ' s s e r v i c e s . The S t a t e o b j e c t s t o
t h e amount a l l o w e d , on t h e ground t h a t no e v i d e n c e was
i n t r o d u c e d t o s u p p o r t t h e award.
On t h i s p o i n t t h e S t a t e i s c o r r e c t . The r u l e i n t h i s
S t a t e i s t h a t an award o f a t t o r n e y f e e s must be based on a
h e a r i n g a l l o w i n g f o r o r a l t e s t i m o n y , t h e i n t r o d u c t i o n of
e x h i b i t s , and t h e o p p o r t u n i t y t o a r e s p o n s i b l e p a r t y t o
cross-examine t h e r e a s o n a b l e n e s s of t h e a t t o r n e y f e e s c l a i m e d .
Xarsh, s u p r a .
Helehan c l a i m s t h a t h e i s e n t i t l e d t o $7,300.00 for
Engel's attorney fees. The r e c o r d does n o t d i s c l o s e what
t h e S t a t e c o n s i d e r s would be a p r o p e r f e e f o r Engel. Whether
t h a t amount s h o u l d be more o r less t h a n t h e $1,500.00 a l r e a d y
g r a n t e d by t h e c o u r t i s a m a t t e r t o be d e t e r m i n e d by t h e
D i s t r i c t C o u r t on a n e v i d e n t i a r y h e a r i n g a f t e r remand.
D a n i e l s ' A t t o r n e y Fees
I n h i s motion t o d e t e r m i n e n e c e s s a r y e x p e n s e s o f l i t i g a t i o n ,
Helehan a s k e d f o r a t o t a l o f $3,350.00 a s a t t o r n e y f e e s
f o r M. K. Daniels. The D i s t r i c t C o u r t o r d e r e d $3,450.00.
The S t a t e a p p e a l s on t h e ground t h a t t h e award f o r D a n i e l s
i s excessive.
A t t o r n e y Rex Henningsen t e s t i f i e d t h a t a r e a s o n a b l e
a t t o r n e y ' s f e e f o r a day of t r i a l i n t h e S i l v e r Bow County area
i s $350.00, and t h a t $50.00 t o $60.00 i s a r e a s o n a b l e h o u r l y
r a t e . A t t o r n e y D a n i e l s showed t h a t he had t h i r t y h o u r s of
work i n t h e Helehan c a s e i n a d d i t i o n t o t h e f o u r d a y s of
t r i a l . Using t h e h i g h e s t of t h e Henningsen f i g u r e s , r e a s o n a b l e
a t t o r n e y f e e s f o r D a n i e l s would be $1,800.00 f o r h i s h o u r l y
work and $1,400.00 for his four days of trial, or total fees
of $3,200.00. The court's award is $3,450.00.
In the final analysis, the duty of fixing attorney fees in
condemnation cases for the prevailing party falls upon the
District Court. The purpose of the evidentiary hearing on
attorney fees, required since Crncevich v. Georgetown
Recreation Corporation (1975), 168 Mont. 113, 119, 120, 541
P.2d 56, 59, is to aid the court in its determination in
exercising its discretion to fix reasonable attorney fees.
The court, as a jury, is not bound absolutely to the testimony
of expert witnesses. It can reduce or increase the figures
submitted to it by experts as reasonable attorney fees and
as long as its findings are not clearly erroneous, the
determination made in its discretion will not be disturbed.
Rule 59 (a), M. R.Civ. P. Here, Daniels ' fee must be reduced
in any event to the $3,350.00 claimed by Helehan. Should
we, on the basis that the permissible award is $150.00
higher than the expert's testimony, return the matter for
further determination in the District Court? If for no
-
other reason than the doctrine of de minimis, the matter of
Daniels' fees should end here.
The Fees Awarded to Two Attorneys
The State finally contends that it was improper to
award Helehan attorney fees for Daniels and also for Engel.
The State contends that Helehan is entitled to be paid for
but one attorney, and that award must be made either on the
basis of Daniels' work or Engel's work, but not both.
The State's position cannot be sustained. The Constitutional
provision protecting landowners in condemnation cases
commands that all reasonable, necessary expenses of litigation
be paid to the prevailing landowner. Engel's services to
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Helehan w e r e c e r t a i n l y n e c e s s a r y i n t h e p e r i o d of t i m e t h a t
h e r e p r e s e n t e d Helehan i n t h e condemnation p r o c e e d i n g s .
Likewise, a f t e r Engel withdrew a s H e l e h a n ' s a t t o r n e y , t h e
s e r v i c e s p r o v i d e d by M. K. Daniels w e r e likewise a necessary
expense of l i t i g a t i o n , f o r which Helehan a s t h e p r e v a i l i n g
party i s e n t i t l e d t o recover. The work done by D a n i e l s d i d
n o t o v e r l a p t h a t done by E n g e l , e x c e p t i n s o f a r a s it may
have been n e c e s s a r y f o r D a n i e l s t o a c q u a i n t h i m s e l f w i t h h i s
c l i e n t ' s case. W e see no p r e j u d i c e t o t h e S t a t e on t h i s
p o i n t , n o r do we f i n d s u b s t a n c e i n t h e c o n t e n t i o n t h a t an
award may b e made o n l y t o one a t t o r n e y i n t h i s c a s e .
A c c o r d i n g l y , w e a f f i r m t h e D i s t r i c t C o u r t ' s award of
w i t n e s s f e e s t o Rowley and E v e r l y , and w e r e d u c e t h e amount
of a t t o r n e y f e e s a l l o w e d f o r t h e s e r v i c e s o f M. K. Daniels
L. C3
& $3,350.00. W e remand t h e c a u s e t o t h e D i s t r i c t C o u r t f o r
an e v i d e n t i a r y h e a r i n g on t h e v a l u e of t h e s e r v i c e s r e n d e r e d
by Engel t o Helehan i n t h e condemnation c a s e , f o r which
v a l u e an award s h a l l be made by t h e D i s t r i c t C o u r t t o Helehan.
C o s t s t o Helehan.
Justice
W e Concur:
a
Chief J u s t i c e
I' n
I concur i n t h e f o r e g o i n g o p i n i o n e x c e p t t h a t I would r e q u e s t
t h a t A t t o r n e y Engel be r e q u i r e d t o pay t h e a t t o r n e y f e e s t o
M . K . D a n i e l s o u t of t h e money he r e c e i v e d when t h e d e p o s i t was
made by t h e Department o f Highways and t h e w i t h d r a w a l was made
by Helehan and Engel. *
I\