Court of Appeals Office of Appellate Courts.
James C. Backstrom, Dakota County Attorney, Jay R. Stassen, Michael R. Ring, Assistant County Attorneys, Hastings, Minnesota, for respondent.
Daniel J. Biersdorf, Edward Kelly Keady, Biersdorf & Associates, P.A., Minneapolis, Minnesota, for appellant.
Lori Swanson, Attorney General, Jeffrey S. Thompson, Assistant Attorney General, Saint Paul, Minnesota, for amicus curiae Minnesota Commissioner of Transportation.
Steven J. Quam, Richard D. Snyder, John E. Drawz, Patrick D.J. Mahlberg, Fredrikson & Byron, P.A., Minneapolis, Minnesota, for amicus curiae CapX2020.
Katelynn K. McBride, Anthony B. Sanders, Lee U. McGrath, Minneapolis, Minnesota, for amicus curiae Institute for Justice.
Susan L. Naughton, Saint Paul, Minnesota, for amicus curiae League of Minnesota Cities.
Kirk A. Schnitker, Jon W. Morphew, Schnitker Law Office, P.A., Spring Lake Park, Minnesota; Leland J. Frankman, Harry A. Frankman, Frankman Law Offices, Minneapolis, Minnesota; and Bradley J. Gunn, Malkerson, Gunn & Martin, LLP, for amicus curiae Minnesota Eminent Domain Institute.
1. The term "community" in Minnesota's minimum-compensation statute, Minn. Stat. § 117.187 (2012), means an identifiable locality that has a socially or governmentally recognized identity, or a group of such localities.
2. The phrase "comparable property" in Minn. Stat. § 117.187 refers to an existing property, regardless of its availability for purchase, that has enough like characteristics or qualities to another property that the value of one can be used to determine the value of the other.
3. The lodestar method applies to an award of attorney fees under Minn. Stat. § 117.031(a) (2012).
The legal questions presented by this case relate to the operation of Minnesota's minimum-compensation statute, Minn. Stat. § 117.187 (2012), which provides a mechanism for compensating property owners who "must relocate" following the condemnation of their real property. Appellant George W. Cameron, IV, who had his commercial property taken by respondent County of Dakota ("the County"), argues that the district court erred when it failed to award him sufficient damages under the minimum-compensation statute to purchase a "comparable property in the community." Minn. Stat. § 117.187. Cameron also challenges the court's award of attorney fees under Minn. Stat. § 117.031(a) (2012). We affirm.
On July 25, 2008, as part of a highway-reconstruction project, the County acquired a commercial property in Inver Grove Heights ("the condemned property") through the exercise of its eminent-domain power. The condemned property, which Cameron owned, included a building constructed in 1885. The building had a 4, 444-square-foot ground level and a 1, 600- to 2, 000-square-foot basement, for a total size of between 6, 000 and 6, 400 square feet. Cameron operated a high-volume, low-margin liquor business on the condemned property. The taking by the County required Cameron to move his liquor business to a temporary location, and the move made his business less profitable. Cameron rejected the County's initial offer of $560, 300 for the condemned property, an offer that was based on the County's calculation of the appraised value of the property using a sales-comparison approach. Following an administrative hearing, three court-appointed condemnation commissioners awarded Cameron $655, 000 in damages. Cameron appealed the award to the Dakota County District Court.
An evidentiary hearing followed. At the hearing, Cameron relied on Minnesota's minimum-compensation statute, Minn. Stat. § 117.187, to argue that he was entitled to an award of damages that would allow him "to purchase a comparable property in the community, " even if the amount awarded under the minimum-compensation statute exceeded the appraised value of the condemned property. Cameron's expert, Robert Strachota, testified that the relevant "community" in which to locate a comparable property consisted of the "trade area" of Cameron's business, which Cameron testified is an area within three miles of the condemned property. Strachota stated that no comparable property was available for purchase at the time of the taking, either in the trade area of Cameron's business or elsewhere in Inver Grove Heights. Cameron claimed that, in the absence of a comparable property available for purchase, he was entitled to compensation that would allow him to purchase land and construct a new building of comparable size and quality to the building located on the condemned property. Cameron projected that it would cost $2, 175, 000 to purchase vacant land across the street from the condemned property and construct a new building.
The County's expert, Daniel Wilson, testified that either the city of Inver Grove Heights or the trade area of Cameron's business could qualify as the relevant "community" under the minimum-compensation statute. Wilson identified a liquor store located on South Robert Trail in Inver Grove Heights ("the Robert Trail property") as a comparable property. The Robert Trail property had sold for $505, 000 in June 2008— just 1 month before the County acquired the condemned property. Wilson concluded that, because the condemned property had a higher appraised value than the Robert Trail property, Cameron was not entitled to damages that exceeded the appraised value of the condemned property.
The district court found that the Robert Trail property was both comparable to and located in the same community as the condemned property. Even though the Robert Trail property was no longer available for purchase and the building on the Robert Trail property was much smaller than the building on the condemned property, the court concluded that the two properties were comparable because they "ha[d] similar effective age, condition, quality, and parking/landscaping."
To account for the difference in size between the two buildings, the district court made its own supplementary calculations. First, the court determined that the price-per-square-foot of the main floor of the Robert Trail building was $224.36. Second, the court multiplied the square footage of the main floor of the building on the condemned property (4, 444 square feet) by the price-per-square-foot of the main floor of the Robert Trail building ($224.36) to ascertain the amount of damages to which Cameron was entitled under the minimum-compensation statute. That figure, the court concluded, was $997, 055.84.
The district court also awarded attorney fees to Cameron under Minn. Stat. § 117.031(a). That statute provides that a property owner shall recover "reasonable attorney fees" if the final judgment or damages award in an eminent-domain proceeding is, as here, "more than 40 percent greater than the last written offer of compensation made by the condemning authority prior to the filing of the petition." Minn. Stat. § 117.031(a). Cameron sought $217, 991.45 in attorney fees based on his fee arrangement with counsel, but the court reduced the award to $161, 964.50—an amount equal to one-third of the difference between the court's award of damages for the taking and the last offer made by the County. The court reasoned that Cameron was not entitled to recover the total amount of his requested attorney fees because the court did not accept the "bulk of" Cameron's arguments during the proceeding.
The court of appeals affirmed. Cnty. of Dakota v. Cameron, 812 N.W.2d 851 (Minn.App. 2012). The court of appeals concluded that the district court did not err when it determined that the Robert Trail property qualified as a comparable property in the community under the minimum-compensation statute. Id. at 859-60. The court of appeals further concluded that the district court's award of ...