918 N.W.2d 371
N.D.2018Background
- Curtis and Karen Erickson bought two adjoining Red River lots in Oxbow (lots 39 & 40) and later listed them for sale; lot 40 had river frontage. 2009 floods prompted a flood-control Diversion Project that required acquiring the lots for the Oxbow Hickson Bakke Ring Levee.
- The Cass County Joint Water Resource District (District) made offers (initial appraisal $48,200; later a $150,000 “final offer” for both lots). Parties agreed in 2015 to allow access for construction and to litigate only compensation if unresolved; date of taking was stipulated as May 14, 2015.
- Appraisers: GE Bock (multiple appraisals valuing the pair at $48,200 then $37,100) and James Wise (Ericksons’ appraiser valuing the parcels at $456,000 based on residential development comparables that were flood-protected).
- District commissioned a geotechnical (Barr) soil report; the district court declined to base valuation on that report because an average buyer would not have commissioned similar testing, but acknowledged the soil/flood history was generally known in the market.
- The district court awarded just compensation of $48,200 and granted the Ericksons $114,346.47 in attorney fees and costs. Both sides appealed (Ericksons on valuation; District on the fee award).
Issues
| Issue | Plaintiff's Argument (Ericksons) | Defendant's Argument (District) | Held |
|---|---|---|---|
| Proper measure of just compensation / highest-and-best use | Lots were zoned and adaptable for residential development; highest-and-best use is residential, so valuation should be much higher | Market perception, flood risk, and comparable sales without flood protection justify low valuation | Court: No clear error in finding highest-and-best use limited by site conditions and market; affirmed $48,200 award |
| Use of project-commissioned Barr soil report (project influence) | Barr report reflects real physical conditions relevant to value | District argued evidence from its project should be disregarded as project influence | Court: Statute bars value changes caused by the project but does not bar consideration of physical-condition evidence obtained by the project; court properly considered only generally known conditions, not the Barr report itself |
| Admissibility and weight of competing appraisals | Wise’s appraisal supports residential valuation; should control | Bock’s local-market expertise and comparables are more reliable | Court: Trial court properly credited Bock over Wise; not a clear error to weigh credibility and comparables as it did |
| Award of attorney fees and expert costs under N.D.C.C. § 32‑15‑32 | Ericksons sought full fees and costs incurred | District argued fees shouldn’t be awarded when recovery < condemnor’s offer (reliance on Thom) | Court: §32‑15‑32 allows discretionary fee awards without requiring recovery exceed offer; Thom’s contrary language is overruled; district court did not abuse discretion in awarding fees and costs and applied Thom factors in assessing reasonableness |
Key Cases Cited
- City of Devils Lake v. Davis, 480 N.W.2d 720 (N.D. 1992) (fair market value standard and appellate review of condemnation awards)
- City of Hazelton v. Daugherty, 275 N.W.2d 624 (N.D. 1979) (definition of fair market value)
- City of Jamestown v. Leevers Supermarkets, Inc., 552 N.W.2d 365 (N.D. 1996) (project-influence rule and disregard of value change caused by project)
- Thom, City of Bismarck v. Thom, 261 N.W.2d 640 (N.D. 1977) (framework for calculating reasonable attorney fees in eminent domain; discussed and narrowed here)
- Gissel v. Kenmare Twp., 512 N.W.2d 470 (N.D. 1994) (statute §32‑15‑32 controls fee shifting in eminent domain; Rule 68 inapplicable)
- Frederickson v. Hjelle, 149 N.W.2d 733 (N.D. 1967) (highest-and-best-use principle in condemnation)
- N.D. Dep’t of Transp. v. Schmitz, 910 N.W.2d 874 (N.D. 2018) (trial judge’s role as expert on attorney fees; lodestar and factors for fee awards)