COURT OF APPEALS UPHOLDS BROAD ATTORNEY FEE REIMBURSEMENT AFTER SUCCESSFUL CHALLENGES

All reasonable attorney fees, including on appeal, are reimbursable after challenging a taking on jurisdictional or necessity reasons.

MCL 213.66 provides for wide reimbursement of property owner attorney fees and expenses, including where the property owner obtains increased just compensation, for expert expenses, and if there is a successful challenge to the taking. The Michigan Court of Appeals just upheld broad reimbursement when the attorney fees are sought in response to a challenge to the taking.

MCL 213.66(2) governs attorney fee reimbursement following a successful challenge to the taking. “If the property owner, by motion to review necessity or otherwise, successfully challenges the agency's right to acquire the property, or the legal sufficiency of the proceedings, and the court finds the proposed acquisition improper, the court shall order the agency to reimburse the owner for actual reasonable attorney fees and other expenses incurred in defending against the improper acquisition.” In Indiana Michigan Power Company v Community Mills, the condemning agency failed to include the property owner’s mortgage company. After initially opposing a motion to dismiss for jurisdictional reasons, the condemning agency agreed that dismissal was required. Last year, the Michigan Court of Appeals confirmed the requirement that all property owners receive a good faith offer in a published decision where I represented the property owners. This blog post describes that ruling.

The Indiana Power case discussed what attorney fees are reimbursable. The Court of Appeals recognized that “the purpose of the UCPA is to ensure just compensation for the taking of private property as required by Const 1963, art 10, §2” and that “the rationale behind MCL 213.66(2) is that ‘property owners may not be forced to suffer because of  an  action  that  they  did  not  initiate  and  that  endangered,  through  condemnation  proceedings, their right to private property.’” The condemning agency sought “to limit the reimbursement award to only those fees  and  expenses  relating  to  the  procedural  defect.” This argument was expressly rejected. “Nothing in MCL  213.66(2)’s language limits the reimbursement of attorney fees and expenses so long as the costs were actually (and reasonably) incurred while defending the improper acquisition. The statute simply does not limit recovery of fees to the work that led to the specific grounds on which dismissal was granted.”

The Court of Appeals also acknowledged that appellate expenses are included in MCL 213.66(2), ordering that the property owner “may also pursue additional fees and costs incurred as a result of this appeal.” Of course, “the trial court has discretion to determine whether the actual attorney fees incurred by [the property owner] are reasonable.”

This decision is positive for property owners by confirming the breadth of reimbursement in this specific scenario while emphasizing the general policy behind the UCPA as ensuring that property owners are not harmed by condemnation proceedings.

I have handled numerous successful eminent domain challenges on jurisdictional and necessity grounds.  If you have any eminent domain issues, please feel free to contact me.