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Fee Considerations In Right-to-Take Cases

On Behalf of | Mar 16, 2015 | Blog |

In theory, most property owners affected by a condemnation project would probably rather see the project go somewhere else or, at the least, avoid having to take their property. By the time they hire an attorney, property owners are generally resigned to the inevitability of the project, and their focus has shifted to the more practical issue of compensation. As mentioned above, however, there are instances where the client property owner’s primary goal is to defeat the taking. When this situation arises, it can present a number of ethical issues for the condemnation lawyer.

Most of these issues relate to the management of the client’s expectations. The client needs to understand that the trial court’s discretion to second guess a condemning authority’s determination of public necessity and authorization to condemn is limited. While it is true that the condemning authority has less discretion in failing to follow the statutory procedures for a condemnation case, a dismissal under these circumstances will generally be followed by a subsequent condemnation lacking whatever procedural infirmity resulted in the initial dismissal. This does not accomplish the client’s goal of avoiding the eventual acquisition of its property. Moreover, if the attorney charges the client for his time incurred, the fees and expenses in a full-blown challenge to the right to condemn can be substantial, potentially exceeding the amount of compensation that the property owner stands to recover if the challenge is unsuccessful. If the attorney has a contingent fee arrangement that fails to address how a challenge to the right to condemn will be handled, the attorney may be forced to pursue the challenge with the only hope of recovering his time in the case coming from the condemning authority in the unlikely event that the challenge is successful. This situation can lead to an unacceptable tension between the attorney’s obligation to his client to accomplish its aims and his own self-interest in avoiding a potential sinkhole of time and opportunity cost.

The attorney representing a property owner must work hard to ensure his client has a reasonable expectation of what can be accomplished in terms of challenging the right to take. An unsuccessful challenge to the condemnation, with its attendant fees and expenses, can vitiate the overarching purpose behind the constitutional guarantee that property will not be taken for a public purpose without adequate compensation being paid. Money is fungible, and every dollar spent by the property owner, either in challenging the right to take or in attempting to obtain the compensation to which it is entitled, is a dollar that is deducted from its ultimate recovery and, accordingly, just compensation. Where appropriate, the property owner’s counsel has an obligation to pursue a challenge to the condemning authority’s right to take. The decision to do so, however, should be entered into only after careful consideration by the attorney and full disclosure of the potential cost to the client and a realistic assessment of the likelihood that the challenge will not be sustained.