Free Motion for Attorney Fees - District Court of Arizona - Arizona

1 2 3 4 5 6 7 IN THE UNITED STATES DISTRICT COURT 8 FOR THE DISTRICT OF ARIZONA 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 By: /s/ Lori A. Butler Lori A. Butler v. 192.019 Acres of Land, more or less, located in Yuma County, State of Arizona, et al., Defendants. Cha Cha, L.L.C., an Arizona Limited Liability Company, respectfully applies for fees and expenses under the Equal Access to Justice Act and provides the following Memorandum of Points and Authorities in support thereof. Respectfully submitted this 30th day of January 2007. Weil & Weil, PLLC Plaintiff, APPLICATION FOR FEES AND EXPENSES UNDER THE EQUAL ACCESS TO JUSTICE ACT (28 U.S.C. § 2412) UNITED STATES OF AMERICA, Case No. CV03-2006-PHX-SRB Lori A. Butler, Bar No. 016139 W EIL & W EIL, PLLC 1600 S. Fourth Avenue, Suite C Yuma, Arizona 85364 Tel: (928) 783-2161 Fax: (928) 783-6082 Attorney for Cha Cha, L.L.C.

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MEMO RANDUM OF POINTS AND AUTHORITIES Cha Cha, L.L.C., respectfully applies for fees and costs under the Equal Access to Justice Act and as grounds states as follows: I. ELIGIBILITY A. Application is Timely The Equal Access to Justice Act, as amended, 28 U.S.C. § 2412 (the "EAJA"), provides for an award of attorney fees and costs to a prevailing party in litigation against the United States. Pursuant to 28 U.S.C. § 2412(d)(1)(A): "Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses, in addition to any costs awarded pursuant to subsection (a), incurred by that party in any civil action (other than cases sounding in tort), including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust." Pursuant to 28 U.S.C. § 2412(d)(1)(B), an application for EAJA fees must be filed no

16 later than 30 days after final judgment in the action. Here, that date would be within 30 days 17 after the November 1, 2006, Judgment became final. (A copy of the Judgment is attached 18 as Exhibit "A".) The Judgment became final 60 days after the Judgment was issued because 19 no notice of appeal was filed. Federal Rules of Appellate Procedure, Rule 4(a)(1)(B). This 20 application was filed within 30 days after final judgment. Hence, this application is timely. 21 B. Real Party In Interest 22 Cha Cha, L.L.C., is one of the real parties in interest in this proceeding. The other real 23 party in interest in this proceeding is Sam Perricone, Trustee. Sam Perricone, Trustee does 24 not join in this Application. 25 The Complaint in Condemnation was filed on October 16, 2003. 26 27 28 2 Prior to October 2003 the subject properties (the "Velda Ranch" and "14th Street

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Ranch") were owned by Glen G. Curtis, Trustee of the Curtis Family Trust, and Sam Perricone, Trustee. On September 15, 2003, (and again on June 10, 2004, by corrected warranty deed), Glen G. Curtis as Trustee conveyed the Trust's undivided one-half interest in the 14th Street Ranch to Cha Cha, L.L.C. Glen G. Curtis as Trustee also conveyed the Trust's one-half undivided interest in the Velda Ranch to Cha Cha, L.L.C. The Curtis

Family Trust held an interest in Cha Cha, L.L.C., but all property in this eminent domain proceeding was held as follows: one-half undivided interest held by Cha Cha, LLC and onehalf undivided interest held by Sam Perricone, Trustee. Cha Cha, L.L.C. listed the one-half undivided interest in Velda Ranch and the 14th Street Ranch as assets on its Balance Sheets dated October 2003. See Exhibit "B", Affidavit of Kathy McCloud. Cha Cha, L.L.C. received payment out of the Court Registry for just compensation in this action. Cha Cha, L.L.C. has paid one-half of the invoices for attorney's fees and costs in this litigation. Cha Cha, L.L.C. is the real party in interest for purposes of this EAJA application. See Germano-Millgate Tenants Ass'n v. Cisneros, 855 F.Supp. 233 (N.D.Ill. 1993)(Partnership that issued checks to counsel was real party in interest and was "party" entitled to attorney's fees under 28 U.S.C. § 2412(d)). Attached hereto as Exhibit "B" is the Affidavit of Kathy McCloud, Comptroller of Cha Cha, L.L.C. Ms. McCloud states that Cha Cha, L.L.C. meets the statutory eligibility requirements of a "party" under 28 U.S.C. § 2412(d)(2)(B). C. Prevailing Party Under 28 U.S.C. § 2412(d)(2)(H), "prevailing party" in the case of eminent domain proceedings means: "a party who obtains a final judgment (other than by settlement), exclusive of interest, the amount of which is at least as close to the highest valuation of the property involved that is attested to at trial on behalf of the property owner as it is to the highest valuation of the property involved that is attested to at trial on behalf of the Government".

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At trial Don Dorchester, on behalf of the Government, attested to the value of the subject property as $2,400,000.00 ($2,050,000.00 for the Velda Ranch and $350,000.00 for 14 th Street Ranch). At trial, on behalf of the property owner, Glen Curtis attested to the value of the subject property as $5,186,640.00 ($4,368,000.00 for the Velda Ranch and $818,640.00 for 14 th Street Ranch). Also on behalf of the property owner, Jim Sanders, Defendants' expert witness, attested to the value of the subject property as $4,325,300.00 ($3,559,300.00 for the Velda Ranch and $766,000.00 for 14th Street Ranch). On August 15, 2006, following trial, a jury returned a verdict in the amount of $4,327,468.80. Judgment was issued on November 1, 2006, for just compensation in the amount of $4,327,468.80. See Judgment attached hereto as Exhibit "A". Here, final judgment, in the amount of $4,327,468.80, is at least as close to the highest valuation of the property that is attested to at trial on behalf of the property owner ($5,186,640.00) as it is to the highest valuation of the property that is attested to at trial on behalf of the Government ($2,400,000.00). Cha Cha, L.L.C. is unquestionably the prevailing party under the EAJA. II. ENTITLEMENT The EAJA creates a presumption of a fee award. See United States v. 313.34 Acres of Land, 897 F.2d 1473, 1477 (9 th Cir. 1990); United States v. First Nat'l Bank of Circle, 732 F.2d 1444, 1447 (9 th Cir. 1984); Thomas v. Peterson, 841 F.2d 332, 335 (9 th Cir. 1988). According to the terms of 28 U.S.C. § 2412(d)(1)(A): "Except as otherwise specifically provided by statutes, a court shall award to a prevailing party other than the United States fees and other expenses . . . incurred by that party in any civil action . . ., unless the court finds that the position of the

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United States was substantially justified or that special circumstances make an award unjust." (Emphasis added.) The Government's position was not substantially justified. Title 28 U.S.C. § 2412(d)(2)(D) imposes upon the government the burden to show that its position was substantially justified. Ratnam v. Immigration and Naturalization Service v. Jean, 177 F.3d 742, 743 (9 th Cir. 1999). A determination of whether the government's position was substantially justified is within the Court's discretion. United States v. 313.34 Acres of Land, 897 F.2d at 1477. The Ninth Circuit has set forth the following considerations which should form the basis of a court's reasoning when deciding whether the government's position was substantially justified: 1. The reasonableness and reliability of the government's appraisals introduced

into evidence based on the (a) qualifications of the appraiser, (b) impartiality or lack thereof of the appraiser (how often he was employed by the government), (c) factual basis of the appraisal (specifically, the reasons the appraisal differs from that of the landowner; (d) awards and sales of similar property in the area at or about the time in question, (e) whether the comparable sales used by the appraiser were in fact comparable; 2. A comparison of the government's appraisal, the offer made, and proof of

valuation at trial; 3. Any explanation offered by the government as to discrepancies between its

offer, the appraisal(s), and trial evidence; 4. The good faith, or lack of it, of the government in trying to reconcile the

dispute prior to litigation; and 5. Any other relevant evidence.

United States v. 313.34 Acres of Land, 897 F.2d 1473 (9 th Cir. 1990); see also United States

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v. Charles Gyurman Land & Cattle Co., 836 F.480, 485 (10 th Cir. 1987); United States v. 1,378.65 Acres of Land, 794 F.2d 1313, 1317 (8 th Cir 1986); United States v. 640.00 Acres of Land, 756 F.2d 842, 850 (11th Cir. 1985). Although the Government has the burden to prove substantial justification, Cha Cha, L.L.C. provides the following information to support a finding of no substantial justification. The Government's pre-litigation offer was in the amount of $358,000.00 for the 14th Street Ranch and $1,750,000.00 for the Velda Ranch. The total offered for the Velda and14th Street Ranch was $2,108,000.00. After the eminent domain proceeding was filed, the Government retained appraiser Don Dorchester. Mr. Dorchester provided an appraisal of the subject property at

$2,400,000.00 (approximately $300,000.00 more than the offer). This was also the valuation provided at trial. At trial Defendants were able to point out numerous errors with M r. Dorchester's valuation. The Government's appraiser lists eight "comparable" sales in his appraisal report that precede the valuation date by four years (1999 sales). Mr. Dorchester did not make any market conditions adjustment regarding sales that preceded the valuation date by over four years. Mr. Dorchester arrived at his valuations by taking a mathematical average of all sales (old sales and newer sales) and made no adjustment for timing of sales, location, zoning or other elements of comparison required. Mr. Dorchester used an insider transaction as a comparable sale, in violation of basic tenet of real estate appraisal principles. Mr. Dorchester did not utilize industrial sale property as comparable sales, despite the zoning of the subject property as industrial property. Finally, as to good faith of the Government trying to reconcile the dispute prior to trial, Cha Cha, L.L.C. submits there was absolutely no attempt to resolve this matter. The parties executed a Stipulation for Modification of Pretrial Schedule acknowledging May 9,

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2006, as the date for settlement conference. A settlement conference was set before Mark E. Aspey, United States Magistrate Judge, for May 9, 2006. In preparation for the settlement conference counsel expended time to complete a Confidential Settlement Brief. Defendants and counsel cleared their schedules for this conference. At the last minute counsel for Defendants were notified that the settlement conference would be cancelled because the Government does not settle condemnation cases. Accordingly, there is no good faith in attempting to resolve this dispute prior to trial. In sum, there is no substantial justification for the Government's position on just compensation in this matter. There are no special circumstances present in this case that would make an award of fees unjust. 28 U.S.C. § 2412(d)(1)(A). III. REASONABLENESS OF REQUESTED AWARD Cha Cha, L.L.C. submits that the requested attorneys' fee award is reasonable. Cha Cha, L.L.C. makes this application for only one-half of the attorney's fees and costs incurred for this litigation, as this one-half was the responsibility of Cha Cha, L.L.C. (the other half being the responsibility of Sam Perricone, Trustee). Counsel for Defendants expended substantial time to all facets of this litigation up to and including the week long trial in August 2006. During the months of June, July and August 2006, John Weil, counsel for Defendants, was precluded from working for other clients because of the required preparation for trial in this case. The fee contracted between attorney and client in this case was a fixed hourly rate. No written fee agreement exists. See Exhibit "C", Statement of Consultation and Statement of Verbal Fee Agreement and Exhibit "D", Affidavit of Lori Butler. The amount of money involved in this litigation was significant. Defendants' valuation of the subject property was $4,449,864.00. This valuation differed greatly from the Government's valuation of $2,400,000.00. Accordingly, presentation of this case was

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valued at least over two million dollars, due to the differential in valuations. As a result of counsel's efforts prior to and at trial, the jury returned a verdict in the amount of $4,327,468.80. This result clearly substantiated counsel's significant effort expended on this case. John Weil has a long-standing attorney/client relationship with Defendants which has lasted over twenty years. The hourly fee charged for this litigation is identical to the hourly fee charged to the client for all matters. Attached is a true and correct copy of Invoices itemizing the time spent in this eminent domain action and the costs of the litigation. As the Invoices show, Defendants' counsel spent attorney time in the amount of $89,342.50 on this litigation and incurred additional costs of $8,743.83. Some of the time entries indicate "split with 33.845 acres". This designates that the attorney time or expense pertained to two condemnation cases, the instant case, and United States v. 33.845 Acres of Land, Case No. CIV-03-2007, and therefore, the attorney time or expense was split 50/50 between the two cases. Wherefore, Cha Cha, L.L.C. respectfully applies for an award of attorney fees and costs pursuant to the Equal Access to Justice Act. Respectfully submitted this 30 th day of January 2007. Weil & Weil, PLLC

By:

/s/ Lori A. Butler Lori A. Butler

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CERTIFICATE OF SERVICE I hereby certify that on January 30 th , 2007, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM /ECF registrants: Sue A. Klein Assistant U.S. Attorney Two Renaissance Square 40 North Central Ave., Ste. 1200 Phoenix, AZ 85004-4408 [email protected] I hereby certify that on January 30 th , 2007, I electronically transmitted the attached

The Honorable Susan R. Bolton United States District Court 401 West Washington Street, SPC 50 Phoenix, Arizona 85003 [email protected] /s/ Lori A. Butler Lori A. Butler

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