Oregon’s Supreme Court Takes up Important Issue Concerning Recovery of Attorney Fees in Condemnation Cases

ORS 35.346 provides that property owners may recover reasonable attorney fees, expenses and costs if they recover more at trial than the condemner’s highest written offer before filing its condemnation lawsuit.  Property owners will often be able to meet this standard given the various factors outside the condemner’s control that may support a higher verdict at trial, including market appreciation between the date of the condemner’s appraisal supporting its prefiling offer and the date of value at trial, the date the complaint is filed.

ORS 35.300 allows condemners to attempt to reduce their reimbursement exposure after the litigation has begun (and the condemner is able to conduct formal and informal discovery) by making an offer of compromise.  The offer of compromise establishes an amount that the condemner is willing to pay the property owner to settle the case.  The offer can set a specific amount the condemner is willing to pay in attorney fees and costs or provide that the court will establish the amount of recoverable fees and costs.  ORS 35.300(2) provides that the judgment entered memorializing an accepted offer of compromise and requiring that the court determine recoverable fees, costs and expenses will “give judgment to the defendant for the amount offered as just compensation for the property and as compensable damages to the remaining property of the defendant and, in addition, for costs and disbursements, attorney fees and expenses that are determined by the court to have been incurred before service of the offer on the defendant.”  If the property owner rejects the offer and does not beat the offer at trial, the judgment entered will be for just compensation and those fees, expenses and costs incurred as of the date of service of the offer.

In TriMet v. Aizawa, 277 Or App 504 (2016), the Court of Appeals upheld a trial court decision that the property owner may also recover attorney fees, costs and expenses incurred after the date of service of a successful offer of compromise in the pursuit of recovering their fees, costs and expenses.  The reimbursement of these additional amounts was justified based on prior interpretations of a procedural statute, ORCP 68, outside the condemnation context.  The Oregon Supreme Court has granted TriMet’s petition for review.

In its decision, the Court of Appeals did not address TriMet’s argument that the text of the statute did not authorize the recovery of fees and costs subsequent to service of the offer or consider the legislative history submitted.  As TriMet told the court, ORS 35.300 was drafted to

Condemners will be watching this case closely to see whether the plain language of ORS 35.300 controls or the legislature must somehow go further.