Battle over a 1.4 acres generates over $680,000 in attorneys’ fees
By Tom Shean, The Virginian-Pilot – March 2, 2007
NORFOLK – Winning a high-stakes case for a client is one thing. Getting paid for the work is something else.
After an eight-month battle over fees it charged and time spent on the case, the Norfolk law firm Waldo & Lyle may soon collect nearly $300,000 for halting an effort by the Norfolk Redevelopment and Housing Authority to take a client’s property through condemnation.
Norfolk Circuit Court Judge John C. Morrison Jr. ordered the housing authority on Feb. 13 to pay $292,928 to property owner C and C Real Estate Inc. for its attorneys’ fees and costs. The company’s 1.4-acre tract on East 22nd Street near Monticello Avenue is the site of Downtown Used Auto Parts, an auto salvage yard.
The authority objection to Morrison’s order but said earlier this week that it has not yet determined whether it will appeal the court order.
If the order stands, NRHA could end up paying nearly $700,000 in legal fees over a property it sought to buy for $560,000 in 2003.
At that time, C and C contended that the property and the business combined should be valued at more than $3 million.
The C and C Real Estate case attracted attention two years ago when the Norfolk Circuit Court determined that the authority exceeded its powers while seeking to condemn the property as part of a program for upgrading the largely industrial neighborhood. The parcel had been mentioned as a possible site for the expansion of parking for the Mid-Atlantic Coca-Cola Bottling p lant on Monticello Avenue .
Court dismissals of petitions for property condemnation have been rare. The housing authority, however, appealed the outcome of the C and C case to the Virginia Supreme Court, which last June upheld the Norfolk court’s decision.
The authority’s board of commissioners sought to have the lower court’s decision reversed because of the precedent-setting nature of the case, said Ed Ware, a spokesman for the authority.
Joseph Waldo, head of Waldo & Lyle, said he was puzzled by the prolonged opposition by the housing authority, including its resistance to payment of C and C’s attorneys’ fees.
By appealing the Norfolk court’s decision to the state Supreme Court, the authority “decided to take it a step further, and that’s their right,” said Waldo, whose firm concentrates on eminent-domain disputes. “But to dig in their heels over payment of attorneys’ fees sends a signal that ‘we are going to fight you, no matter what.’ ”
The dispute over C and C’s request for attorneys’ fees stands out for the mounting cost of the condemnation case and its outcome. Fees for both sides in the Circuit Court case, the appeal before the high court, and C and C’s application for payment of fees have exceeded $680,000, according to court records and interviews.
Through last May, the housing authority paid $273,540 to its Norfolk law firm, Crenshaw, Ware & Martin, for work on the case. Since then, the authority paid another $67,300 to the firm. In addition, it paid the Richmond-based firm McGuire Woods $54,243 for representation in the appeal to the Supreme Court.
Virginia law allows a property owner to seek reimbursement of its costs, including reasonable attorneys’ fees, when a petition for condemnation is dismissed or a government agency abandons an effort to take property through condemnation.
Court battles over the payment of attorneys’ fees often occur in cases involving the denial of individuals’ civil rights, said Steve Emmert, a Virginia Beach attorney who has handled condemnation cases. However, prolonged disputes over a property owner’s application for payment of attorneys’ fees are unusual.
In its challenge to the C and C request for reimbursement of attorney s’ fees, the authority contended that Waldo & Lyle’s attorneys inflated their bills and charged unreasonably high hourly rates. Waldo, for example, billed $400 an hour and later $450 for his representation of C and C.
The authority also argued that Waldo & Lyle failed to break out its fees in sufficient detail. In addition, the authority contended that the firm should not be paid for the time that its attorneys spent on certain parts of C and C’s defense before the Virginia Supreme Court.
Attorneys for the authority reviewed Waldo & Lyle’s billing records last fall and sought to gather additional information about the firm’s legal work for C and C through the legal process called discovery. Morrison rejected that request.
Before issuing his order for reimbursing C and C, the judge determined in February that Waldo & Lyle’s attorneys billed C and C for some deposition-related services that overlapped. He subtracted these billings from the hours that he included in the order for reimbursement.
In addition, Morrison reduced the rates that Waldo & Lyle billed for work done by a younger, less experienced attorney. It was unreasonable, Morrison said, for this attorney to charge $250 an hour.
Morrison, however, said in a letter to both law firms that the hourly rates charged by Waldo and another of the firm’s attorneys, Henry E. Howell III, were reasonable. He said that the authority’s request that C and C should not be reimbursed for certain parts of Waldo & Lyle’s defense before the Virginia Supreme Court was not appropriate.
In the explanation of his findings, Morrison said the payment of $292,928 for attorneys’ fees and other costs was “reasonable in light of the effort expended by Waldo & Lyle in pursuit of such an unusual and beneficial result.”