State of Minnesota, by its Commissioner of Transportation v. David P Williams, doing business as Bear Track ...
Opinion text
STATE OF MINNESOTA
IN COURT OF APPEALS
A24-1713
State of Minnesota, by its Commissioner of Transportation,
Appellant,
vs
David P Williams, doing business as Bear Track Outfitting Co. et al.,
Respondents Below,
Mike’s Holiday,
Respondent.
Filed August 4, 2025
Affirmed
Bratvold, Judge
Cook County District Court
File No. 16-CV-19-192
Keith Ellison, Attorney General, Jeffrey S. Thompson, Andrew D. Gross, Assistant
Attorneys General, St. Paul, Minnesota (for appellant)
Tyson Smith, Richard T. Furlong III, Smith Law, PLLC, Grand Marais, Minnesota (for
respondent)
Considered and decided by Bratvold, Presiding Judge; Larson, Judge; and
Reilly, Judge. *
SYLLABUS
Reasonable attorney fees and expenses awarded in an eminent-domain proceeding
under Minn. Stat. § 117.031(a) (2024) must relate to the work performed to obtain the final
*
Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.
judgment or award for damages and may include fees incurred in defending an objection
to the eminent-domain proceeding.
OPINION
BRATVOLD, Judge
Appellant State of Minnesota by its Commissioner of Transportation (MnDOT)
challenges the district court’s judgment awarding respondent Mike’s Holiday attorney fees
and expenses in an eminent-domain proceeding. MnDOT sought a temporary easement and
fee acquisition so it could improve a highway in Grand Marais. MnDOT contends that the
district court’s award must be reversed and remanded for two reasons: first, the district
court erred as a matter of law by awarding attorney fees not authorized by Minn. Stat.
§ 117.031(a) and, second, the district court abused its discretion by misapplying the
lodestar method.
The first issue requires us to interpret Minn. Stat. § 117.031(a), which
unambiguously provides that a district court must award a property owner reasonable
attorney fees and expenses if the final judgment or damages award exceeds $25,000 and is
more than 40% greater than the condemning authority’s last written offer before petitioning
for condemnation. The district court determined that Mike’s Holiday was eligible to
recover attorney fees and expenses under Minn. Stat. § 117.031(a), and MnDOT does not
challenge the eligibility determination on appeal. Instead, MnDOT posits that the district
court erred by awarding attorney fees and expenses not authorized by Minn. Stat.
§ 117.031(a) because the award included fees and expenses incurred for Mike’s Holiday’s
failed objection to the condemnation petition.
2
We conclude that the district court did not err in awarding reasonable attorney fees
and expenses to Mike’s Holiday under Minn. Stat. § 117.031(a). First, the district court
stayed within its statutory authority because it determined the fees and expenses related to
the work performed to obtain the final judgment or award for damages and that work
included defending an objection to the condemnation petition. Second, the district court
did not abuse its discretion in applying the lodestar method and determining the amount of
reasonable fees and expenses that Mike’s Holiday was entitled to under Minn. Stat.
§ 117.031(a). Thus, we affirm.
FACTS
In September 2019, MnDOT petitioned to condemn 12 parcels of land to make
improvements to Trunk Highway 61 in Grand Marais. The petition named
40 respondents—the owners of the 12 parcels—including Mike’s Holiday, which owns
parcel 50 situated at the intersection of Highway 61 and Broadway Avenue. Mike’s
Holiday improved parcel 50 with a convenience store, a canopy, and two rows of gas-pump
islands with 16 fueling stations.
MnDOT’s eminent-domain petition as to parcel 50 sought, first, a temporary
easement on parcel 50 during the construction and, second, acquisition of the remaining
fee interest in over 6,000 feet encumbered by a permanent highway easement. The
temporary easement ran along Highway 61 and extended under the canopy. The petition
also asked the district court to appoint commissioners to appraise the damages for the
requested taking.
3
In December 2019, Mike’s Holiday noticed its objection to the petition. The
objection included that the petition did not “adequately describe” the land to be taken “with
certainty” and that the “[l]ack of certainty in the land to be taken renders impossible the
determination of what compensation is just.” Mike’s Holiday specifically contended that
the petition did not allege a “taking of access,” yet MnDOT’s plans “show that [Mike’s
Holiday] will be deprived of Highway access.”
After an evidentiary hearing, the district court denied the objections raised by
Mike’s Holiday and concluded that MnDOT’s proposed takings were “necessary, for a
public use, and authorized by law.” The district court then granted the petition as to
parcel 50 and referred the matter to appointed commissioners to “ascertain and report the
amount of damages” incurred by Mike’s Holiday because of the taking.
In June 2022, the commissioners conducted a hearing at which Mike’s Holiday
presented expert testimony that just compensation totaled $465,000, including $16,678 for
the fee taking, $18,339 for the temporary-easement taking, and $430,000 for severance
damages. 1 MnDOT offered expert testimony that just compensation for the taking was
$14,300.
In January 2023, the commissioners filed a report with the district court, awarding
$210,017 to Mike’s Holiday as just compensation for the taking of parcel 50, including
1
Severance damages are a claim for construction-related interference and “must arise from
changes in the land actually taken, and not merely from the impact of the project as a
whole.” County of Hennepin v. Laechelt, 949 N.W.2d 288, 291 (Minn. 2020). In its brief
to this court, Mike’s Holiday states that it offered witness testimony at the commissioner
hearing to support its claims that “MnDOT’s use of the temporary easement taking made
it nearly impossible to access [the Mike’s Holiday] parking lot.”
4
$16,678 for the fee taking, $18,339 for the temporary-easement taking, and $175,000 for
severance damages.
MnDOT appealed the commissioners’ award for parcel 50 to the district court,
arguing that the award “is excessive and that the damages for the taking of said premises
are less” than that award. Mike’s Holiday cross-appealed the commissioners’ award,
arguing that “the just compensation payable for the taking of Parcel 50 is no less than
$465,000.”
In March 2024, Mike’s Holiday and MnDOT entered into a settlement agreement
in which they agreed to dismiss their appeals, reinstate the commissioners’ award, and
stipulate to modifying the amount of just compensation to $100,000. The settlement also
reserved Mike’s Holiday’s right to seek reasonable attorney fees and expenses under Minn.
Stat. § 117.031(a). Mike’s Holiday moved for a statutory award of attorney fees and
expenses, and MnDOT opposed the motion.
After a hearing, the district court issued findings of fact, conclusions of law, and an
order for judgment, which it later amended to award fees incurred for bringing the fee
motion. The district court found that MnDOT’s final written offer for the taking was
$14,600. The district court concluded that Mike’s Holiday was entitled to attorney fees and
expenses because the final judgment exceeded $25,000 and was more than 40% greater
than MnDOT’s final written offer, as provided in Minn. Stat. § 117.031(a). The amended
award of statutory fees and expenses was $127,657.10, which included $121,342.60 in
attorney fees, survey costs, and appraisal costs as well as $6,332.50 in attorney fees and
expenses to bring the motion.
5
MnDOT appeals.
ISSUES
I. Did the district court award attorney fees and expenses outside the scope authorized
by Minn. Stat. § 117.031(a)?
II. Did the district court abuse its discretion in awarding Mike’s Holiday attorney fees
and costs?
ANALYSIS
Just compensation for the taking of private property by government is guaranteed
by the Minnesota and United States Constitutions. Minn. Const. art. I, § 13; U.S. Const.
amend. V. Attorney fees incurred in securing just compensation, however, “are not an
element of ‘just compensation’” and thus are available only if authorized by “appropriate
legislation.” State by Spannaus v. Carter, 221 N.W.2d 106, 107 (Minn. 1974). Minnesota
Statutes section 117.031(a) requires an award of attorney fees and expenses in some
circumstances:
If the final judgment or award for damages, as determined at
any level in the eminent domain process, is more than 40
percent greater than the last written offer of compensation
made by the condemning authority prior to the filing of the
petition, the court shall award the owner reasonable attorney
fees, litigation expenses, appraisal fees, other experts fees, and
other related costs in addition to other compensation and fees
authorized by this chapter. . . . The final judgment or award of
damages shall be determined as of the date of taking. No
attorney fees shall be awarded under this paragraph if the final
judgment or award of damages does not exceed $25,000.
(Emphasis added.)
MnDOT maintains that the district court erred in awarding attorney fees to Mike’s
Holiday in two ways: (1) by awarding fees not authorized by section 117.031(a) and (2) by
6
abusing its discretion in determining that the amount of attorney fees sought by Mike’s
Holiday was reasonable under section 117.031(a). MnDOT does not challenge the
attorney-fee award for bringing the fee motion; nor does MnDOT challenge the litigation
expenses, appraisal fees, or other expert fees awarded by the district court. We address both
of MnDOT’s asserted errors about the attorney-fee award in turn.
I. The district court did not award attorney fees and expenses outside the scope
authorized by Minn. Stat. § 117.031(a).
MnDOT contends that attorney fees Mike’s Holiday paid “[1] in an unsuccessful
attempt to defeat the underlying condemnation Petition, [2] expended in motion practice
on what appears to be completely different cases, and [3] expended on a never-filed inverse
condemnation action, as a matter of law, are outside the scope of section 117.031(a).”
Mike’s Holiday argues that the district court’s award is authorized by the applicable statute
and that MnDOT failed to raise some of these arguments to the district court so has forfeited
those arguments.
A. MnDOT forfeited some of its arguments.
We consider which arguments MnDOT raised in its objection to Mike’s Holiday’s
attorney-fee motion. Generally, we do not consider an issue raised for the first time on
appeal; “[n]or may a party obtain review by raising the same general issue litigated below
but under a different theory.” Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988); accord
Crowley v. Meyer, 897 N.W.2d 288, 293 (Minn. 2017) (quoting this aspect of Thiele).
As to its second argument, MnDOT maintains on appeal that Mike’s Holiday’s fee
award included fees incurred in a different case and that recovery is not authorized under
7
section 117.031(a). But when the fee motion was before the district court, MnDOT argued
only that Mike’s Holiday requested fees “without justifying why such hours were
reasonable or prudent in this case.” MnDOT did not argue that the fees requested by Mike’s
Holiday were not authorized by section 117.031(a).
Similarly, as to MnDOT’s third argument, MnDOT argues on appeal that Mike’s
Holiday’s fee award included work on an inverse-condemnation claim and that recovery is
not within the scope of section 117.031(a). But when the fee motion was before the district
court, MnDOT argued only that the inverse-condemnation fees were “not reasonably part
of this, and that claim remains available should Mike’s Holiday successfully bring that
inverse claim in the future.” We conclude that MnDOT did not articulate during district
court proceedings that its second and third arguments challenged the scope of fees available
under section 117.031(a). We therefore decline to address the second and third statutory
“scope” arguments that MnDOT raises for the first time on appeal. 2
B. The fees and expenses awarded are recoverable under Minn. Stat.
§ 117.031(a).
We turn to MnDOT’s first argument—that the district court erred, as a matter of
law, by awarding attorney fees “not recoverable under section 117.031(a)” when it awarded
Mike’s Holiday fees for defending its objection to the condemnation petition. MnDOT
urges that “[c]hallenging a petition in an effort to defeat the taking in the first instance is
antithetical to establishing or increasing the award of just compensation damages.”
2
Even so, this opinion considers the second and third arguments below, in the context in
which MnDOT raised them in district court—whether the amount of the attorney-fee award
is reasonable.
8
Whether attorney fees for an unsuccessful objection to a condemnation petition are
available under section 117.031(a) is a question of statutory interpretation that we review
de novo. A.A.A. v. Minn. Dep’t of Hum. Servs., 832 N.W.2d 816, 819 (Minn. 2013). When
interpreting statutes, we seek “to ascertain and effectuate the intention of the legislature.”
Minn. Internship Ctr. v. Minn. Dep’t of Educ., 10 N.W.3d 178, 184 (Minn. 2024)
(quotation omitted); see also Minn. Stat. § 645.16 (2024) (“The object of all interpretation
and construction of laws is to ascertain and effectuate the intention of the legislature.”). In
interpreting section 117.031(a), we first determine whether the statutory language is clear
and unambiguous. See A.A.A., 832 N.W.2d at 819. A statute is ambiguous if “the statutory
language is susceptible to more than one reasonable interpretation.” Spann v. Minneapolis
City Council, 979 N.W.2d 66, 73 (Minn. 2022) (quotation omitted). If the “legislature’s
intent is clearly discernable from plain and unambiguous language,” the statute is
unambiguous, “statutory construction is neither necessary nor permitted[,] and [we] apply
the statute’s plain meaning.” Am. Tower, L.P. v. City of Grant, 636 N.W.2d 309, 312
(Minn. 2001). If the statute is ambiguous, then “we may consider the canons of statutory
construction” to determine which reasonable interpretation we should adopt. Spann,
979 N.W.2d at 73 (quotation omitted).
To “determin[e] whether a statute is ambiguous, we read the statute as a whole and
interpret each section in light of the surrounding sections.” Id. (quotation omitted). We
construe “words and phrases . . . according to rules of grammar and according to their
common and approved usage.” Minn. Stat. § 645.08 (2024). And we consider the statute
“as a whole to harmonize and give effect to all its parts” and presume that the legislature
9
“intended the entire statute to be effective and certain.” Save Lake Calhoun v. Strommen,
943 N.W.2d 171, 177 (Minn. 2020) (quotations omitted).
MnDOT does not argue that section 117.031(a) is ambiguous. Rather, MnDOT
urges that section 117.031(a) must be read along with Minn. Stat. § 117.031(b) (2024),
which provides, “In any case where the court determines that a taking is not for a public
use or is unlawful, the court shall award the owner reasonable attorney fees and other
related expenses, fees, and costs in addition to other compensation and fees authorized by
this chapter.” From this, MnDOT reasons that, if Mike’s Holiday’s “objections to the
Petition successfully resulted in denial of the Petition, [it] would have been eligible for
reimbursement of reasonable costs and fees” under section 117.031(b). Because Mike’s
Holiday’s objections to the petition were rejected, MnDOT urges us to recognize that
section 117.031(b) “does not provide for an award of costs and fees to a landowner who is
unsuccessful in objection to the Petition.” MnDOT concludes, therefore, that “neither does
section 117.031(a).”
MnDOT’s argument is sound in part, but not in its conclusion. It is true that, if
Mike’s Holiday had prevailed in obtaining a determination “that a taking is not for public
use or is unlawful,” it would have been entitled to attorney fees and expenses under
section 117.031(b). It is also true Mike’s Holiday’s objections were rejected and that
section 117.031(b) does not authorize the recovery of attorney fees and expenses for a
failed objection to a government taking as unlawful. But the district court’s award to
Mike’s Holiday was not granted under section 117.031(b); the district court relied on
section 117.031(a).
10
The unambiguous language of section 117.031(a) does not categorically preclude
an award for attorney fees or expenses incurred in bringing an unsuccessful objection to a
condemnation petition. Section 117.031(a) reflects three conditions for a mandatory award
of attorney fees and expenses: (1) there is a “final judgment or award for damages”
determined “at any level in the eminent domain process”; (2) the damages award is more
than 40% greater than MnDOT’s last written offer before filing the condemnation petition
and exceeds $25,000; and (3) the owner has incurred “reasonable attorney fees, litigation
expenses, appraisal fees, other expert fees, and other related costs.” (Emphasis added.)
Once a property owner is eligible for an award under section 117.031(a)—and eligibility
is covered by the first two conditions—reasonableness and relatedness are the sole
constraints on the award of attorney fees and expenses. We agree with the district court
that section 117.031(a) entitles Mike’s Holiday to all fees reasonably related to work
performed to obtain a final judgment or award for damages in MnDOT’s eminent-domain
proceeding, including those associated with the unsuccessful objection to the taking.
We reject MnDOT’s view that section 117.031(b) somehow restricts the award
authorized by section 117.031(a). The plain language of section 117.031(b) does not
discuss an award of attorney fees and expenses under section 117.031(a), much less restrict
it. It is true that we read related statutes as a whole to harmonize and give effect to all parts.
See Strommen, 943 N.W.2d at 177. While section 117.031 is silent on the interaction of
parts (a) and (b), “[w]e have recognized that silence does not render a statute ambiguous
unless the silence renders the statute susceptible to more than one reasonable
11
interpretation.” Rohmiller v. Hart, 811 N.W.2d 585, 590 (Minn. 2012). Thus, MnDOT has
failed to articulate any ambiguity related to these two provisions.
Both parts (a) and (b) of section 117.031 are unambiguous, and when read together,
each part may be given full effect without reading part (b) as a restriction on part (a). First,
section 117.031(a) is broader than section 117.031(b) because part (a) authorizes a district
court to award attorney fees and expenses “at any level in the eminent domain process.”
Therefore, an award under section 117.031(a) is not limited to the district court’s
determination that a taking is unlawful, as it is under section 117.031(b). Second,
section 117.031(a) authorizes an award of “reasonable attorney fees, litigation expenses,
appraisal fees, [and] other expert fees,” which is similar to the language used in
section 117.031(b). But section 117.031(a) also authorizes an award of “other related costs
in addition to other compensation and fees authorized by this chapter.” (Emphasis added.)
Because section 117.031(a) awards attorney fees and expenses “in addition” to
attorney fees and expenses authorized by other provisions in chapter 117,
section 117.031(b) does not restrict the scope of attorney fees and expenses authorized by
section 117.031(a). Indeed, MnDOT appears to recognize that if an owner receives an
attorney-fee award under section 117.031(b)—for an unlawful taking—there is no
possibility for an attorney-fee award under section 117.031(a) because there will be no
“final judgment or award for damages.” Thus, the two provisions operate in separate
scenarios, and part (b) does not limit part (a).
To support its interpretation of section 117.031(a), MnDOT relies on several cases,
all of which we find unpersuasive on this issue. First, MnDOT asserts that State by Head
12
v. Savage, 255 N.W.2d 32 (Minn. 1977), and City of Minnetonka v. Carlson, 265 N.W.2d
205 (Minn. 1978), constrain the availability of attorney fees to only the services “that assist
an owner in attaining greater just compensation damages.” But both Savage and Carlson
are distinguishable from the district court’s award here because each addresses a request
for attorney fees for portions of a condemnation proceeding following the condemning
authority’s abandonment of the action. See Savage, 255 N.W.2d at 38; Carlson,
265 N.W.2d at 207. In other words, neither Savage nor Carlson involved a final judgment
or award for damages to a property owner for just compensation. Unlike the condemning
authorities in Savage and Carlson, MnDOT did not abandon the condemnation
proceedings, and Mike’s Holiday received a final judgment or award for damages. Thus,
neither Savage nor Carlson supports MnDOT’s interpretation of section 117.031(a).
MnDOT also relies on Hensley v. Eckerhart, 461 U.S. 424, 440 (1983), arguing that
the “[l]odestar analysis requires removal from the tabulation of the reasonable hours
expended any hours spent on any distinct claim upon which the claimant ‘failed to
prevail.’” But Hensley holds that hours should be excluded only where the failed claim “is
distinct in all respects” from a party’s successful claims. 461 U.S. at 440 (emphasis added).
As also discussed below, the district court concluded, within its discretion, that
Mike’s Holiday’s unsuccessful objections related to—and were not distinct in all respects
from—the just-compensation proceedings. The district court explained its conclusion:
Mike’s Holiday’s “just compensation claim and objection to the taking in this matter arise
from the same set of facts.” The record supports the district court’s conclusion because
Mike’s Holiday objected to the taking based on MnDOT’s description of the “lands to be
13
taken” and argued that the description directly relates to just compensation. Thus,
MnDOT’s reliance on Hensley is misguided. 3
In sum, the legislature’s intent is readily discernable from the plain and
unambiguous language of section 117.031(a), statutory construction is neither necessary
nor permitted, and we therefore apply the statute’s plain meaning. See City of Grant,
636 N.W.2d at 312. We therefore hold that reasonable attorney fees and expenses awarded
in an eminent-domain proceeding under Minn. Stat. § 117.031(a) must relate to the work
performed to obtain the final judgment or award for damages and may include fees incurred
in defending an objection to the eminent-domain proceeding.
II. The district court did not abuse its discretion in awarding Mike’s Holiday
attorney fees and costs.
MnDOT argues that the district court “abused its discretion when determining the
costs and fees owed under the statute by misapplying the lodestar methodology.” Mike’s
Holiday urges us to affirm, arguing that the district court “made findings on each of the
[lodestar] factors in its evaluation of the overall reasonableness of the award” and “avoided
re-analyzing, or double counting” in determining the hours expended and hourly rate.
3
In addition, MnDOT’s reliance on Hensley and Milner v. Farmers Insurance Exchange,
748 N.W.2d 608, 624 (Minn. 2008), is undermined by the shared posture of those cases. In
both cases, the lower court did not assess the reasonableness of an attorney-fee award in
light of the mixed success of the party seeking fees. Hensley, 461 U.S. at 440; Milner,
748 N.W.2d at 624. By contrast, the district court here explicitly considered Mike’s
Holiday’s mixed success in reaching its fee award. The district court explained that, while
“the settlement amount was less than the amount initially sought by [Mike’s Holiday], it
significantly exceeds the initial offer, demonstrating substantial success for” Mike’s
Holiday.
14
Appellate courts “review the reasonableness of a particular [attorney-fee] award for
an abuse of discretion.” State by Comm’r of Transp. v. Krause, 925 N.W.2d 30, 32-33
(Minn. 2019). A district court abuses its discretion when it “errs as a matter of law in
applying improper standards in an award of fees” or makes clearly erroneous findings of
fact in determining the reasonable value of counsel’s work. Green v. BMW of N. Am., LLC,
826 N.W.2d 530, 534-35 (Minn. 2013) (quotation omitted); see also County of Dakota v.
Cameron, 839 N.W.2d 700, 711 (Minn. 2013) (“We will not set aside a district court’s
factual findings underlying an award of attorney fees unless they are clearly erroneous.”
(quotation omitted)).
The reasonableness of attorney fees and expenses awarded under section 117.031(a)
is measured by the lodestar method. State by Comm’r of Transp. v. Schaffer, 8 N.W.3d
220, 223 (Minn. 2024). Under that method, the district court applies a two-step process. Id.
First, the district court “determines the number of hours reasonably expended on the
litigation and multiplies that number by a reasonable hourly rate.” Id. (quotation omitted).
Second, the court “evaluates the overall reasonableness of the award,” considering factors
including “the time and labor required; the nature and difficulty of the responsibility
assumed; the amount involved and the results obtained; the fees customarily charged for
similar legal services; the experience, reputation, and ability of counsel; and the fee
arrangement existing between counsel and the client.” Id. (emphasis omitted) (quotation
omitted).
Based on its consideration of the factors in the second part of the lodestar analysis,
the district court may “enhance or decrease the lodestar amount, although ‘many of these
15
factors usually are subsumed within the initial calculation of hours reasonably expended at
a reasonable hourly rate.’” Krause, 925 N.W.2d at 33 (quoting Hensley, 461 U.S. at 434 &
n.9). “[T]he amount involved and the results obtained must be addressed in the initial
lodestar calculation when determining the reasonable number of hours expended.” Id.
(quotation omitted). And when a party challenges the reasonableness of an attorney-fee
request, “the district court must provide a concise but clear explanation of its reasons for
the fee award.” Id. at 35 (quotation omitted).
Applying the lodestar analysis, the district court determined that the attorneys
representing Mike’s Holiday charged reasonable hourly rates before assessing whether the
hours billed were reasonable. 4 The district court concluded that “all the work . . .
performed” as detailed in the attorney’s affidavit “was performed for the benefit of [Mike’s
Holiday] to secure just compensation for the taking.” And the district court noted that the
fee request “properly excluded charges for unrelated and duplicative work and reduced fees
proportionally where work benefitted multiple clients to avoid double billing.”
To provide context to the district court’s decision, we add that the district court did
not enhance or multiply the lodestar during the second part of its analysis. We also note
that Mike’s Holiday did not ask the district court to enhance the lodestar amount, while
MnDOT asked the district court to reduce the lodestar amount during the second part of its
analysis.
4
MnDOT does not challenge on appeal the reasonableness of the hourly rates charged.
16
On appeal, MnDOT challenges the amount awarded on three grounds, which we
discuss in turn. First, MnDOT argues that the district court “misapplied” the lodestar
method because it did not consider the Paulson factors in the first lodestar step and only
considered those factors in determining whether the lodestar amount should be adjusted
downwards. In State by Head v. Paulson, the Minnesota Supreme Court held that, “[a]bsent
any statutory limitations,” the factors considered in determining reasonableness of an
attorney-fee award include “[1] the time and labor required; [2] the nature and difficulty of
the responsibility assumed; [3] the amount involved and the results obtained; [4] the fees
customarily charged for similar legal services; [5] the experience, reputation, and ability of
counsel; and [6] the fee arrangement existing between counsel and the client.” 188 N.W.2d
424, 426 (Minn. 1971).
MnDOT’s argument is unavailing. Our caselaw permits overlap between the two
lodestar steps. For example, in Cameron, the supreme court noted that a district court must
“consider all relevant circumstances” in setting a lodestar amount but specifically applied
the Paulson factors in the second step to “evaluate[] the overall reasonableness” of an
award. 839 N.W.2d at 711 (quotation omitted); see also Krause, 925 N.W.2d at 34
(applying Cameron). Rather than delineating between the two steps of the lodestar method,
the caselaw highlights the interrelated nature of these steps.
The district court assessed each of the Paulson factors and determined that (1) the
hours billed were reasonable based on the “duration and complexity” of the case;
(2) Mike’s Holiday’s attorneys exercised “proper billing judgment” in the hours
17
expended; 5 (3) the “hours billed [were] reasonable in light of the overall relief obtained”;
(4) the fees charged “reflect[ed] a reasonable rate” and were “proportionate” with fees
“customarily charged for similar legal services”; (5) counsel’s billing amount was
reasonable given their experience, reputation, and ability; and (6) the fee arrangement
between Mike’s Holiday and its counsel was typical. We conclude that the district court
adequately considered each Paulson factor and did not duplicate factors or ignore any
single Paulson factor.
Second, MnDOT contends that the district court failed to consider adequately the
third Paulson factor—the amount involved and results obtained—in its analysis, arguing
that proper consideration of this factor “strongly support[s] reducing hours sought by
[Mike’s Holiday] because no reasonable ‘paying client’ would have paid $127,675.10 in
fees and costs to litigate this matter in which their net gain was $86,300.” MnDOT
emphasizes that Mike’s Holiday recovered only 21 cents of each dollar sought as damages
and cites Milner, which states that, in applying the third Paulson factor to adjust the
lodestar amount, the district court “should focus on whether the hours expended are
reasonable in relation to the overall relief obtained.” 748 N.W.2d at 623.
The district court concluded that the results obtained supported the attorney-fee
award. The district court reasoned that Mike’s Holiday’s just-compensation claim arose
5
In determining the reasonableness of attorney hours submitted under the first lodestar
step, the district court considered the first and second factors together. Based on “the
duration and complexity” of the case and counsel’s “proper billing judgment,” the district
court determined that the billed hours were “reasonable.” The district court found that the
litigation “spann[ed] over five years and involv[ed] extensive documentation, required
substantial research, collaboration, and preparation.”
18
from the same “set of facts” as its unsuccessful objections or unfiled claims, and thus, the
court declined to “dissect” Mike’s Holiday’s “successes and failures on individual motions
and . . . instead assess[ed] the success of the representation” as a whole. The district court
concluded that the “final award is approximately a 585 percent increase from (or nearly
seven times greater than) MnDOT’s initial offer.” The district court specifically considered
the final settlement award and found that, “[a]lthough the settlement amount was less than
the amount initially sought by [Mike’s Holiday], it significantly exceeds the initial offer,
demonstrating substantial success” for Mike’s Holiday.
A district court may reduce an award of attorney fees if it concludes that the amount
involved or the results obtained do not support the award. Cameron, 839 N.W.2d at 712
(affirming a fee-award reduction under the results-obtained factor when the district court
found that it “did not go along with the bulk of [appellant’s] arguments”). And when a
plaintiff has mixed success, the district court may consider whether unsuccessful claims
related to successful claims and whether the fee award is reasonable given the plaintiff’s
level of success. Hensley, 461 U.S. at 434. If an unsuccessful claim for relief is unrelated
to a successful claim, fees should not be awarded for time expended on the unsuccessful
claim. Id. at 434-35. When the claims “involve a common core of facts” or are based on
“related legal theories,” however, it is difficult to divide hours expended on a
“claim-by-claim basis” and “the fee award should not be reduced simply because the
plaintiff failed to prevail on every contention raised in the lawsuit.” Id.; see also Musicland
Grp., Inc. v. Ceridian Corp., 508 N.W.2d 524, 535 (Minn. App. 1993) (applying Hensley
in addressing the availability of statutory attorney fees incurred in bringing an action under
19
the Minnesota Environmental Response and Liability Act), rev. denied (Minn. Jan. 27,
1994).
The final damages awarded to Mike’s Holiday pursuant to a settlement between the
parties—$100,000—greatly exceeded MnDOT’s final offer before litigation—$14,600.
The damages award determined by the commissioners before settlement was over
$200,000. The settlement agreement also expressly reserved Mike’s Holiday’s right to
move for an award of attorney fees as provided by statute. Moreover, the attorney-fee
award is consistent with the remedial nature of statutory fee-shifting provisions. See
Kvidera v. Rotation Eng’g & Mfg. Co., 705 N.W.2d 416, 424-25 (Minn. App. 2005)
(“[S]tatutory penalties permitting the award of attorney fees are designed to encourage
parties with potentially modest damages to bring their claims.”). Under these
circumstances, we discern no abuse of discretion in the district court’s conclusion that the
attorney-fee award was reasonable given the final damages awarded to Mike’s Holiday.
See Cameron, 839 N.W.2d at 711 (“There is no precise rule or formula for applying the
results-obtained factor . . . .” (quotation omitted)).
Third and finally, we address MnDOT’s challenges to the district court’s decision
to award attorney fees for time expended on pleadings for motions in another action, a
joint-defense agreement with another property owner, and an inverse-condemnation
petition that has not been filed. 6 Above, we concluded that MnDOT did not preserve its
6
A party may assert an inverse-condemnation claim when the government has appropriated
land without attempting “formal exercise of the power of eminent domain.” Alevizos v.
Metro. Airports Comm’n, 216 N.W.2d 651, 657 (Minn. 1974); see also Stenger v. State,
20
argument that these fees were outside the scope of a section 117.031(a) award as a matter
of law, but here, we address the reasonableness of these fees.
The district court acknowledged that the attorneys representing Mike’s Holiday also
represented other parties in “several pending or finalized cases [that] involve the same set
of takings.” The district court found that, “[g]iven the limited legal counsel available in the
area, overlap in research, drafting, and meetings between these cases [was] inevitable.”
The district court concluded “[u]pon review” that “counsel appropriately reduced [their]
hours when serving multiple clients simultaneously” in separate matters. The district court
also determined that counsel’s time spent on an inverse-condemnation claim was
reasonable and “a logical extension of [Mike’s Holiday’s] overall legal strategy and
comprehensive representation in this matter.” 7
Caselaw recognizes that the district court “is in a better position than” an appellate
court to assess the reasonableness and relatedness of fees incurred. Milner, 748 N.W.2d at
622. We are not persuaded to overturn the fee award, for three reasons. First, the record
supports the district court’s findings about the complicated and extended duration of this
case. MnDOT’s initial condemnation petition included 12 parcels and triggered extensive
449 N.W.2d 483, 484 (Minn. App. 1989) (“Actions for inverse condemnation must be
brought through an action in mandamus.”), rev. denied (Minn. Feb. 28, 1990).
7
The district court also addressed MnDOT’s concern about the potential for a double
recovery by Mike’s Holiday and ordered that, “should [Mike’s Holiday] pursue this
[inverse-condemnation] claim in the future, counsel would not be permitted to ‘bill’
MnDOT again for previously expended and paid time.”
21
litigation that spanned five years. 8 Second, the district court presided over this litigation
and much of the pendent litigation. The district court also analyzed the fee request given
work on other legal actions and an unfiled inverse-condemnation claim. Having completed
this analysis, the district court determined that the fee request was “appropriately reduced”
to address overlap. Indeed, MnDOT does not argue on appeal that the district court clearly
erred in finding that counsel appropriately reduced their billing to account for representing
several clients in various aspects of the condemnation petition. Third, the district court
determined that the lodestar amount was for work connected to Mike’s Holiday’s overall
legal strategy in this just-compensation proceeding.
In sum, the district court did not abuse its discretion by awarding Mike’s Holiday
reasonable attorney fees and expenses under Minn. Stat. § 117.031(a) using the lodestar
method. And, as required, it provided “a concise but clear explanation of its reasons for the
fee award.” Krause, 925 N.W.2d at 35 (quotation omitted).
DECISION
Minnesota Statutes section 117.031(a) does not limit the scope of attorney fees and
expenses that may be awarded in an eminent-domain proceeding provided that such fees
and expenses are reasonable and relate to the final judgment or award for damages. The
district court therefore did not err as a matter of law by awarding Mike’s Holiday
reasonable attorney fees that included its unsuccessful defense of objecting to MnDOT’s
8
See State by Comm’r of Transp. v. JKJ Holdings, LLC, 22 N.W.3d 168, 179-80
(Minn. App. 2025) (reversing and remanding the dismissal of MnDOT’s appeal to the
district court of a commissioners’ award arising from the same underlying petition as here
but related to a different parcel).
22
condemnation petition. And the district court appropriately exercised its discretion by
applying the lodestar method to determine “reasonable attorney fees” and expenses under
Minn. Stat. § 117.031(a). Accordingly, we affirm the district court’s judgment.
Affirmed.
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