JUDE G. GRAVOIS, Judge.
In this inverse condemnation proceeding, defendant/appellant, State of Louisiana, through the Governor and/or the Division of Administration, State Land Office ("the State"), appeals an award of damages to plaintiffs/appellees, Sid-Mar's Restaurant & Lounge, Inc. ("Sid-Mar's"), Marion Gemelli Burgess ("Mrs.Burgess"), and her son, Sidney Kent Burgess ("Mr.Burgess").
A bench trial for compensation took place in November of 2014. By judgment dated February 10, 2015, the trial court awarded plaintiffs compensation for the value of the land taken ($1,111,732.00), economic damages (lost business profits and lost wages of plaintiffs totaling $808,249.00
The State appealed aspects of both judgments. Regarding the damages judgment, the State does not appeal the award made for the value of the land taken. The State argues, however, that La. Const. Art. I, § 4(G) and La. R.S. 49:214.6.5, which govern the scope of damages for property taken for hurricane control projects, are to be applied retroactively to limit plaintiffs' compensation to only the fair market value of plaintiffs' property, as per the Fifth Amendment to the United States Constitution, and thus plaintiffs are not entitled under the law to economic damages or mental anguish damages. In the alternative, the State argues that plaintiffs are not entitled to a greater amount of mental
The State also argues that the ten years' worth of economic damages awarded to plaintiffs was excessive and not supported by the evidence. It argues that plaintiffs are only entitled to economic damages for a reasonable time period, not to exceed four years from the determinative date, as discussed below.
Lastly, the State argues that plaintiffs are entitled to interest on the damages award only from the date of judicial demand (June 2, 2006), not from the date of the taking (February 10, 2006).
Plaintiffs/appellees answered the appeal. Regarding the fees and costs judgment, plaintiffs argue that the trial court should have increased the attorneys' fees awarded in the judgment below to include attorneys' fees plaintiffs incurred in separate, related litigation in federal court. Regarding the damages judgment, plaintiffs argue that they are entitled to a greater amount of mental anguish damages. Further, plaintiffs filed a motion with this Court seeking an award of attorneys' fees incurred on appeal.
For the following reasons, we find that La. Const. Art. I, § 4(G) and La. R.S. 49:214.6.5 apply prospectively only, and thus do not apply to limit plaintiffs' available compensation under the Fifth Amendment standard. Further, we affirm the amount of economic damages awarded to plaintiffs. However, we reverse the award of mental anguish damages awarded to plaintiffs, finding that as a matter of law, plaintiffs are not entitled to mental anguish damages for this non-tortious taking.
We also find no merit to plaintiffs' assertion that they are entitled, under La. R.S. 13:5111, to attorneys' fees for the related federal court proceeding, and thus affirm the fees and costs judgment. We affirm the trial court's award of interest from the date of the taking as to the award for the land value and the economic damages. Finally, we decline to remand this matter for an award for additional attorneys' fees to plaintiffs for defending this appeal.
The factual and procedural history of this case was set forth in this Court's previous opinion in Sid-Mar's I and will not be repeated here. Suffice it to say that therein, the issue of the ownership of the restaurant property was litigated, with the trial court rejecting the State's position that the restaurant property had previously been part of the lake bottom of Lake Pontchartrain and thus was insusceptible of private ownership by acquisitive prescription. That judgment is now final. Pertinent to this appeal, the compensation trial was held on November 10 and 12, 2014. After taking the matter under advisement, the trial court entered two judgments in favor of plaintiffs on February 10, 2015, as noted above. The State moved for a suspensive appeal, which was granted, and plaintiffs answered the State's appeal.
First, the State argues that the only compensation to which plaintiffs are entitled for the State's taking is the fair market value of the land itself, according to the Fifth Amendment of the United States Constitution (the "Fifth Amendment standard"), and thus are not entitled to economic damages or mental anguish damages. The State argues that La. R.S. 49:214.6.5, which was effective on July 10, 2009 and which limits compensation to
The starting point of our analysis is La. Const. Art. I, § 4(B), which stated at the time of the taking in question:
La. Const. Art. I, § 4(G) was added by constitutional amendment (Acts 2006, No. 853) in October of 2006, after the taking in question. This section states in full:
The State argues that the language contained in paragraph C of R.S. 49:214.6.5, which states that the new law "supersedes and controls," evidences the Legislature's "clear intent" to apply this statute retroactively to claims that arose prior to its passage. We disagree, as did the trial court, and find no merit to the State's position on this point.
In M.J. Farms, Ltd. v. Exxon Mobil Corp., 07-2371 (La.7/1/08), 998 So.2d 16, 30-34, the Supreme Court reiterated the framework of analysis courts must employ to determine whether laws are to be applied retroactively. The Court stated:
Acts 2009, No. 523, which enacted La. R.S. 49:214.6.5, contains no language evidencing legislative intent for retroactivity.
The Supreme Court, in M.J. Farms, noted quite accurately that the Legislature understands the concept of statutory retroactivity and regularly employs such language in various statutes or their enacting language to evidence its intent. The lack of such language here, regarding either R.S. 49:214.6.5, R.S. 49:214.5.6, or La. Const. Art. I, § 4(G), is a very strong indication that the Legislature did not intend R.S. 49:214.6.5 to apply retroactively to claims for compensation for inverse condemnation that arose prior to its enactment.
The State next argues that R.S. 49:214.6.5 was meant to clarify and interpret another statute, R.S. 49:214.5.6, that was passed in the same enactment, and thus applies retroactively to limit plaintiffs' compensation, because prior versions of R.S. 49:214.5.6, namely La. R.S. 49:213.10 (repealed in the same enactment that passed R.S. 49:214.5.6 and R.S. 49:214.6.5), contained an explicit retroactivity provision (as noted above) in that statute's enactment language in 2003, prior to this taking.
As the State's argument goes, in 2003, La. Const. Art. I, § 4(F) was amended to allow the Legislature to the limit compensation to landowners subject to state takings actions. Also in 2003, prior to this taking, the Legislature enacted R.S. 49:213.10, which applied to limit compensation to the Fifth Amendment standard to landowners whose property was taken for coastal restoration projects. This statute's enactment language (Acts 2003, No. 583 § 2) specifically provided, "The provisions of this Act shall be applied both prospectively and retroactively and shall be applied to all pending and existing and future claims and property interests covered by the provisions of Section 1 of this Act." Such language exhibits a clear and unmistakable legislative intent for retroactive application.
In 2006, after the Sid-Mar's property was taken and after plaintiffs filed suit against the State, R.S. 49:213.10 was amended to include, in that limitation of compensation, land taken for hurricane control projects. However, the act that passed the 2006 amendment thereto did not contain any language providing for retroactive application of this particular amendment, quite unlike the language found in the 2003 act that enacted R.S. 49:213.10. And then in Acts 2009, No. 523, R.S. 49:213.10 was repealed and its substance was subsumed within the new statute, R.S. 49:214.5.6. This 2009 act contains no language evidencing the legislative intent for retroactive application.
The history of R.S. 49:214.5.6's evolution actually goes against the State's position that R.S. 49:214.6.5 should apply retroactively. The fact that the legislature, in 2003, explicitly made R.S. 49:213.10 retroactive in application, but then failed to explicitly state that the 2006 amendment thereto was to be applied retroactively as well, strongly discredits the State's position for retroactivity for the new R.S. 49:214.5.6 or the argument that the new R.S. 49:214.6.5 was meant to "interpret" or explain the new R.S. 49:214.5.6.
Though this point was only briefly argued in the motion for partial summary judgment hearing, it also appears that express language in both La. Const. Art. I, § 4(G) and R.S. 49:214.6.5 precludes application of either section's limitation on compensation to these plaintiffs. R.S. 49:214.6.5(D) states:
It is a fact that a presidential declaration of major disaster and/or emergency was issued for the event of Hurricane Katrina, and that plaintiffs' property was taken within three years of the event. The restaurant building or structure that was formerly upon that land was destroyed by the event, Hurricane Katrina. Plaintiffs' land was taken by the State for a hurricane control project. Though it could be argued that the compensation the State owes plaintiffs for the taking was for the land and not the building, the building was destroyed by the hurricane, as per the statute. The permanent taking of the restaurant land necessarily foreclosed any possibility of the restaurant (building or structure) being rebuilt.
We note that at least one Louisiana state court has found that § 4(G) does not apply to takings that occurred prior to this section's passage. See Borgnemouth Realty Co. v. Parish of St. Bernard, 13-1651 (La.App. 4 Cir. 5/21/14), 141 So.3d 891.
The trial court also found that R.S. 49:214.6.5 was a substantive law not subject to retroactive application. We agree. Prior to the statute's enactment, plaintiffs whose land was taken for hurricane control projects were not limited to compensation under the Fifth Amendment standard. The limitation on compensation provided by R.S. 49:214.6.5 took away those plaintiffs' rights to compensation for types of damages caused by the taking other than the value of the land itself, which is a substantive change in the law. See Terrebonne v. South Lafourche Tidal Control Levee Dist., 445 So.2d 1221, 1223-24 (La. 1984) (holding that changes to the measure of compensation in takings case are substantive, not merely procedural or remedial).
Accordingly, we find no error in the trial court's conclusion that R.S. 49:214.6.5 applies prospectively only, is substantive legislation, and thus does not apply to limit plaintiffs' compensation for this taking to the Fifth Amendment standard.
Both parties appeal the award of mental anguish damages to Mrs. Burgess and Mr. Burgess. As part of its first assignment of error, the State argues that plaintiffs are not entitled to mental anguish damages (general damages) for this taking by inverse condemnation, because such taking action does not sound in tort, citing Mathis v. DeRidder, 90-1240 (La. App. 3 Cir. 4/16/92), 599 So.2d 378. In their Answer to the appeal, plaintiffs argue that they are entitled to an increase in the amount of the award for mental anguish damages. In response thereto, the State argues alternatively that if mental anguish damages were indeed properly awarded, the amount of damages awarded were well within the trial court's great discretion and should not be increased. For the following reasons, we find that as a matter of law, plaintiffs are not entitled to an award of damages for mental anguish for an inverse condemnation that was not the result of an unlawful or tortious act of the State.
Questions of law are not reviewed on appeal under the manifest error/clearly
The trial court, citing Williams v. City of Baton Rouge, 98-1981, 98-2024 (La. 4/13/99), 731 So.2d 240, found that Mrs. Burgess and Mr. Burgess were each entitled to an award of $50,000.00 for mental anguish. In Williams, the court affirmed an award of mental anguish damages to the plaintiffs after it found that the City of Baton Rouge was a bad faith trespasser when it dug three wide canals across the plaintiffs' properties. In a thorough review of existing jurisprudence on the issue, the Williams Court held that when an inverse condemnation "taking" occurred by an act of the governmental authority that was tortious, in bad faith, or otherwise unlawful in nature, a plaintiff-landowner was not limited to compensatory damages for inverse condemnation, but was also entitled to assert a cause of action for tort damages under La. C.C. art. 2315. The jurisprudence reviewed by the Williams Court shows that where general damages were allowed in inverse condemnation cases, the governmental authority was either in bad faith, committed a trespass on the plaintiff's land, or the taking action was otherwise unlawful or tortious in nature. See Williams, 731 So.2d at 247 (cases cited therein).
The Williams Court distinguished cases where the taking resulting in the inverse condemnation was not tortious or otherwise unlawful. For example, general damages were not allowed when the taker was found to have made an inverse condemnation of the plaintiff's land through a "good faith error" in an expropriation proceeding (See Gray v. State Through Dept. of Highways, 250 La. 1045, 202 So.2d 24 (La. 1967)). Nor were general damages allowed when; through "oversight or lack of foresight," the State failed to expropriate the plaintiff's property that was adjacent to other, expropriated property for a highway construction project (See Reymond v. State, 255 La. 425, 231 So.2d 375 (La. 1970)).
Thus, the trial court's reliance on Williams as its basis to award the Burgesses mental anguish damages under the facts of this case is an error of law. Williams provides no authority for an award general damages to a plaintiff in an inverse condemnation case where the taking authority's actions were lawful. The taking in this case was lawful: the State commandeered plaintiffs' land pursuant to the statutory authority granted to it by La. R.S. 29:721, et seq.
The Mathis court looked at jurisprudence from both before and after the amendment to La. Const. Art. I, § 4. The jurisprudence considered by the court in Mathis clearly shows that the allowance of mental anguish damages in an inverse condemnation case is associated with the State's conduct in the taking, tortious or statutory, and not amendments to Art. I, § 4 of the State constitution.
Plaintiffs rely on Holzenthal v. Sewerage & Water Bd., 06-0796 (La.App. 4 Cir. 1/10/07), 950 So.2d 55, 79, to support their claim for mental anguish damages. However, that case is distinguishable. Holzenthal noted that in Louisiana, an award for mental anguish resulting from property damage is permissible in limited situations: (1) when property is damaged by an intentional or illegal act; (2) when property is damaged by acts for which the tortfeasor will be strictly or absolutely liable; (3) when property is damaged by acts constituting a continuing nuisance; or (4) when property is damaged when the owner is either present or nearby and suffered a psychic trauma as a direct result. The Holzenthal case involved inverse condemnation and a claim for strict tort liability under La. C.C. art. 667 for serious property damage sustained by those plaintiffs caused by a Sewerage & Water Board construction project involving timber pile and sheet metal driving. Mental anguish tort damages were awarded to the plaintiffs because the Sewerage & Water Board knew or should have known that the project would likely result in damage to neighboring properties, but failed to take adequate steps to prevent that foreseeable damage.
Plaintiffs also rely on Mitter v. St. John the Baptist Parish, 05-375 (La.App. 5 Cir. 12/27/05), 920 So.2d 263, 265, but that case is also distinguishable from the present case in that it, like Holzenthal, also involved general tort claims and tort claims under La. C.C. art. 667, when the Parish's actions in alleviating drainage problems in an adjacent subdivision resulted in erosion, flooding, and stagnated water on the plaintiffs property.
Plaintiffs also argue in their brief that the extended years of litigation entitled them to a mental anguish award. Plaintiffs cite no authority for the position that a plaintiff is entitled to mental anguish damages for having to engage in litigation, however complex or time-consuming, with
Next, the State argues that the award of ten years' worth of economic damages to plaintiffs was unreasonable and contrary to jurisprudence. The State argues that this time period is excessive and should be lowered to something around four years from the first time at which reopening the restaurant was feasible, which corresponds approximately to the date in 2010 when Mr. Burgess opened a new Sid-Mar's restaurant in Metairie at a different location. The State cites State, DOTD v. Dietrich, 555 So.2d 1355 (La.1990), in support of its position.
In reviewing a court's factual conclusions with regard to special damages, an appellate court must satisfy a two-step process based on the record as a whole: there must be no reasonable factual basis for the trial court's conclusions, and the finding must be clearly wrong. Dufrene v. Gautreau Family, LLC, 07-467 (La.App. 5 Cir. 2/22/08), 980 So.2d 68, 82.
In Phillip Family L.L.C. v. Bayou Fleet P'ship, 12-565 (La.App. 5 Cir. 2/21/13), 110 So.3d 1158, 1167-68, writ denied, 13-0641 (La. 4/26/13), 112 So.3d 846, this Court explained the standard of appellate review of a trial court's findings of fact based on expert testimony, to-wit:
In Dietrich, supra, cited by both parties, the defendants in that expropriation case were awarded past economic damages of four years (between the taking and the trial), and future economic damages by a jury based on the life expectancy of the defendant landowner, or future economic damages for approximately 39 years. The Court of Appeal reversed on the basis that the awards were contrary to law and fact. The Supreme Court reinstated the jury's finding that past and future economic losses were due, and found that four years' past economic damages (from the date of the taking to the time of trial) and four years future economic damages (from the time of the trial) was reasonable given the facts of that particular case. In reducing the award of future economic losses from
In the instant case, the trial court was presented with expert testimony on the issue of economic damages from both plaintiffs and defendant. Plaintiffs' expert regarding economic damages was William G. Stamm, C.P.A., who prepared several reports during the course of this litigation regarding economic damages. The State presented the expertise of Dr. W. Patton Culbertson. A review of the expert reports and testimony shows that while each expert employed a different methodology to arrive at their "base" numbers for average annual adjusted income, those amounts actually differed only minimally. The issue, therefore, as framed by the State's brief, is whether the trial court abused its discretion in awarding plaintiffs economic damages for ten total years, which the State argues is excessive under the facts of this case. The State agrees that some economic damages are due to plaintiffs, but argues economic damages should cease as of the date the new Sid-Mar's opened in Metairie in 2010.
The State argues that awarding plaintiffs ten years of lost profits and ten years of lost wages for Mr. Burgess is excessive and unreasonable given the fact that Sid-Mar's did in fact reopen in 2010. It argues that Mr. Stamm's opinion was flawed in that it gave undue weight to the old Sid-Mar's location and its loyal client base, which apparently did not follow to the new Sid-Mar's that opened in Metairie in 2010.
Mr. Stamm testified that he was personally familiar with Sid-Mar's restaurant and other restaurants in the Bucktown/West End area prior to the storm. His testimony, and the testimony of Mr. Burgess, noted that Sid-Mar's location was special, unique, and a primary factor of the success of the restaurant prior to the storm. Mr. Burgess testified that Sid-Mar's was unique in that it was not a leased restaurant on the water on pilings, but was situated on the ground. Other previous hurricanes, such as Andrew, had destroyed or partially destroyed those restaurants over the water, whereas Sid-Mar's reopened within days of Hurricane Andrew. Also, Sid-Mar's location outside of the ring protection levee on the lake gave it access to water views not available to the restaurants inside of the ring protection levee, such as R & O's and Deanie's, and that was a primary attraction for Sid-Mar's customers, Mr. Burgess said, who often sat for hours enjoying their food and the view. The taking by the State completely and forever deprived Sid-Mar's of its valuable and unique location. Mr. Burgess testified that he was unable to find any property on the lake similarly situated on which to reopen the restaurant.
Mr. Stamm testified that he made a "judgment call" when he decided to use a multiplier of ten when calculating Sid-Mar's economic damages. He felt that with Sid-Mar's long history at that unique location, and given that it was a family business with a loyal clientele and significant goodwill, this multiplier was fair and reasonable because the risk was "low" that, absent the taking, Sid-Mar's would not have resumed operations and continued
The State focuses on the fact that Mr. Burgess eventually received approximately $600,000 in insurance proceeds after Katrina, and that he had only $50,000 or so left in 2009, and still had not reopened the business at that time. The trial court recognized, however, that the collateral source rule does not allow the State to benefit from insurance proceeds received by plaintiffs for insurance purchased by plaintiffs. Also, the insurance settlement was compensation for distinctly different damages (flood damage to the building and business interruption losses) than those owed by the State to plaintiffs (the value of the land taken and economic damages resulting therefrom). In any event, Mr. Burgess testified that he eventually received $250,000 in flood insurance proceeds for the building, but only after hiring a lawyer and not until approximately a year after the storm. He also eventually received some business interruption coverage proceeds. Mr. Burgess explained that the insurance proceeds were used to pay his existing bills, unpaid obligations of the business incurred before the storm, and some salaries for employees, because he was without his normal "economic engine," the restaurant, that had previously provided for these expenses. He also testified that he used some of the proceeds to pay significant legal bills during this time to counsel in this suit, which, as noted by the trial court, lasted more than eight years from the taking to the compensation trial.
Dr. Culbertson's failure to appropriately value the taken location that Mr. Burgess's and Mr. Stamm's uncontradicted testimony showed was vital to Sid-Mar's success prior to the storm undermined his conclusion that a three-year multiplier was appropriate in this case. That factor, together with other factors relied upon as noted by Mr. Stamm, support the trial court's use of Mr. Stamm's expert opinion that plaintiffs sustained the awarded economic losses caused by the State's taking. The State's repeated reference to the reopening and apparent continued viability of another destroyed Bucktown restaurant, Jaeger's, on Clearview Parkway, is irrelevant and without evidentiary value, as all testimonial references to Jaeger's are only anecdotal and are unsupported by any evidence regarding that restaurant's client base and financial situation prior to the storm or afterwards.
For the foregoing reasons, we find no abuse of the trial court's discretion in accepting the multiplier used by Mr. Stamm rather than the multiplier used by Dr. Culbertson, and accordingly affirm the trial court's award of economic damages. See Phillip Family L.L.C. v. Bayou Fleet P'ship, supra.
The State next argues that the trial court erred in awarding interest on the damages judgment from the date of the taking, rather than from the date of judicial demand. The State cites Weiss v. Board of Commissioners, 238 La. 419, 115 So.2d 804 (1959), in support of its position. It attempts to distinguish the case relied upon by the trial court, A.K. Roy, Inc. v. Board of Commissioners, 238 La. 926, 117 So.2d 60 (1960).
Upon review, we find no error in the trial court's conclusion that interest is due from the date of the taking. A.K. Roy expressly found that compensation is due a
Jurisprudence on the issue has followed the holding in A.K. Roy rather than Weiss (See, e.g., Roy v. Belt, supra, at 215; Simmons v. Bd. of Comm'rs of the Bossier Levee Dist., 624 So.2d 935, 959 (La.App. 2nd Cir.1993); Mathis v. DeRidder, supra; Reddel v. State, 340 So.2d 1010, 1017 (La. App. 4th Cir.1976)). Accordingly, we find that interest is due on the award for land value and the awards for economic damages from the date of the taking rather than from the date of judicial demand. This assignment of error is without merit.
In their Answer to the appeal, plaintiffs argue that the trial court erred in limiting their recovery for attorneys' fees under La. R.S. 13:5111(A) to those fees only incurred in this state court litigation, and denying their request for attorneys' fees they incurred in a related federal court condemnation litigation instituted by the United States in 2009.
In Louisiana, litigants may only recover attorneys' fees when authorized by contract or statute. Rivet v. State DOTD, 96-0145 (La.9/5/96), 680 So.2d 1154, 1160. Pertinent to this case, La. R.S. 13:5111(A) allows a successful plaintiff in an inverse condemnation action to recover reasonable attorneys' fees actually incurred. This section states:
Attorney's fees statutes must be construed strictly because the award of attorneys' fees is exceptional and penal in nature. Bordelon v. Comeaux Furniture & Appliance, 97-405 (La.App. 5 Cir. 10/15/97), 701 So.2d 1032, 1037. Plaintiffs argue that an award of attorneys' fees that includes fees for the federal suit is warranted in this instance because the federal
Plaintiffs cite Olivier Plantation, L.L.C. v. Parish of St. Bernard, 14-2496 (La. 2/27/15), 160 So.3d 173, 173, as authority for their position that La. R.S. 13:5111(A) allows a state trial court to award attorneys' fees, in a state court proceeding, for attorneys' fees incurred in a related federal court proceeding. Olivier Plantation, L.L.C., like the instant suit, involved related state and federal court proceedings concerning plaintiffs' request for compensation for land commandeered by the governor following Hurricane Katrina under La. R.S. 29:721, et seq. We have closely studied the Louisiana Fourth Circuit's discussion of the attorneys' fees award made to plaintiff Olivier Plantation in that case. At issue was whether the award was reasonable under La. R.S. 13:5111(A). One factor the court considered was that the litigation lasted almost five years in both state and federal courts. Olivier Plantation, L.L.C. v. Parish of St. Bernard, 13-0497 (La.App. 4 Cir. 10/30/14), 151 So.3d 965, 972. Considering the opinion as a whole, the court's note of this factor in its analysis of reasonableness rather than entitlement under the statute is not sufficient for this Court to conclude that the attorneys' fees award made to Olivier Plantation in the state court suit did, in fact, include fees incurred in the related federal court litigation. Even if this Court were to conclude that such an award was in fact made to Olivier Plantation, such a determination, coming from another court of appeal, is not binding on this Court. In any event, however, in this case, we find that the trial judge's strict interpretation of La. R.S. 13:5111(A) and resultant attorneys' fees award was correct. Accordingly, plaintiffs' request for attorneys' fees they incurred in the related federal litigation is denied.
Plaintiffs have filed a motion for an award of additional attorneys' fees incurred on appeal. They argue that an award for these additional attorneys' fees is in line with La. R.S. 13:5111(A)'s authority to make plaintiffs whole. They ask that this Court remand the matter to the trial court for a hearing regarding additional attorneys' fees for defending this appeal. For the following reasons, this claim is without merit.
While plaintiffs successfully defended the trial court's awards in some respects, they were also unsuccessful in other respects. This Court has rejected their request for attorneys' fees for the federal condemnation proceeding. The State, likewise, prevailed in its argument to overturn the mental anguish damages award, thus also denying plaintiffs' request that this award be increased. We find that under the facts of this case, plaintiffs are not entitled to an award for additional attorneys' fees, and thus decline to remand this matter for determination of such an award.
Accordingly, for the foregoing reasons, regarding the damages judgment, we affirm the award of economic damages in
