TransCanada Keystone Pipeline v. Nicholas Family , 299 Neb. 276 ( 2018 )


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    TRANSCANADA KEYSTONE PIPELINE v. NICHOLAS FAMILY
    Cite as 
    299 Neb. 276
    TransCanada K eystone Pipeline, LP, appellant and
    cross-appellee, v.  Nicholas Family Limited Partnership
    et al., appellees and cross-appellants.
    TransCanada K eystone Pipeline, LP, appellant and
    cross-appellee, v. William F. Dunavan et al.,
    appellees and cross-appellants.
    TransCanada K eystone Pipeline, LP, appellant,
    v. Bartels Farms I nc., appellee.
    TransCanada K eystone Pipeline, LP, appellant,
    v. John F. Small et al., appellees.
    ____ N.W.2d ___
    Filed March 9, 2018. Nos. S-17-116 through S-17-134, S-17-366, S-17-367,
    S-17-369, S-17-424, S-17-741 through S-17-745, S-17-747, S-17-748,
    S-17-750, S-17-751, and S-17-753 through S-17-760.
    1.	 Statutes: Appeal and Error. Statutory interpretation presents a ques-
    tion of law, on which an appellate court has an obligation to reach an
    independent conclusion irrespective of the decision made by the court
    below.
    2.	 Attorney Fees: Appeal and Error. On appeal, a trial court’s decision
    awarding or denying attorney fees will be upheld absent an abuse of
    discretion.
    3.	 Rules of Evidence: Hearsay: Appeal and Error. Apart from rul-
    ings under the residual hearsay exception, an appellate court reviews
    for clear error the factual findings underpinning a trial court’s hear-
    say ruling and reviews de novo the court’s ultimate determination to
    admit evidence over a hearsay objection or exclude evidence on hear-
    say grounds.
    4.	 Hearsay: Words and Phrases. Hearsay is defined as a statement, other
    than one made by the declarant while testifying at the trial or hearing,
    offered in evidence to prove the truth of the matter asserted.
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    TRANSCANADA KEYSTONE PIPELINE v. NICHOLAS FAMILY
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    5.	 Rules of Evidence: Affidavits. An affidavit is admissible in certain
    enumerated situations, including motion practice, which includes the use
    of affidavits relating to preliminary, collateral, and interlocutory matters.
    6.	 Attorney Fees: Pleadings. A motion for attorney fees under 
    Neb. Rev. Stat. § 76-726
     (Reissue 2009) is a collateral and independent request
    from the underlying merits of the case between the parties.
    Appeals from the District Court for Holt County, M ark D.
    Kozisek, Judge, on appeal thereto from the County Court for
    Holt County, A lan L. Brodbeck, Judge.
    Appeals from the District Court for York County, M ary C.
    Gilbride, Judge, on appeal thereto from the County Court for
    York County, Linda S. Caster Senff, Judge.
    Appeal from the District Court for Saline County, Vicky L.
    Johnson, Judge, on appeal thereto from the County Court for
    Saline County, Linda A. Bauer, Judge.
    Appeals from the District Courts for Nance, Boone, and
    Polk Counties, R achel A. Daugherty, Judge, on appeal thereto
    from the County Courts for Nance, Boone, and Polk Counties,
    Stephen R.W. Twiss, Judge.
    Judgments of District Courts reversed, and causes remanded
    with directions.
    James G. Powers and Patrick D. Pepper, of McGrath, North,
    Mullin & Kratz, P.C., L.L.O., for appellant.
    David A. Domina and Brian E. Jorde, of Domina Law
    Group, P.C., L.L.O., for appellees.
    Heavican, C.J., Miller-Lerman, Cassel, Stacy, K elch, and
    Funke, JJ.
    Heavican, C.J.
    INTRODUCTION
    These 40 appeals have been consolidated into 4 for pur-
    poses of appeal. At issue in each case is whether the individual
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    TRANSCANADA KEYSTONE PIPELINE v. NICHOLAS FAMILY
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    landowners are entitled to an award of attorney fees under
    
    Neb. Rev. Stat. § 76-726
     (Reissue 2009). We conclude that the
    landowners did not offer sufficient proof as to their entitlement
    to an award of attorney costs and fees.
    FACTUAL BACKGROUND
    TransCanada Keystone Pipeline, LP (TransCanada), is
    a limited partnership wishing to construct an oil pipeline,
    Keystone XL, through the State of Nebraska. On January
    20, 2015, and in connection with this proposed construction,
    TransCanada filed a number of eminent domain proceedings
    in various counties, seeking to acquire right-of-way and other
    property interests.
    On January 16, 2015, just prior to TransCanada’s initiation
    of these proceedings, certain property owners (including some
    of the same landowners involved in these eminent domain pro-
    ceedings) filed, in York County District Court, a constitutional
    challenge to the pipeline route as approved by Nebraska’s
    Governor. As a result of this challenge, TransCanada and the
    landowners agreed to stay the eminent domain proceedings
    while the constitutional challenge was being litigated.
    TransCanada dismissed its condemnation petitions on
    October 1, 2015, except that the Holt County petitions were
    dismissed on September 30, in order for TransCanada to
    pursue approval of a pipeline route by the Public Service
    Commission:
    TransCanada . . . (“Keystone”) . . . hereby dismisses,
    without prejudice, its Petition for Condemnation in this
    matter. Keystone will be seeking route approval pursu-
    ant to 
    Neb. Rev. Stat. § 57-1401
     et seq., also known as
    the Major Oil Pipeline Siting Act. In the event the route
    approval is granted, Keystone will reinstitute eminent
    domain proceedings if necessary.
    The landowners filed the motions for attorney fees and costs
    at issue in these consolidated appeals on October 6, 2015,
    except that the Holt County motions were filed on October 2.
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    The motions were brought pursuant to § 76-726 and requested
    that the various county courts award to the landowners costs,
    expenses, and attorney fees for work done in connection with
    both the county court eminent domain proceedings and the
    constitutional challenge. These requests were accompanied by
    affidavits from (1) the individual landowners, (2) counsel for
    the landowners, and (3) other attorneys attesting to the rea-
    sonableness of the attorney fees charged. In each instance,
    TransCanada objected to the landowner affidavits on the basis
    of hearsay.
    In each of these cases, the county court granted the requests
    for attorney fees and TransCanada appealed. In the cases
    docketed at Nos. S-17-116 through S-17-134 (Holt County
    cases), the district court (1) found that the county court erred
    in admitting the landowner affidavits because they were hear-
    say, but that the admission was not reversible error because
    TransCanada did not insist upon a ruling on its objection and
    thus waived the objection; (2) found that the dismissals with-
    out prejudice amounted to an abandonment of the condemna-
    tion proceedings; and (3) reversed the awards of attorney fees
    and costs, because there was no evidence that the landowners
    actually incurred costs or fees as required by § 76-726, and
    remanded the causes to the county court for redetermination.
    In the case docketed at No. S-17-424 (Saline County case),
    the district court found that (1) the county court did not err in
    admitting the landowner affidavits and did not err in failing to
    rule on TransCanada’s hearsay objection because TransCanada
    did not insist upon a ruling and thus waived the objection, (2)
    the dismissals without prejudice amounted to an abandonment
    of the condemnation proceedings, and (3) the award of attor-
    ney fees and costs was proper because the landowner affidavit
    testimony showed an agreement to pay fees.
    In the cases docketed at Nos. S-17-366, S-17-367, and
    S-17-369 (York County cases), the district court found that (1)
    the dismissals without prejudice amounted to an abandonment
    of the condemnation proceedings and (2) the fees sought may
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    be proved by affidavit, but the affidavits offered into evidence
    did not allow the court to determine the amount actually
    incurred, and thus, the award was reversed and the cause was
    remanded for further proceedings.
    Finally, in the cases docketed at Nos. S-17-741 through
    S-17-745, S-17-747, S-17-748, S-17-750, S-17-751, and
    S-17-753 through S-17-760 (Nance, Boone, and Polk County
    cases), the district court found that (1) the dismissals without
    prejudice amounted to an abandonment of the condemnation
    proceedings and (2) the attorney fees sought may be proved
    by affidavit and the award was proper because the landown-
    ers’ affidavit testimony showed an agreement to pay attor-
    ney fees.
    ASSIGNMENTS OF ERROR
    Cases Nos. S-17-116 through S-17-134.
    In these appeals, TransCanada assigns that that district
    court for Holt County erred in (1) finding that TransCanada
    waived its hearsay objections to the landowners’ affidavits and
    holding that the county court did not err in admitting those
    affidavits and (2) remanding the causes to the county court for
    further proceedings on the amount of attorney fees and costs
    the landowners actually incurred.
    On cross-appeal, the landowners assign that the district court
    erred in (1) failing to affirm the county court’s award of attor-
    ney fees, (2) finding there was insufficient evidence to show
    that the landowners actually incurred the attorney fees awarded
    by the county court, (3) finding that an application for attorney
    fees under § 76-726 requires evidence of legal fees “actually
    ‘paid,’” and (4) finding that the landowners’ affidavit evidence
    was hearsay.
    Case No. S-17-424.
    In this appeal, TransCanada assigns that the district court
    for Saline County erred in (1) finding that the landowners’
    affidavit evidence was admissible to prove attorney fees and
    costs under § 76-726 and that TransCanada waived its hearsay
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    objection and (2) affirming the county court’s award of attor-
    ney fees and costs without proof of payment and without evi-
    dence showing the amount of attorney fees actually charged or
    how those fees were charged.
    Cases Nos. S-17-366, S-17-367,
    and S-17-369.
    In these appeals, TransCanada assigns that the district court
    for York County erred in (1) finding that the landowners’ affi-
    davit evidence was admissible to prove attorney fees and costs
    under § 76-726 and (2) construing § 76-726 to hold that reim-
    bursement was allowed without proof of payment and accord-
    ingly remanding the cause to the county court for a determina-
    tion of the attorney fees actually incurred.
    On cross-appeal, the landowners assign that the district court
    erred in (1) failing to affirm the county court’s award of legal
    fees and (2) finding there was insufficient evidence to show
    that the landowners actually incurred the attorney fees awarded
    by the county court.
    Cases Nos. S-17-741 through S-17-745,
    S-17-747, S-17-748, S-17-750,
    S-17-751, and S-17-753
    through S-17-760.
    In these appeals, which by stipulation of the parties were
    all heard in the Nance County District Court, TransCanada
    assigns that the district court for Nance County erred in (1)
    finding that the landowners’ affidavit evidence was admis-
    sible to prove attorney fees and costs under § 76-726 and (2)
    affirming the county court’s award of attorney fees and costs
    without proof of payment and without evidence showing the
    amount of attorney fees actually charged or how those fees
    were charged.
    STANDARD OF REVIEW
    [1] Statutory interpretation presents a question of law,
    on which an appellate court has an obligation to reach an
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    independent conclusion irrespective of the decision made by
    the court below.1
    [2] On appeal, a trial court’s decision awarding or denying
    attorney fees will be upheld absent an abuse of discretion.2
    [3] Apart from rulings under the residual hearsay excep-
    tion, an appellate court reviews for clear error the fac-
    tual findings underpinning a trial court’s hearsay ruling and
    reviews de novo the court’s ultimate determination to admit
    evidence over a hearsay objection or exclude evidence on
    hearsay grounds.3
    ANALYSIS
    These appeals generally present three issues: (1) whether
    TransCanada waived its hearsay objection, (2) whether the
    affidavits were admissible, and (3) whether the proof in these
    cases was sufficient.
    Attorney fees in these cases were requested under the author-
    ity of § 76-726, which provides in relevant part:
    (1) The court having jurisdiction of a proceeding
    instituted by an agency as defined in section 76-1217
    to acquire real property by condemnation shall award
    the owner of any right, title, or interest in such real
    property such sum as will, in the opinion of the court,
    reimburse such owner for his or her reasonable costs,
    disbursements, and expenses, including reasonable attor-
    ney’s, appraisal, and engineering fees, actually incurred
    because of the condemnation proceedings if (a) the final
    judgment is that the agency cannot acquire the real
    property by condemnation or (b) the proceeding is aban-
    doned by the agency. If a settlement is effected, the court
    may award to the plaintiff reasonable expenses, fees,
    and costs.
    1
    Simon v. City of Omaha, 
    267 Neb. 718
    , 
    677 N.W.2d 129
     (2004).
    2
    
    Id.
    3
    O’Brien v. Cessna Aircraft Co., 
    298 Neb. 109
    , 
    903 N.W.2d 432
     (2017).
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    TRANSCANADA KEYSTONE PIPELINE v. NICHOLAS FAMILY
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    Waiver.
    In its appeals in the Holt County and Saline County cases,
    TransCanada assigns that the district court erred in finding
    that it waived its hearsay objection by failing to insist upon
    a ruling. We need not address the waiver issue as presented
    by these cases, because, as is addressed in more detail below,
    we reject the hearsay issue in the York County and Nance
    County appeals.
    Admissibility of Affidavits.
    TransCanada next argues that the affidavits were inadmis-
    sible, both because they consisted of hearsay and because
    § 76-726 requires a higher level of proof.
    [4] We turn first to TransCanada’s hearsay contention.
    Hearsay is defined as “a statement, other than one made by
    the declarant while testifying at the trial or hearing, offered
    in evidence to prove the truth of the matter asserted.”4 As
    TransCanada correctly notes, it is “beyond question” that these
    affidavits contain hearsay.5
    [5] But as TransCanada also points out, under 
    Neb. Rev. Stat. § 25-1244
     (Reissue 2016), an affidavit is admissible in
    certain enumerated situations, including “motion practice,”
    which includes the use of affidavits relating to preliminary,
    collateral, and interlocutory matters.6 TransCanada sug-
    gests, without authority, that a motion for attorney fees under
    § 76-726 fits under none of these categories; the landowners
    argue that these types of motions are obviously collateral for
    purposes of § 25-1244 motion practice.
    [6] We have previously suggested, as the landowners now
    contend, that a motion for attorney fees is a “collateral and
    independent request from the underlying merits of the case
    4
    
    Neb. Rev. Stat. § 27-801
    (3) (Reissue 2016).
    5
    See, e.g., brief for appellant in cases Nos. S-17-116 through S-17-134
    at 12.
    6
    
    Id.
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    between the parties.”7 This makes logical sense—without the
    underlying action, there would be nothing for which to seek an
    award of attorney fees.
    In fact, we have suggested that affidavits are a preferred
    method of introducing such evidence:
    The best practice will always be to provide an affi-
    davit or other evidence such as testimony or exhibits
    as detailed above, and we certainly encourage doing so.
    With such evidence, a party is assured that both the trial
    court and the appellate court will not be required to scour
    a record in an effort to support attorney fees in any par-
    ticular case.
    We will not absolutely require the filing of an affi-
    davit. . . . But we emphasize that the filing of an affi-
    davit or presentation of other evidence will always be
    the preferable way to support the award of attorney
    fees. Litigants who do not file an affidavit or present
    other evidence risk the loss of attorney fees, because of
    the difficulty of discerning such information from the
    record alone.8
    We hold accordingly in this case. Affidavits are generally
    admissible in collateral matters, and a motion for attorney fees
    under § 76-726 is such a collateral matter.
    TransCanada also contends that affidavits are insufficient
    under § 76-726 and that live testimony is required. It cites
    no authority for this proposition. Having examined the lan-
    guage of § 76-726, we find it to be without merit. We find
    no error in the district court’s admission of the affidavits in
    this case.
    7
    Kaminski v. Bass, 
    252 Neb. 760
    , 768, 
    567 N.W.2d 118
    , 123 (1997). See,
    also, Central Neb. Pub. Power v. Jeffrey Lake Dev., 
    267 Neb. 997
    , 
    679 N.W.2d 235
     (2004).
    8
    See Garza v. Garza, 
    288 Neb. 213
    , 221, 
    846 N.W.2d 626
    , 633 (2014). See,
    also, ACI Worldwide Corp. v. Baldwin Hackett & Meeks, 
    296 Neb. 818
    ,
    
    896 N.W.2d 156
     (2017).
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    Sufficiency of Proof.
    TransCanada next contends that there was insufficient proof
    to support the award of attorney fees and costs for two rea-
    sons: (1) The landowners were only entitled to an award
    of attorney fees actually paid by them to counsel, and the
    affidavits did not establish that any funds had been paid out
    by the individual landowners to counsel, and (2) the record,
    even including the challenged affidavits, was insufficient to
    establish that any individual landowner was actually indebted
    to counsel.
    We turn to TransCanada’s argument that under § 76-726,
    the landowners were only entitled to an award of attorney fees
    actually paid by them to counsel. In making this assertion,
    TransCanada notes that § 76-726 is different from other attor-
    ney fees statutes because it provides for reimbursement.
    We agree with TransCanada insofar as it notes that this
    attorney fees statute is different from most other statutes allow-
    ing for an award of attorney fees. Most other statutes simply
    provide, where relevant, that reasonable attorney fees may be
    awarded.9 But § 76-726(1) provides for “reimburse[ment of]
    costs, disbursements, and expenses . . . actually incurred.”
    But just because § 76-726 is a “reimbursement” statute, it
    does not follow that the landowners must have actually paid
    counsel in order to be entitled to an award of attorney fees.
    Merriam Webster defines “reimburse” as meaning “to pay
    back . . . someone[,] repay.”10 Black’s Law Dictionary defines
    “incur” as a verb meaning “[t]o suffer or bring on oneself (a
    liability or expense).”11 And “actual” is defined as “[e]xisting
    in fact; real.”12 This is supported by this court’s prior case
    9
    See, e.g., 
    Neb. Rev. Stat. §§ 25-21
    ,108, 29-3004, and 30-4017 (Reissue
    2016) and 59-821 (Reissue 2010).
    10
    Webster’s Third New International Dictionary of the English Language,
    Unabridged 1914 (1993).
    11
    Black’s Law Dictionary 885 (10th ed. 2014).
    12
    
    Id. at 42
    .
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    law defining the phrase “actually incurred,” in a case involv-
    ing the Nebraska Trust Deeds Act, as “a fee that is based on
    serv­ices rendered.”13
    The plain language of § 76-726, then, requires only that the
    landowners be indebted to counsel for services rendered and
    that the attorney fees charged be reasonable. There is no sup-
    port in that language for the conclusion that the fees and costs
    must have already been paid for by the landowner.
    As an initial matter, we observe that there is no dispute
    over the reasonableness of attorney fees requested in this
    case, and affidavits from other practicing attorneys attesting
    to that reasonableness are part of our record. The conclu-
    sion regarding reasonableness, though, has no bearing on
    whether the landowners’ affidavits were sufficient to support
    an award of attorney fees and costs. Accordingly, we turn to
    that question.
    In Holt County, the landowners in some affidavits only
    generally averred that they were represented by counsel. A few
    other Holt County affidavits included language stating that the
    landowners “[were] indebted to [counsel] for the success they
    achieved and agree that the fees they seek for services are the
    landowners’ reasonable obligation. We want TransCanada to
    be ordered to pay this sum, along with expenses incurred on
    our behalf.” In York, Saline, and Nance Counties, the land-
    owners averred that they
    entered into a written fee agreement with [counsel] and
    are indebted to them for legal services they provided and
    expenses they advanced on our behalf. . . .
    ....
    . . . We entered into [a] written engagement agreement
    with [counsel] requiring us to pay for all legal services
    and to reimburse [counsel] for expenses they expended
    on our behalf.
    13
    Arizona Motor Speedway v. Hoppe, 
    244 Neb. 316
    , 323, 
    506 N.W.2d 699
    ,
    703 (1993).
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    ....
    . . . We are indebted to [counsel] for the success they
    achieved and agree that the fees and expenses they seek
    for services are reasonable and the landowners’ obliga-
    tion. We want TransCanada to be ordered to pay the sums
    requested, along with expenses incurred on our behalf
    because this includes the money we have paid for legal
    services and expenses and our debts incurred.
    No written fee agreement or invoice for legal services was
    offered as evidence in support of the motions for attorney fees
    and costs. Nor did the landowners, in their affidavits, aver any
    specific amount owed by them to counsel.
    We observe that affidavits from one or both counsel of
    record regarding the attorney fees actually incurred by the
    landowners were offered and admitted as evidence before each
    of the county courts. Under certain circumstances, such affida-
    vits might supplement other evidence admitted at an attorney
    fees hearing and support the award of fees.14
    But in this case, these affidavits from counsel were not spe-
    cific as to any individual landowner and—with respect to work
    done and fees charged—were virtually identical to one another,
    including seeking payment of the same amount of money
    based upon the same number of hours of work. In fact, these
    affidavits raised more questions than they answered, notably
    about the nature of the fee agreement between the landowners
    and counsel, whether any fee agreement was akin to a contin-
    gency agreement, and the nature of how attorney fees sought
    in these eminent domain proceedings might be related to the
    York County constitutional challenge. As such, we conclude
    that on these facts, these affidavits are insufficient to support
    the award of attorney fees.
    Because the landowners’ affidavits did not allege the amount
    each had actually incurred, and because there was no other
    14
    See Garza v. Garza, supra note 8.
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    evidence sufficient to support the award of attorney fees, we
    find that the county courts’ awards were in error.
    Resolution.
    We conclude that none of the landowners established that
    they were entitled to attorney fees. As such, we reverse the
    decisions of the Saline and Nance County District Courts. We
    remand the causes to those courts, with instructions for those
    courts to remand the causes to the county courts, with direc-
    tions for those courts to vacate the awards of attorney fees.
    We observe that the Holt and York County District Courts
    vacated the amount of the awards of attorney fees, but remanded
    the causes for further proceedings. We agree with TransCanada
    that such a remand was error. Accordingly, in those cases, we
    reverse the district courts’ decisions remanding for further
    proceedings.
    CONCLUSION
    For the reasons set forth above, the decisions of the dis-
    trict courts are reversed and the causes are remanded with
    directions.
    R eversed and remanded with directions.
    Wright, J., not participating.