Township of Millcreek v. A. Cres Trust of June 25, 1998

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Township of Millcreek :

:

v. : No. 449 C.D. 2018

: Argued: October 4, 2019

Angela Cres Trust of June 25, 1998 :

:

Appeal of: Angela Cres Trust of :

June 25, 1998, and Laurel A. Hirt :

as Trustee of the Angela Cres Trust :

of June 25, 1998 :

BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge

HONORABLE MICHAEL H. WOJCIK, Judge

HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge

OPINION

BY PRESIDENT JUDGE LEAVITT FILED: November 25, 2019

The Angela Cres Trust of June 25, 1998 (Trust) appeals an order of the

Court of Common Pleas of Erie County (trial court) awarding the Trust legal fees in

the amount of $285,000. This award reimbursed the Trust for a portion of the fees

and costs it paid to recover the fees and costs it incurred to challenge a condemnation

of Trust land by the Township of Millcreek (Township). The Trust contends that

the trial court erred and abused its discretion because it arbitrarily awarded only 10%

of the Trust’s actual “fees-on-fees.” The Trust also argues that in fashioning its

“arbitrary” award, the trial court improperly considered the Trust’s refusal to settle

the initial fee petition and the wealth of the Trustee. The Township responds that

the Trust simply failed to prove that its legal fees and costs of $2.85 million were

reasonable.

Background

This case concerns a dispute between the Trust and the Township that

began in June 2005, when the Township initiated a condemnation of Trust property

valued at $9,000 as part of its “Heidler Road Channel Improvement Project.” In

accordance with the Eminent Domain Code, 26 Pa. C.S. §§101-1106,1 the Trust filed

preliminary objections to the Township’s declaration of taking.2

On December 16, 2009, the trial court sustained the Trust’s preliminary

objections, concluding that the Township lacked authority under The Second Class

Township Code3 to build a water channel on Trust property. This Court affirmed.

See Township of Millcreek v. Angela Cres Trust of June 25, 1998, 25 A.3d 1288 (Pa.

Cmwlth. 2011), appeal denied, 49 A.3d 444 (Pa. 2012). On August 3, 2012, four

days after the Township’s appeal to the Pennsylvania Supreme Court was denied,

the Township filed a second amended declaration of taking, which the trial court

denied.

In October 2013, the Trust filed a Petition for Fees, Costs and Expenses

(Fee Petition) to recover the $3,359,900.33 in legal fees it spent to defend against

the Township’s condemnation of Trust property. In September of 2014, the Trust

1

The former Eminent Domain Code, Act of June 22, 1964, Special Sess., P.L. 84, as amended,

formerly 26 P.S. §§1–101 – 1–903, was repealed by Section 5 of the Act of May 4, 2006, P.L. 112.

In 2006, the Eminent Domain Code was consolidated at 26 Pa. C.S. §§101-1106 (effective

September 1, 2006).

2

“Preliminary objections in the context of eminent domain actions serve a different purpose than

preliminary objections filed in other civil actions.” In re Condemnation of .036 Acres, More or

Less, of Land Owned by Wexford Plaza Associates, 674 A.2d 1204, 1207 (Pa. Cmwlth. 1996)

(citing North Penn Water Authority v. A Certain Parcel of Land, 650 A.2d 1197 (Pa. Cmwlth.

1994)). In eminent domain cases, preliminary objections are intended as a procedure to resolve

expeditiously the factual and legal challenges to a declaration of taking before the parties proceed

to determine damages. North Penn Water Authority, 650 A.2d at 1201.

3

Act of May 1, 1933, P.L. 103, as amended, 53 P.S. §§65101-68701.

2

filed a supplemental petition seeking reimbursement of its engineering and technical

expert fees, which totaled $649,682.63. The trial court bifurcated the hearing to

separately address each fee request. In December 2014, the trial court awarded the

Trust $517,868 in attorney fees, costs and expenses, and in August 2015, the trial

court awarded the Trust $164,000 in expert witness fees, costs and expenses. The

Trust appealed the award, as did the Township.

On June 22, 2016, this Court affirmed the trial court’s award. Township

of Millcreek v. Angela Cres Trust of June 25, 1998, 142 A.3d 948 (Pa. Cmwlth.

2016) (Fee Petition I). The Trust sought reconsideration, which this Court denied.

Subsequently, the Trust petitioned the Pennsylvania Supreme Court for allowance

of appeal, which was denied. Township of Millcreek v. Angela Cres Trust of June

25, 1998, 166 A.3d 1236 (Pa. 2017).

In January 2015, while the Fee Petition was pending, the Trust filed an

“Interim Petition for Additional Fees, Costs and Expenses.” The Trust sought to

recover approximately $2.85 million, i.e., the amount it spent litigating the Fee

Petition. The trial court conducted a three-day hearing on the Trust’s petition.4

The Trust presented the expert testimony of Steven Tasher,5 who

reviewed the invoices from the Trust’s three law firms; the pleadings; and the Fee

Petition. Tasher prepared “a task-based analysis,” looking at “the work that was

required to be performed” and evaluating that work. Notes of Testimony (N.T.),

12/19/2017, at 157; Reproduced Record at 8767a (R.R. __). In assessing the

4

Attorneys Eric Purchase of Purchase & George; Herbert Bass of Fox Rothschild; and James

McDonald, Jr. of The McDonald Group, provided testimony regarding their law firms’ billing

invoices. The Trustee, Laurel Hirt, also testified.

5

Tasher is the managing director of Wyatt Partners, a consulting firm. He has advised companies

and law firms concerning attorney billing practices and guidelines. In addition, he has served as

an expert witness in attorney fee litigation in multiple jurisdictions.

3

reasonableness of the Trust’s legal fees, Tasher explained that he was guided by Rule

1.5(a) of the Pennsylvania Rules of Professional Conduct, which governs the

propriety of a lawyer’s fee agreement.6 After reducing the Trust’s requested

additional fees by $200,000, which he attributed to a double counting error, Tasher

opined that the Trust’s legal fees of $2.85 million were reasonable, given the

Township’s “aggressive” opposition to the Fee Petition and the difficulty of

complying with the trial court’s “rulings.” N.T., 12/19/2017, at 143, 145; R.R.

6463a, 6469a.

In opposition, the Township offered the expert testimony of Arthur H.

Stroyd, Jr., who was familiar with the condemnation litigation and knowledgeable

6

Rule 1.5(a) states as follows:

(a) A lawyer shall not enter into an agreement for, charge, or collect an illegal or

clearly excessive fee. The factors to be considered in determining the propriety of

a fee include the following:

(1) whether the fee is fixed or contingent;

(2) the time and labor required, the novelty and difficulty of the

questions involved, and the skill requisite to perform the legal

service properly;

(3) the likelihood, if apparent to the client, that the acceptance of the

particular employment will preclude other employment by the

lawyer;

(4) the fee customarily charged in the locality for similar legal

services;

(5) the amount involved and the results obtained;

(6) the time limitations imposed by the client or by the

circumstances;

(7) the nature and length of the professional relationship with the

client; and

(8) the experience, reputation, and ability of the lawyer or lawyers

performing the services.

204 Pa. Code Rule 1.5(a). The trial court found that Rule 1.5(a) was worthy of consideration but

not determinative where a “third party is asked to foot the bill.” Trial Court Op. at 30. Rather,

Rule 1.5(a) governs the conduct of an attorney when entering into a fee agreement with his client.

4

about the legal marketplace in Erie, Pennsylvania. Stroyd criticized the Trust’s

attorneys’ use of “block billing,” i.e., a single time entry to cover multiple tasks.

Because the time was not allocated among these tasks, Stroyd stated the

reasonableness of the total could not be discerned. Stroyd noted that 87% of the

total hours billed by the attorneys for the Trust were in a block-billed format. Stroyd

emphasized that the Trust’s attorneys charged hourly rates that far exceeded what is

reasonable in the Erie legal marketplace. Stroyd concluded that “none of the fees

and costs” of litigation for which the Trust sought reimbursement were reasonable.

N.T., 12/20/2017, at 156; R.R. 9020a. Stroyd opined that the Trust was not entitled

to recover any fees it paid to litigate the Fee Petition.

The trial court awarded the Trust $285,000 as reimbursement for its

fees, costs and expenses that it incurred to pursue the Fee Petition. In support, the

trial court issued a 46-page opinion.

In the Fee Petition proceeding, the trial court had identified “problems”

with “a block billing format, vague and generalized invoice entries, inordinately high

hourly fees, lack of evidence of justification and other deficiencies.” Trial Court

Op. at 10. Nevertheless, “the Trust’s attorneys made no material changes to the

manner in which legal services were provided or documented in the fees on fees

petition.” Id.

The trial court found Stroyd’s testimony “substantially more credible”

because he “methodically categorized and catalogued the tasks performed by Trust

lawyers.” Id. at 34. The trial court offered several reasons for not crediting the

Trust’s expert. Specifically, Tasher “did not provide a specific analysis of the

content of the invoice summaries or ‘blocks’ in question or whether the time spent

on specific tasks expressed in the ‘blocks’ was reasonable and necessary.” Id. at 28.

5

Indeed, in testimony given in other fee petition proceedings, Tasher had criticized

“block billing” and stated that such practices require “amplification” from the

timekeepers. Id. However, the trial court found that Tasher did not provide this

amplification; at best, Tasher did a “walk through” with the timekeepers. Id.

The trial court rejected Tasher’s claim that the Trust’s fees were

justified by the Township’s vigorous defense, noting that the large amount at issue

in the Fee Petition warranted a vigorous defense. Likewise, the trial court rejected

Tasher’s claim that the bifurcated hearing was responsible for the Trust’s

extraordinary fee demand. Rather, the bifurcation was required because the Trust

neglected to request $650,000 in engineering fees in its initial Fee Petition. Finally,

the trial court found it irrelevant that the Trustee had no complaint with the attorney

fees paid by the Trust. This fact did not make these fees presumptively reasonable.

To evaluate the reasonableness of the Trust’s attorney fees and costs,

the trial court considered the factors established in the Supreme Court’s decision in

In re LaRocca’s Trust Estate, 246 A.2d 337 (Pa. 1968). Those factors are:

the amount of work performed; the character of the services

rendered; the difficulty of the problems involved; the importance

of the litigation; the amount of money or value of the property in

question; the degree of responsibility incurred; whether the fund

involved was ‘created’ by the attorney; the professional skill and

standing of the attorney in his profession; the results he was able

to obtain; the ability of the client to pay a reasonable fee for the

services rendered; and, very importantly, the amount of money

or the value of the property in question.

Id. at 339. The trial court discussed each LaRocca factor in detail.7

7

On the LaRocca factors, the trial court found as follows:

First, the Trust’s attorneys billed for 6,470 hours by 17 attorneys and a total of 37

timekeepers for a total of $2.9 million to litigate the Fee Petition. Trial Court Op. at 34.

6

The trial court determined that the majority of the Trust’s legal fees

could not be recovered for the reasons that follow:

1. The hourly rates of the attorneys, both partners and most

associates of [Fox Rothschild], were not reasonable as those rates

were nowhere near local norms of compensation for attorneys of

comparable experience and ability in the area of practice

required. This resulted in an unjustified expense of

approximately $764,000.

2. The hourly rates for the paralegals … were not reasonable

as those rates were significantly above local norms of

compensation for paralegals of comparable experience and

ability. This resulted in an unjustified expenditure of

approximately $118,000.

Second, capable attorneys and support personnel performed the work, but there was

“no justification in the record for the inordinate number of attorneys and others involved

on the Trust’s behalf throughout the litigation process and for the many instances of

multiple attorneys, multiple partners and paralegals continuing to be involved in virtually

every aspect of the fees litigation.” Id.

Third, the case did not involve complex, highly technical or novel questions of law.

Id. at 35.

Fourth, the Fee Petition did not involve an issue of broad public policy. Id.

Fifth, the Trust retained attorneys from three law firms, and “[t]he attorneys were

not responsible for developing a litigation budget nor did they act within any clearly

delineated financial constraints.” Id. at 37.

Sixth, there was no fund created. Id.

Seventh, the Trust’s attorneys were capable, but the Fee Petition did not require the

environmental or condemnation specialists who billed them.

Eighth, the results were limited because the Trust was awarded 17% of its original

claim of $4 million and lost its appeal. Id. at 37-38.

Ninth, the Trustee had considerable resources and was able to pay “legal fees in

any amount reasonable or not.” Id. at 38.

Tenth, the value of the underlying property was $9,000, and the Trust incurred $4

million in legal fees and costs to prevent the condemnation of this property. In the fees-

on-fees petition, the Trust sought to recoup $2.5 million it spent to pursue the $4 million

in legal fees and costs incurred to defend against the condemnation. Id.

7

3. The amount of time and the number of attorneys involved

with the Motion for Reconsideration were unreasonable

particularly in light of the entirely speculative basis for the

request resulting in an unnecessary expenditure of more than

$80,000.

4. The amount of time and the number of attorneys involved

in the development of a post-trial motion were unreasonable in

light of its superfluous nature resulting in the unnecessary

expenditure of $90,000.

5. The Trust’s attorneys charged their client approximately

$240,000 to participate in a mediation process that dealt almost

exclusively with advancing a solution to the stormwater problem

in the Heidler Road area and had nothing to with the

condemnation proceeding and little to do with resolving the fees

petition. A significant portion of this amount, if not all of it,

would not be recoverable pursuant to [former Section 408 of the

Eminent Domain Code,] 26 Pa.C.S. [§]1-408.

6. Excessive charges for administrative tasks resulting in the

expenditure of $78,000.

Trial Court Op. at 42-43. These unnecessary charges totaled well over $1 million.

As for the remainder of the requested fees, the trial court concluded that they were

not susceptible to a precise evaluation because of the use of block billing and the

lack of testimony to explain them.

The trial court rejected the conclusion of the Township’s expert that the

Trust was not entitled to any fees for litigating the Fee Petition. Rather, the trial

court determined that $285,000, or 10% of the amount the Trust actually paid,

constituted a reasonable fee award. The trial court reasoned that given the Trust’s

limited success in the Fee Petition, i.e., recovery of 17% of the amount requested,

the excessive hourly rates charged and the lack of evidence needed to “parcel out”

the block billing, an award of 10% was appropriate.

8

Appeal

On appeal,8 the Trust has raised five issues, two of which we have

consolidated for purposes of this opinion. First, it argues that the trial court erred and

abused its discretion in choosing a flat, arbitrary award that bore no relation to fees

and costs that the Trust actually incurred. Second, it argues that the trial court erred

and abused its discretion in relying upon irrelevant evidence. Third, it argues that

the trial court improperly applied the LaRocca factors. Fourth, it argues that the trial

court erred and abused its discretion by giving greater weight to the Township’s

expert witness than to the Trust’s expert.

We address these issues seriatim.

Analysis

I.

In its first issue, the Trust argues that the trial court’s fee determination

cannot be sustained. It contends that the trial court arbitrarily reduced the fees

actually incurred and paid by the Trust by 90%, which departs from what is required

under the Eminent Domain Code and by precedent. The Township responds that

the evidence was overwhelming that the Trust’s “actual” legal fees were

unreasonable and, further, the Trust was only moderately successful in its Fee

Petition.

The Eminent Domain Code authorizes the award of costs to a

condemnee who is successful with preliminary objections. Section 306(g) states as

follows:

8

This Court’s review determines whether the trial court abused its discretion or committed an error

of law. Fee Petition I, 142 A.3d at 956 n.15.

9

(g) Costs and expenses.-

(1) If preliminary objections which have the effect

of terminating the condemnation are sustained, the

condemnor shall reimburse the condemnee for

reasonable appraisal, attorney and engineering fees

and other costs and expenses actually incurred

because of the condemnation proceedings.

(2) The court shall assess costs and expenses under

this subsection.

26 Pa. C.S. §306(g).9 As we have explained, the “statute does not require that a

condemnee be made whole; rather, recovery is limited to reasonable attorney and

expert fees and costs.” Fee Petition I, 142 A.3d at 956.

In a fee award, a trial court must explain its reasoning so that this Court

can conduct meaningful appellate review. In re Appeal of Silverman, 90 A.3d 771,

785 (Pa. Cmwlth. 2014). In doing so, however, a trial court is not required “to

delineate with specificity … every reason for every disallowance of every aspect of

the fee request.” Id. In Arches Condominium Association v. Robinson, 131 A.3d

122, 132 (Pa. Cmwlth. 2015), this Court noted that a flat $10,000 award of attorney

fees, in another case, which bore no relation to “actual expenses involved,” could

not be sustained.

This discussion in Arches referred to a $10,000 fee award that was

appealed, and reversed, in Centennial Station Condominium Association v. Schaefer

Company Builders, Inc., 800 A.2d 379, 386 (Pa. Cmwlth. 2002). This Court

reversed the flat fee in Centennial because the trial court had received no evidence

9

The codification of the Eminent Domain Code took place after the Township filed its declaration

of taking of Trust land but before the trial court granted the Trust’s preliminary objections to the

condemnation. The precodification statutory provision was found at former Section 408 of the

Eminent Domain Code, 26 P.S. §1-408 (repealed), and is nearly identical to 26 Pa. C.S. §306(g).

10

on the fee request before entering its award. By contrast, here, the trial court

conducted a three-day hearing on the Trust’s fees-on-fees petition. Notably, in

Arches, this Court affirmed the trial court’s fee award. Also notable was this Court’s

observation that “as long as the trial court reviews the record … it is difficult for an

appellate court to hold that a trial court abused its discretion in issuing a particular

award of attorney’s fees.” Arches, 131 A.3d at 132-33. Nevertheless, it is

undeniable that a flat fee award, unmoored from the actual invoices for legal

services, is not favored.

In Fee Petition I, 142 A.3d 948, the trial court awarded the Trust legal

fees that doubled those incurred by the Township in the condemnation. It awarded

far less on engineering fees, for a total award of $681,868. The Trust complains that

the trial court’s total award of fees, from both petitions, is less than the $1 million

the Township incurred to litigate this matter.10 Because the trial court’s 10% bears

no relation to the legal fees paid by either party, the Trust argues the award is

arbitrary and capricious.

Additionally, the Trust argues that the trial court erred in its application

of the Eminent Domain Code by eliminating those legal fees incurred to pursue

unsuccessful motions or on litigation before the Environmental Hearing Board,

which was not directly related to the condemnation proceeding. The Trust argues

that it would not have “actually incurred” any legal fees but for the Township’s

decision to condemn, unlawfully, Trust land. 26 Pa. C.S. §306(g). Thus, all work

10

The Trust notes that the trial court’s award of $285,000 was equal to the invoice of Purchase &

George, the Erie law firm that was primarily responsible for the Fee Petition. The Trust argues

that this means nothing was awarded for the fees paid to Fox Rothschild and The McDonald Group.

This is an inaccurate characterization of the award. The trial court pointed out that some of the

fees of Purchase & George were unreasonable, such as its filing of a post-trial motion. Trial Court

Op. at 6-7. It is a coincidence that the 10% award matches the actual fees of one law firm.

11

performed by the Trust’s attorneys was necessary and reasonable, even those efforts

that were not successful, such as the post-trial motion.

The Eminent Domain Code reimburses those fees and costs that are

determined to be “reasonable.” Id. Generally, this means that “[t]he assessment of

attorney’s fees should be based on the efforts within the case and should be

reasonable in light thereof.” Harborcreek Township v. Ring, 570 A.2d 1367, 1372

(Pa. Cmwlth. 1990). Here, the trial court found that fees incurred for the motion for

reconsideration, for a “superfluous” post-trial motion, and for a mediation that had

nothing to do with the Fee Petition would not be reimbursed. Trial Court Op. at 42.

We agree with the Trust that the Eminent Domain Code should be given

a broad reading when determining whether a particular legal task was caused by the

condemnor’s action. Certainly, “reasonable” fees encompasses those incurred to

pursue fees and costs allowed under 26 Pa. C.S. §306(g). However, causation is a

matter for the trial court to decide. It decides whether certain tasks constitute a

reasonable legal response to a condemnor’s action or have an attenuated relation to

the condemnation.

This Court will not interfere with a fee award that is based on “all the

circumstances” of a case, even if the trial court does not explain exactly how it

calculated an award. In re Condemnation by Urban Redevelopment Authority, 451

A.2d 1071, 1072-73 (Pa. Cmwlth. 1982). Here, the circumstances on which the trial

court focused were that the Trust’s attorneys issued invoices that contained:

[an] extraordinary number of hours billed by firm partners, the

pervasive duplication of effort, the utilization of multiple

attorneys and paralegals for various court proceedings and other

legal tasks, hourly rates by some attorneys and paralegals that

were considerably outside local norms, and the inordinate sums

charged for travel and administrative tasks.

12

Trial Court Op. at 42.

A reduction of a fee request that is based on credible expert testimony

is appropriate. Gross v. City of Pittsburgh, 741 A.2d 234, 240 (Pa. Cmwlth. 1999).

Here, after a lengthy hearing, the trial court chose an award in an amount that fell

between the opinions of two experts. This is consistent with the way a dispute about

a property tax assessment is often resolved. See, e.g., In re Appeal of Township of

Ross, 491 A.2d 929, 931 (Pa. Cmwlth. 1985) (trial court’s determination that the fair

market value of property lies between the valuations offered by the experts does not

render the determination arbitrary). See also Bosniak v. Redevelopment Authority of

City of Philadelphia, 341 A.2d 260 (Pa. Cmwlth. 1975) (condemnation award that

falls between the opposing experts’ opinions will be sustained).

The trial court delineated over $1 million in fees that were either

“patently unreasonable” or “not incurred as part of the condemnation or fees case.”

Trial Court Op. at 44. It evaluated the remainder using the LaRocca factors. It was

not able to “parcel out of an aggregate request of $2.85 million an amount that was

reasonable for the Trust to have incurred in its effort to recover its attorneys’ fees.”

Id. at 41.

The trial court concluded that the Trust did not meet its burden of

proving “that any specific amount of its claim was reasonable.” Id. at 44. Simply,

the award of 10% of the actual fee incurred was the best the trial court could do

given the block billing practice of the Trust’s attorneys and its inability to provide

the court with the expected “amplification.” Trial Court Op. at 28. Unlike

Centennial, where the trial court’s flat $10,000 fee award was entered without a

hearing, here, the trial court conducted a lengthy hearing. The trial court awarded

$285,000, which is a substantial award that fell between the opinions of two experts

13

as to what constituted a “reasonable” fee award. Given the fact that the Trust failed

to prove that “any specific amount” of its incurred fees and costs was reasonable, we

conclude that the trial court did not err or abuse its discretion in its award on the

Trust’s fees-on-fees petition.

II.

In its second issue, the Trust argues that the trial court erred in its

application of the LaRocca principles by considering the Trustee’s wealth. The

Trust also contends that the trial court wrongly identified the amount in dispute and

did not consider the labor provided on behalf of the Trust.

In LaRocca, the Pennsylvania Supreme Court explained:

The amount of fees to be allowed to counsel, always a subject of

delicacy if not difficulty, is one peculiarly within the discretion

of the court of first instance. Its opportunities of judging the

exact amount of labor, skill and responsibility involved, as well

as its knowledge of the rate of professional compensation usual

at the time and place, are necessarily greater than ours, and its

judgment should not be interfered with except for plain error.

[T]he allowance or disallowance of counsel fees rests generally

in the judgment of the court of first instance and its decision will

not be interfered with except for palpable error.

LaRocca, 246 A.2d at 340 (internal citations omitted). The Supreme Court set forth

eleven factors to be taken into consideration in determining the fee or compensation

payable to an attorney. Id. at 339. Notably, the trial court does not have to address

every LaRocca factor. Carmen Enterprises, Inc. v. Murpenter, LLC, 185 A.3d 380,

390 (Pa. Super. 2018).

LaRocca requires an examination of the client’s ability to pay “a

reasonable fee for the services rendered.” LaRocca, 246 A.2d at 339. In considering

this factor, the trial court found that the Trustee had considerable resources “largely

14

comprised of stock in [the] Erie Insurance Company[,]” which was valued at over

$500 million, Trial Court Op. at 38, and was able to pay $6 million to attorneys to

contest the Township’s effort to obtain an easement on her property valued at $9,000.

Thus, the trial court found that the Trust was “in a position to pay attorneys’ fees in

any amount, reasonable or not.” Id. at 38. The Trust argues the trial court placed

too much emphasis on the Trustee’s wealth.

The extent of the Trustee’s wealth does not foreclose the Trust from

recovering its reasonable attorney fees and costs from a condemnor. Precedent does

not explain how the LaRocca factor of “ability of the client to pay a reasonable fee

for the services rendered” should be applied in a condemnation proceeding.

LaRocca, 246 A.2d at 339. LaRocca raised “the ability of the client to pay” legal

fees in a case where the client, a minor, was the beneficiary of a trust. The trust

assets totaled $64,000. The client’s lawyers sought payment of $10,600 from the

trust for their work in protecting her interest in the trust. The orphans’ court reduced

the fee award to $7,000. It was in that context that the Supreme Court held that

although the attorneys spent a significant amount of time on the matter and obtained

a beneficial result for their client, “the small amount of money involved must be

taken into consideration in fixing their fee[.]” Id. at 340. The Supreme Court

affirmed the orphans’ court fee award. See also Shaw by Ingram v. Bradley, 672

A.2d 331, 333 (Pa. Super. 1996) (trial court reduced legal fees requested by attorneys

on behalf of a minor plaintiff because of minor’s limited ability to pay).

Here, the trial court dutifully addressed each LaRocca factor, including

“the ability of the client to pay,” and made findings about the Trustee’s wealth. This

LaRocca factor has little direct relevance here. The trial court’s finding that the

Trustee was able to pay for expensive legal services, whether or not they were

15

reasonable, was unnecessary but, if this was error, it was at most harmless error.11

In the end, it was not the Trustee’s wealth that caused the trial court to reduce the

Trust’s request for $2.85 million in fees. Rather, it was the trial court’s holding that

the Trust did not prove that any specific part of that $2.85 million was reasonable.

The Trust also argues that the trial court erred in applying the LaRocca

factor relating to the amount in controversy. The Trust notes that the amount in

controversy was $4 million, which was the total amount of legal fees it spent

litigating the Fee Petition. In its opinion, the trial court mentioned the $9,000 value

of the property sought to be condemned. The observation of the trial court was a

side comment with no impact on the ultimate award. The trial court understood that

the Trust “spent $2.85 million” in order to “prove that the $4 million it had already

paid … was reasonable.” Trial Court Op. at 40.

The trial court addressed each LaRocca factor, including the Trust’s

ability to pay the legal fees it incurred. We discern no reversible error in the trial

court’s application of the LaRocca factors.

III.

In its third issue, the Trust argues that the trial court abused its

discretion by placing undue emphasis on irrelevant matters, such as the Trust’s

refusal to settle the Fee Petition. The Trust contends that as long as the Township

11

The Trust asserted in Fee Petition I that the trial court should have considered the Township’s

ability to pay a reasonable fee because it was the entity that was going to be called upon to pay the

Trust’s legal fees. The “ability to pay” LaRocca factor is ambiguous. The “client” in LaRocca

was the minor beneficiary of the trust, but it was the trust that was going to pay the requested legal

fees on behalf of the minor client.

The real point is that not every LaRocca factor is relevant and required to be considered by

the court.

16

continued to challenge its right to attorney fees, the Trust was entitled to fight “on

principle.” Trust Brief at 28-29 (quoting Arches, 131 A.3d at 135).

At the hearing, the Trust’s counsel, Eric Purchase, testified about the

efforts to settle the Fee Petition. Prior to the hearings on the Fee Petition, the

Township offered the Trust $750,000 to settle the matter. N.T., 12/18/2017, at 29,

31; R.R. 8412a, 8414a. The Trust rejected the offer. Purchase explained that, at that

time, the Trust had incurred approximately $1 million in fees and costs in the Fee

Petition litigation. Id. Purchase acknowledged that the Trust did not make a counter-

offer, noting that he “never had authority to accept less [than the full amount].” Id.

at 56; R.R. 8439a.

The trial court stated that the Trust did not make a “good faith attempt

at any time in the proceedings to promote or encourage settlement of the fees in

dispute[.]” Trial Court Op. at 42. The trial court noted that the Trust continued in

this position “even after having the benefit of the trial and appellate courts’ decisions

and in the face of overwhelming legal authority that strongly suggested that full

reimbursement was an exceedingly unrealistic goal.” Id. Although a party is entitled

to fight “on principle,” its decision to do so does not mean that its fees will be found

reasonable. In evaluating the reasonableness of requested fees, the trial court may

consider the party’s efforts to mitigate the fees expended in the litigation, or lack

thereof. See McMullen v. Kutz, 925 A.2d 832, 835 (Pa. Super. 2007), affirmed, 985

A.2d 769 (Pa. 2009) (in determining reasonableness of attorney’s fee request, trial

court did not abuse its discretion by considering lack of settlement negotiations).

Here, that includes the Trust’s decision not to settle.

Additionally, contrary to the Trust’s assertion, the trial court’s

consideration of settlement discussions did not violate Pennsylvania Rule of

17

Evidence 408(a), Pa. R.E. 408(a).12 Generally, offers to settle or compromise a

disputed claim are not admissible to prove or disprove the validity or amount of a

claim. Pa. R.E. 408. Here, the trial court considered the lack of settlement efforts

to assess the reasonableness of the Trust’s legal fees, not the validity of the Trust’s

request for reimbursement. See McMullen v. Kutz, 925 A.2d at 835.

The Trust contends that the trial court placed undue weight on the

Trust’s continued use of block billing. The Trust explains that many of the fees at

issue were incurred in preparation for the fee proceedings before the trial court issued

its opinion in Fee Petition I. Trust’s Brief at 31.

The trial court did not merely criticize block billing. It explained that

“amplification” was needed in order to evaluate block-billed entries. Trial Court

Op. at 28. The Trust’s request for fees-on-fees lacked “any serious effort to explain

the content of the voluminous entries contained in the block billing format.” Id. at

40. Because the Trust’s witnesses did not provide a clarification of each task and

the time spent, the trial court lacked the evidence needed to conclude that the fees

and costs paid by the Trust were reasonable.

In sum, the trial court did not err in considering, inter alia, the Trust’s

refusal to settle its Fee Petition in evaluating the Trust’s request for fees to litigate

12

It states:

(a) Prohibited Uses. Evidence of the following is not admissible—on behalf of any

party—either to prove or disprove the validity or amount of a disputed claim or to

impeach by a prior inconsistent statement or a contradiction:

(1) furnishing, promising, or offering—or accepting, promising to

accept, or offering to accept—a valuable consideration in

compromising or attempting to compromise the claim; and

(2) conduct or a statement made during compromise negotiations

about the claim.

Pa. R.E. 408(a).

18

that petition. Likewise, the trial court’s decision not to accept the block-billed

invoices did not constitute error or an abuse of discretion.

IV.

In its fourth issue, the Trust argues that the trial court abused its

discretion by giving greater weight to the testimony of the Township’s expert

witness than to its expert. Credibility and conflicts in the evidence are for the trial

court to resolve. Beaver Falls Municipal Authority ex rel. Penndale Water Line

Extension v. Beaver Falls Municipal Authority, 960 A.2d 933, 940 (Pa. Cmwlth.

2008). This Court will “not disturb a trial court’s credibility determinations where

explained” or obvious from the record. Id.

Here, the trial court fully explained its credibility determinations. It

stated that “the testimony and supporting documents amassed by [] Stroyd provided

the kind of in-depth assessment that was demanded by the often confusing

aggregated billing entries utilized by the Trust’s lawyers, particularly those of [Fox

Rothschild].” Trial Court Op. 32. In addition,

[] Stroyd laboriously reviewed countless invoice entries,

followed closely the procedural history of the case and

methodically categorized and catalogued the tasks performed by

Trust lawyers. Moreover, his experience allowed him the benefit

of extensive knowledge of the normative standards of legal

practices in northwestern Pennsylvania in both state and federal

courts, including customary rates charged by lawyers and other

legal professionals in matters of comparable difficulty and

complexity as exemplified in this case.

Id. Stroyd pointed out: duplication of efforts; multiple attorneys/paralegals

attending court hearings; and work done by firm partners, as opposed to attorneys

with a lower billing rate, on matters that did not warrant the attention of a senior

attorney. Stroyd specifically identified what was unreasonable.

19

The Trust argues that because Stroyd lacked experience in

condemnation proceedings, “[i]t was ludicrous to permit [] Stroyd to opine on the

intent behind a statute … let alone for the [t]rial [c]ourt to rely on his opinion.” Trust

Brief at 43. We disagree that Stroyd’s testimony about the Eminent Domain Code

affected the trial court’s award. As the trial court observed, the litigation of a fee

petition “required the skill of capable litigation and trial attorneys,” not experts on

condemnation. Trial Court Op. 37. As an experienced litigator and expert on

attorney fees, Stroyd was qualified to opine on the reasonableness of the Trust’s fee

request.

The Trust also contends that Stroyd was unreliable because he

contradicted himself. The Trust explains that, at the hearing, Stroyd acknowledged

that the Trust is “guaranteed” to recover its fees under the law, but opined that the

Trust should recover zero fees. Trust Brief at 44-45 (quoting N.T., 12/20/2017, at

169; R.R. 9033a). This is not a contradiction. Stroyd’s point was that after

reviewing the Trust’s invoices, he did not find them reasonable. As such, the Trust

was not entitled to recover any fees and costs.

Finally, the Trust contends that the trial court erred in holding that

Tasher did not sufficiently analyze the block-billed entries and directs the Court to

Tasher’s expert report. That report identified the amount of fees billed for each task.

For example, in preparing the Fee Petition, attorneys at the firm of Fox Rothschild

billed the Trust $122,000. Tasher explained:

Fox Rothschild performed extensive work … preparing its Initial

Fee Petition. Fox Rothschild took the lead on drafting and

preparing the fee petition. The petition itself was very detailed

with the history of the condemnation proceeding (153 paragraphs

over 30 pages), accompanied by 155 pages of exhibits (including

listing of fees), so the petition had to be prepared by an individual

20

with extensive institutional knowledge and understanding of the

information pertaining to the technical aspects of the

condemnation.

Accordingly, Mr. Hinerman performed the majority of the work

(about $74,500) with some assistance from Mr. Snyder (about

$30,000), who also had worked on certain aspects of the

underlying condemnation action and whose input was necessary

with regard to those aspects, and with assistance of Ms. Snarr

(the Fox Rothschild paralegal who worked on certain aspects of

the underlying condemnation action) in preparing and redacting

invoices. Fox Rothschild also communicated with The

McDonald Group (especially Ms. Welsh) since she was the one

preparing portions of the exhibits on The McDonald Group

(nearly 100 pages of the exhibits were the invoices of The

McDonald Group).

R.R. 6482a-83a. Missing from Tasher’s analysis is a breakdown of the specific tasks

performed; the amount of time for each task; and whether that task was reasonable.

By contrast, Stroyd went through each entry, identifying the date,

timekeeper, hours billed, billing rate, amount billed, revised billing rate, revised

billed amount, and narrative provided by the Trust’s attorneys. Stroyd identified

those entries that lacked adequate time descriptions and those entries relating to the

Trust’s unsuccessful motions. Stroyd identified the time entries relating to the Fee

Petition appeal, including the petition for rehearing, and the petition for allowance

of appeal to the Pennsylvania Supreme Court, for which no fees could be awarded

under LaRocca, which requires that the work be successful. Stroyd identified

unreasonable time entries for travel, for administrative tasks, excessive group

meetings, group conference calls, and attorney fee hearing and preparation.

The trial court’s findings about the limitations of Tasher’s analysis are

supported by the record. Likewise, the trial court’s findings on Stroyd’s analysis are

also supported by the record. We reject the Trust’s argument to the contrary.

21

Conclusion

The Eminent Domain Code does not require that a condemnee be made

whole, as the Trust seems to presume. In re: Condemnation by the Commonwealth,

Department of Transportation, 709 A.2d 939, 944 (Pa. Cmwlth. 1998). It was the

Trust’s burden to prove that its fees and costs in litigating the Fee Petition were

reasonable, and it did not do so. The Trust was entitled to pursue all means and any

cost to save its land and recover its attorney fees. It does not follow, however, that

all those fees, costs and expenses were reasonable, as required by the Eminent

Domain Code before the condemnor must reimburse the condemnee for fees and

costs. 26 Pa. C.S. §306(g). The trial court fixed on a 10% award as reasonable,

considering the Trust’s limited success in the underlying Fee Petition and its failure

to prove that “any specific amount” of its claim for fees-on-fees was reasonable.

This Court’s standard of review of a legal fee award is highly

deferential. Our Supreme Court has directed that “[t]he allowance or disallowance

of counsel fees rests generally in the judgment of the court of first instance and its

decision will not be interfered with except for palpable error.” LaRocca, 246 A.2d

at 340. Discerning no palpable error, we affirm the trial court.

_____________________________________

MARY HANNAH LEAVITT, President Judge

22

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Township of Millcreek :

:

v. : No. 449 C.D. 2018

:

Angela Cres Trust of June 25, 1998 :

:

Appeal of: Angela Cres Trust of :

June 25, 1998, and Laurel A. Hirt :

as Trustee of the Angela Cres Trust :

of June 25, 1998 :

ORDER

AND NOW, this 25th day of November, 2019, the order of the Court of

Common Pleas of Erie County, dated March 2, 2018, in the above-captioned matter

is hereby AFFIRMED.

_____________________________________

MARY HANNAH LEAVITT, President Judge