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Idaho Supreme Court orders developer to pay part of state’s legal fees in North Idaho condemnation fight
The Idaho Supreme Court has ruled in favor of the state in a long-running eminent domain dispute with a developer who was trying to build a shopping center on Highway 95 north of Coeur d’Alene – and has even ordered the developer to pay some of the state’s legal fees in the battle. Justice Jim Jones wrote that in his view, the developer was “shooting for the moon” and seeking much more for 16 acres of its property that the state took for a new interchange than the land was worth. He and the rest of the court’s justices ruled that the appeal was “completely unreasonable and frivolous,” and therefore was one of the rare cases when a private party could be ordered to pay the state’s attorney fees in a condemnation case.
H.J. Grathol Co. had been trying to build a travel center, grocery store and hotel at the northeast corner of U.S. Highway 95 and Highway 54, when the Idaho Transportation Department took a chunk of its property for a new interchange through condemnation in 2010, as part of the Garwood to Sagle project to widen and improve Highway 95 from a surface road into a freeway. The state hired a private law firm, Holland and Hart, to represent it in the condemnation case, and ran up legal fees and costs of more than $1 million before the appeal to the state Supreme Court. Grathol lost at the District Court level, and the court declined to charge the firm for the state’s attorney fees, saying the firm’s arguments were “reasonably based in law and fact” and the case was not brought “frivolously.” The district court did, however, order Grathol to pay more than $25,000 of the state’s court costs.
Now, on appeal, the Idaho Supreme Court has determined that this is one of those “extreme and unlikely” cases where a private party should be ordered to pay the state’s legal fees, at least for the appeal portion of the case. The irony there: The state only paid H.J. Grathol $675,000 for the 16 acres it took. Depending on how much Holland and Hart charges the state for the appeal, the fee award could eat up some or all of that, and leave the developer actually out both money and land to the state. Here's a link to my full story at spokesman.com.
Alan Johnson’s company lost 16.3 acres of prime property along U.S. 95 in North Idaho when the state seized it for a new interchange under eminent domain law. Now the shopping center developer stands to lose another $1.1 million, which is how much the state paid an outside law firm to wrangle over reimbursement for the property – because the state wants Johnson’s company to pay the legal fees the Idaho Transportation Department incurred in trying to seize the land. Johnson calls the tactic “completely unconstitutional,” a sentiment echoed by his lawyer, who said the episode is a “perversion” of law.
The case, now pending before the Idaho Supreme Court, is raising questions about Idaho’s use of eminent domain; a local legislator, Rep. Ed Morse, R-Hayden, says Idaho needs to change its laws. Meanwhile, the shopping center site – slated for the Athol area’s first major grocery store – stands vacant as the multi-year court fight continues. “I’ve never encountered anything like this,” said Johnson. “All we’re trying to do is get the fair market value for what the property was, to get the access to the site after it’s done, and to make sure that our utility issues were taken care of,” he said, adding, “For every dollar we spend in attorney fees, the state spends about $3 or $4. … There’s got to be an easier way to do this.”
ITD has spent $2.1 million and counting on legal fees to an outside firm to battle over prices for seized property along the Garwood-to-Sagle project on Highway 95. Another property owner, Dee Jameson, had his own year-plus legal fight with the state, after which the state’s legal bills added up to nearly as much as it agreed to pay Jameson. “I don’t think they gained any ground by their strategy,” said Jameson, a past president of the Idaho Association of Realtors. He said the long fight over the price was “a total waste of the state’s time and money, in my opinion.” You can read my full story here from Sunday’s Spokesman-Review.