City of Gulfport, Mississippi v. Cowan Road & Hwy 90, LLC and Priorityone Bank

CourtMississippi Supreme Court
DecidedJune 16, 2022
Docket2020-CA-01286-SCT
StatusPublished

This text of City of Gulfport, Mississippi v. Cowan Road & Hwy 90, LLC and Priorityone Bank (City of Gulfport, Mississippi v. Cowan Road & Hwy 90, LLC and Priorityone Bank) is published on Counsel Stack Legal Research, covering Mississippi Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Gulfport, Mississippi v. Cowan Road & Hwy 90, LLC and Priorityone Bank, (Mich. 2022).

Opinion

IN THE SUPREME COURT OF MISSISSIPPI

NO. 2020-CA-01286-SCT

CITY OF GULFPORT, MISSISSIPPI

v.

COWAN ROAD & HWY 90, LLC, AND PRIORITYONE BANK

DATE OF JUDGMENT: 11/18/2020 TRIAL JUDGE: HON. LAWRENCE PAUL BOURGEOIS, JR. TRIAL COURT ATTORNEYS: JUSTIN DAVID KOPF JOE SAM OWEN SAMUEL STEVEN McHARD WILLIAM J. LITTLE, JR. DANIEL THORNTON SEAWELL KAARA LENA LIND JEFFREY S. BRUNI WILLIAM E. WHITFIELD, III DEREK ANDREW HENDERSON COURT FROM WHICH APPEALED: HARRISON COUNTY CIRCUIT COURT ATTORNEYS FOR APPELLANT: WILLIAM E. WHITFIELD, III JEFFREY S. BRUNI KAARA LENA LIND ATTORNEYS FOR APPELLEES: JOE SAM OWEN DEREK ANDREW HENDERSON NATURE OF THE CASE: REAL PROPERTY DISPOSITION: ON DIRECT APPEAL: AFFIRMED. ON CROSS APPEAL: AFFIRMED IN PART; REVERSED IN PART AND REMANDED - 06/16/2022 MOTION FOR REHEARING FILED: MANDATE ISSUED:

BEFORE KING, P.J., COLEMAN AND GRIFFIS, JJ.

COLEMAN, JUSTICE, FOR THE COURT: FACTS AND PROCEDURAL HISTORY

¶1. Hurricane Katrina made landfall along the Mississippi Gulf Coast on August 29, 2005,

and caused extensive destruction to public utilities, including at U.S. Highway 90, which

fronts the beaches of the City of Gulfport. The City’s water and sewer systems were

significantly damaged and had to be replaced. In 2008, the City undertook a project to

replace the infrastructure associated with its water and sewer systems. Some of the repairs

were within a block or so north of U.S. Highway 90 from the City’s western municipal limits

to its eastern borders. The repair project involved federal, state, and local agencies and

ultimately cost approximately $85 million to complete.

¶2. The project was divided into several different areas (identified and referred to as Area

1, Area 2, Area 3A, Area 3B, Area 3C, and Area 3D). The geographic zones were each bid

separately for utility construction work to occur within them. The area roughly east of

Hewes Avenue and west of DeBuys Road with U.S. Highway 90 on the south was designated

as Area 3B. The original design of the Area 3B project, the sewer infrastructure, e.g., pipes

and manholes, that crossed the Cowan Road property located north of U.S. Highway 90 and

east of Highway 605 were to be replaced, and the new infrastructure was to be installed

within the City’s existing easements across the properties. The Cowan Road property at issue

was located in the Area 3B geographic zone.

¶3. Sometime after the construction project commenced in Area 3B in 2008, Robert

“Kris” Riemann, P.E., then-director of the City’s department of public works, was notified

that John Felsher had inquired about relocating the sewer infrastructure in Area 3B in the

2 area between Highway 605, or Cowan Road, on the west and Allan Drive on the east.

Felsher owned an adjacent parcel of land, and he and Michael Long, the owner of Cowan

Road & Hwy 90, LLC, entered into a participation agreement to aid in the marketability of

their adjoining properties. Felsher’s request that the City relocate the existing sewer

easement was based on the above-referenced participation agreement. In early April 2008,

Riemann forwarded the contact information of Felsher to Kelly Heitstuman, the senior

project manager assigned the project by Yates Construction. Heitstuman thereafter met with

Felsher on the properties in question, including the one that is the subject of the present case.

¶4. Based on the agreement with Felsher to relocate the utilities, the City had the Area 3B

design drawings redrafted to incorporate the agreement to move the utilities. On June 20,

2008, the contractor informed Heitstuman that the discovery of underground telephone lines

and other utilities required that the sewer line being relocated along the northern parts of the

properties had to be angled to the southwest instead of running perpendicular to the northern

border of Cowan Road, i.e., it had to cut the northwest corner of the property. That

northwest corner is the .616 acres at issue.

¶5. On April 29, 2011, Cowan Road filed a complaint in the Chancery Court of Harrison

County, Mississippi, advancing a claim for inverse condemnation against the City. The

chancery court transferred the case to the Special Court of Eminent Domain-County Court

in Harrison County. Due to the jurisdictional limits of county court, the case ended up in

Harrison County Circuit Court.

3 ¶6. On July 10, 2018, the circuit court entered an order granting the motion for partial

summary judgment filed by the City on the issue of the date of the taking. A factual finding

established the date of taking was in the latter part of the 2008 calendar year. The date was

important for the purposes of evaluating any potential damages to which Cowan Road and/or

PriorityOne Bank, which held the deed of trust on the Cowan Road property, were entitled

under the reverse condemnation action.

¶7. The parties eventually settled the reverse condemnation claim, and the City agreed to

pay $100,000 to Cowan Road & Hwy 90, LLC, for the improper and unlawful taking of its

property. As part of the settlement, the parties agreed to reserve all claims, rights and

defenses on the issue of fees and expenses under Mississippi Code Section 43-37-9.

¶8. On January 3, 2019 the trial court ruled on the motion for partial summary judgment

filed by the City on the issue of attorneys’ fees, finding that the Cowan Road property was

part of the Area 3B Project. The court determined that Section 43-37-9 applied and

authorized an award of attorneys’ fees.

¶9. On March 8, 2019, Cowan Road filed its application for an award of attorneys’ fees

and expenses, seeking legal fees and expenses in the total amount of $371,097.37. Of that

amount, $321,800 represented the attorneys’ fees of the law firm of Owen Galloway &

Myers, PLLC, where the attorneys were paid at a rate of $400 per hour. Appraisal and

engineering fees were $30,426.37, and other costs amounted to $18,871 ($49,297.37 total).

The breakdown of costs was presented in exhibits attached to the application, some of which

were provided to the trial court for in camera inspection.

4 ¶10. The trial court entered an order for attorneys’ fees on May 22, 2020. Regarding the

attorneys’ fees and expenses of Owen Galloway and Myers, PLLC, the trial court found that

the hourly rate requested by Owen of $400/hour was excessive and that the hourly rate of

$300/hour would be more appropriate. The trial court further reduced the total amount by

the agreement for the time billed for mediation. The trial court then awarded $234,750 in

attorneys’ fees to Owen Galloway & Myers, PLLC. The trial court removed any fees and

costs associated with the mediation, reducing the award of expenses and fees to $47,355.71.

PriorityOne was awarded $81,005.00 in attorneys’ fees and $6,537.03 in related expenses,

for a total amount of $87,542.03.

DISCUSSION

I. Whether Cowan Road & Hwy 90, LLC and PriorityOne Bank are entitled to recover attorneys’ fees and expenses from the City of Gulfport under Mississippi Code Section 43-37-9.

¶11. Gulfport argues that Cowan Road and POB should not have been allowed to recover

attorneys’ fees under Section 43-37-9. Mississippi Code Section 43-37-9 states in its

entirety:

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City of Gulfport, Mississippi v. Cowan Road & Hwy 90, LLC and Priorityone Bank, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-gulfport-mississippi-v-cowan-road-hwy-90-llc-and-priorityone-miss-2022.