City of Siloam Springs v. La-De, LLC

Cite as 2015 Ark. App. 130

ARKANSAS COURT OF APPEALS
DIVISION IV
No. CV-14-631

Opinion Delivered February 25, 2015

CITY OF SILOAM SPRINGS APPEAL FROM THE BENTON
APPELLANT COUNTY CIRCUIT COURT
[No. CV-2011-2063-3]
V.
HONORABLE THOMAS E. SMITH,
LA-DE, LLC (S/K/A DE-LA, LLC), JUDGE
LARRY MURUAGA and KATHY
MURUAGA, HUSBAND and WIFE,
ET AL.
APPELLEES REVERSED

LARRY D. VAUGHT, Judge

At the conclusion of this condemnation case, the Circuit Court of Benton County

entered a judgment awarding attorney’s fees to landowners, appellees Larry Muruaga, Kathy

Muruaga, and La-De, LLC (s/k/a De-La, LLC) (collectively “the Muruagas”), against appellant,

City of Siloam Springs, Arkansas (“the City”). On appeal, the City argues that the trial court

erred as a matter of law in awarding attorney’s fees against it in the absence of statutory

authority. The City also argues that the trial court clearly erred in finding that it assumed state

liability for attorney’s fees. We agree with both points and reverse.

On September 1, 2011, the Arkansas State Highway Commission (ASHC) filed a

complaint and a declaration of taking against the Muruagas, stating that it was taking title to the

Muruagas’ real property pursuant to its power of eminent domain under the authority of

Arkansas Code Annotated sections 27-67-301 to -321 (Repl. 2010). In the declaration, the ASHC
Cite as 2015 Ark. App. 130

stated that just compensation for the real property being condemned was $13,950, which was

placed in the court’s registry. An order of possession was entered on September 9, 2011,

granting the ASHC the right of immediate possession of the property pursuant to sections 27-

67-301 to -309. The Muruagas answered, claiming that they were entitled to just compensation

for the condemned property in excess of the amount offered by the ASHC, and they requested

a jury trial.

On June 8, 2012, an order substituting the City for ASHC was entered.1 The order stated

that the ASHC filed the condemnation action, the City should be substituted as the proper

plaintiff, and the ASHC was dismissed from the action. The order directed the City to file an

amended complaint setting forth its condemning authority. Finally, the order expressly stated

that the Muruagas consented to the substitution of the City.

As directed, the City, on January 7, 2014, filed an amended complaint for condemnation

and an order of immediate possession. The City alleged that it was authorized to proceed with

condemnation under the authority granted to municipalities pursuant to Arkansas Code

Annotated sections 18-15-301 to -309. The City sought immediate possession of the property

and stated that compensation for the taking, $13,950, had been deposited in the court’s registry.

The Muruagas answered the City’s amended complaint. They admitted that the City was

proceeding pursuant to sections 18-15-301 to -309. The Muruagas, however, denied that the

amount of money in the court registry was just compensation for the taking.

1
The order states that the City moved for the substitution of party; however, the motion
is not in the record. The order further states that there was no objection to the entry of the
order.

2
Cite as 2015 Ark. App. 130

A trial was held on February 20, 2014, and the jury rendered a verdict in favor of the

Muruagas, finding that they were entitled to just compensation in the amount of $22,253. On

February 28, 2014, the Muruagas filed a motion for attorney’s fees pursuant to section 27-67-

317(b).

On May 6, 2014, the trial court entered a judgment detailing the jury verdict and awarding

the Muruagas attorney’s fees. That same day, the trial court entered a separate order granting the

Muruagas’ motion for attorney’s fees. The trial court found that pursuant to the authority and

provisions of sections 27-67-301 to -321, the Muruagas’ property was acquired by the ASHC and

that the City affirmatively sought and received court approval to assume the ASHC’s liability for

just compensation owed.

The City’s first argument on appeal is that section 27-67-317(b) cannot support the

attorney’s-fees award as a matter of law. Our standard of review for issues of statutory

construction is well settled:

We review issues of statutory construction de novo. We are not bound by the trial court’s
decision; however, in the absence of a showing that the trial court erred, its interpretation
will be accepted as correct on appeal. When reviewing issues of statutory interpretation,
we keep in mind that the first rule in considering the meaning and effect of a statute is
to construe it just as it reads, giving the words their ordinary and usually accepted
meaning in common language. When the language of a statute is plain and unambiguous,
there is no need to resort to rules of statutory construction. A statute is ambiguous only
where it is open to two or more constructions, or where it is of such obscure or doubtful
meaning that reasonable minds might disagree or be uncertain as to its meaning. When
a statute is clear, however, it is given its plain meaning, and this court will not search for
legislative intent; rather, that intent must be gathered from the plain meaning of the
language used.

City of Little Rock v. Carpenter, 374 Ark. 511, 516–17, 288 S.W.3d 647, 651 (2008) (citing Harris

v. City of Fort Smith, 366 Ark. 277, 280, 234 S.W.3d 875, 878 (2006)).

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Cite as 2015 Ark. App. 130

Section 27-67-317(b) provides:

If the compensation finally awarded exceeds the amount of money deposited by ten
percent (10%) or more, the court shall enter judgment against the State of Arkansas and in
favor of the party entitled thereto for the amount of the deficiency and shall award the
party entitled to judgment its costs, expenses, and reasonable attorney’s fees incurred in
preparing and conducting the final hearing and adjudication, including without limitation
the cost of appraisals and fees for experts.

Ark. Code Ann. § 27-67-317(b) (Supp. 2013) (emphasis added). The plain meaning of the

language used in section 27-67-317(b) authorizes attorney’s fees against the State of Arkansas.

The language of this statute does not authorize attorney’s fees against the City. Our supreme

court has said that attorney’s fees are not allowed except where expressly provided for by statute.

Harris, 366 Ark. at 280, 234 S.W.3d at 878. Therefore, we hold that the trial court erred as matter

of law in granting the Muruagas’ motion for attorney’s fees against the City based on section

27-67-317(b).

The City’s second point on appeal is that the trial court clearly erred in finding that the

City assumed ASHC’s liability under sections 27-67-301 et seq.—including liability for attorney’s

fees authorized in section 27-67-317(b)—to the Muruagas. A decision to grant or deny a motion

for attorney’s fees will not be set aside absent an abuse of discretion by the trial court. Ellis v.

Ark. State Highway Comm’n, 2010 Ark. 196, at 8, 363 S.W.3d 321, 326. While the decision to

award attorney’s fees and the amount awarded are reviewed under an abuse-of-discretion

standard, we review factual findings by a trial court under a clearly erroneous standard of review.

Id., 363 S.W.3d at 326.

We agree that the trial court’s finding that the City assumed the liabilities of the ASHC

is clearly erroneous. There are no facts in this case supporting the trial court’s conclusion that

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Cite as 2015 Ark. App. 130

the City assumed the liabilities of ASHC under sections 27-67-301 to -321. The City could not

have and never stated that it was proceeding pursuant to state-condemnation authority

authorized in sections 27-67-301 et seq. The order substituting the City for the ASHC as the

plaintiff does not provide that the City assumed the liabilities of the ASHC. When the City

subsequently filed its amended complaint, it averred that it was proceeding under the authority

of a different statute—sections 18-15-301 to -309.2 The City consistently and expressly stated

that it was proceeding under the authority granted to municipalities in sections 18-15-301 et seq.

Significantly, the Muruagas, in their answer to the City’s amended complaint, admitted

the allegation that the City was proceeding under the municipal-condemnation authority found

in sections 18-15-301 et seq. The Muruagas did not lodge any objection to the City proceeding

under sections 18-15-301 to -309 until after the jury’s verdict. These facts demonstrate that the

Muruagas admitted and agreed to the City’s position throughout the case—until they filed their

posttrial motion for attorney’s fees. Accordingly, we hold that the trial court clearly erred in

finding that when the City was substituted as plaintiff for the ASHC, the City assumed the

ASHC liabilities for attorney’s fees pursuant to section 27-67-317(b).

Reversed.

HARRISON and WHITEAKER, JJ., agree.

Harrington, Miller, Kieklak, Eichmann & Brown, P.A., by: J. Greg Brown, for appellant.

Lisle Rutledge P.A., by: Stephen Lisle, for appellees.

2
Under sections 18-15-301 et seq., a municipal corporation has the power and right of
eminent domain. Ark. Code Ann. §§ 18-15-301 to -309 (Repl. 2003 & Supp. 2013). Section 18-
15-307(a), which governs compensation for and possession of condemned property, does not
authorize an award of attorney’s fees. Ark. Code Ann. § 18-15-307(a) (Repl. 2003).

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