If an attorney needs an expert witness on a particular subject, it’s always good to be able to say that the witness “wrote the book” on the subject. In a recent Fulton County Superior Court case, plaintiff’s attorney was able to do precisely that, calling a recognized Georgia authority on eminent domain law to give an opinion regarding the value of the legal services the plaintiff law firm had provided in an eminent domain case. Chamberlain, Hrdlicka v. Elie Karam et al. (2014CV242261)
The case arose out of a condemnation proceeding brought by the Department of Transportation in 2006 against the owners of a popular metro Atlanta discount clothing store, D&K Suit City. The store was located near the intersection of Memorial Drive & I-285 in DeKalb County, but when the DOT needed to widen the highway, D&K was forced to move. Although the new location was across Memorial Drive from the old one, due to the prevailing traffic patterns and visibility, it was not nearly as successful.
The owners, represented by Elie Karam, who operated D&K, retained the Atlanta law firm of Chamberlain, Hrdlicka, White, Williams & Aughtrey to represent them in the eminent domain dispute that continued for six years. Eventually, Karam and the other owners received a settlement from the DOT that was over $4 million higher than the original offer. However, a dispute arose between the law firm and Karam regarding the amount of attorney fees Karam owed.
Karam never signed a fee contract in regard to the eminent domain dispute. However, Chamberlain, Hrdlicka contended that the two sides had an agreement, based on a letter sent by the firm to Karam that the firm would receive $250 an hour (considerably below its usual fee) plus a contingency fee in the event of a sufficiently favorable outcome in the case. Karam claimed that he had never agreed to pay any contingency, only a straight hourly fee of $250 an hour. Chamberlain, Hrdlicka then filed suit to recover the balance of the attorney fees it contended Karam owed.
One potential problem plaintiff’s attorney Howell Hollis faced in the fee dispute case was the fact that Karam had been billed by Chamberlain, Hrdlicka periodically for services rendered at $250 an hour and had paid over $130,000 in fees by the end of the eminent domain case. Hollis did not want the jury to be influenced by any possible perception that those fees already represented sufficient compensation for plaintiff’s services.
To establish the value of Chamberlain, Hrdlicka’s services, Hollis called as an expert witness, Charles Pursley, widely considered perhaps the leading expert on eminent domain law in the state of Georgia. Because a lay jury was undoubtedly less familiar with Pursley’s expertise than were members of the bar, Hollis first had Pursley establish his credentials with the jury. These credentials included writing Georgia Eminent Domain, the leading legal guide on eminent domain law in the state. In addition, as Hollis established, the annual award given by the Eminent Domain Section of the Georgia Bar is named in honor of Pursley, who was its first recipient, and Richard Hubert, principal attorney for Chamberlain, Hrdlicka in the condemnation case, was its second recipient.
Pursley then gave the jury a brief explanation of Georgia condemnation law and procedures, followed by a detailed explanation of exactly what services Chamberlain, Hrdlicka provided Karam and how that effected the D&K case. Pursley said that from the time the case was filed, “it was clear that it would be a complicated and difficult case.”
He explained the reasons for the complications, which centered around the fact that D&K was operating a business on the property. As a result, Karam could recover for the loss of value of the business in addition to the loss of value of the land itself, but only if he was able to satisfy a complex series of requirements. The original offer from the DOT did not include any amount for business damage, so Chamberlain, Hrdlicka had to meet the requirements for establishing damage to the business, a process Pursley said typically required several years to resolve. Pursley noted that Karam received $2.3 million for business damage, even though the store relocated to a shopping center across the street from its former location, a result Pursley deemed “remarkable,” especially since it resulted from negotiations with the DOT rather than a jury trial.
Finally, Pursley gave his opinion about the value of the services Chamberlain, Hrdlicka provided. Pursley noted that the eventual settlement was approximately $4.2 million above the DOT’s original $4.4 million offer. In his view, reasonable compensation for the law firm for its services would have been approximately $1.4 million, or one-third of the additional recovery.
When asked by Hollis whether lawyers with lesser expertise could have achieved a similar result, Pursley said that, in his opinion, “this case required an extremely high level of expertise from the lawyers to accomplish what was accomplished. There were things that were done in this case that an inexperienced lawyer would not have even known what to do.” He also agreed with an opinion expressed by a DOT attorney who testified earlier that there were only two or three lawyers in the state who could have gotten the same result. Further, Pursley said that it would not be fair and reasonable for the Chamberlain, Hrdlicka attorneys to agree to a $250 fixed hourly fee in 2005 for the duration of the case without any contingency (as the defendants alleged), knowing that standard fee rates would probably increase substantially during the years the case likely would take to resolve.
The jury may have been persuaded by Pursley’s testimony that the law firm’s understanding of the fee agreement was correct rather than Karam’s. The jury returned a verdict for plaintiff of $749,776.29, the exact amount requested under the contingency fee agreement, an amount that, when added to the fees Karam paid earlier, was approximately 60 percent of what Pursley said would be the fair value of the legal services provided
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