APPEAL FROM THE STEUBEN CIRCUIT COURT, The Honorable Dane L. Tubergen, Judge, Cause Number C-83-390, ON PETITION TO TRANSFER, No. 4-1285 A 361.
Shepard, C.j., DeBRULER, Givan, Pivarnik and Dickson, JJ., Concur.
The issue presented is whether statutory provisions for costs and litigation expenses authorize the award of attorney fees to litigants who successfully challenge a condemning authority's valuation of property taken through inverse condemnation.
Appellants Maurice and Irene Terry filed a property damage suit against the City, claiming the City of Garrett appropriated a portion of their land for a storm sewer. The trial court granted summary judgment and appointed three appraisers, who assessed damages at $14,400. The Terry took exception to the appraised damages. The City offered $3,500 in settlement, which the Terrys refused. A jury heard the issue of damages and returned a verdict of $6,500. Additionally, the trial court assessed the City $1,369.96 in costs and $3,515 in attorney fees.
In a memorandum decision, the Court of Appeals affirmed the award of damages to the Terrys, but reversed the trial court's award of attorney fees. City of Garrett v. Terry, No. 4-1285 A 361 (Ind. App., Sept. 11, 1986). Appellant City of Garrett seeks transfer on the award of damages, while the Terrys seek transfer of the reversal of the award of attorney fees. The Court of Appeals was correct in affirming the damages awarded. The order for attorney fees, however, presents a new question, and we grant transfer to address it. the Terry's motion for In reversing the award of attorney fees, the Court of Appeals determined that attorney fees were not appropriate as costs under Ind. Code § 32-11-1-10. That section provides for costs and expenses to litigants who successfully challenge the valuation of property taken by condemning authorities; these procedures also apply to inverse condemnation proceedings. Ind. Code § 32-11-1-12. Section 10 reads, in pertinent part:
The costs of the proceedings shall be paid by the plaintiff, except that in case of trial the additional costs thereby caused, shall be paid as the court shall adJudge. However, if, in case of trial, the amount of damages awarded to the defendant by the judgment, exclusive of interest and costs, is greater than the amount specified in the last offer of settlement . . . , the court shall allow the defendant his litigation expenses in an amount not to exceed twenty-five hundred dollars.
Ind. Code § 32-11-1-10 (Burns 1980 Repl.) as amended by 1977 Ind. Acts, P.L. 312, § 3.
Relying on City of Indianapolis v. Central Railroad Co. of Indianapolis (1977), 175 Ind. App. 120, 369 N.E.2d 1109, the Court of Appeals determined that costs allowed by this section do not include attorney fees. Such was consonant with this Court's decision in State v. Holder (1973), 260 Ind. 336, 295 N.E.2d 799, which held that "the bare term 'costs' does not encompass attorney fees," and thus does not provide statutory authority to award such fees. Id. at 339, 295 N.E.2d at 800.
The decisions in Holder and Central Railroad, however, were based on the statute as it read in 1977:
The costs of the proceedings shall be paid by the plaintiff, except that in the case of contest, the additional cost thereby caused shall be paid as the court shall adJudge.
Ind. Code § 32-11-1-10 (Burns 1973).
While costs under the earlier statute did not include attorney fees, the current statutory allowance for litigation expenses is sufficient authority for such an award. The language added to the statute in 1977 is nearly identical to the Uniform Eminent Domain Code, which reads:
If the amount of the compensation awarded to the defendant by the judgment, exclusive of interest and costs, is equal to or greater than the amount specified in the last offer of settlement . . . , the court shall allow the defendant . . . his ...