Opinion
No. WD 66269.
Opinion Filed: December 12, 2006.
Appeal from the Circuit Court of Carroll County, Missouri, The Honorable Stephen K. Griffin, Judge.
Before: HOWARD, C.J., and ELLIS and SMITH, JJ.
Appellants ("Property Owners") own real and personal property in and around Carrollton, Missouri. They appeal the decision of the trial court in dismissing their personal property claims in an inverse condemnation action as being untimely and the denial of an award of attorney fees and costs in their inverse condemnation case for property damages. On cross-appeal, the Missouri Highways and Transportation Commission ("MHTC") appeals the trial court's grant of prejudgment interest. For the reasons set forth below, the trial court's dismissal of the personal property claims is affirmed, the denial of attorney fees and costs is affirmed, and the grant of prejudgment interest is reversed. The case is remanded for proceedings consistent with this holding.
Factual Background
In 1977, MHTC constructed a highway bypass for Highway 65 around Carrollton, Missouri. In 1993, Missouri experienced one of the worst floods in its history. During this flood, the Property Owners suffered damage to real and personal property and on May 24, 1999, the Property Owners brought an inverse condemnation action against MHTC. The Property Owners alleged that the construction around Highway 65 had materially changed and altered the flow of the surface water in and around the highway and Wakenda Creek resulting in the flooding of their property in 1993 and again in 1998.
This same construction project was what led to the flooding described in Heins Implement Co. v. Missouri Highway Transportation Commission, 859 S.W.2d 681 (Mo. banc 1993). Additional details of the project can be found in Heins.
On March 19, 2004, MHTC filed a motion to dismiss, arguing that a five-year statute of limitations barred the Property Owners' personal property claims. At a pre-trial conference, the trial court ruled that the Property Owners would be precluded from making any claims for damages that related to personal property.
On May 26, 2005, a jury returned verdicts in favor of Property Owners for real estate damages. The Property Owners filed a Memorandum in Support of Plaintiffs' Proposed Judgment that included a request for attorneys' fees under 49 C.F.R. 24.107 and prejudgment interest. The trial court entered its judgment on August 24, 2005, awarding the Property Owners prejudgment interest but denying the request for attorneys' fees and costs. Both the Property Owners and MHTC filed motions to amend and/or modify the judgment and motions for a new trial, which were all denied. This appeal follows.
Standard of Review
Property Owners argue on appeal that the trial court erred in granting the motion to dismiss in regard to the personal property claims based on the five-year statute of limitations and that the court erred in denying attorney fees and costs. MHTC cross-appeals, arguing that the trial court erred in awarding prejudgment interest. All of these issues regard the application of statutes and are questions of law. We review questions of law de novo, and no deference is given to the trial court's judgment. McKinney v. State Farm Mut. Ins., 123 S.W.3d 242, 245 (Mo.App.W.D. 2003) (citations omitted).
Discussion Statute of Limitations on Personal Property Damage
In their first point on appeal, Property Owners argue that the trial court erred when it granted MHTC's motion to dismiss regarding the personal property claims based on a five-year statute of limitations. They argue that Shade v. Missouri Highway Transportation Commission, 69 S.W.3d 503 (Mo.App.W.D. 2001) was wrongly decided in that: (1) a ten-year statute of limitations should apply and (2) subsequent flooding, such that occurred in 1998 in this case, should constitute a new cause of action. We disagree.
The motion for rehearing and/or transfer to the supreme court was denied on March 5, 2002.
Similar to the case at bar, Shade involved flooding that was caused by a MHTC highway construction project. Id. at 506. The plaintiffs alleged that the construction project materially changed and altered the flow of surface water surrounding their properties. Id. at 507. They filed a lawsuit against MHTC under the theory of inverse condemnation for damages to their personal and real property. Id. MHTC filed a motion for summary judgment based on the affirmative defense of the statute of limitations. Id. The trial court granted the motion and the plaintiffs appealed. Id.
On appeal, this court recognized the fact that Heins Implement Company v. Missouri Highway Transportation Commission, 859 S.W.2d 681, had "remove[d] inverse condemnation actions from the realm of tort liability and set them in a constitutional context." Shade, 69 S.W.3d at 510. After an extensive review of the conflicting precedent on inverse condemnation actions, we held that the statute of limitations in inverse condemnation cases for real property was ten years. Id. at 513. This decision was based on the time period required for an entity with the power of eminent domain to obtain a prescriptive easement. Id. at 512-13.
In regard to personal property, we acknowledged that the eminent domain statute, section 227.120, RSMo 1994, only spoke of "lands," but that the prohibition of taking or damaging personal property stemmed from the constitution and not statutory law. Id. at 516. However, unlike the taking of real property, the time period regarding a prescriptive easement could not be applied to personal property. Id. at 517. We also noted that unlike real property, a specific statute of limitations, section 516.120(4), RSMo 1994, applied to injury to personal property. Id. Section 516.120(4) requires that "[a]n action for taking, detaining or injuring any goods or chattels, including actions for the recovery of specific personal property, or for any other injury to the person or rights of another, not arising on contract and not herein otherwise enumerated" was to be brought within five years.
Nothing has changed since our holding in Shade. Section 516.120(4) still imposes a five-year statute of limitations to actions for injuring personal property. There is still no statute that prescribes a specific time limit to inverse condemnation claims. See Shade, 69 S.W.3d at 512. Therefore, the Property Owners' personal property claims in this case were required to be brought within five years. The date of taking in this case was determined to be July 18, 1993. Therefore, in order for the suit for personal property damages to be timely, it had to be filed by July 18, 1998. However, the Property Owners did not file their petition for damages until May 24, 1999. Thus, the claim was not timely, and the trial court did not err in granting MHTC's motion to dismiss for failure to state a claim.
All statutory references are to RSMo 2000 unless otherwise noted.
Anticipating that we would not overturn Shade, the Property Owners also argue that even if the five-year statute of limitations were to apply, the subsequent flooding in 1998 would constitute a new cause of action. Yet, once again, whether or not subsequent flooding constitutes a new cause of action was answered in Shade.
In Shade we held that a "cause of action for inverse condemnation accrues once the fact of damage is capable of ascertainment." 69 S.W.3d at 514 (citations omitted). An injury will accrue at the "'completion of installation'" or "'when the effect of the injury becomes manifest.'" Id. (quoting Rebel v. Big Tarkio Drainage Dist. of Holt City, 602 S.W.2d 787, 792 (Mo.App.W.D. 1980). The determination depends on the facts of each case, but in situations involving successive floods:
the damage may not be ascertainable on the date of the first flood. It may well be that it would only become "apparent by the passage of time that the intermittent flooding was of a permanent nature." Accrual date of a cause of action does not arise until the damages and the cause of the damages are reasonably ascertainable. Damages are capable of ascertainment to initiate the running of the limitation period when a plaintiff with a recognized theory of recovery sustains damage.
Id. (internal citations omitted). In Shade, the case was remanded because no determination had been made at the summary judgment stage of when the different causes of actions were capable of ascertainment. Id. at 515. That is not the situation in the case at bar. Here, the date of ascertainment was in 1993. The highway construction that caused the flooding at issue in this case was a permanent one that had been completed in 1977. The Property Owners admit that none of them experienced a personal property loss for the first time in 1998. Therefore, the five-year statute of limitations was triggered in 1993. The trial court's grant of the motion to dismiss is affirmed.
Property Owners also argue that the subsequent flooding caused "continuing injury." Their argument is similar to the continuing tort exception to the statute of limitations. However, for this exception to apply, the wrong must be continuing or repeating. D'Arcy Assocs., Inc. v. K.P.M.G. Peat Marwick, L.L.P., 129 S.W.3d 25, 30 (Mo.App.W.D. 2004). Damages resulting from one completed, wrongful act, such as the MHTC construction in this case, are not adequate. Id. When there is only one wrong, which results in continuing damage, the cause of action accrues when that wrong is committed and the damage sustained is capable of ascertainment. Id. In this case, not only does the holding in Shade support the trial court's dismissal, but also the Property Owners' argument regarding a continuing type of injury must fail.
Attorneys' Fees and Costs
In their second point on appeal, Property Owners argue that the trial court erred in denying their motion for assessment of litigation expenses. They argue that pursuant to the Uniform Policy on Real Property Acquisition Practices, 42 U.S.C. 4651, et seq., and 49 C.F.R. 24.107 ("the Act"), attorney fees and costs can be awarded in inverse condemnation cases. In response, MHTC argues that no error was committed because Missouri law does not authorize the award of attorney fees in inverse condemnation cases. We agree with MHTC.
There is no dispute that the highway bypass construction received federal funding.
Missouri courts are not allowed to award attorney fees unless provided for by statute, contract or "when needed to balance benefits in a court of equity." Moore v. Weeks, 85 S.W.3d 709, 723 (Mo.App.W.D. 2002) (quoting Killion v. Bank Midwest, N.A., 987 S.W.2d 801, 809 (Mo.App. W.D. 1998)). Missouri follows the "American Rule" which requires each party to bear the expense of their own attorney's fees. Id. (citing Fisher v. Fisher, 874 S.W.2d 543, 546 (Mo.App.W.D. 1994)).
The Property Owners argue that the Act provides the required statutory authorization of attorney fees. They allege that through case law, Missouri courts have fully adopted the Act. City of Columbia v. Baurichter, 713 S.W.2d 263, 265-66 (Mo. banc 1986). However, a closer look at the applicable case law does not support this assertion.
In State ex rel. Missouri Highway Transportation Commission v. Anderson, the Missouri Supreme Court found that a party was not entitled to subpoenas regarding matters allegedly covered by the Act. 735 S.W.2d 350, 357-58 (Mo. banc 1987). This case clearly stands for the proposition that the Act is not applied in all cases.
Furthermore, in Baurichter, the Missouri Supreme Court pointed out that the Act would only be applied where Missouri law does not expressly prohibit its application. 713 S.W.2d at 266. "The law is well established that costs cannot be assessed against state agencies or state officials absent express statutory authority." M. P. v. Mo. Dep't of Soc. Servs., Div. of Family Servs., 147 S.W.3d 765, 766 (Mo. banc 2004) (citing Richardson v. State Highway Transp. Comm'n, 863 S.W.2d 876, 882 (Mo. banc 1993)). In the face of such a strong prohibition against awarding attorney fees against a state agency, such as the MHTC, the roundabout way that the Property Owners attempted to overcome this prohibition cannot succeed.
Missouri law expressly prohibits the application of attorney fees absent statutory authority. Although the Property Owners try to use the Act as such statutory authorization, we find the Act's application tenuous at best. In accordance with the long-standing and strict application of the American Rule in Missouri and the prohibition of awarding costs against state agencies, the trial court correctly denied the Property Owners' application for attorney fees. The trial court's denial is affirmed.
Prejudgment Interest
On cross-appeal, MHTC argues that the trial court erred in awarding prejudgment interest. On October 31, 2006, this court handed down an opinion that deals with this exact issue. In Collier v. City of Oak Grove, WD 65355 (Mo.App.W.D. Oct. 31, 2006), we held that the trial court had erred as a matter of law by adding prejudgment interest to a jury's verdict in an inverse condemnation action. Slip op. at 33. The arguments presented by the parties in this case do not differ from those presented in Collier. Therefore, our holding in Collier controls. See also Akers v. City of Oak Grove, WD 65220 (Mo.App.W.D. Nov. 14, 2006).
In Collier, we recognized that in order for one to receive just compensation in an inverse condemnation action, interest should be awarded for the time between the taking and the time payment is actually made. Slip op. at 24. Because "a claim for interest in the inverse condemnation action is predicated on the just compensation clauses of the United States and Missouri Constitutions[,] [s]uch a claim does not require a statutory basis." Id. at 26.
However, the Missouri Supreme Court has held that "[a] trial court is powerless to amend a verdict beyond that required for clerical errors made manifest by the record and may never amend 'matters of substance to be passed on by the jury, which, in their nature, are essential to the determination of the case.'" Id. at 27 (quoting State ex rel. State Highway Comm'n v. Green, 305 S.W.2d 688, 694 (Mo. 1957)). Therefore, although interest can be awarded in an inverse condemnation action, it must be done by a jury, not after the verdict by the judge. Id. "The award of interest and its calculation is the province of the jury as an element of damages." Id. at 30 (citing City of St. Louis v. Vasquez, 341 S.W.2d 839, 848 (Mo. 1961)).
In this case, the parties agreed that if an award of prejudgment interest was to be awarded, it was to be done by the judge following the jury's verdict. Although this is probably the best procedure for awarding prejudgment interest, under the precedent of Green, it is not permissible. Once again, we appeal to the legislature to address this issue. However, in this case, the trial court erred as a matter of law by adding interest to the verdict returned by the jury. The award of prejudgment interest is reversed, and the case remanded to the trial court for proceedings consistent with this opinion.
Conclusion
In conclusion, we affirm the trial court's dismissal of the Property Owners' personal property claims based on our holding in Shade that the five-year statute of limitations applies and that even with successive floods, the cause of action accrued when the cause of the damage was capable of ascertainment. We affirm the trial court's denial of attorney fees because there is no applicable exception to the American Rule of attorney fees. Finally, based on our recent decision in Collier, that the Missouri Supreme Court has held that a trial court does not have power to add interest to a jury's verdict, absent statutory authority, we reverse the trial court's award of prejudgment interest. This case is remanded for proceedings consistent with this opinion.
Affirmed in part, reversed in part and remanded.
Ellis and Smith, JJ., concur.