Vera Lee Weaver Living Trust, Jerold Lee Weaver, Trustee v. City of Eureka Springs

*NOTE TO PRINTER*This opinion will replace the Court of Appeals opinion
delivered 29 April 1998 and published at 62 Ark. App. 15.  The heading
will remain the same, including the line "Opinion delivered April 29,
1998"; a bracketed line should be printed beneath that line reading:
"[Substituted opinion delivered June 3, 1998]" -- with no period.  The
substituted opinion should be included separately in the Advance Reports,
at the end of this week's cases, with pagination to begin with 62 Ark.
App. 15.  Thanks.  -- WBJ

                              DIVISION IV




                                       CA 97-246
                                        
                                                   June 3, 1998        
                
                           

VERA LEE WEAVER LIVING TRUST,        AN APPEAL FROM THE CIRCUIT
JEROLD LEE WEAVER, TRUSTEE           COURT OF CARROLL COUNTY,         
                 APPELLANT           NO. CIV-92-42-2             
VS.
                                     HONORABLE DAVID S. CLINGER,     
CITY OF EUREKA SPRINGS               CIRCUIT JUDGE
                 APPELLEE
                                     SUBSTITUTED OPINION ON 
                                     DENIAL OF REHEARING




                 Judith Rogers, Judge

     
     This is an appeal from an order denying appellant's motion for
attorney's fees and costs that was made when appellee abandoned
condemnation proceedings against appellant's property.  Because we
agree that the evidence demonstrates a lack of good faith on the
part of the condemning authority, we reverse and remand.  
     On December 2, 1992, appellee, the City of Eureka Springs,
filed a complaint, pursuant to Ark. Code Ann.  18-15-201 (1987),
to condemn property owned by appellant, the Vera Lee Weaver Living
Trust, that is administrated by Jerold Lee Weaver, the grantor's
son.  The city obtained an order of immediate possession based on
the representation that the work of renovating the structure should
be commenced at once, and it placed on deposit the sum of $29,500
as just compensation.  It is undisputed, however, that the city did
not begin renovation of the property nor did it take actual
possession during the pendency of the action.  At the trial held on
September 27, 1995, the jury returned a verdict of $80,000 as the
fair market value of the property at the time of the taking, which
exceeded the highest estimate of value adduced at trial by  
$10,000.  On October 20, 1995, appellant filed a motion for the
court to release the funds that had been placed on deposit in the
court's registry.  Three days later, the city moved to exercise its
right to abandon the condemnation action.  Appellant responded with
a request for attorney's fees and costs, alleging that the city had
acted in bad faith.  A hearing was held on the issue of fees and
costs in November of 1996, after which the trial court denied
appellant's prayer for relief.  This appeal followed.
     It has long been held that a condemnor has an absolute right
to discontinue a condemnation action until actual payment of the
compensation.  Selle v. City of Fayetteville, 207 Ark. 966, 184 S.W.2d 58 (1944).  However, under Arkansas law, a landowner is
permitted to recover a reasonable attorney's fee, as well as other
expenses, when a condemning agency fails to act in good faith in
instituting and, later, abandoning condemnation proceedings.  Des
Arc Watershed Improvement District v. Finch, 271 Ark. 603, 609 S.W.2d 70 (1980); Housing Authority of the City of North Little
Rock v. Amsler, Judge, 239 Ark. 592, 393 S.W.2d 268 (1965).  This
is considered an exception to the general rule that attorney's fees
are not recoverable unless specifically authorized by statute.  Des
Arc Watershed Improvement District v. Finch, 275 Ark. 229, 630 S.W.2d 17 (1982).  As was said by the court in Amsler, supra, a
trial court has an inherent right to require such reimbursement to
the landowner when a condemning agent chooses to renege merely
because the jury verdict is not to its liking, in order to protect
its own processes, property owners, and the constitutional
provision of just compensation.
     From the testimony of city council members, it was disclosed
that the city had no pressing need for the property and that it had
no set plans for what it intended to do with the property when the
action for eminent domain was filed.  It was said that there was an
agreement to wait until the condemnation proceedings were over to
decide how the property might be used.  James Walden, the City
Administrator Assistant, testified that the amount placed on
deposit with the court was based on an appraisal the city had
obtained.  He also said that the parties had engaged in negotia-
tions prior to trial and that the city had rejected an offer made
by the landowner of $60,000.  He acknowledged that this offer was
accompanied by an appraisal of a reputable and knowledgeable real
estate broker in the area, and he agreed that the offer was made in
good faith and that the amount offered was actually $9,000 less
than the broker's appraisal because the landowner was willing to
accept a reduced price in order to settle the dispute.  It was
Walden's testimony that the city would have kept the property if it
"had gotten it cheap," and the jury would have returned a verdict
of $29,900 or less.  He said that the city was unwilling to pay the
price set by the jury.
     In Des Arc Watershed Improvement District v. Finch, 275 Ark.
229, 630 S.W.2d 17 (1982), the supreme court held that bad faith
was shown when the condemnor claimed that it had abandoned the
action because it had no funds to pay the jury's award, yet it
later instituted another condemnation proceeding in the wake of the
first.  We can infer from that decision that mere dissatisfaction
with the jury's verdict can be cause for a finding of bad faith.  
     In this case, the city makes no claim that it does not have
the ability to pay the jury's award.  Instead, it abandoned the
condemnation action because it did not want to pay any more than a
bottom-dollar price for the property.  If a specious claim of
inability to pay an award is said to be an affirmative indication
of bad faith, then we believe that a lack of good faith is shown
here.  
     From the objective facts in the record, the evidence shows
that the city had a notion to take the property without any defined
purpose for its use.  The record also reveals that the city had no
intention of completing the action unless the property could be
obtained "cheap," despite having good reason to believe that it was
worth substantially more than its own low-end estimate.  Even so,
the city continued its pursuit of the property, keeping it in limbo
for several years, thereby preventing the landowner from having
full use and enjoyment of the property.  We can hardly conceive of
any greater demonstration of bad faith as is evidenced here, and we
are at a loss to understand the trial court's ruling in light of
its recognition that the city's actions represented an "arbitrary
use of the - almost capricious use of the condemning authority."
Although the trial court noted that the jury's verdict did exceed
the highest estimate offered at trial, we are not convinced that
this fact alone compels a different conclusion.  The city did not
urge this as a reason for discontinuing the action, and it could
have, but did not seek a remittitur for reduction of the award to
an amount sustained by the evidence.  See Johnson v. Gilliland, 320
Ark. 1, 896 S.W.2d 856 (1995).  On this record, it is quite clear
that the city's motivation for abandoning the action was its
unwillingness to pay no more than a paltry sum for the property and
that any excessiveness of the jury's verdict had little bearing on
that decision.  We, therefore, reverse and remand for the trial
court to determine an amount of reasonable fees and costs and to
enter judgment accordingly.
     Reversed and remanded.
     Pittman and Neal, JJ., agree.