Yuki

The State of California (the State), the plaintiff in this eminent domain action, paid the property owners a judgment of $1,970,076.60 following a jury trial which determined the question of just compensation for the taking of property. In a subsequent motion by the property owners to recover reasonable expenses of litigation, pursuant to Code of Civil Procedure section 1250.410, the court awarded an additional $1,452,846.25 in litigation expenses, including attorney fees in the amount of $1,303,714.30.

The State appeals from the order awarding litigation expenses, challenging both the property owners’ entitlement to expenses under section 1250.410 and also the amount of expenses awarded, in particular the attorney fee award. We will affirm the order of entitlement to litigation expenses, but we reverse the award of attorney fees on the ground that it includes an improper surcharge.

Background

For more than 40 years the Yuki family has owned numerous parcels of property in the vicinity of Lark Avenue in the Town of Los Gatos. The property which is the subject of this action consisted of approximately 45 acres, bisected by Highway 17. Approximately 34 acres lay on the…