The South Dakota Supreme Court has affirmed a lower court's award of attorney fees to a property owner in an eminent domain case involving the City of Sioux Falls, rejecting the city's argument that the fee amount was excessive.
In *City of Sioux Falls v. Johnson Properties, LLC* (2025 S.D. 66), the state's highest court upheld a circuit court decision ordering the city to pay Johnson Properties $139,724.60 in reasonable attorney fees following a condemnation proceeding. The case centered on two pieces of property owned by Johnson Properties at the corner of Arrowhead Parkway and Six Mile Road in Sioux Falls.
The condemnation case originated from a 2005 agreement between the City of Sioux Falls and the South Dakota Department of Transportation. Under that agreement, the DOT committed to expanding Arrowhead Parkway from Sycamore Avenue to 26th Street before transferring control to the city. The DOT handed the project over to the City in 2011 while agreeing to continue providing assistance with design and construction costs.
When the City began designing the roadway expansion, it determined that acquiring Johnson Properties' land was necessary for the project. The city filed a petition for condemnation to acquire the two parcels at the busy intersection.
The condemnation proceedings moved to trial in Minnehaha County Circuit Court before Judge Jeffrey C. Clapper. After hearing evidence from both sides, a jury returned a verdict awarding Johnson Properties just compensation of $382,600 for the condemned property.
Following the jury's compensation award, Johnson Properties filed a motion seeking attorney fees incurred during the condemnation litigation. South Dakota law allows property owners to recover reasonable attorney fees in certain eminent domain cases where they successfully obtain compensation.
After conducting a hearing on the attorney fee motion, the circuit court determined that Johnson Properties was entitled to reasonable attorney fees totaling $139,724.60. The court's analysis would have considered factors such as the complexity of the case, the time spent by attorneys, the experience and skill of the legal team, and the results achieved for the client.
Dissatisfied with the attorney fee award, the City of Sioux Falls appealed to the South Dakota Supreme Court. The city argued that the circuit court had abused its discretion in determining the amount of attorney fees, contending that $139,724.60 was excessive given the scope and complexity of the condemnation case.
The appeal was argued before the state supreme court on Oct. 9, 2025. Chief Justice Steven Jensen authored the court's opinion, which was filed on Nov. 19, 2025.
In its decision, the South Dakota Supreme Court rejected the city's arguments and affirmed the circuit court's attorney fee award. The court found that the circuit court had not abused its discretion in calculating the reasonable attorney fees owed to Johnson Properties.
The case highlights the significant costs that can accompany eminent domain litigation, particularly for municipalities that must pay not only just compensation for condemned property but also the property owner's attorney fees in certain circumstances. The attorney fee award of nearly $140,000 represented approximately 36% of the $382,600 jury verdict for the property value.
The dispute involved experienced legal teams on both sides. The City of Sioux Falls was represented by attorneys Drew A. Driesen and James E. Moore from Woods Fuller Shultz & Smith, P.C., while Johnson Properties was represented by Clint Sargent and Erin E. Willadsen from Meierhenry & Sargent, LLP.
The Arrowhead Parkway expansion project that prompted the condemnation represents a multi-year infrastructure initiative spanning partnerships between state and local government. The DOT's initial involvement in 2005 and subsequent transfer to city control in 2011 demonstrates the complex coordination often required for major roadway projects.
For property owners facing condemnation proceedings, the decision reinforces that successful resistance to eminent domain can result in recovery of legal costs in addition to just compensation for property value. The case also serves as a reminder to municipalities that condemnation proceedings can carry substantial litigation costs beyond the compensation awarded to property owners.
The South Dakota Supreme Court's affirmation of the attorney fee award provides clarity on the state's approach to calculating reasonable legal costs in eminent domain cases. The decision suggests that courts will give appropriate deference to trial court determinations of attorney fee amounts when those determinations are supported by proper analysis of relevant factors.
With the supreme court's decision, the condemnation case has reached its conclusion, allowing the Arrowhead Parkway expansion project to move forward while establishing important precedent for future eminent domain litigation in South Dakota.