Court Actions to Contest Right of Condemnation

byJohn M. Van Lieshout

Reinhart Boerner Van Deuren s.c.jvanlies@reinhartlaw.com

414-298-8182

Court Actions to Contest Right of Condemnation

Wis. Stats. sec. 32.05(5): If an owner desires to contest the right of the condemnor to condemn the property described in the jurisdictional offer, for any reason other than that the amount of compensation offered is inadequate, the owner may within 40 days from the date of personal service of the jurisdictional offer or within 40 days from the date of postmark of the certified mail letter transmitting such offer, or within 40 days after date of publication of the jurisdictional offer as to persons for whom such publication was necessary and was made, commence an action in the circuit court of the county wherein the property is located, naming condemnor as defendant. Such action shall be the only manner in which any issue other than the amount of just compensation, or other than proceedings to perfect title under ss. 32.11 and 32.12, may be raised pertaining to the condemnation of the property described in the jurisdictional offer. The trial of the issues raised by the pleadings in such action shall be given precedence over all other actions in said court then not on trial. If the action is not commenced within the time limited, the owner or other person having any interest in the property shall be barred from raising any such objection in any other manner. Nothing in this section shall be construed to limit in any respect the right to determine the necessity of taking as conferred by s. 32.07 nor to prevent the condemnor from proceeding with condemnation during the pendency of the action to contest the right to condemn.

Wis. Stats. sec. 32.06(5): This section shall not apply to any owner who had a right to bring a proceeding pursuant to s. 66.431(7), 1959 Stats., prior to its repeal by chapter 526, Laws of 1961, effective on October 8, 1961, and, in lieu of this section, s. 66.431(7), 1959 Stats., as it existed prior to such effective date of repeal shall be the owner's exclusive remedy.

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Time to file: Failure to bring an action contesting the right to take within the time limit of s. 32.05(5) deprives the court of subject‐matter jurisdiction. Achtor v. Pewaukee Lake Sanitary Dist., 88 Wis. 2d 658, 277 N.W.2d 778 (1979).•Achtor serves Summons and Complaint on 12/27/1975•Rules change on 1/1/1976: Cause of action not commenced until Summons and Complaint are filed. Prior to 1/1/1976, an action was commenced by serving the Summons , and plaintiff thereafter had one year to serve and file the Complaint•Achtor amends Complaint and serves on 1/15/1976•Complaint not filed until 8/24/1976•40 days elapses prior to filing

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Time to file: Arrowhead Farms, Inc. v. Dodge County, 21 Wis. 2d 647 (1963)

• Arrowhead owns a parcel at the southeast edge of the Horicon Marsh

• DOT relocates Highway 28 and takes 3.33 acres, and issues award for $1,986

• Arrowhead appeals award, and contends DOT refused to negotiate• DOT stipulates no negotiations occurred, but claims Arrowhead

failed to raise the argument in a timely manner under 32.05(5)• Cournt found the JO was issued in October 1960, but landowner did

not raise the issue of failure to negotiate until November 1961• "Because the owner failed to assert his right within the forty-day

period, by the terms of sec. 32.05(5), Stats., he is 'forever barred from raising any such objection in any other manner.'"

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Time to file: Area Bd v. Saltz, 57 Wis. 2d 524 (1972)

• Landowner dies without a will• Her sole heirs are her husband and her son• October 6, 1969, JO is served on husband and son• Administrator is appointed on April 13, 1970• Husband and son argue that DOJ should have commenced

proceeding to appoint special administrator and served the special administrator

• Court rules that husband and son failed to raise the issue within the 40 days prescribed by 32.05(5) and were therefore barred from "raising their challenge in any other manner."

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CASHING THE CHECK

Cashing the check which accompanies an award for damages is fatal to any action to contest the right of condemnation: An owner's acceptance and retention of any compensation resulting from an award paid before he or she commences an action will be an absolute bar to the action. Wis. Stats. sec. 32.05 (3)(b); Beer v. Ozaukee County Highway Comm., 9 Wis. 2d 346, 351, 101 N.W.2d 89 (1960).•Award of damages is recorded, and check for $8,500 is issued to Beer and his wife•Beer accepted the award and cashed the check•Beer appealed the award, and in such appeal also contested that the County Highway Commission had the jurisdiction to take and extinguish all rights of access Beer had to a state trunk highway except for one private driveway•"This court has repeatedly held that receipt by the landowner of damages for property rights taken by eminent domain in the laying out of a highway estops him from contesting the validity of the proceedings… Not only is this the rule in Wisconsin, but it is the general rule in other jurisdictions."

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CASHING THE CHECKTFJ Nominee Trust v. State DOT, 2001 WI App 116, 244 Wis. 2d 242•DOT issued award of damages for $18,000•Trust filed an action to contest right to take, and moved for an injunction prohibiting DOT from closing the road that provided the Trust property with direct access to the highway•The DOT contended that because the Trust did not return the check the Trust received with the Award of Damages, the Trust had "accepted and retained compensation" as defined in Wis. Stats. sec. 32.05(3)(h) and was barred from filing an action contesting the right to take•The Court found the phrase ambiguous, and declared it should be interpreted in favor of the landowner and should be liberally construed•"[W]e conclude that the phrase 'acceptance and retention of any compensation' requires that the landowner negogiate the check and retain the check proceeds before the owner can be barred from contesting the condemnation under §32.05(5)."

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"OLD" CASE LAW ON RIGHT-TO-TAKE

• Grounds for such action• Failure to follow procedures. Harro v. Natural Resources

Board, 53 Wis. 2d 157, 171 (1971)• Lack of good faith in the determination of necessity

• Public declaration was that the land could be used for a wildlife and refuge recreation area, but members of the board "waffled" on whether that would be the ultimate end use

• Court was convinced wildlife refuge use was sufficient and refused to question the Board's motives

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"OLD" CASE LAW ON RIGHT-TO-TAKE• Failure to negotiate• Board offered $135,000 and landowner rejected and refused to

counter• Two parcels: 977 acres and 1,591 acres• "The attempt to agree need not be pursued further than to

develop the fact that an agreement to purchase is not possible at any price the condemnor is willing to pay."

• Publication of JO• December 2, 1969, Milwaukee Journal publishes amount of JO• Condemnation commission meets on March 23-27, 1970• Court held a petition (by statutes) cannot disclose amount of JO,

but no record that newspaper article impacted the proceedings

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"OLD" CASE LAW ON RIGHT-TO-TAKE

• Failure to make timely award• Commission concluded March 27, 1970 and filed award on

June 19, 1970• Statute required award to be filed within ten days after the

hearing• Court found this to be a harmless error

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"OLD" CASE LAWWarehouse II, 2006 WI 62 291 Wis. 2d 80•DOT commenced condemnation proceedings•Issued the JO•Warehouse filed right-to-take suit, alleging a failure to negotiate•Circuit court held an evidentiary hearing, and ruled that there was a failure to negotiate, and nullified the JO•Was Warehouse entitled to attorneys' fees?•Turned on whether the error was fundamental or merely technical•In order to rise to a fundamental defect, error must go to the "primary purpose" underlying the statute that required the action•In Wieczerak v. City of Franklin, 82 Wis. 2d 19 (1978), JO failed to include the "proposed date of occupancy." Court ruled it was technical and could be cured by issuing an amended JO, and refused to award attorneys' fees•In City of Racine v. Bassinger, 163 Wis. 2d 1029 (Ct. App. 1998), the condemnor failed to timely provide pamphlets describing relocation benefits. Court ruled this type of error was not fundamental or jurisdictional.

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"OLD" CASE LAW

Grunwald v. West Allis CDA, 202 Wis. 2d 471 (1996)•Grunwald filed a right-to-take suit alleging his property was not "blighted" and was not necessary to a successful redevelopment of the area. He also alleged the taking was for a private, not public, purpose because the CDA had granted a "right of first refusal" to a private developer.Ingalls v. Village of Walworth, 66 Wis. 2d 773 (1975)•Ingalls filed right-to-take alleging that relocation order and JO were fundamentally defective because there are no engineering maps, data, plans or specs of the planned sewer improvements, included as part of the relocation order. Court decided maps showing the location of the line were attached, and the statute does not require "engineered drawings."

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"OLD" CASE LAW

Mitton v. Wis DOT, 184 Wis. 2d 738 (1994)•Only 1.26 acres of land needed, but DOT condemned 6.26 arguing the "other five" were a historic site containing Indian artifacts and needed to be acquired to "preserve" an historic site. Court ruled that Wis DOT exceeded its authority.

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NEW CASE LAW REGARDING RIGHT-TO-TAKE

Waller v. ATC, 350 Wis. 2d 242 (2013)•Wallers' claim that easements to facilitate the construction and placement of high-voltage transmission lines diminished their property so much that they are left with an uneconomic remnant•Supreme Court concludes that the right-to-take provision sets out the proper and exclusive way for a property owner to raise a claim that the owner will be left with an uneconomic remnant•The right-to-take suit should be decided promptly•Shall not prevent the condemnor from filing a simultaneous valuation petition, proceeding thereon, and taking any property interest whose condemnation is not being directly contested by the owner. Right-to-take action is not designed to paralyze public interest takings

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Kauer v. DOT, 329 Wis. 2d 713 (2010)•DOT planned a roundabout; the Kauers filed suit challenging the necessity of the taking under 32.05(5)•The Kauers claimed that the roundabout design was unsafe, and therefore a gross abuse of discretion•The Kauer's retained an expert who opined that a curved approach to a roundabout is inappropriate and unsafe for slippery conditions which are common during Wisconsin winters•Court could find no case law directly addressing the ability to raise safety as an issue under 32.05(5)•The determination of necessity will be upheld if there is "any reasonable ground" to support it•"The Kauers are asking us to allow them a trial in which they can second guess the DOT's decision as to the best design for a road, and that is something we may not and will not do."•The Kauers also alleged they never received all of the "Landowners Rights" pamphlet – only half of it. Court found that the Kauers were not prejudiced and the defect was not jurisdictional.

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Sai Ram Real Estate Management v. Wisconsin Department of Transportation, 2015 WI App 13, 359 Wis. 2d 675, 859 N.W.2d 628•DOT provides Sai Ram with appraisal indicating damages of $63,000•JO and Award of damages: $250,000•Sai Ram files appeal, then moved for production of the appraisal report which formed the basis for the JO and Award•Sai Ram claims that the DOT is required to produce/provide the condemnee with "a full narrative appraisal upon which the jurisdictional offer is based."•As trial, the jury awarded damages of $100,000. Sai Ram was required to refund the difference•Sai Ram appealed; Court declared that Sai Ram's exclusive remedy was 32.05(5) since his complaint related to an element of "proper adherence to pre-condemnation procedure."

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Issues for lawyers?

Waller Dissent, Footnote 1: "In essence, this case has the potential to spawn a cottage industry of uneconomic remnants."

"As ATC warned before the circuit court, the ramifications of this case extend far beyond this relatively small dispute. The importance of this case was described by ATC's attorney on the record:The value is small in this case. But the implications of it are enormous not just for ATC but for the Department of Transportation and every other condemnor in the state… If there were a finding that this small amount of visual and noise w[as] enough to render this an uneconomic remnant, you'll have uneconomic remnants in all sorts of cases."

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Forty-Day Limit

•OK if you are there "at the creation" and the client walks in with the first contact from the condemnor

•What about the client who walks in 38 days after the JO is served?

•Protective filing?

•Sanctions?

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