118th St. Kenosha, LLC v. Wis. Dep't of Transp.

• Decision Date: 10 December 2014
• Docket Number: No. 2012AP2784.,2012AP2784.
• Citation: 856 N.W.2d 486,359 Wis.2d 30
• Parties: 118TH STREET KENOSHA, LLC, Plaintiff–Appellant, v. WISCONSIN DEPARTMENT OF TRANSPORTATION, Defendant–Respondent–Petitioner.
• Court: Wisconsin Supreme Court

359 Wis.2d 30

856 N.W.2d 486

118TH STREET KENOSHA, LLC, Plaintiff–Appellant

v.WISCONSIN DEPARTMENT OF TRANSPORTATION, Defendant–Respondent–Petitioner.

No. 2012AP2784.

Supreme Court of Wisconsin.

Argued Sept. 10, 2014.

Decided Dec. 10, 2014.

For the defendant-respondent-petitioner, the cause was argued by Abigail C.S. Potts, assistant attorney general, with whom on the briefs was J.B. Van Hollen, attorney general.

For the plaintiff-appellant, there was a brief by Charles P. Graupner, Susan M. Sager, and Michael Best & Friedrich LLP, Milwaukee, with oral argument by Charles P. Graupner.

Opinion

ANNETTE KINGSLAND ZIEGLER, J.

¶ 1 This is a review of a published decision of the court of appeals,¹ which reversed the order of the Kenosha County Circuit Court² that granted the Wisconsin Department of Transportation's (“DOT”) motion in limine to exclude evidence of diminution in value of commercial property owned by 118th Street Kenosha, LLC (“the LLC”). We reverse the court of appeals and remand to the circuit court to dismiss the action.

¶ 2 The LLC owns commercial property consisting of a four-store shopping center in the City of Kenosha. Before 2010 the commercial property had direct access to 118th Avenue by a driveway onto 118th Avenue and indirect access to 118th Avenue by a driveway onto 74th Place, a private road that intersected with 118th Avenue. In 2010 the DOT performed three acts relevant to this case: the DOT (1) relocated 118th Avenue to the east one block, thereby eliminating the commercial property's direct access to 118th Avenue; (2) acquired a temporary limited easement³ that authorized the DOT to construct a new double-throated driveway connecting the commercial property to 74th Place; and (3) constructed that new driveway onto 74th Place. After the DOT finished these three acts, the commercial property had two driveways to 74th Place, indirect access to 118th Avenue via 74th Place, and no direct access to 118th Avenue. The DOT paid the LLC $21,000 for the temporary limited easement. The LLC and the DOT stipulated that $21,000 was adequate compensation for the temporary limited easement itself.

An appraiser determined that the commercial property's value declined by $400,000 because the relocation of 118th Avenue caused the commercial property to lose direct access and proximity to 118th Avenue.

¶ 3 The LLC now seeks to recover damages under Wis. Stat. § 32.09(6g) (2011–12)⁴ for the commercial property's diminution in value caused by the relocation of 118th Avenue. Subsection 32.09(6g) provides compensation for diminution in value caused by “the taking of an easement.” Because the temporary limited easement and the relocation of 118th Avenue were both part of the same greater highway reconstruction project, the LLC argues its award for the temporary limited easement under § 32.09(6g) should include damages for the commercial property's decline in value caused by the relocation of 118th Avenue.

¶ 4 This case presents the following three issues:

(1) Is a temporary limited easement compensable under Wis. Stat. § 32.09(6g) ?⁵

(2) Assuming that a temporary limited easement is compensable under Wis. Stat.§ 32.09(6g), did the circuit court appropriately exercise its discretion when it excluded evidence of the commercial property's diminution in value from lost direct access and proximity to 118th Avenue because the temporary limited easement did not cause the loss?

(3) Is the LLC barred from recovering compensation for the commercial property's loss of direct access and proximity to 118th Avenue because the relocation of 118th Avenue was a proper exercise of the DOT's police power?

¶ 5 The crux of the issue before this court is whether damages under Wis. Stat. § 32.09(6g) for the temporary limited easement include the commercial property's diminution in value caused by its loss of direct access and proximity to 118th Avenue due to that road's relocation, although the temporary limited easement did not cause that loss of direct access and proximity.

¶ 6 For purposes of our analysis, we assume, without deciding, that a temporary limited easement is compensable under Wis. Stat. § 32.09(6g).

¶ 7 We conclude that the LLC is precluded from seeking damages under Wis. Stat. § 32.09(6g) for the commercial property's diminution in value which resulted from its loss of direct access and proximity to 118th Avenue due to the 118th Avenue relocation. The temporary limited easement did not cause the commercial property to lose direct access and proximity to 118th Avenue, so damages under § 32.09(6g) for the temporary limited easement cannot include damages for the loss of direct access and proximity to 118th Avenue. Because the LLC seeks damages for its loss of direct access and proximity to 118th Avenue, the circuit court did not err by excluding evidence of those damages in the § 32.09(6g) claim for taking an easement. Thus, the LLC improperly seeks compensation under § 32.09(6g) for the commercial property's diminution in value based on its lost direct access and proximity to 118th Avenue when 118th Avenue was relocated. Because our resolution of the narrow issue presented disposes of the LLC's claim, we need not address the other issues presented. See Maryland Arms Ltd. P'ship v. Connell, 2010 WI 64, ¶¶ 48, 326 Wis.2d 300, 786 N.W.2d 15.

¶ 8 We affirm the circuit court's grant of the DOT's motion in limine seeking to exclude evidence of damages caused by the LLC's loss of direct access and proximity to 118th Avenue. We reverse the court of appeals and remand to the circuit court to dismiss the action.

I. FACTUAL BACKGROUND

¶ 9 The LLC owns 1.83 acres or 79,715 square feet of land (“commercial property”) that consists of a one-story strip mall with four stores and restaurants. The commercial property is located at 7300 118th Avenue in the City of Kenosha, just northeast of the intersection of Interstate 94 and State Trunk Highway 50. Before 2010 the eastern side of the commercial property abutted 118th Avenue and the southern side abutted 74th Place, a private road. A driveway on the northeastern side of the commercial property provided direct access to 118th Avenue. An existing single-lane driveway on the southern side of the commercial property provided direct access to 74th Place. The commercial property had indirect access to 118th Avenue via 74th Place, which intersected with the western side of 118th Avenue.

¶ 10 On January 4, 2010, the DOT acquired a temporary limited easement of .262 acres of the commercial property for the purpose of constructing a new double-throated driveway connecting the commercial property to 74th Place. Sometime in 2010, the DOT built the new driveway.⁶ The DOT awarded the LLC $21,000 in damages for the temporary limited easement.⁷ This new driveway was located on the southern side of the commercial property, near the commercial property's existing single-lane driveway to 74th Place. Therefore, the double-throated driveway provided the commercial property with two points of direct access to 74th Place instead of one. The DOT acquired this temporary limited easement as part of a greater highway reconstruction project (“Highway Reconstruction Project”).⁸

¶ 11 Also sometime in 2010, as part of the greater Highway Reconstruction Project, the DOT vacated and relocated to the east one block the portion of 118th Avenue that abutted the LLC's commercial property. After 118th Avenue was relocated, the commercial property no longer abutted the Avenue; thus, it lost direct access to 118th Avenue. The DOT did not alter 74th Place or the fact that it connected to 118th Avenue.

¶ 12 On January 24, 2011, the LLC appealed to the circuit court the DOT's award and sought additional compensation under Wis. Stat. § 32.09(6g) for the commercial property's decline in value caused by the loss of direct access and proximity to 118th Avenue when the Avenue was relocated. Specifically, the LLC's expert appraiser determined that the commercial property's “loss of direct access to [118th Avenue], and the loss of proximity to [118th Avenue]” caused the commercial property's value to decline by $400,000. The LLC did not allege that $21,000 was inadequate compensation for the temporary limited easement itself. The damages at issue in this appeal instead relate to the property's diminution in value because it lost direct access and proximity to 118th Avenue due to the Highway Reconstruction Project.

II. PROCEDURAL POSTURE

¶ 13 On December 27, 2011, the DOT filed a motion in limine with the circuit court, requesting the court to exclude evidence of damages caused by the LLC's loss of direct access and proximity to 118th Avenue. On November 5, 2012, the circuit court granted the DOT's motion in limine.

¶ 14 The circuit court reasoned that Wis. Stat. § 32.09(6g) allows only damages that result from an easement. The circuit court stated that § 32.09(6g) “merely identifies the damages which are allowed if, and only if, caused by a taking by the state.” (Emphasis in original.) According to the circuit court, the LLC's loss of direct access and proximity to 118th Avenue “was caused by the vacation of the street [118th Avenue], not by the taking of any property from the plaintiff. Damages are allowed under § 32.09(6g), Stats., only for loss which was a consequence of the particular taking.”

¶ 15 On November 9, 2012, the DOT and the LLC entered into a stipulated judgment that preserved each party's right to appeal the circuit court's ruling on the DOT's motion in limine. The parties agreed that $21,000 was the fair value of the temporary limited easement itself.

The DOT already paid the LLC that amount in damages.

¶ 16 On November 20, 2013, the court of appeals reversed the circuit court's decision granting the DOT's motion in limine. 118th St. Kenosha, LLC v. DOT, 2013 WI App 147, ¶ 1, 352 Wis.2d 183, 841 N.W.2d 568. The court of appeals reasoned that “the temporary easement was integrally connected with the property's loss of direct access and...