Christus Lutheran Church of Appleton v. Wis. Dep't of Transp.
| Decision Date | 26 November 2019 |
| Docket Number | Appeal No. 2018AP1114 |
| Citation | 389 Wis.2d 600,2019 WI App 67,937 N.W.2d 63 |
| Parties | CHRISTUS LUTHERAN CHURCH OF APPLETON, Plaintiff-Appellant, v. WISCONSIN DEPARTMENT OF TRANSPORTATION, Defendant-Respondent. |
| Court | Wisconsin Court of Appeals |
On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Alan Marcuvitz and Nicholas Boerke of von BRIESEN & ROPER, S.C., Milwaukee. There was oral argument by Alan Marcuvitz.
On behalf of the defendant-respondent, the cause was submitted on the brief of Brad D. Schimel, attorney general, and Maura FJ Whelan, assistant attorney general. There was oral argument by Maura FJ Whelan.
Before Stark, P.J., Hruz and Seidl, JJ.
¶1 State law requires that when a governmental entity wishes to condemn property for transportation use, it must issue to the property owner a jurisdictional offer that is based on an appraisal. See WIS. STAT. § 32.05(2)(b), (3)(e) (2017-18).1 Christus Lutheran Church of Appleton challenges the validity of the jurisdictional offer the Wisconsin Department of Transportation (DOT) made for its property. The DOT’s offer was approximately $270,000 more than the property value stated in an appraisal submitted by the DOT in support of the offer, and the offer also included items (such as severance damages) that were not included in the appraisal. Although Christus Lutheran would benefit monetarily from the increased jurisdictional offer, it contends the DOT could not condemn its property at this time because there was an insufficient nexus between the jurisdictional offer and the appraisal.
¶2 We conclude the jurisdictional offer in this case was not sufficiently based on the appraisal. The appraisal must value "all property proposed to be acquired," WIS. STAT. § 32.05(2)(a), and it must form a "fundamental ingredient" or "supporting part" of the jurisdictional offer, Otterstatter v. City of Watertown , 2017 WI App 76, ¶24, 378 Wis. 2d 697, 904 N.W.2d 396. In this case, the third-party appraisal concluded that no severance damages would occur as a result of the project, yet the DOT’s jurisdictional offer included a $159,574 line item for such damages. Given that just compensation for a taking includes applicable severance damages, see WIS. STAT. § 32.09(6)(e), the appraisal failed to satisfy subsec. (2)(a)’s "all property" requirement. As a result, the jurisdictional offer’s line item for severance damages found no support in the appraisal, and the offer was invalid under subsecs. (2)(b) and (3)(e). We therefore reverse the order granting summary judgment to the DOT and remand for further proceedings consistent with this opinion.
¶3 Christus Lutheran is a non-profit entity that owns and operates Christus Lutheran Church, located in Greenville, Wisconsin. The church abuts State Trunk Highway 15, which the DOT endeavors to reconstruct and expand. In October 2016, a DOT representative notified Christus Lutheran that it would require 5.87 acres of Christus Lutheran’s land for the highway project, as well as temporary easement rights over another .198 acres. In the letter the DOT sent to initiate negotiations, the DOT stated it valued the land to be acquired at $79,245 and the easement rights at $921. Together with compensation for the loss of various site improvements, the DOT estimated the fair market value of the property to be acquired at $133,400, and it provided Christus Lutheran with the forms necessary to accept an offer in that amount.2 Notably, the initial offer letter did not identify severance damages as a line item for compensation.
¶4 The DOT attached to its initial offer letter an appraisal prepared on August 8, 2016, by an outside appraiser, Single Source, Inc.3 The appraisal’s analysis of land sales indicated the land to be acquired in fee should be valued at $13,500 per acre, for a total of $79,245. The appraisal reached a valuation of $921 for the temporary easement rights based on commercial land rents, and it estimated the value of site improvements to the property at $53,100. The appraisal explicitly considered the issue of severance damages, which it defined as "the loss in value to the portion of the larger parcel remaining after the taking and construction of the public improvement." It concluded that no severance damages would occur as a result of the highway project.
¶5 After receiving the DOT’s initial offer, Christus Lutheran requested an electronic copy of the appraisal, which the DOT provided. The parties exchanged a few other communications in October 2016, after which Christus Lutheran notified the DOT that it had retained an attorney to assist in the negotiations. Although Christus Lutheran was advised of its statutory right to request a second appraisal at government expense, it did not seek such an appraisal. It does not appear the parties engaged in any meaningful negotiation regarding the Single Source appraisal or the amount of the DOT’s initial offer, nor does it appear that Christus Lutheran suggested the amount of the initial offer was inadequate or proposed a different value that would fairly compensate it for the taking. Eventually, in January 2017, Christus Lutheran’s attorney advised the DOT that the congregation would not authorize a sale and that the DOT should proceed to acquire the property it needed by eminent domain.
¶6 After being notified of Christus Lutheran’s decision, DOT officials reviewed the initial offer internally through the Department’s administrative review process.4 The DOT determined the acquisition was more complex than initially believed and involved additional impacts to the church’s pond, parking lot, signs and landscaping, as well as severance issues regarding the church building. Accordingly, the DOT determined that a higher offer was warranted. The DOT contacted Christus Lutheran while preparing the revised offer and discussed some aspects of the project, including the need for Christus Lutheran to replace lost parking and construct a retention pond. In mid-February 2017, while the DOT was preparing its revised offer, Christus Lutheran’s attorney advised the DOT that it should proceed with condemnation, as there was no consensus from the congregation and the church council on the DOT’s acquisition.
¶7 On March 24, 2017, the DOT sent Christus Lutheran a revised offer of $403,200. Among other things, the revised offer increased the per-acre value of the land by a total of $14,675; added $75,321 for Christus Lutheran to remedy the resulting parking lot impacts and construct a retention pond; and awarded $159,574 as severance damages based upon the proximity of the church structure to the new right of way. The table below, which was included in the DOT’s letter, shows the differences between its October 2016 offer and its revised March 2017 offer:
Allocation Description Size Unit Appraisal offer Revised offer
$13,500/ac $16,000/ac
Land Fee Acquisition 5.870 Acres $79,245.00 $93,920.00
Temporary Limited Temporary Limited 0.198 Acres $921.00 $1,089.00
Easement (TLE) Easement
Access Rights Access to STH 15 $0.00 $0.00
Site Improvements Monument Sign $8,400.00 $8,400.00
Site Improvements Small Directional Sign $558.00 $558.00
Site Improvements Landscaping Contributory $12,420.00 $30,495.00
Value including Pond
Site Improvements Acquired Paved Parking $27,690.00 $29,820.00
Site Improvements Parking Space Restriping $150.00 $150.00
Within the TLE Area
Site Improvements Acquired Concrete $1,288.00 $1,288.00
Sidewalk
Site Improvements Parking Lot Floodlight $2,530.00 $2,530.00
Site Improvements Retention Pond $45,000.00
Cost to Cure Parking Area $30,321.00
Severance Proximity of right of way $159,574.00
Appraiser Rounding $198.00 $55.00
Total Allocation $133,400.00 $403,200.00
¶8 After internally discussing the revised offer, Christus Lutheran again informed the DOT it should proceed with the acquisition by eminent domain. The DOT responded on April 11, 2017, with a jurisdictional offer of $403,200. The DOT allocated that amount as follows: (1) $242,537 for loss of land, including fixtures and improvements being acquired; (2) $159,574 for damages resulting from severance of land, including proximity damage to improvements remaining on the condemnee’s land; and (3) $1,089 as compensation for a temporary limited easement.
¶9 As of May 1, 2017, the DOT had not received a response to the jurisdictional offer. On May 9, the DOT notified the Outagamie County Register of Deeds of the award of damages and sent Christus Lutheran a closing letter along with a check, a closing statement, and a copy of the award of damages. Christus Lutheran, represented by a new attorney, subsequently sought to reopen negotiations with the DOT, but he was told it was too late. The property transfer to the DOT was recorded on May 24.5
¶10 Christus Lutheran filed the present action on May 15, 2017. It alleged the DOT "failed to provide any appraisal that forms the basis for, or supports, the...
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Christus Lutheran Church of Appleton v. Wis. Dep't of Transp.
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