Hoffer Props., LLC v. State

Decision Date04 February 2016
Docket NumberNo. 2012AP2520.,2012AP2520.
Citation874 N.W.2d 533,366 Wis.2d 372
Parties HOFFER PROPERTIES, LLC, Plaintiff–Appellant–Petitioner, v. STATE of Wisconsin, DEPARTMENT OF TRANSPORTATION, Defendant–Respondent.
CourtWisconsin Supreme Court

For the plaintiff-appellant-petitioner, there were briefs by Benjamin Southwick, Richland Center and oral argument by Benjamin Southwick.

For the defendant-respondent, the cause was argued by Abigail C.S. Potts, Assistant Attorney General, with whom on the brief was Brad D. Schimel, Attorney General.

There was an amicus curiae brief by Erik Samuel Olsen, Joseph J. Rolling, Andrew Weininger and Eminent Domain Services, LLC, Madison, on behalf of Eminent Domain Services, LLC.

MICHAEL J. GABLEMAN, J.

¶ 1 This is a review of an unpublished decision of the court of appeals affirming a grant of partial summary judgment to the Department of Transportation (DOT).1 Pursuant to Wis. Stat. § 84.25 (2007–08),2 DOT eliminated Hoffer Properties, LLC's (Hoffer's) direct driveway connections to State Trunk Highway 19 (STH 19), a controlled-access highway. DOT also separately exercised its power of eminent domain to acquire .72 acre of Hoffer's land in order to extend Frohling Lane westward so as to connect Hoffer's property to the highway. Hoffer received $90,000 in compensation for the .72 acre taken to construct the Frohling Lane extension. Hoffer is challenging the amount of compensation awarded.

¶ 2 Hoffer does not claim that the $90,000 was inadequate compensation for the .72 acre itself. Hoffer concedes that DOT properly designated STH 19 as a controlled-access highway.3 Additionally, Hoffer agrees that the designation of a highway as "controlled-access" is a valid exercise of the police power and further agrees that such exercises are not compensable under the eminent domain statutes.4 Hoffer argues, however, that because there was a partial taking of some portion of its property under eminent domain, the damages attributable to the loss of direct access to STH 19 are compensable pursuant to the partial takings subsection of the just compensation statute, Wis. Stat. § 32.09(6)(b). Consequently, Hoffer contends, compensation for the .72 acre must include the diminution of value of the property due to the loss of its direct access to the highway.

¶ 3 Hoffer appealed the amount of compensation to the Jefferson County circuit court, Honorable William F. Hue, presiding. At the circuit court, Hoffer argued that DOT owed him additional compensation for diminution of the value of the property due to the loss of direct access to STH 19 if a jury determined the access provided by the Frohling Lane extension is unreasonable. DOT argued that because it exercised its police power to eliminate Hoffer's direct access to STH 19 and because Hoffer has alternate access to the property through the Frohling Lane extension, Hoffer has reasonable access as a matter of law and no compensation is due. The circuit court agreed and granted partial summary judgment to DOT.

¶ 4 The court of appeals affirmed, concluding that under our holding in Surety Savings & Loan Ass'n v. DOT, 54 Wis.2d 438, 195 N.W.2d 464 (1972), when DOT acts pursuant to the controlled-access highway statute "the inquiry is merely whether alternate access was provided." Hoffer Props., LLC v. DOT, No. 2012AP2520, 354 Wis.2d 621, 848 N.W.2d 903, unpublished slip op., ¶ 7 (Wis.Ct.App. May 1, 2014) (citing Surety Savings, 54 Wis.2d at 444–45, 195 N.W.2d 464 ). The court of appeals determined that the circuit court's grant of summary judgment was proper because DOT provided alternate access to Hoffer's property. Id.

¶ 5 We consider two issues. First, whether DOT is duly authorized by Wis. Stat. § 84.25 to eliminate an abutting owner's direct access to a controlled-access highway and replace it with more circuitous access.5 Second, whether the provision or existence of some access to the abutting property obviates the need for a jury determination of "reasonableness" because the abutting property owner is precluded from compensation pursuant to Wis. Stat. § 32.09(6)(b).

¶ 6 First, we hold that Wis. Stat. § 84.25(3) authorizes DOT to change Hoffer's access to STH 19 in whatever way it deems "necessary or desirable." Such changes, including elimination of direct access points, are duly authorized exercises of the police power and are not compensable under Wis. Stat. § 32.09 as long as alternate access is given that does not deprive the abutting owner of all or substantially all beneficial use of the property. Second, we hold that when DOT changes an abutting property owner's access to a controlled-access highway but other access is given or exists, the abutting property owner is precluded from compensation pursuant to Wis. Stat. § 32.09(6)(b) as a matter of law and no jury determination of reasonableness is required. Reasonableness is the wrong standard to apply because the provision of some access preserves an abutting property owner's right of access to a controlled-access highway, and thus no taking compensable under Wis. Stat. § 32.09(6)(b) occurs. Accordingly, Hoffer is precluded from compensation under Wis. Stat. § 32.09(6)(b) because alternate access to the property was provided by the Frohling Lane extension. We therefore affirm the court of appeals.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

¶ 7 Hoffer Properties, LLC, owns the subject property, a 9.90 acre parcel of land located west of Watertown. The property's northern boundary is State Trunk Highway 19. Prior to 2008, the property had direct access to STH 19 via two driveways. The property consists of a single-family dwelling, the first floor of which is Hoffer's real estate office; a barn that is rented for storage; and a machine shed that is partially rented as a workshop. On June 14, 2002, DOT designated 13.76 miles of STH 19 a "controlled-access" highway pursuant to Wis. Stat. § 84.25.6 The portion of STH 19 that was designated "controlled-access" included the portion that bounded Hoffer's property.

¶ 8 In 2008, DOT undertook a highway improvement project that involved relocating STH 26, which was to intersect with STH 19 to the west of Hoffer's property. DOT determined that it was necessary to change the access points to STH 19 in the vicinity of the relocated STH 26 as part of the project. To that end, on December 29, 2008,7 DOT eliminated Hoffer's direct access to STH 19. DOT acquired through eminent domain both .72 acre of Hoffer's land as well as a temporary limited easement in order to create alternate access to Hoffer's property. DOT tendered to Hoffer $90,000 for this taking. Hoffer's existing direct access to STH 19 was replaced by extending Frohling Lane (a north-south roadway that intersects with STH 19) westward to Hoffer's property. DOT constructed a new driveway north from this extension to restore vehicular access to Hoffer's property.8 Hoffer's replacement access requires vehicles to travel roughly 1,000 feet to reach STH 19.

¶ 9 On May 29, 2009, Hoffer appealed the amount of compensation it received to the Jefferson County circuit court pursuant to the eminent domain statutes, Wis. Stat. ch. 32.9 Hoffer claimed that because there had been a partial taking of its land, Wis. Stat. § 32.09(6)(b)10 required DOT to include in the amount of compensation paid for the taking the amount by which the value of the property was diminished due to the loss of its direct access to STH 19. Hoffer conceded that DOT properly designated STH 19 a "controlled-access" highway pursuant to Wis. Stat. § 84.25.11 Hoffer contended, however, that Wisconsin law requires DOT to pay compensation if DOT does not provide reasonable access between the highway and Hoffer's property. Citing our decision in National Auto Truckstops, Inc., v. DOT, 2003 WI 95, 263 Wis.2d 649, 665 N.W.2d 198, Hoffer filed a motion in limine seeking an order that reasonable access was a jury question and that Hoffer was due compensation if a jury decided that the Frohling Lane access was unreasonable.

¶ 10 DOT moved for partial summary judgment, arguing that pursuant to our holding in Surety Savings "there is no compensable taking when direct access to a controlled-access highway is denied, where other access is given or otherwise exists." Surety Savings, 54 Wis.2d at 443, 195 N.W.2d 464. DOT stated that because there was no dispute that it had acted pursuant to Wis. Stat. § 84.25, the controlled-access highway statute, and because the Frohling Lane extension had provided "other access" to the property, Hoffer's access was reasonable as a matter of law, so any claim for damages resulting from a change in Hoffer's access was barred.

¶ 11 Following a hearing, the circuit court denied Hoffer's motions and granted partial summary judgment to DOT. The circuit court found that the elimination of Hoffer's direct access to STH 19 was a noncompensable exercise of the police power and that reasonable access had been given as a matter of law. Thereafter, the circuit court granted Hoffer's motion to dismiss the action but preserved Hoffer's right to appeal.

¶ 12 On appeal, Hoffer argued that our holding in National Auto Truckstops required DOT to compensate the owner of abutting land if 1) DOT eliminates the property's direct access to a controlled-access highway; and 2) a jury determines that the replacement access is unreasonable. In an unpublished per curiam opinion, the court of appeals affirmed the circuit court. Hoffer Props., LLC, No. 2012AP2520, unpublished slip op. The court of appeals distinguished National Auto Truckstops by noting that the highway at issue there was not a controlled-access highway. Id., ¶ 6. The court of appeals determined that Surety Savings controlled, and "reject[ed] Hoffer's argument that the question of whether the alternate access was reasonable was required to be decided by a jury, because reasonableness is not the correct legal standard to apply. Under Surety Savings, the inquiry is merely whether...

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