Howell Plaza, Inc. v. State Highway Commission

• Decision Date: 06 November 1979
• Docket Number: No. 76-545,76-545
• Citation: 92 Wis.2d 74,284 N.W.2d 887
• Parties: HOWELL PLAZA, INC., a Wisconsin Corporation, Plaintiff-Appellant, v. STATE HIGHWAY COMMISSION, Defendant-Respondent.
• Court: Wisconsin Supreme Court

Page 887

284 N.W.2d 887

92 Wis.2d 74

HOWELL PLAZA, INC., a Wisconsin Corporation, Plaintiff-Appellant, v. STATE HIGHWAY COMMISSION, Defendant-Respondent.

No. 76-545.

Supreme Court of Wisconsin.

Submitted on Briefs Oct. 10, 1979.

Decided Nov. 6, 1979.

This is an action for inverse condemnation under sec. 32.10, Stats. After a trial to the court without a jury the trial court dismissed the complaint for insufficiency of proof. The plaintiff appeals.

Jeffrey S. Schuster and Stupar, Gollin & Schuster, S. C., Milwaukee, for plaintiff-appellant.

Bronson C. La Follette, Atty. Gen., and Charles A. Bleck, Asst. Atty. Gen., for defendant-respondent.

BEILFUSS, Chief Justice.

The appellant Howell Plaza, Inc., hereinafter petitioner, acquired a sixty-acre parcel of land located at the corner of Howell Avenue and Puetz Road in the City of Oak Creek in 1959. Approximately ten or eleven acres of this property has been developed with a bank, post office building, shopping center and fast food operation occupying one corner of the tract. The rest of the land remains vacant.

The petitioner, through its president and primary stockholder, Reuben Kritzik, testified that it first became aware of the proposed highway project known as the "Belt Freeway" in 1967 or 1968 through the news media and Oak Creek city officials. As proposed, the freeway was to be approximately 33 miles in length, running from the proposed lake freeway in Oak Creek to a junction with Highway 41 in Washington County. The path of the freeway was to pass through the undeveloped portion of petitioner's property, taking about sixteen acres therefrom. It is only this sixteen-acre portion that petitioner claims the highway commission has taken.

On December 17, 1969, the State Highway Commission approved the corridor. Approval by the Milwaukee County Board and the Federal Highway authorities followed on March 10, 1970 and July 21, 1970, respectively.

Harvey Shebesta, district engineer for the Highway Division of the Wisconsin Department of Transportation, testified that the normal procedure following corridor approval by the appropriate authorities included the employment of a consultant to prepare preliminary plans and alternative preliminary plans, the development of an environmental impact statement (EIS), distribution of the EIS for comment, public hearings on the freeway design, alternate designs and the EIS, and preparation of a final EIS along with recommendations for design specifications for submission to the Federal Highway Administration for approval. Following approval of the EIS and design specifications, plans for the preparation of contract documents and for the identification of the real estate required for the project were to be developed.

Shebesta also testified the commission had developed procedures whereby a property owner whose property was eventually to be taken for highway purposes could request early acquisition. The property owner had to establish that because of an extensive planning period the beneficial use would be severely curtailed and that he would suffer serious hardship if he was required to keep the land without early acquisition. It was also necessary to establish the property in question was within the corridor required for the highway project.

The commission had acquired four parcels within the proposed Belt Freeway corridor from owners who claimed hardship under these procedures.

On July 30, 1970, the petitioner Howell Plaza, through its president Reuben Kritzik, requested that the commission purchase the sixteen-acre tract under its early acquisition procedures. Shebesta testified as of that time no EIS had been prepared; however, preliminary work was undertaken for acquisition of the petitioner's land located in the freeway corridor prior to the EIS statement in response to the petitioner's request.

In a letter dated July 28, 1971, the commission advised petitioner that engineering had progressed to the point where acquisition would be possible. On August 18, 1971, the commission informally approved acquisition of petitioner's property as a hardship acquisition, and further approval was given by the State Department of Local Affairs and Development on October 21, 1971. Two appraisers were appointed by the commission to appraise petitioner's property.

From then until late 1972 petitioner repeatedly contacted either the appraisers or other representatives of the commission. Finally, in a letter dated January 25, 1973, petitioner was informed by the commission that all efforts to purchase its property had been terminated as a result of government investigation into the legality of the commission's early acquisition procedures.

On March 20, 1973, petitioner commenced this inverse condemnation action under sec. 32.10, Stats., and Art. 1, sec. 13 of the Wisconsin Constitution in the Circuit Court for Milwaukee County. A motion to dismiss was filed, heard, overruled, and an appeal taken. This court reversed in Howell Plaza, Inc. v. State Highway Comm., 66 Wis.2d 720, 226 N.W.2d 185 (1975). Petitioner filed an amended petition and the case was tried to the Circuit Court on March 17 and April 5, 1976.

Petitioner contends that the State Highway Commission has so acted as to deprive it of all, or substantially all, of the beneficial use of its property. Kritzik testified at trial that as a result of the activities of the commission he was unable to develop the land. He stated that he had contacted several prospective tenants who had expressed interest in locating on his property prior to 1970, but that, as a result of the planned highway project, no one would deal with him. He also testified that he had been informed by the director of city planning for the City of Oak Creek that he would not be able to obtain a building permit for his property as it would be either denied or delayed due to the freeway project.

The director of city planning himself testified that, in his opinion, no building permit would have been issued to petitioner. He stated that this was due to the state and county policy of keeping the property in a vacant condition so that it could be purchased at a lower price than developed property when the highway acquisitions finally occurred.

In fact, however, petitioner never actually applied for a building permit or took any steps toward the development of its property beyond contacting prospective tenants. In both his correspondence with the commission and his testimony at trial, Kritzik referred to his relationship with the commission as one of cooperation, but qualified this by stating that he had no choice but to cooperate in view of the circumstances.

On the basis of this evidence the trial court stated in its findings of fact that, "Petitioner voluntarily withheld development of the area within the designated corridor; that it made no attempt to sell such land; that Respondent did not have the authority to prevent development of these lands and that Petitioner could have developed its land if it had wanted to; that condemnation by Respondent was never threatened." It concluded that petitioner's land had not been taken or occupied by the commission.

The question before us is whether the petitioner's land was taken or occupied within the meaning of Art. I, sec. 13 of the Wisconsin Constitution or sec. 32.10, Stats.

A preliminary issue raised by the parties is whether the trial court's finding that petitioner was not deprived of the beneficial use of its property raises a question of fact, in which case that finding would be accorded great deference by this court, or one of law. In Chicago, M., St. P. & P. R. R. Co. v. Milwaukee, 47 Wis.2d 88, 96, 176 N.W.2d 580, 583 (1970), this court stated that "(w)hen the principal facts in a case are undisputed and the controversy centers on what has been called ultimate conclusions of fact, or conclusions of law," it is not bound by the findings of the trial court.

In the first Howell Plaza Case the court defined a "taking" as the deprivation of all, or substantially all, of the beneficial use of one's property. The issue here is whether the facts established at trial meet this standard. This is a question of law in which this court is not bound by the conclusion of the trial court.

It is the law in this state that, in proceedings brought under the power of eminent domain, there must be a taking before there can be a claim for just compensation. Howell Plaza, Inc. v. State Highway Comm., 66 Wis.2d at 725, 226 N.W.2d 185; More-Way North Corp. v. State Highway Comm., 44 Wis.2d 165, 169, 170 N.W.2d 749 (1969). ". . . (I)ncidental damages to property resulting from governmental activities, or laws passed in the promotion of the public welfare, is not considered a taking of the property for which compensation must be made." State ex rel. Carter v. Harper, 182 Wis. 148, 153, 196 N.W. 451, 453 (1923); Nick v. State Highway Comm., 13 Wis.2d 511, 514, 109 N.W.2d 71, 111 N.W.2d 95 (1961); Surety Savings & Loan Asso. v. State, 54 Wis.2d 438, 443, 195 N.W.2d 464 (1972). This court stated in Wisconsin Power & Light Co. v. Columbia County, 3 Wis.2d 1, 6, 87 N.W.2d 279, 281-282 (1958), that

". . . mere consequential damage to property resulting from governmental action is not a taking thereof. Art. I, sec. 13, Wis.Const., like its equivalent in the federal constitution, 'does not undertake, . . . to socialize all losses, but those only which result from a taking of property.' United States v. Willow River Co., 324 U.S. 499, 502, 65 S.Ct. 761, 764, 89 L.Ed. 1101. Thus impairment of the value of plaintiff's farm by odors from a municipal sewerage disposal plant is not a taking. Hasslinger v. Hartland, 234 Wis. 201, 206, 290 N.W. 647, nor is partial obstruction of ingress to and egress from plaintiff's property, and the view therefrom, by a municipal shelter a taking of the property. Randall v. Milwaukee, 212 Wis. 374, 382-383, 249 N.W. 73. See also State ex...