Lamar Central Outdoor v. Dept. of Transp.

• Decision Date: 20 November 2008
• Docket Number: No. 2008AP439.,2008AP439.
• Citation: 762 N.W.2d 745,2008 WI App 187
• Parties: LAMAR CENTRAL OUTDOOR, LLC d/b/a Lamar Advertising of Central Wisconsin, Petitioner-Appellant<SMALL><SUP>&#x2020;</SUP></SMALL> v. WISCONSIN DEPARTMENT OF TRANSPORTATION, Respondent-Respondent.
• Court: Wisconsin Court of Appeals

762 N.W.2d 745

2008 WI App 187

LAMAR CENTRAL OUTDOOR, LLC d/b/a Lamar Advertising of Central Wisconsin, Petitioner-Appellant^† v. WISCONSIN DEPARTMENT OF TRANSPORTATION, Respondent-Respondent.

No. 2008AP439.

Court of Appeals of Wisconsin.

Submitted on Briefs September 8, 2008.

Opinion Filed November 20, 2008.

On behalf of the petitioner-appellant, the cause was submitted on the briefs of Thomas S. Hornig and Kraig A. Byron of Brennan, Steil & Bastings, S.C., Madison.

On behalf of the respondent-respondent, the cause was submitted on the brief of Kathleen M. Batha, asst. attorney general, and J.B. Van Hollen, attorney general.

Before HIGGINBOTHAM, P.J., VERGERONT and BRIDGE, JJ.

¶ 1 VERGERONT, J

Lamar Central Outdoor, LLC, seeks compensation for an outdoor advertising sign that was removed by the Wisconsin Department of Transportation (DOT) after DOT issued a removal order asserting the sign was unlawful. The primary issue on appeal is whether the administrative and judicial review provided in WIS. STAT. § 84.30(18) (2005-06)¹ is the exclusive procedure for determining the legality of the sign after a removal order has issued, even if DOT has already removed the sign. The circuit court concluded this was the exclusive procedure and dismissed this action because Lamar had not exhausted this procedure. We agree with the circuit court. We conclude the administrative and judicial review provided in § 84.30(18) is the exclusive procedure for challenging the legality of Lamar's sign after issuance of the removal order, even though DOT removed the sign. We also conclude that a determination under § 84.30(18) that Lamar's sign is legal is a necessary predicate to just compensation for the sign under the statutory scheme. Because Lamar did not exhaust the administrative and judicial review procedure in § 84.30(18) before bringing this action for just compensation and because we conclude no exception from the exhaustion doctrine is warranted, we affirm.

BACKGROUND²

¶ 2 The sign at issue, owned by Lamar, was located on the side of interstate Highway 39 as of March 18, 1972, the effective date of WIS. STAT. § 84.30 ("Regulation of outdoor advertising"). See 1971 Wis. Laws ch. 197. By letter dated February 13, 2006, DOT notified Lamar that the sign was a nonconforming sign under § 84.30, it had been rebuilt illegally, and it was therefore noncompliant with WIS. ADMIN. CODE § TRANS 201.10 (Feb.2005).³ The letter stated that it constituted a sixty-day removal notice, with the sixty days beginning on the date of the letter. The letter also informed Lamar that within sixty days of the letter it could request a formal hearing conducted by the Division of Hearings and Appeals (DHA) under WIS. STAT. ch. 227.

¶ 3 On April 6, 2006, Lamar requested that DHA schedule a hearing on DOT's removal order, asserting that the order was based on incorrect facts and an incorrect interpretation of the law. DHA scheduled a hearing for July 31, 2006, to address the issues "set forth in the Department of Transportation's removal order ... [s]pecifically, whether the subject sign lost its legal, nonconforming status either [sic] because it was substantially changed in violation of WIS. ADMIN. CODE § TRANS 201.10(2)(e)."

¶ 4 On May 18, 2006, DOT removed the sign in connection with a highway improvement project.⁴ Lamar filed a motion to dismiss its case before DHA, contending that, with the removal of the sign, the issue to be decided at the hearing was moot. According to Lamar, the issue had become whether Lamar was "entitled to compensation for the removal of its sign because of a highway improvement project pursuant to either Section 84.30 or Chapter 32" and "[t]hose issues [were] more properly, if not exclusively, handled by the Circuit Court."

¶ 5 DOT objected to dismissal on the ground that the issue of the lawfulness of its removal order was not moot because, if DOT was correct that the sign was illegal, Lamar would not be entitled to compensation for the sign. DOT contended that the hearing before DHA was the only means to challenge DOT's finding that the sign was illegal and, if DHA did dismiss the matter pursuant to Lamar's request, the unchallenged removal order would preclude Lamar from litigating the issue of the legality of the sign in a subsequent action.

¶ 6 The DHA hearing examiner entered an order dismissing the matter pursuant to Lamar's withdrawal of its request for a hearing.⁵ In a letter accompanying the order, the examiner explained that, while in his view DHA still had the authority to decide the issue of the legality of the sign, he had no basis for preventing Lamar from voluntarily withdrawing its request for a hearing on that issue. Because the examiner found it unnecessary to do so, he did not resolve the parties' dispute over whether DHA had the exclusive authority to decide the issue of the sign's legality. The examiner stated that he was not aware of a reason the sign's legality could not be decided by a circuit court as part of an action seeking compensation for the sign's removal. However, the examiner also cautioned that, if DOT was correct that DHA must decide the issue of legality, "then Lamar by withdrawing its request for a hearing to review the [DOT]'s removal order has assumed the risk that it may be precluded from seeking compensation for the sign."

¶ 7 Several months later, Lamar filed this action seeking compensation for the sign under either WIS. STAT. § 84.30 or WIS. STAT. § 32.10 ("Condemnation proceedings instituted by property owner"). In its petition Lamar alleged that DOT had failed to follow statutory condemnation procedures with respect to removal of the sign. The petition did not refer to the removal order or Lamar's request for a hearing before DHA, stating only that "DOT threatened to remove said sign structure and faces promptly after April 13, 2006 and then removed said sign structure on or about May 23, 2006."

¶ 8 DOT filed a motion to dismiss, asserting that WIS. STAT. § 84.30(18) provided the exclusive procedure for challenging an order for removal of an uncompensated sign and that Lamar had failed to exhaust these administrative and judicial remedies.⁶ The motion also asserted that the petition failed to state a claim for relief because Lamar was not entitled to compensation on two alternative grounds: the sign was illegal because of noncompliance with WIS. ADMIN. CODE § TRANS 201.10(2)(e) and no compensation is due for a sign removed pursuant to the police powers of the state. DOT accompanied its motion with affidavits that related both to the proceedings on the removal order and to the merits of its contention that the sign was illegal.

¶ 9 Lamar opposed the motion and filed affidavits in opposition, but none related to the proceedings on the removal order. Lamar contended in its brief that the circuit court could not rely on anything outside the petition because DOT's motion was not one for summary judgment. In the event the court elected to treat the motion as one for summary judgment, Lamar stated, it "reserve[d] the right" to present additional factual materials.

¶ 10 The circuit court granted DOT's motion. The court concluded that the administrative and judicial review established in WIS. STAT. § 84.30(18) is the exclusive procedure for reviewing the validity of DOT's removal order, including determination of the sign's legality. The court also concluded that Lamar was required to exhaust that procedure and had not done so. In arriving at these conclusions, the court relied on DOT's submissions describing the DHA proceedings on the removal order. The court did not address the merits of the dispute on the sign's legality.

DISCUSSION

¶ 11 Lamar argues on appeal that the court erred in dismissing its petition because the administrative and judicial review specified in WIS. STAT. § 84.30(18) for challenging sign removal orders is not applicable once the sign is removed by DOT. Lamar concedes that it is the exclusive procedure by which a sign owner may challenge a notice to remove an allegedly illegal sign before the sign is removed. However, according to Lamar, once DOT removes the sign, the only issue to be decided is just compensation for the removed sign, and this is an issue that only the circuit court may determine.

¶ 12 DOT responds that the circuit court correctly determined that WIS. STAT. § 84.30(18) provides the exclusive means of challenging the removal order even after DOT removes the sign. According to DOT, because the issue of the legality of the sign is determined in the hearing before DHA and is necessarily an issue in a suit seeking just compensation, Lamar must exhaust the administrative and judicial review procedure established in § 84.30(18) before bringing a suit for compensation in circuit court.

¶ 13 As a threshold matter we address Lamar's position that, in resolving these issues, we may rely only on the petition and not on the submissions DOT filed with its motion. Lamar appears to agree with DOT that, although the motion was called a motion to dismiss, under WIS. STAT. § 802.06(2)(b) the circuit court could have considered matters outside the petition and treated the motion as one for summary judgment.⁷ However, Lamar points out that, when it asked the court at the end of the motion hearing whether the court was treating the motion as one for dismissal or one for summary judgment, the court stated it was treating it as a motion to dismiss. Lamar asserts that it was not given "an additional opportunity to present any factual evidence relating to the subject sign."

¶ 14 We are not persuaded by Lamar's argument. The petition mentions nothing about the removal order and proceedings before DHA. The only way for DOT to raise the issues on exclusivity and exhaustion is by a motion that presents to the court factual materials showing the DHA proceedings related to the removal order. Lamar had the opportunity to present opposing submissions on...