Luber v. Milwaukee County, 258

• Decision Date: 05 June 1970
• Docket Number: No. 258,258
• Citation: 177 N.W.2d 380,47 Wis.2d 271
• Parties: Joseph LUBER et al., Appellants, v. MILWAUKEE COUNTY et al., Respondents.
• Court: Wisconsin Supreme Court

Page 380

177 N.W.2d 380

47 Wis.2d 271

Joseph LUBER et al., Appellants, v. MILWAUKEE COUNTY et al., Respondents.

No. 258.

Supreme Court of Wisconsin.

June 5, 1970.

This case arises out of the exercise of condemnation powers by the Milwaukee County Expressway Commission and challenges the constitutionality of sec. 32.19(4), Stats., under which payment was offered to the condemnees.

On February 28, 1967, the Expressway Commission acquired through condemnation, property on which a three and one-half story building had been constructed. The property had been owned by plaintiffs Joseph and Emily Luber and had been leased to two tenants. Approximately two-thirds of the building had been leased to Edward S. Frisch who was engaged in the retail furniture business and who used the premises for showrooms. Mr. Frisch paid $500 per month under the terms of a written lease and remained in the property until the time of taking. The remaining one-third of the building had been leased to Ambur Distilled Products, Inc., which was engaged in the bottling and wholesale sale of liquor products. Ambur Distilled Products, Inc., had first taken occupancy in the building in 1944, but when its written lease expired on July 1, 1964, it decided not to renew. The reason for such decision was the fact that it had learned acquisition by the Expressway Commission was imminent; and, since its state and federal license prerequisites required that it maintain a long-term lease, it had no alternative. Had condemnation not been imminent, it is undisputed that Ambur would have renewed its lease for a three-or five-year period at a monthly rent of $350.

Although the plaintiffs made reasonable efforts to obtain a new tenant for the vacated portion of the premises, such efforts were to no avail. Despite the failure of these efforts, however, the plaintiffs were required to continue incurring expenses, such as heat, repair and taxes. Since the rental which they would have received, had the cloud of condemnation not engulfed their property, totaled $11,200 (32 $350), the plaintiffs declined the commission's offer of $2,100 as rental loss.

On March 20, 1968, the plaintiffs commenced an action pursuant to sec. 32.20, Stats., for recovery of rental loss. The defendants, Milwaukee County and the Milwaukee County Expressway Commission, moved for summary judgment on the ground that their offer of $2,100 for rental loss was in accordance with that allowed by sec. 32.19(4), Stats. The plaintiffs then filed a counter affidavit and asked that summary judgment be granted them in the amount of $11,200.

In support of their motion the plaintiffs argued that sec. 32.19(4), Stats., which allows recovery only for rent loss incurred in the year prior to taking, was unconstitutional. They also argued that if sec. 32.19(4) was, in fact, valid, the commission had improperly applied it to their claim.

The trial court concluded that while the statute was not unconstitutional, it had been improperly applied. It thus awarded the plaintiffs judgment in the amount of $4,200, disbursements in the amount of $115 and interest from March 1, 1967, to May 1, 1969, in the amount of $455.

The plaintiffs (hereinafter the appellants) appealed from that portion of the judgment which sustained the constitutionality of sec. 32.19(4), Stats. The defendants (hereinafter the respondents) appealed from that portion of the judgment which awarded damages based upon vacancies during the year preceding the taking, unreduced by vacancies which occurred during the first four years of the five-year period immediately preceding the taking and from that portion of the judgment which awarded the appellants interest on their damages from the date of taking to May 1, 1969.

Peregrine, Schimenz, Marcuvitz & Cameron, Hugh R. Braun, Milwaukee for appellants.

Robert P. Russell, Corp. Counsel, and Robert G. Polasek, Asst. Corp. Counsel, Milwaukee, for respondents.

HANLEY, Justice.

Two issues are presented on appeal:

(1) Is sec. 32.19(4), Stats., unconstitutional either in itself or in the manner in which it was applied by the respondents; and

(2) Are the appellants-condemnees entitled to interest on the award from the date of taking until the date judgment was entered?

Constitutionality of Sec. 32.19(4), Stats.

It is the appellants' basic position on this appeal that the limitation on recovery for rent loss contained in sec. 32.19(4), ¹ Stats., is an arbitrary and unreasonable limitation on the right of recovery granted by the Wisconsin Constitution, art. I, sec. 13. ²

The respondents maintain that although the trial court correctly sustained the statute's constitutionality, it failed to properly apply the limitations upon recovery contained therein. They thus take the position that liability is limited by the statute to rent loss incurred in the year immediately preceding taking and only as that loss is reduced by the average annual rent loss caused by vacancies in the first four years of the five-year period preceding taking.

The total rent loss in the year preceding taking was $4,200 (12 $350). The property stood vacant for 20 months in the first four years of the five-year period preceding taking. The respondent Expressway Commission thus determined that the average vacant period during the first four years of the five-year period preceding taking was five months (20 months divided by 4). The respondent then multiplied 7 (12 months minus 5 months) times $300 per month and arrived at the $2,100 amount which it offered to the appellants.

The trial court determined that the statutory language limiting recovery '* * * to the amount that exceeds the average annual rental loss caused by vacancies * * *' should be construed to limit recovery to the amount that exceeds average rental loss caused by vacancies other than those caused by the condemnation proceedings. Since it was conceded that the 20 months of vacancy during the first four years of the five-year period preceding the taking were caused by the pending condemnation proceedings, the trial court refused to subtract the average period of vacancy (five months) and thus awarded $4,200 (12 $350) as rental loss. The trial court realized that were it to interpret the statute otherwise and apply the formulae urged by respondents, the respondents could avoid all liability for rental loss by simply delaying the taking for a sufficient length of time.

While we think that the trial court was correct in construing sec. 32.19(4), Stats., so as to avoid such a result, grave doubt exists as to whether such section conflicts with the 'just compensation' provision of the Wisconsin Constitution, art. I, sec. 13.

It is the respondents' position that compensation should be awarded for the physical property taken and that such was done when they awarded the fair market value of appellants' property. Respondents also maintain that 'consequential' ³ damages, except as are provided by the legislature, are damnum absque injuria and are to be suffered in legal silence. They justify the limitations of sec. 32.19(4), Stats., by, in effect, saying that what the legislature giveth, the legislature can taketh away.

Although such justification ignores the possibility that compensation for rental loss is a constitutional necessity rather than a legislative dole, much authority exists for the proposition that the constitution does not require compensation for consequential losses.

In reference to the rights of condemnees, under the Fifth Amendment of the United States Constitution, Mr. Justice DOUGLAS, in a concurring opinion, has stated:

'* * * Consequential losses or injuries resulting from the taking are not compensable under the Fifth Amendment. Mitchell v. United States, 267 U.S. 341, 45 S.Ct. 293, 69 L.Ed. 644; United States v. Miller, 317 U.S. 369, 376, 63 S.Ct. 276, 281, 87 L.Ed. 336; United States (ex rel. Tenn. Val. Authority) v. Powelson, 319 U.S. 266, 281--283, 63 S.Ct. 1047, 1055, 1056, 87 L.Ed. 1390. It takes an Act of Congress to make them so. * * *' ⁴

Recently this court has stated that '* * * 'just compensation' has never been construed as requiring payment for all injuries imposed upon persons or property by acts of government.' More-Way North Corp. v. State Highway Comm. ⁵ Distinction was then drawn between the power of eminent domain, the exercise of which necessitates compensation, and an exercise of police power which allows imposition of injury without payment of compensation.

In regard to such distinction, this court had previously stated in Wisconsin Power & Light Co. v. Columbia County ⁶ 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 only those 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. Village of 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. City of Milwaukee, 212 Wis. 374, 382--383, 249 N.W. 73. See also State ex rel. Saveland Park Holding Corp. v. Wieland, 269 Wis. 262, 267, 69 N.W.2d 217. * * *'

The question often before this court is thus whether there has in effect been a taking. In answering this question a court of necessity must define property and determine what interests in property are significant enough to be protected from a taking without compensation. In the instant case there is no question that the appellants' entire building was taken. The question is whether there are any interests, other than the building itself, for which appellants are...