Nodell Inv. Corp. v. City of Glendale, Milwaukee County, 75-506

• Decision Date: 01 June 1977
• Docket Number: No. 75-506,75-506
• Citation: 254 N.W.2d 310,78 Wis.2d 416
• Parties: NODELL INVESTMENT CORPORATION, a Wisconsin Corporation, and Kathleen Zappia and Krista Berg, co-partners, d/b/a Echo Bowl, Appellants, v. CITY OF GLENDALE, COUNTY OF MILWAUKEE and Department of Transportation, a Division of the State of Wisconsin, Respondents.
• Court: Wisconsin Supreme Court

Page 310

254 N.W.2d 310

78 Wis.2d 416

NODELL INVESTMENT CORPORATION, a Wisconsin Corporation, and Kathleen Zappia and Krista Berg, co-partners d/b/a Echo Bowl, Appellants, v. CITY OF GLENDALE, COUNTY OF MILWAUKEE and Department of Transportation, a Division of the State of Wisconsin, Respondents.

No. 75-506.

Supreme Court of Wisconsin.

Argued May 3, 1977.

Decided June 1, 1977.

Harry W. Theuerkauf, Milwaukee, for appellants.

L. C. Hammond, Jr., and Quarles & Brady, Milwaukee, on brief.

Michael J. Spector & James H. Baxter, III, Milwaukee, for respondent.

ABRAHAMSON, Justice.

The determinative issue for this court on appeal is whether a property owner may challenge as unconstitutional the method of administering and applying an apparently constitutional ordinance by a declaratory judgment action in the circuit court without first appealing to the zoning board of appeals. The circuit court held that since the property owners had failed to exhaust the available administrative remedies, the court did not possess jurisdiction over the subject matter of the controversy. We agree.

On or about March 5, 1956, the Echo Bowl partnership applied to the city of Glendale for a building permit to construct a bowling alley. Pursuant to city ordinances, the application was referred to the city plan commission which approved the application on the condition that the partnership dedicate to the city a strip of land along North Port Washington Road for road expansion purposes. To obtain the permit the dedication was made on or about April 2, 1956.

On or about April 18, 1966, the Nodell Investment Corporation applied to the City of Glendale for a building permit to construct an automobile showroom and garage. An initial "foundation permit" was granted to allow the project to begin, but the plan commission withheld a final permit pending the dedication to the city of a strip of land along North Port Washington Road for road expansion purposes. Nodell Investment Corporation complied with the condition and made the dedication on August 30, 1966, allegedly because of increasing construction costs and the continued interest charges on loans taken to complete construction.

The complaint alleges that prior to and subsequent to the dedications mentioned above, the city plan commission required as a condition of the granting of building or occupancy permits gratuitous dedication of land along North Port Washington Road by several other property owners.

The North Port Washington Road widening project began in 1974, and the State began purchasing frontage property not previously dedicated to the city. The two property owners described above commenced this action in 1975 under the Declaratory Judgment Act ¹ seeking to have their 1956 and 1966 deeds to the city declared null and void. They alleged that the plan commission's administration of the Glendale building permit ordinance, sec. 85.17-(9), ² violated the constitutional guarantees of equal protection of the laws and just compensation for private property taken for public use. The trial court sustained demurrers to the complaint, and this appeal followed.

The parties agree that the plan commission required applicants for building permits to deed strips of street frontage to the city, without receiving the city's payment therefor, as a condition for issuance of the permits pursuant to ordinance sec. 85.17-(9). The parties further agree that at all times material to the controversy the city of Glendale had in operation a board of appeals ³ to which grievances concerning the administration of city zoning ordinances may be taken, ⁴ as mandated by sec. 62.23(7)(e)1, Stats. ⁵ The powers of the board are set forth in sec. 62.23(7)(e)7, Stats. ⁶ and they include the power to "hear and decide appeals where it is alleged there is error in any order, requirement, decision or determination made by an administrative official in the enforcement of this section or of any ordinance adopted pursuant thereto." Sec. 62.23(7)(e), Stats., provides for judicial review of the decision of the board of appeals. ⁷ The property owners concede in their statement of facts that they did not challenge before the board of appeals the validity of the plan commission's conditional building permits.

In a continuing line of cases this court has stated that where a statute sets forth a procedure for review of administrative action and court review of the administrative decision, such remedy is exclusive and must be employed before other remedies are used. In Ferch v. Schroedel, 241 Wis. 457, 461, 6 N.W.2d 176 (1942), this court refused to allow a lot owner to enjoin the holders of a building permit, holding that the remedy was to follow the statutory route for judicial review of the issuance of a permit. The court adopted the language of State ex rel. Martin v. Juneau, 238 Wis. 564, 568, 300 N.W. 187 (1941):

" 'This court has repeatedly held that where a specified method of review is prescribed by an act creating a new right or conferring a new power, the method so prescribed is exclusive and if review is sought that method must be pursued.' Citing State ex rel Attorney General v. Fasekas, 223 Wis. 356, 362, 269 N.W. 700; Corstvet v. Bank of Deerfield, 220 Wis. 209, 263 N.W. 687.

"Plaintiff having failed to follow the required statutory procedure, the court below had no jurisdiction in the instant case, and should have dismissed the action on that ground. . . . " 241 Wis. at 461, 6 N.W.2d at 178.

See also Master Disposal v. Village of Menomonee Falls, 60 Wis.2d 653, 656, 657, 211 N.W.2d 477 (1973); Corstvet v. Bank of Deerfield, 220 Wis. 209, 232, 233, 263 N.W. 687 (1936).

In Jefferson County v. Timmel, 261 Wis. 39, 63, 51 N.W.2d 518, 530 (1952), the court construed sec. 59.99, Stats., the county analogue of subs. 62.23(7)(e), as follows:

"8 McQuillin, Mun. Corp. (3d ed.), p. 538, sec. 25.283, states that the authorities are in conflict as to whether a property owner must first pursue and exhaust the administrative remedy available to him under a zoning ordinance or statute before resorting to the courts for injunctive or other relief. We believe the sounder rule is that which holds that if a zoning ordinance provides for an appeal to a Board of Adjustment created pursuant to a statute similar to sec. 59.99 from an adverse ruling of an administrative officer or board in administering the ordinance, and court review of the decision or order of the Board of Adjustment is specifically provided for by statute, such remedy is exclusive of all other remedies and must be exhausted before a party can resort to the courts for other relief except in cases where the validity of the ordinance itself is attacked."

See also Kmiec v. Town of Spider Lake, 60 Wis.2d 640, 646, 211 N.W.2d 471 (1973), where the above language from Timmel was quoted with approval in the context of a case involving subs. 62.23(7)(e), Stats.; Beres v. New Berlin, 34 Wis.2d 229, 148 N.W.2d 653 (1967), in which we held that the trial court had properly quashed a writ of mandamus where the landowner did not appeal to the board of appeals. ⁸

These cases set forth the general doctrine that judicial relief will be denied until the parties have exhausted their administrative remedies; the parties must complete the administrative proceedings before they come to court. The rule of exhaustion of administrative remedies is a doctrine of judicial restraint which the legislature and the courts have evolved in drawing the boundary line between administrative and judicial spheres of activity. The premise of the exhaustion rule is that the administrative remedy (1) is available to the party on his initiative, (2) relatively rapidly, and (3) will protect the party's claim of right. ⁹ The reasons for the rule requiring exhaustion are essentially the same as those for the rule that appeals may be taken only from a final judgment of a trial court. ¹⁰

Although the exhaustion requirement is sometimes expressed in absolute terms and in terms of a court's subject-matter jurisdiction, ¹¹ the cases demonstrate that sometimes exhaustion is required and other times not and that the rule of exhaustion has numerous exceptions. ¹² Our court and federal and state courts have been willing to assume jurisdiction of a case, notwithstanding a party's failure to exhaust administrative remedies, where the court finds that the reasons supporting the exhaustion rule are lacking. In Kmiec v. Town of Spider Lake, 60 Wis.2d 640, 645, 211 N.W.2d 471, 473 (1973), this court recognized a "well-defined distinction in applying this judicial policy (of exhaustion of remedies) to the statutory administrative remedies in zoning cases. . . . (A) challenge to the constitutional validity of a zoning ordinance presents a question of law. Such a challenge may properly be made by commencing an action for declaratory judgment and the doctrine of exhaustion of remedies is not applicable. Compare: Master Disposal v. Village of Menomonee Falls (60 Wis.2d 653, 211 N.W.2d 477 (1973))." The reason for this exception is that an appeal to the administrative agency would not have afforded the party adequate relief since the administrative agency has no right to repeal or declare unconstitutional zoning ordinances enacted by the legislative body from which the board derives its existence.

By contrast, in this case the board of appeals does have the power to invalidate the conditions imposed by the plan commission and to afford relief to the property owners without invalidating the ordinance itself. Both parties concede that this case does not involve declaring an ordinance invalid. Sec. 85.17(9) of the city ordinances neither requires nor expressly authorizes the plan commission to condition approval of the issuance of building permits on the dedication of land. Under subs. 62.23(7)(e) 8, Stats., the board is empowered to exercise the same power as the plan commission and could have issued...