Reel Enterprises v. City of La Crosse

• Decision Date: 29 September 1988
• Docket Number: No. 86-0746,86-0746
• Citation: 146 Wis.2d 662,431 N.W.2d 743
• Parties: REEL ENTERPRISES, a Wisconsin partnership, Harold Swanson, Sr., Harold Swanson, Jr., Robert L. Swanson, Gary R. Swanson and Swanson Heavy Moving Company, Inc., Petitioners-Appellants, v. CITY OF La CROSSE, a municipal corporation, and Wisconsin Department of Natural Resources, Respondents. * . Orally
• Court: Wisconsin Court of Appeals

Page 743

431 N.W.2d 743

146 Wis.2d 662

REEL ENTERPRISES, a Wisconsin partnership, Harold Swanson Sr., Harold Swanson, Jr., Robert L. Swanson, Gary R. Swanson and Swanson Heavy Moving Company, Inc., Petitioners-Appellants, v. CITY OF La CROSSE, a municipal corporation, and Wisconsin Department of Natural Resources, Respondents.^*

No. 86-0746.

Court of Appeals of Wisconsin.

Orally Argued April 18, 1988.

Opinion Released Sept. 29, 1988.

Opinion Filed Sept. 29, 1988.

James G. Curtis, argued for petitioners-appellants; Hale, Skemp, Hanson & Skemp, La Crosse, on brief.

Thomas L. Dosch, Asst. Atty. Gen., argued for respondent Wisconsin Dept. of Natural Resources; Bronson C. La Follette, Atty. Gen., on brief.

Thomas L. Jones, III, Asst. City Atty., argued for respondent City of La Crosse; Patrick J. Houlihan, City Atty., on brief.

Before GARTZKE, P.J., and DYKMAN and EICH, JJ.

GARTZKE, Presiding Judge.

Reel Enterprises, its individual partners and Swanson Heavy Moving Company, Inc., appeal from a judgment dismissing their complaint for inverse condemnation against the City of La Crosse and the Department of Natural Resources. The theory of the complaint is that the DNR's acts in pursuit of but before the adoption of a floodplain zoning ordinance for the city, pursuant to sec. 87.30, Stats., and DNR's other acts, "took" the plaintiffs' properties for public use without compensation. ¹

The circuit court concluded that since the zoning ordinance had not become legally effective, this suit had been prematurely commenced. It dismissed the complaint without prejudice to plaintiffs' right to bring another suit if the ordinance became effective.

The dispositive issue is whether the complaint alleges acts by the city or the DNR which can be a temporary taking of property, requiring just compensation under sec. 32.10, Stats., and Wis. Const. art. I, sec. 13. We conclude that because all but one of the alleged acts are not legally enforceable restrictions on the use of any of the properties, none of those acts can be a taking. Because the complaint fails to allege that the remaining act deprived any of the plaintiffs of all or substantially all of the beneficial use of their properties, that act is not a taking. We therefore affirm the judgment dismissing the complaint.

The trial court properly treated defendants' motion to dismiss as one for summary judgment. When defendants moved to dismiss the complaint, matters outside the pleadings were presented to and not excluded by the trial court. Under these circumstances the motion to dismiss must be treated as one for summary judgment. Sec. 802.06(3), Stats.

The only purpose of summary judgment methodology is to determine whether a genuine issue of material fact exists which requires a trial. If no factual issue exists and the moving party is entitled to judgment as a matter of law, then the trial court has no discretion: it must grant the relief requested. Green Spring Farms v. Kersten, 136 Wis.2d 304, 310, 401 N.W.2d 816, 820 (1987). The first step is to determine whether the complaint states a claim. If it does not, the methodology stops and the complaint must be dismissed.

As an appellate court, we apply the same methodology as the trial court. Appellate review is de novo. Wright v. Hasley, 86 Wis.2d 572, 579, 273 N.W.2d 319, 322-23 (1979).

We read the complaint in light of pertinent floodplain legislation. If a municipality does not adopt a reasonable and effective floodplain zoning ordinance within one year after data adequate to formulate the ordinance is available, the DNR must determine the limits of a floodplain in the municipality and adopt an ordinance applicable to the municipality. ² Sec. 87.30(1)(a), Stats. The floodplain determination and ordinance adopted by the DNR has the same effect as if adopted by the city, and the city must enforce the ordinance as its own. Sec. 87.30(1)(b). Anything placed on or maintained within the floodplain in violation of the ordinance is a public nuisance, and violators risk a fine of $50 for each day during which a violation exists. Sec. 87.30(2).

The complaint alleges that the plaintiffs own lots in an industrial plat near the LaCrosse River. Reel Enterprises purchased the entire tract before 1980, retained some lots within it and conveyed others to Swanson Heavy Moving, Harold Swanson, Jr., and to persons not parties to this action. When Reel Enterprises bought the property, it was subject to a city floodplain zoning ordinance applicable to the La Crosse River and approved by DNR. That ordinance permitted the plaintiffs to develop the property as a commercial industrial park, and they obtained city permits to put fill materials and buildings on it.

On July 22, 1981 the DNR advised the city that DNR's study of the La Crosse River floodplain indicated a need for the city to revise its ordinance. The city hired a consultant to make an independent study of the floodplain, and the DNR agreed not to adopt an ordinance for the city under sec. 87.30, Stats., until that study had been completed. In April 1982, the city revised its ordinance in accordance with the conclusions of its independent study.

In May 1982, the DNR disapproved the city's revised ordinance and gave notice the next month that it would begin proceedings under sec. 87.30, Stats., to adopt a floodplain zoning ordinance for the city. That summer the DNR filed a series of lis pendens which effectively precluded the plaintiffs from developing or selling their properties.

The city brought an action to review DNR's disapproval of the revised ordinance. On March 21, 1983 the circuit court reversed DNR's decision disapproving the ordinance. DNR appealed, and the court of appeals reversed the decision of the circuit court and upheld DNR's original disapproval of the ordinance. City of La Crosse v. DNR, 120 Wis.2d 168, 353 N.W.2d 68 (Ct.App.1984).

In April 1982 the city applied to DNR for a sanitary sewer extension in the plat. In May 1982 DNR disapproved the application because the extension would be within a floodway. The city and all but one of the plaintiffs brought a circuit court action challenging DNR's decision, and on March 21, 1983 the court reversed DNR's denial of the extension permit. ³

The complaint alleges that in the summer of 1982 the DNR refused to permit further deposits of fill materials on the property. The reason for the denial is not alleged, nor do plaintiffs allege they sought judicial relief.

In the fall of 1984 the DNR held a public hearing in La Crosse with respect to its imposition of a floodplain zoning ordinance on the city under sec. 87.30, Stats. In early 1985 the city brought an action to stay any further proceedings before the DNR. That action was dismissed.

The complaint continues that the DNR's studies of the La Crosse River floodplain put all or much of plaintiffs' properties within the floodway, and that the DNR intends to impose a floodplain zoning ordinance on the city, putting all or most of plaintiffs' property within the "floodway" designation. The ordinance and floodway designation will render the plaintiffs' properties useless for all reasonable purposes.

The complaint further alleges that since at least July 22, 1981, plaintiff's properties have been "occupied and taken" by the city and DNR without just compensation. The "occupancy and taking" will continue as to all or a material part of their properties, depending on where DNR places its floodway line. The complaint ends with the allegation that neither of the defendants has exercised its power of condemnation or eminent domain as to the plaintiffs' properties.

For plaintiffs to succeed in the initial stages of an inverse condemnation proceeding, the complaint must allege facts that prima facie show either an occupation of the plaintiff's property under sec. 32.10, Stats., or a taking which must be compensated under the terms of the Wisconsin Constitution. ⁴ Howell Plaza, Inc. v. State Highway Comm., 66 Wis.2d 720, 723, 226 N.W.2d 185, 187 (1975) (Howell Plaza I ).

The bare allegations that the property has been taken and occupied, standing alone, are conclusions of law. We look to the facts alleged in the complaint. Those allegations claim less than outright seizure or physical invasion of the plaintiff's properties.

However, a taking may result from official activities not involving outright seizure or physical invasion. Restrictive regulation, whether by the state, a county or municipality, may constitute a "regulatory taking," the term used in First Lutheran Church v. Los Angeles County, 482 U.S. 304, ----, 107 S.Ct. 2378, 2383, 96 L.Ed.2d 250 (1987), and in MacDonald, Sommer & Frates v. County of Yolo, 477 U.S. 340, 348, 106 S.Ct. 2561, 2566, 91 L.Ed.2d 285 (1986), to describe a taking which results from officially imposed restraints on the use of property.

[W]here the [regulatory] restriction is so great the landowner ought not to bear such a burden for the public good, the restriction has been held to be a constructive taking even though the actual use or forbidden use has not been transferred to the government so as to be a taking in the traditional sense.

Just v. Marinette County, 56 Wis.2d 7, 15, 201 N.W.2d 761, 767 (1972) (citations omitted). The principle was refined in Howell Plaza I, 66 Wis.2d at 730, 226 N.W.2d at 190, where the court held that a regulatory taking may occur in the absence of actual possession or occupation but only if the owner has been deprived of all, or practically all, of the beneficial use of the property.

Following the remand in Howell Plaza I, the same property owner again petitioned for inverse condemnation. Howell Plaza, Inc. v. State Highway Comm., 92 Wis.2d 74, 78, 284 N.W.2d 887, 889 (1979) (Howell Plaza II ). Petitioner's theory was that the activities of the state highway commission toward acquisition of petitioner's land for a highway corridor had deprived petitioner of all or substantially all...