Shanak v. City of Waupaca

• Court: Wisconsin Court of Appeals
• Writing for the Court: Before EICH, C.J., GARTZKE, P.J., and DYKMAN; GARTZKE
• Citation: Shanak v. City of Waupaca, 185 Wis.2d 568, 518 N.W.2d 310 (Wis. App. 1994)
• Decision Date: 19 May 1994
• Docket Number: No. 92-1055,92-1055
• Parties: Michael SHANAK, Jr., and Virginia Shanak, d/b/a Shanak Foundry & Machine Company, Plaintiffs-Appellants, d v. CITY OF WAUPACA, Defendant-Respondent.

Page 310

518 N.W.2d 310

185 Wis.2d 568

Michael SHANAK, Jr., and Virginia Shanak, d/b/a Shanak Foundry & Machine Company, Plaintiffs-Appellants,^d v. CITY OF WAUPACA, Defendant-Respondent.

No. 92-1055.

Court of Appeals of Wisconsin.

Submitted on Briefs April 2, 1993.

Opinion Released May 19, 1994.

Opinion Filed May 19, 1994.

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

GARTZKE, Presiding Judge.

Michael Shanak, Jr. and Virginia Shanak d/b/a Shanak Foundry & Machine Company (Shanaks) appeal from a judgment in favor of the City of Waupaca (City). We affirm the judgment in part and reverse in part.

I. NATURE OF THE CASE

Shanaks own a millpond, dike, dam, hydroelectric plant and machine shop, all in the City. The Crystal River feeds the pond. The pond provides water to the hydroelectric plant which produces power for their machine shop and for sale to a utility. The dam, which regulates the pond's water level, is built against the pond side of a stone arch in the dike. The dam consists of a row of four vertical I-beams and a set of horizontal "stop logs." The I-beams provide back support for the stop logs which hold back the water. The arch acts both as a back support for the I-beams and as a bridge for Riverside Drive ¹ which runs on top of the dike. Any water that escapes over the top stop log flows through the arch culvert.

One group of issues clusters around the stone arch. In August 1981 the United States Army Corps of Engineers advised Shanaks that the bridge and arch needed repair and recommended that the arch be replaced or rehabilitated. Shanaks sent a copy of the army corps' report to the City. In July 1983, after inspecting the structure, DNR sent a letter to Shanaks and a copy to the City. In the letter, DNR stated that the arch was in a bad state of disrepair and represented a hazard in terms of both dam safety and bridge safety. In response to that letter, the City closed Riverside Drive and installed barricades. According to the City's director of public works, the City intended to reopen the road once the repairs were made to the arch. In August 1987, after making another inspection, DNR found that the dam was unsafe and dangerous and ordered Shanaks to lower the millpond's water level and make repairs, or drain the pond and apply for a permit to abandon the dam. The order was attached to DNR's letter which stated that until the arch was repaired the pond level could not be raised beyond that stated in the order.

Shanaks brought this action for damages arising out of the City's failure to repair the arch and for an injunction to require the City to make future repairs. When the action was commenced, the City and Shanaks caused the repairs to be made and each paid half. They agreed that the party legally responsible for the maintenance and repair of the arch would reimburse the other for half the cost of the repairs.

The second group of issues concerns the millpond. Five city storm sewers empty into it, and Shanaks claim that the sewers deposit materials into the pond, reducing its capacity and the hydroelectric plant's production of electric power. Shanaks seek an injunction to stop the City from depositing materials in the pond. ²

The jury found that the City owns the arch and that Shanaks were damaged by the City's failure to maintain it. The jury determined that Shanaks' damages consisted of $3,700 for diesel-generating expenses incurred while the pond was drawn down to repair the arch, $8,900 for connecting with a utility to obtain electricity which the hydroelectric plant could not produce during the drawdown, $6,000 for damage to the hydroelectric equipment during the drawdown due to material unavoidably drawn into the equipment, nothing for the cost of purchasing electric power from the utility, $10,000 loss of business profits resulting from the closing of Riverside Drive and $3,000 for the loss of business profits resulting from the drawdown. The jury also found that the materials deposited in the pond by the City's storm sewers interfere with Shanaks' flowage rights.

The trial court treated the verdict as advisory, because the case raised only issues of law, except as to Shanaks' damages. The court concluded that Shanaks are responsible for the arch repairs, they are not entitled to an injunction to compel the City to repair or raze the arch, and they are not entitled to an injunction to stop the City from depositing materials in the pond through its sewers. The court entered a judgment conforming to those conclusions, including $9,553.27 in favor of the City to reimburse it for its half of the cost to repair the arch.

II. ISSUES AND DECISION

The issues and our resolution of them are as follows:

(A) Are Shanaks' claims barred for failure to give timely notice of claim to the City under § 893.80, STATS.? We conclude that § 893.80 bars only their claim for loss of business profits resulting from the closing of Riverside Drive.

(B) Is the City responsible for repairs to the arch? We hold that the City is responsible.

(C) Is Shanaks' action for damages relating to the arch repairs barred by the statute of limitations in § 893.43, STATS.? We conclude it is not.

(D) Are Shanaks entitled to damages incident to repair resulting from the City's failure to maintain the arch? We conclude that they are.

(E) Are Shanaks entitled to damages for loss of business profits resulting from the closing of Riverside Drive? We conclude they are not.

(F) Are Shanaks entitled to injunctive relief requiring the City to maintain the arch in perpetuity or to remove it? We conclude they are not.

(G) Did the trial court properly allow the jury to offset payments Shanaks received from a utility for the electricity they sold to the utility (after the pond's water level was returned to normal) against the cost Shanaks incurred in connecting with the utility to obtain electricity while the pond was drawn down? We conclude the court erred but the error was harmless.

(H) Is the award of damages to Shanaks insufficient? We conclude it is sufficient, except as to Shanaks' expense for power during the pond drawdown.

(I) Does the "reasonable use doctrine" regarding surface waters apply to the deposition of materials on the millpond bed by the City through its storm sewers? We conclude that the doctrine applies.

(J) Is the City's use of its storm sewer outlets reasonable under that doctrine? We conclude it is.

(K) Are Shanaks entitled to an injunction by virtue of § 844.01, STATS., or Article I, Section 9 of the Wisconsin Constitution to stop the City from depositing materials via the storm sewer system into the millpond? We conclude that they are not.

III. DISCUSSION

A. Notice of Claim: Section 893.80, STATS.

Section 893.80(1)(a), STATS., provides in material part that no action may be brought against a municipality unless:

Within 120 days after the happening of the event giving rise to the claim, written notice of the circumstances of the claim ... is served on the ... [municipal] corporation.... Failure to give the requisite notice shall not bar action on the claim if the ... [municipal] corporation ... had actual notice of the claim and the claimant shows to the satisfaction of the court that the delay or failure to give the requisite notice has not been prejudicial to the ... [municipal] corporation....

In its answer the City asserted that Shanaks failed to give notice of claim. But the trial court rejected that assertion. Given the undisputed facts of this case, the issue is one of law which we decide de novo. Shanaks assert that they have complied with § 893.80, STATS. We conclude that they have complied, except in regard to their claim for lost business profits resulting from the closing of Riverside Drive, which we discuss later in this opinion.

On August 18, 1987, DNR issued a decision and order that required Shanaks to reduce the water level behind the dam and to repair the dam and arch, or to drain the pond and seek permission to abandon the dam. Pursuant to DNR's order, the water level was lowered, resulting in a substantial reduction of hydroelectric power generating capacity. The repairs were made. Because the order required that the pond be drawn down and repairs made, or that it be drained and permission to abandon sought, Shanaks needed to make the repairs to continue operating their hydroelectric plant. During the drawdown Shanaks became aware of a substantial amount of silt and other deposits allegedly caused by the City's storm sewer system. The event giving rise to Shanaks' claims for cost of repairs, reduced electrical power generating capacity, hydroelectric equipment damage and lost profits from the drawdown was DNR's order requiring action. Shanaks gave the City notice of the circumstances of their claims for cost of repairs, reduced power generating capacity, equipment damage and lost profits from the drawdown on November 14, 1987, within 120 days of DNR's order. Therefore § 893.80, STATS., does not bar these claims.

B. City's Duty to Repair Arch

The trial court reasoned that the deeds in Shanaks' chain of title control who owns the arch, and the duty to repair it attends its ownership. The court ruled on the basis of the prior conveyances in Shanaks' chain of title that the City holds an easement over Shanaks' land, but because they own the land, they own the arch and must maintain and repair it. The court therefore gave the City judgment for the amount it paid to repair the arch.

We agree that the City holds an easement over Shanaks' land. The deeds in the chain of title to Shanaks convey the real estate, "together with the dam and flowage rights and [the] right to maintain the same," and contain the following phrase or a variation of it: "subject only to the right of the City of Waupaca to cross said dam as a highway." The deed to the Shanaks includes "all water power and rights of flowage now owned by first party. Subject to the right of the City of Waupaca...