Surety Sav. & Loan Ass'n v. State Department of Transp. Division of Highways

• Decision Date: 28 March 1972
• Docket Number: Nos. 94,95,s. 94
• Citation: 54 Wis.2d 438,195 N.W.2d 464
• Parties: SURETY SAVINGS & LOAN ASSN., Appellant, v. STATE of Wisconsin, DEPT. OF TRANSPORTATION, DIVISION OF HIGHWAYS, Respondent. Herbert J. KILIAN et al., Appellants, v. STATE of Wisconsin, Respondent.
• Court: Wisconsin Supreme Court

Page 464

195 N.W.2d 464

54 Wis.2d 438

SURETY SAVINGS & LOAN ASSN., Appellant, v. STATE of Wisconsin, DEPT. OF TRANSPORTATION, DIVISION OF

HIGHWAYS, Respondent.

Herbert J. KILIAN et al., Appellants, v. STATE of Wisconsin, Respondent.

Nos. 94, 95.

Supreme Court of Wisconsin.

March 28, 1972.

Actions commenced by appellants Surety Savings & Loan Association and Herbert J. Kilian against respondent State of Wisconsin Department of Transportation to determine the compensability of damages allegedly suffered by the elimination of direct access between their respective lands and U.S. Highway 41.

In 1950, respondent State Department of Transportation commenced public hearings on plans to construct a new highway between Milwaukee and Fond du Lac. The highway was to be designated a limited access highway. After determining that public safety, convenience and the general welfare would be served by the construction of the controlled-access highway, the department, on February 14, 1952, recorded a document entitled 'Finding, Determination and Declaration By The State Highway Commission of Wisconsin Establishing Certain Controlled-Access Highways In Waukesha County, Wisconsin,' in the office of register of deeds for Waukesha county.

The department condemned a strip of land which cut diagonally across appellants' properties, causing a severance of the northeast and southwest portions of their lands. This severance, coupled with the declaration of controlled-access, resulted in a loss of access to the severed parcels. Rather than constructing a frontage road to allow access, and instead of paying damages for the loss of access, the department granted direct access to the new highway from the land of both appellants at certain specified locations.

The property in which appellant Surety Savings & Loan Association has an interest was purchased by Fred Storm in 1955. He and his partner, George T. Klein, applied to the department for a permit for direct access to U.S. Highway 41 from their land, on which they intended to construct a restaurant, motel and filling station. This request was granted by the issuance of an 'Authorization for Access To or Across a Controlled- Access Highway' on September 22, 1958. In 1959, Mr. Storm applied to the Planning Commission of Menomonee Falls for permission to develop his land commercially. A representative of the department attended the hearing on this application and stated that local zoning regulations governed the use of the direct access granted to the highway. The Planning Commission authorized the commercial development of Storm's land and the construction of a commercial drive at the point at which access had been given to the highway. Part of the land was then leased to Shell Oil Company, which constructed a filling station; the rest of the property was sold to R. Walter Gross, who built the Golden Lion Motel and the La Carousel Restaurant. Appellant Surety Savings & Loan Association provided the financing for these projects. Access to both the Shell Oil Company and the Gross parcels depended upon the commercial drive to U.S. Highway 41.

The land owned by appellant Kilian was devoted to raising nursery stock. Highway 41 severed his property, leaving approximately four acres to the southwest of the highway and the balance of the land to the northeast. In order to provide access to and between the severed parcels, the department granted Kilian the right of direct access to the highway and the right to cross the highway at a median crossing. Kilian, who still owns both parcels of land, moved his nursery business to the northeast parcel and made extensive additions to the buildings thereon, allegedly relying on the special access and crossing permits.

In 1968, the department announced plans to construct a service road in front of the two parcels involved in this appeal. The appellants' right of access directly to U.S. Highway 41 was terminated and replaced by the right of access to the frontage road. Appellants and their customers now have to leave Highway 41 at an interchange and travel more than a mile on the frontage road in order to reach appellants' land. An award of damages was made for the land taken for the frontage road, but no amount was included for damages resulting from the loss of direct access to the land from U.S. Highway 41. Appellants challenged the award in the circuit court, which entered interlocutory judgments against appellants, ruling that they had no right to receive compensation for the loss of direct access. Appeal is taken from those judgments.

Additional facts will be stated in the opinion.

Hugh R. Braun, Peregrine, Marcuvitz, Cameron, Braun & Peltin, Milwaukee, of counsel for Surety Sav. & Loan Assn.

Schroeder, Gedlen, Riester & Moerke, Ewald L. Moerke, Jr., and Lewis A. Posekany, Jr., Milwaukee, of counsel for Herbert J. Kilian and others.

Robert W. Warren, Atty. Gen., William H. Wilker, Asst. Attys. Gen., Madison, for respondent.

HANLEY, Justice.

The sole issue presented on this appeal is whether appellants should be compensated for damages suffered because of the termination of their right to direct access to U.S. Highway 41. ¹

Compensation would be required if a property right was so impaired as to amount to a taking of land. Such would be the case if action by the state resulted in denying all access to a parcel of land. Carazalla v. State (1955), 269 Wis. 593, 70 N.W.2d 208, 71 N.W.2d 276. However, injury to property resulting from the exercise of the police power of the state does not necessitate compensation. Luber v. Milwaukee County (1970), 47 Wis.2d 271, 177 N.W.2d 380. As stated in Nick v. State Highway Comm. (1961), 13 Wis.2d 511, 514, 109 N.W.2d 71, 72, 111 N.W.2d 95:

'An impairment of the use of property by the exercise of police power, where the property itself is not taken by the state, does not entitle the owner of such property to a right to compensation. The law on this subject remains as we stated it in State ex rel. Carter v. Harper, 1923, 182 Wis. 148, 153, 196 N.W. 451, 453, 43 A.L.R. 269--a zoning case,

". . . incidental damages to property resulting from governmental activities, or laws passed in the promotion of the public welfare are not considered a taking of the property for which compensation must be made."

The designation of a highway as a controlled-access highway is an exercise of the police power. Nick v. State, supra, at pages 513 and 514, 109 N.W.2d 71, 111 N.W.2d 95.

This court has frequently held, therefore, that there is no compensable taking when direct access to a controlled-access highway is denied, where other access is given or otherwise exists. Carazalla v. State, supra; Stefan Auto Body v. State Highway Comm. (1963), 21 Wis.2d 363, 124 N.W.2d 319; McKenna v. State Highway Comm. (1965), 28 Wis.2d 179, 135 N.W.2d 827; Schneider v. State (1971), 51 Wis.2d 458, 187 N.W.2d 172. Since the department in this case granted reasonable access to a service road when it terminated direct access to the highway, under the foregoing rules of law, the appellants are not entitled to compensation for the termination of their direct...