Vivid, Inc. v. Fiedler

Decision Date02 July 1998
Docket NumberNo. 96-1900,96-1900
Citation580 N.W.2d 644,219 Wis.2d 764
PartiesVIVID, INC., a Wisconsin corporation, Petitioner-Respondent, d v. Ronald R. FIEDLER, Secretary of the Wisconsin Department of Transportation and Wisconsin Department of Transportation, Respondents-Appellants-Petitioners.
CourtWisconsin Supreme Court

For the respondents-appellants-petitioners the cause argued by Robert W. Larson, Assistant Attorney General, with whom on the briefs was James E. Doyle, Attorney General.

For the petitioner-respondent there was a brief by Thomas S. Hornig, Marc T. McCrory and Brennan, Steil, Basting & MacDougall, S.C., Janesville and oral argument by Thomas S. Hornig.

¶1 WILLIAM A. BABLITCH, Justice

This case involves the question of the proper determination of just compensation for outdoor advertising signs, owned by Vivid, Inc. (Vivid), that the State of Wisconsin removed in 1989 in conjunction with a highway improvement project along Interstate 90. Three issues are presented. 1) Does Wis. Stat. § 84.30 provide the exclusive remedy for just compensation for these signs? We conclude it does. 2) Does just compensation for the taking of these signs include the value of the location of the signs? We conclude it does. 3) What is the appropriate method for determining just compensation in this case? Three of us conclude that the use of a Gross Income Multiplier (GIM) method, among other valuation methods, was appropriate. Accordingly, although four justices concur in the result but disagree with the analysis regarding the GIM, we affirm the court of appeals' decision on these issues. However, the court of appeals also allowed attorney fees to Vivid. Because § 84.30 does not allow for attorney fees, we reverse the court of appeals on that issue.

FACTUAL AND PROCEDURAL HISTORY

¶2 This case has a long and complex history which warrants review in some detail. Vivid is a company that owns outdoor advertising signs. Typically, Vivid rents land adjacent to heavily traveled roads and highways. Vivid then constructs a billboard on this rented land. Although Vivid rents the land on which the billboard is located (the sign site), Vivid owns the sign itself. Vivid contracts with businesses to display their advertising on the billboard for a certain term.

¶3 In 1988, the State Department of Transportation (DOT or State) notified Vivid that two signs, the "Antiques" sign and the "Trucks" sign, located next to Interstate 90 and the Avalon Road interchange near Janesville had to be removed as part of a highway improvement project. Vivid had eight- and nine-year sign site leases left on the property and 36-month advertising contracts on the signs.

¶4 The State offered compensation to the owners of the land on which the signs were located. The State also offered Vivid relocation benefits according to Wis. Stat. § 32.19 (1987-88) 1 and Wis. Admin. Code § ILHR 202.64. The relocation benefits offered included reasonable expenses relating to moving the signs as well as actual or reasonable expenses not exceeding $1,000 per sign for searching for new sign sites. The State informed Vivid that if the signs could not be moved, the State would reimburse Vivid for the actual, direct loss of its tangible personal property predicated on the lesser of the units' depreciated in-place value or their estimated moving cost. Vivid did not respond to either the State's offer for Vivid to participate in the compensation offered to the landowners nor to the State's offer for relocation assistance. The State removed the signs in April, 1989.

¶5 On June 2, 1989, Vivid filed a notice of injury and notice of claim with the State, pursuant to Wis. Stat. §§ 893.80(1) and 893.82. Vivid claimed that it suffered a total of $54,000 in damages, an amount Vivid claimed reflected the fair market value of the razed signs. Vivid also requested interest and loss of revenues from April, 1989 when the signs were destroyed, as well as attorney fees. The State did not respond to these notices. On October 16, 1989, Vivid filed an action, requesting that inverse condemnation proceedings be commenced pursuant to Wis. Stat. § 32.10. With this action, Vivid requested just compensation under § 32.10 for the signs that the State removed and other costs and disbursements including attorney fees according to Wis. Stat. § 32.28.

¶6 The circuit court granted the State's motion for summary judgment and dismissed Vivid's petition for an inverse condemnation proceeding. Vivid appealed.

¶7 The court of appeals reversed the circuit court's order granting the State summary judgment and remanded the cause for further proceedings under Wis. Stat. § 32.10. See Vivid, Inc. v. Fiedler, 174 Wis.2d 142, 147, 497 N.W.2d 153 (Ct.App.1993) (hereinafter referred to as Vivid I ).

¶8 This court granted the State's petition for review. The issue presented was whether Vivid was entitled to just compensation for its signs. The State argued that it need only pay Vivid relocation benefits under Wis. Stat. § 32.19. Vivid argued that it was entitled to just compensation under a variety of theories, including Wis. Stat. § 84.30. Like the court of appeals, this court concluded that the State had to pay Vivid just compensation and remanded to determine the amount of just compensation. See Vivid, Inc. v. Fiedler, 182 Wis.2d 71, 73, 512 N.W.2d 771 (1994) (hereinafter referred to as Vivid II ). However, we relied solely on § 84.30 for our conclusion and specifically stated that we need not reach the other grounds raised by Vivid to support its argument that it was due just compensation. See id. at 75 n. 4, 80, 512 N.W.2d 771.

¶9 We concluded that "[t]he fact that the billboards were removed in the context of an eminent domain proceeding, rather than under sec. 84.30(5), which governs removal of nonconforming signs, is irrelevant. The express language of sec. 84.30(6) requires payment of just compensation 'regardless of whether the sign was removed because of this section.' " Id. at 79, 512 N.W.2d 771 (quoting Wis. Stat. § 84.30(6)). In remanding the case to the circuit court for determination of the amount of just compensation, this court directed the circuit court to "refer to section 84.30(7), Stats., which discusses the measure of just compensation and section 84.30(8), Stats., which discusses agreed price and adds that compensation is determined under section 32.05, Stats., if the DOT and the owner fail to reach agreement on the amount of compensation." Id. at 81 n. 8, 512 N.W.2d 771.

¶10 On remand, the Rock County Circuit Court, John H. Lussow, Judge, allowed Vivid to proceed as if the case were one for inverse condemnation under Wis. Stat. § 32.10. Over the State's objection, the circuit court allowed Vivid's expert to testify about valuing the billboards using an income approach which considers the income of the sign before the taking and projected income after the taking, and a comparable sales or market approach which looks to comparable sales using a Gross Income Multiplier (GIM) to determine the amount of income produced by an individual sign. The circuit court also allowed the State's evidence regarding the cost approach which values the sign structure using cost-less-depreciation and then adds that to the leasehold value. The jury determined that the two billboards had a fair market value of $37,800, an amount far exceeding the amount calculated under the State's cost approach. Vivid then filed a motion for judgment on the verdict. The circuit court concluded that Vivid was entitled to judgment on the verdict of $37,800 as just compensation for the signs, interest on the judgment in the amount of $13,230 pursuant to Wis. Stat. § 32.05(11)(b), and litigation expenses including attorney fees of $166,261 pursuant to Wis. Stat. § 32.28, for a total judgment of $217,292 together with statutory interest.

¶11 The State appealed the circuit court's order. In an unpublished decision, Vivid, Inc. v. Fiedler, No. 96-1900, unpublished slip op., 1997 WL 603411 (Wis.Ct.App. Oct. 2, 1997) (hereinafter referred to as Vivid III ), the court of appeals affirmed the circuit court's order. However, the court of appeals determined that the circuit court erred in allowing testimony regarding the GIM. See id., unpublished slip op. at 13-14. They determined that the income approach was the appropriate valuation method in this case. See id., unpublished slip op. at 15. The court of appeals determined that the error of admitting evidence regarding the GIM was harmless; therefore they concluded that they need not reverse and remand the judgment because the result would probably not be more favorable to the DOT under the income approach than the current jury verdict remand would not affect the substantial rights of the parties. See id., unpublished slip op. at 19 (referring to Wis. Stat. § 805.18(2)).

¶12 This court granted the State's petition for review of this second court of appeals decision, Vivid III, on December 16, 1997. 2

JUST COMPENSATION AND BILLBOARD VALUATION

¶13 The first issue presented is whether Wis. Stat. § 84.30 provides the exclusive remedy for just compensation for the taking of Vivid's signs. Resolution of this issue requires interpretation of § 84.30. A question of statutory interpretation is a question of law which this court reviews de novo. See Hughes v. Chrysler Motors Corp., 197 Wis.2d 973, 978, 542 N.W.2d 148 (1996). Our primary goal in statutory interpretation is to discern the legislature's intent. See id. (citing Scott v. First State Ins. Co., 155 Wis.2d 608, 612, 456 N.W.2d 152 (1990)). This court ascertains that intent by first examining the plain language of the statute. See Anderson v. City of Milwaukee, 208 Wis.2d 18, 25, 559 N.W.2d 563 (1997) (citations omitted). If the plain language is ambiguous, we then turn to the scope, history, context, subject matter and purpose of the statute to determine legislative intent. See Hughes, 197...

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