Waller v. Am. Transmission Co.

• Decision Date: 16 July 2013
• Docket Number: Nos. 2012AP805,2012AP840.,s. 2012AP805
• Citation: 2013 WI 77,833 N.W.2d 764,350 Wis.2d 242
• Parties: Scott N. WALLER and Lynnea S. Waller, Plaintiffs–Respondents, v. AMERICAN TRANSMISSION COMPANY, LLC, Defendant–Appellant.
• Court: Wisconsin Supreme Court

350 Wis.2d 242

833 N.W.2d 764

2013 WI 77

Scott N. WALLER and Lynnea S. Waller, Plaintiffs–Respondents,

v.AMERICAN TRANSMISSION COMPANY, LLC, Defendant–Appellant.

Nos. 2012AP805, 2012AP840.

Supreme Court of Wisconsin.

Argued April 10, 2013.

Decided July 16, 2013.

For the defendant-appellant, there were briefs by Katherine Stadler, Bryan J. Cahill, and Godfrey & Kahn, S.C., Madison, and oral argument by Katherine Stadler.

For the plaintiffs-respondents, there were briefs by Hugh R. Braun, Nicholas R. DiUlio, and Godfrey, Braun & Frazier, LLP, Milwaukee, and oral argument by Hugh R. Braun.

There was an amicus curiae brief by Trevor J. Will, Bradley D. Jackson, Krista J. Sterken, and Foley & Lardner, LLP, Madison, on behalf of the Wisconsin Utilities Association.

ON BYPASS FROM THE COURT OF APPEALS

DAVID T. PROSSER, J.

[350 Wis.2d 246]¶ 1 This case is before the court on a petition for bypass of the court of appeals pursuant to Wis. Stat. (Rule) § 809.60 (2011–12).¹ WE ARE ASKED TO INterpret the condemnation procedures in wis. Stat. § 32.06 and determine the rights of property owners who claim that a taking of property has left them with an “uneconomic remnant.”

¶ 2 American Transmission Company, LLC (ATC) condemned a pair of easements on the residential property of Scott and Lynnea Waller (the Wallers) to facilitate the construction and placement of high-voltage transmission lines. The Wallers claimed that the easements diminished the value of their property so much that they were left with an uneconomic remnant. The Wallers contend that they are entitled to certain rights as the owners of property that has substantially impaired economic viability as a result of a partial taking.

¶ 3 The Walworth County Circuit Court ² agreed with the Wallers, concluding that their property, after the taking of the easements, was an uneconomic remnant. It ordered ATC to acquire the entire property. The circuit court also awarded the Wallers litigation costs and relocation expenses as “displaced persons” when they moved from the property after the taking.

¶ 4 The specific issues before this court are as follows:

(1) At what point in a Wis. Stat. § 32.06 condemnation proceeding must a property owner raise an uneconomic remnant claim?

(2) Were the Wallers left with an uneconomic remnant after ATC took two easements on their property?

(3) Are the Wallers entitled to litigation expenses?

(4) Are the Wallers “displaced persons,” entitling them to relocation benefits?

¶ 5 We affirm the circuit court and reach the following conclusions.

¶ 6 First, Wis. Stat. § 32.06(5), the “right-to-take” provision, sets out the proper and exclusive way for a property owner to raise a claim that the owner will be left with an uneconomic remnant after a partial taking by the condemnor. An uneconomic remnant claim should be brought under § 32.06(5) because the condemnor has failed to include an offer to acquire any uneconomic remnant in the condemnor's jurisdictional offer. The inclusion of an offer to acquire an uneconomic remnant acknowledges the existence of the uneconomic remnant. The exclusion of such an offer indicates that the condemnor disputes the existence of an uneconomic remnant. A right-to-take action must be decided promptly by the court and shall not prevent the condemnor from filing a simultaneous valuation petition, proceeding thereon, and taking any property interest whose condemnation is not being directly contested by the owner. A right-to-take action on an uneconomic remnant claim is designed to protect an owner's right to fair compensation to avoid economic hardship, not to paralyze public interest takings under eminent domain.

¶ 7 Second, the Wallers' property, after ATC took two easements for transmission lines, is an uneconomic remnant because it is of such size, shape, and condition as to be of substantially impaired economic viability as either a residential or an industrial parcel. The taking of the two easements drastically reduced the portion of the Wallers' property not subject to a servitude. The easements themselves not only restricted the Wallers' activity in the easement area but also substantially diminished the desirability, practicality, and value of the Wallers' property for either a residential or industrial user.

¶ 8 Third, the Wallers prevailed on their uneconomic remnant claim brought under Wis. Stat. § 32.06(5)—the right-to-take statute—and, therefore, were entitled to litigation expenses under Wis. Stat. § 32.28.

[350 Wis.2d 249]¶ 9 Finally, the Wallers were displaced persons under Wis. Stat. § 32.19(2)(e)1.a. because they moved “as a direct result” of ATC's jurisdictional offer, and the circuit court's findings of fact on this issue are not clearly erroneous.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

¶ 10 These consolidated cases ³ come before the court with a long and complicated history; the uneconomic remnant claim alone has been the subject of three proceedings before the circuit court and two appeals before the court of appeals. We begin with background information on the Waller property, ATC, and the negotiations between the two parties before ATC's jurisdictional offer to acquire the two easements for its transmission lines. Second, we summarize the Wallers' right-to-take action, along with ATC's simultaneous petition to determine just compensation for the taking of the easements. Third, we examine the holding and reasoning in the first court of appeals decision, Waller v. American Transmission Co., LLC, 2009 WI App 172, 322 Wis.2d 255, 776 N.W.2d 612( Waller I ). Fourth, we explain the circuit court proceedings after the first remand from the court of appeals. Fifth, we examine the holding and reasoning in the second court of appeals decision, Waller v. American Transmission Co., LLC, 2011 WI App 91, 334 Wis.2d 740, 799 N.W.2d 487( Waller II ). Sixth, we recount the proceedings in the circuit court on the uneconomic remnant issue after the second remand. Finally, we examine the circuit court's findings and conclusions on the issues of litigation expenses and relocation benefits.

A. The Waller Property and ATC

¶ 11 In 1989 the Wallers purchased a 1.5 acre triangular lot in the Town of Delavan in Walworth County. The property is bounded on the east by Interstate 43, on the north by Mound Road, and on the west by a vacant lot. The property—zoned A–1 Agricultural—includes a single-family residence, site improvements, landscaping, and outbuildings.

¶ 12 The Waller property had several encumbrances burdening it before the easements taken by ATC. First, a transmission line with a 20–foot–wide easement burdened the property along Mound Road on the north before the Wallers purchased the property. Second, the property was subject to highway setbacks along both Mound Road (25 feet) and Interstate 43 (50 feet).

¶ 13 For almost 20 years, the rural farmette served as the Wallers' home. ⁴ However, in the years since 1989 the character of the land surrounding the Wallers' property changed. By 2008 nearby land that was once agricultural became an industrial park.

¶ 14 ATC is a Wisconsin limited liability company and public utility regulated by the Public Service Commission of Wisconsin (the PSC) ⁵ and the Federal Energy Regulatory Commission. The legislature authorized the creation of ATC and designated it as a “public utility,” an electric “ transmission company,” and a “transmission utility.” Wis. Stat. §§ 196.01 (5), 196.485(1)(ge), 196.485(1)(i). See also 1999 Wis. Act 9. Wisconsin Stat. § 32.02(5)(b) vests entities like ATC with the power of eminent domain.

¶ 15 Public utilities may not undertake work on a project like a high-voltage transmission line unless they have obtained the requisite approval from the PSC and the Department of Natural Resources (the DNR). SeeWis. Stat. § 196.491(3) (requiring the PSC to issue a certificate of public convenience and necessity before the construction of a “facility” like a high-voltage transmission line). Thus, when ATC proposed an upgrade and expansion of an existing transmission line in and around the City of Delavan, the statutes required administrative proceedings before the PSC and the DNR. One of the proceedings included a public hearing at the PSC in Madison at which Scott Waller testified. He expressed concern about possible health hazards and impairment of property values resulting from the placement of high-voltage transmission lines affecting two sides of his property.

¶ 16 Ultimately, on March 30, 2006, the PSC issued ATC a certificate of public convenience and necessity for the utility's project. The PSC determined that the upgrade and expansion of transmission lines “[would] not have undue adverse impacts on ... public health and welfare.”

¶ 17 Having received the requisite regulatory approval, ATC proceeded to acquire the land and easements needed to advance the project. These acquisitions included the easements on the Waller property.

[350 Wis.2d 252]¶ 18 As explained previously, the Waller property was already burdened by a 20–foot–wide easement from an existing transmission line on the north side along Mound Road, highway setbacks along Mound Road, and highway setbacks along Interstate 43.

¶ 19 ATC sought to purchase two easements on the Waller property. The first easement would overlay the existing transmission line easement on the north side of the property, but widen the easement to 45 feet—an extension of 25 feet over the existing easement. The second easement would be 45 feet wide and run along the east side of the property—within the 50 foot highway setback from Interstate 43. In addition, ATC sought to install a large utility pole in the northeast corner of the property to support conductor wires and distribution lines.⁶

[350 Wis.2d 253]¶ 20 Pursuant to Wis. Stat. § 32.06(2)(a),⁷ ATC retained John Rolling (Rolling) of Rolling & Co. to conduct an appraisal of the property. Rolling concluded that the property's appraised value...