Opinion ID: 2759155
Heading Depth: 2
Heading Rank: 4

Heading: Damages Available for an Easement

Text: under Wis. Stat. § 32.09(6g) ¶35 The LLC seeks damages under Wis. Stat. § 32.09(6g) for the commercial property's diminution in value caused by its loss of direct access and proximity to 118th Avenue. The LLC's loss of direct access and proximity to 118th Avenue was caused by the relocation of 118th Avenue. We begin our analysis with a plain reading of the statute. Subsection 32.09(6g) provides: In the case of the taking of an easement, the compensation to be paid by the condemnor shall be determined by deducting from the fair market value of the whole property immediately before the date of evaluation, the fair market value of the remainder immediately after the date of evaluation, assuming the completion of the public improvement and giving effect, without allowance of offset for general 18 No. 2012AP2784 benefits, and without restriction because of enumeration but without duplication, to the items of loss or damage to the property enumerated in sub. (6)(a) to (g) where shown to exist. ¶36 It is true that Wis. Stat. § 32.09(6g) allows for recovery of damages enumerated in § 32.09(6)(a) to (6)(g), but compensation is due for the taking of an easement. The LLC argues that, because its commercial property was subject to a temporary limited easement, § 32.09(6g) allows the LLC to recover damages for its loss of direct access and proximity to 118th Avenue under § 32.09(6)(b) and (6)(e), respectively. However, the LLC falls short of adequately explaining how the taking of the easement caused these damages. Here, the temporary limited easement provided the LLC with additional access to 74th Place, but the easement did not cause the LLC to lose direct access and proximity to 118th Avenue.12 12 We note that the plain language of Wis. Stat. § 32.09(6g) also causes us to pause when considering whether that statutory subsection is designed to apply to temporary limited easements in the first instance. See also More-Way N. Corp. v. State Highway Comm'n, 44 Wis. 2d 165, 173-75, 170 N.W.2d 749 (1969) (holding that a temporary limited easement did not effect an actual permanent taking). First, the plain language of the statute references easements, not temporary limited easements. Second, the before and after valuation approach arguably creates confusion in temporary limited easement cases because it does not consider the temporary nature of the easement. Third, this statutory subsection may not apply to a temporary limited easement because a temporary limited easement often will terminate upon completion of the project. Thus, a benefit, rather than a detriment, may accrue to the property. Thus, the before and after valuation leaves no room for compensation for many temporary easements. As a result, Wisconsin Constitution, Article I, Section 13, and W.H. Pugh Coal Co. v. State, 157 Wis. 2d 620, 631, 460 N.W.2d 787 (Ct. App. 1990), instruct that rental value may be the appropriate measure, rather than (continued) 19 No. 2012AP2784 ¶37 Subsection 32.09(6g) states that compensation for an easement is calculated by considering the fair market value of the whole property immediately before and after the date of evaluation,13 which other statutory provisions explain is the date on which the easement is acquired. Wis. Stat. §§ 32.09(1), 32.06(7).14 Thus, the plain purpose of considering the date of evaluation is to determine the damages to the property caused by the taking of an easement. See Hoekstra v. Guardian Pipeline, LLC, 2006 WI App 245, ¶13, 298 Wis. 2d 165, 726 N.W.2d 648 (holding that § 32.09(6g) provides compensation for damages that occurred 'because of' an easement) (quoting Arents v. ANR Pipeline Co., 2005 WI App 61, ¶14, 281 Wis. 2d 173, 696 N.W.2d 194). We conclude that § 32.09(6g) plainly allows compensation for damages caused by the taking of an easement. See Kalal, 271 Wis. 2d 633, ¶45. ¶38 As we assume, without deciding, that a temporary limited easement is compensable under Wis. Stat. § 32.09(6g), we § 32.09(6g), when a temporary easement occurs. The $21,000 awarded in this case seems to compensate for the temporary limited easement's rental value and resulting loss of landscaping. 13 The date of evaluation generally is the date on which the easement is acquired. Wis. Stat. §§ 32.09(1), 32.06(7); see also 260 N. 12th St., LLC v. DOT, 2011 WI 103, ¶45, 338 Wis. 2d 34, 808 N.W.2d 372; Fields v. Am. Transmission Co., 2010 WI App 59, ¶13, 324 Wis. 2d 417, 782 N.W.2d 729. 14 We may consider closely related statutory provisions. See State ex rel. Kalal v. Circuit Court for Dane Cnty., 2004 WI 58, ¶46, 271 Wis. 2d 633, 681 N.W.2d 110. 20 No. 2012AP2784 proceed to the crux of the issue at hand, which distills into whether under these facts, damages are properly awarded under § 32.09(6g) for the commercial property's diminution in value caused by the loss of direct access and proximity to 118th Avenue. ¶39 In so doing, we first turn to case law which has analyzed how damages for an easement are determined under Wis. Stat. § 32.09(6g). Recognizing that More-Way North determined that a temporary limited easement did not effect an actual permanent taking, we nonetheless endeavor to further discuss § 32.09(6g) damages for easements. See More-Way N. Corp., 44 Wis. 2d at 176. ¶40 For example, in Hoekstra, Guardian Pipeline obtained an easement to install a natural gas transmission pipeline on the Hoekstras' property. Hoekstra, 298 Wis. 2d 165, ¶1. At trial, the circuit court excluded evidence that prospective buyers' fear of gas pipelines reduced the value of the Hoekstras' property. Id., ¶15. The court of appeals reversed because the property's alleged diminution in value was caused by the easement. See id., ¶¶17-23. ¶41 Similarly, in Savage v. American Transmission Co., 2013 WI App 20, 346 Wis. 2d 130, 828 N.W.2d 244, American Transmission acquired a new easement to add more wires to an electricity transmission line that was already on Savage's property. Savage, 346 Wis. 2d 130, ¶4. At trial, the circuit court excluded evidence that the easement precluded Savage from using the easement property as he could have before. Id., ¶6. 21 No. 2012AP2784 The court of appeals reversed and concluded that because the new easement precluded Savage from using the property as he could have before, Savage could introduce evidence of damages caused by the new easement's restrictions. Id., ¶¶15-16. ¶42 Fields v. American Transmission Co., 2010 WI App 59, 324 Wis. 2d 417, 782 N.W.2d 729, further demonstrates that a Wis. Stat. § 32.09(6g) claim for damages is not as sweeping as the LLC suggests. American Transmission acquired a new easement to replace the electricity transmission poles on the Fields' property. Fields, 324 Wis. 2d 417, ¶¶5, 6, 11. Poles were previously located on the Fields' property under an existing easement from 1948. Id., ¶¶1, 4. The Fields sought compensation for the new easement. Id., ¶1. In proving their claim under § 32.09(6g), the Fields were entitled only to damages caused by the new easement, not for the 1948 easement. Id. ¶43 These three court of appeals cases demonstrate that, even where a more permanent easement taking occurs, damages under Wis. Stat. § 32.09(6g) are limited to those caused by the easement at issue. Because the temporary limited easement did not cause the diminution in value of the LLC's commercial property, no published Wisconsin case interpreting § 32.09(6g) allows the LLC to recover damages for its commercial property's diminution in value as part of the LLC's damages for the temporary limited easement. 22 No. 2012AP2784 E. May the LLC's Damages under Wis. Stat. § 32.09(6g) Include the Commercial Property's Diminution in Value Caused by the Relocation of 118th Avenue? ¶44 Our analysis of whether damages are compensable under Wis. Stat. § 32.09(6g) for the commercial property's diminution in value caused by the relocation of 118th Avenue is further guided by precedent which has considered what damages are due when a taking occurs in a highway relocation project. In the case at issue, it is not disputed that no property was taken from the LLC and the property's size and boundaries remained unchanged. However, the LLC lost the commercial property's proximity and direct access to 118th Avenue when that road was relocated. The following cases, while not § 32.09(6g) easement cases, inform our analysis. ¶45 For example, in Carazalla v. State, 269 Wis. 593, 70 N.W.2d 208 (1955) (Carazalla I), the Carazallas' farm abutted United States Highway 51 in Marathon County. Carazalla I, 269 Wis. at 595. The county used eminent domain to acquire 13.05 acres of the Carazallas' farm property, but the property taken did not include an access point to the highway. See id. at 595, 597. Highway 51 was then constructed on the acquired land. Id. at 595-97. At trial over compensation due for the taking, the circuit court allowed evidence that the relocation of Highway 51 caused the Carazallas' property to become less valuable. Id. at 597-98. Initially, in Carazalla I, Justice Currie's unanimous opinion held that the circuit court did not err by allowing that evidence. Id. at 606-08. 23 No. 2012AP2784 ¶46 On rehearing in Carazalla v. State, 269 Wis. 593, 71 N.W.2d 276 (1955) (Carazalla II), however, we made clear that the court erred in admitting such evidence. Justice Currie's unanimous opinion thus concluded that in calculating compensation due for the partial taking of land, the circuit court indeed erred when it allowed the jury to consider the diminution in value caused by the relocation of the highway. Carazalla II, 269 Wis. at 608c. We clarified that Carazalla I was incorrect to conclude that the partial taking of land and relocation of the highway were so interwoven that the two acts were an inseparable whole, because the two acts really were separate and distinct. Id. In other words, we clarified in Carazalla II that compensation for a taking cannot include damages for a lost point of access to a highway if the point of access was lost because of an act separate from the taking, such as the highway's relocation. ¶47 Similarly, in Jantz, Jantz sought damages for a partial taking of land that occurred during a highway relocation. Jantz owned a bar and grill that abutted United States Highway 41-45 and Maple Road in Washington County. Jantz, 63 Wis. 2d at 406. Jantz's property had access to Highway 41-45 only via Maple Road. See id. The DOT used eminent domain to acquire .38 acres of Jantz's land adjacent to Highway 41-45. Id. The property taken did not include Jantz's point of access to the highway. See id. The DOT built additional highway lanes on the strip of land acquired from Jantz. Id. The DOT also relocated Maple Road. Id. Jantz's 24 No. 2012AP2784 property maintained access to Highway 41-45 via Maple Road. Id. Jantz argued, however, that the value of her bar and grill declined because the roadway relocation left her with circuitous access to the highway.15 Id. at 406-07. At trial, the circuit court excluded evidence that the circuity of access or change in grade reduced the value of Jantz's property. Id. at 407. ¶48 On appeal, we upheld the circuit court's exclusion of that evidence. Id. at 412. We reasoned that the relocation of Maple Road was separate from the partial taking of land. Id. at 411. In other words, damages for the circuitous access to the relocated highway were not included in the compensation for the partial taking because those damages were not a consequence of the taking of .38 acre of land . . . . Id. at 412. Even if the relocation of Maple Road and the partial taking of Jantz's land were somehow related to a single overall highway improvement purpose, that fact would not transform the partial 15 Jantz also argued that her property's value declined because of the change of grade of the highway, the right-of-way due to the change of grade, the loss of view to and from the property, and loss of income of the bar and grill. Jantz v. State, 63 Wis. 2d 404, 406-07, 217 N.W.2d 266 (1974). The LLC is incorrect in concluding that Jantz involved only a change in grade. 25 No. 2012AP2784 taking claim into a valid claim for damages based on the highway project's negative effect on Jantz's business. Id. at 411.16 ¶49 Likewise, Schneider v. State, 51 Wis. 2d 458, 187 N.W.2d 172 (1971), like Carazalla II and Jantz, stands for the proposition that even in a compensation claim for a partial taking of land, the damages due are for the taking rather than for a relocated highway's impacts on the property. In Schneider, Schneider owned land abutting State Highway 151 and Thompson Road in Dane County. Schneider, 51 Wis. 2d at 460. In 1956 the State of Wisconsin designated State Highway 151 as a controlled-access highway. Id. Schneider maintained direct access to the highway with a private permit and indirect access to the highway via Thompson Road. Id. In 1968 the State used eminent domain to acquire 3.29 acres of Schneider's land to build a frontage road on the acquired land. Id. The land taken did not include Schneider's access point to the highway. See id. Rather, Schneider's access to the highway was reduced because the State revoked Schneider's private permit to directly access the highway and closed the Highway 151-Thompson Road intersection that Schneider used to access the highway. Id. 16 We noted that Jantz perhaps may have been entitled to recover damages under Wis. Stat. § 32.18 for harm to her property caused by Maple Road's change in grade. Jantz, 63 Wis. 2d at 411. However, those damages were unavailable in Jantz's lawsuit because Jantz brought suit under Wis. Stat. § 32.09(6) to recover compensation for the partial taking, and the partial taking did not cause the change in grade. Id. at 411-12. 26 No. 2012AP2784 The new frontage road became Schneider's only access to the highway. Id. at 463. At the trial on the amount of compensation owed to Schneider, the jury's award for the partial taking of land included damages for the property's diminution in value caused by the property's loss of access to the highway. See id. at 460-61, 464. The circuit court later concluded that it was incorrect to allow evidence of diminution in value that resulted from loss of access to the highway. Id. at 464. ¶50 On appeal we affirmed the circuit court's conclusion that damages for the partial taking of land could not include damages for the diminution in value of Schneider's land that resulted from the closing of Thompson Road and the designation of Highway 151 as a controlled-access highway. Id. at 465-66. We reasoned that the partial taking of Schneider's land was separate and distinct from Schneider's loss of access to Highway 151 and the resulting diminution in value of Schneider's land. Id. at 463 (citing Carazalla II, 269 Wis. at 608c). ¶51 Not surprisingly, the LLC attempts to distinguish the above cases and instead primarily relies on National Auto Truckstops, 263 Wis. 2d 649, for the proposition that compensation under Wis. Stat. § 32.09(6g) for the temporary limited easement should include damages for the commercial property's diminution in value caused by the relocation of 118th 27 No. 2012AP2784 Avenue.17 Notably, National Auto Truckstops neither overruled nor modified Carazalla II, Jantz, or Schneider. As a result, we examine whether these cases can coexist in our jurisprudence. ¶52 In National Auto Truckstops the truckstop's strip of land, which contained the only points of direct access to the highway, was taken. Nat'l Auto Truckstops, 263 Wis. 2d 649, ¶¶4-5. National Auto owned a truckstop near the intersection of United States Highway 12 and Interstate 94 in St. Croix County. Id., ¶4. The DOT used eminent domain to acquire .27 acres from the truckstop to build a frontage road on the land taken and to 17 Relying on National Auto Truckstops, Inc. v. Department of Transportation, 2003 WI 95, 263 Wis. 2d 649, 665 N.W.2d 198, Crown Zellerbach Corp. v. Department of City Development of Milwaukee, 47 Wis. 2d 142, 177 N.W.2d 94 (1970), and Hastings Realty Corp. v. Texas Co., 28 Wis. 2d 305, 137 N.W.2d 79 (1965), the LLC argues that the relocation of 118th Avenue was an exercise of the DOT's eminent domain power rather than police power and, therefore, the LLC's damages for the temporary limited easement should include damages that resulted from the relocation of 118th Avenue. However, even if the LLC correctly characterizes the holdings of these cases, they are distinguishable. In these three cases, whether the taking or easement caused the loss of access to a road was not at issue. In the present case, by contrast, the fact that the temporary limited easement did not cause the LLC's loss of direct access and proximity to 118th Avenue is fatal to the LLC's Wis. Stat. § 32.09(6g) claim. Hastings is further distinguishable because the court in that case did not determine whether the plaintiff was entitled to compensation for a taking. Instead, the court determined whether the plaintiff's lease was terminable under a provision that allowed for termination of the lease if the State took a portion of the leased property under eminent domain. Hastings, 28 Wis. 2d at 308-09. We do not consider whether the relocation of 118th Avenue was an exercise of the police power under these three cases. 28 No. 2012AP2784 widen the highway to four lanes. Id. Because the truckstop's only two points of direct access to the highway were actually located on the portion of land taken, the partial taking resulted in the truckstop losing its only points of direct access to the highway. Id., ¶¶4-5. National Auto's new access to the highway was via the new frontage road. Id., ¶5. At trial over compensation due for the partial taking of land, the circuit court excluded evidence that the truckstop declined in value because of its loss of two points of direct access to the highway. Id., ¶7. ¶53 On appeal, we held the circuit court erred by excluding that evidence because at issue was whether the changed access was reasonable access. Id., ¶2. We held that, in order to award damages to a landowner for loss of access to a road, a jury must determine that the landowner was left without reasonable access to the road. Id. Thus, we held that if a jury determined that the changed access was not reasonable, then just compensation is due for the deprivation or restriction of [National Auto's] right of access. Id. The evidence which related to National Auto's loss of access due to the taking was admissible insofar that the jury found that the changed access was unreasonable. Central to the court's determination that the evidence was admissible, was the fact that the property taken contained the access points. See id., ¶¶17-18. National Auto Truckstops does not stand for the proposition that compensation for an easement includes damages for a commercial property's 29 No. 2012AP2784 diminution in value caused by a highway relocation project when no property was taken. ¶54 National Auto Truckstops is fundamentally distinguishable from the present case. In National Auto Truckstops the parcel of land taken contained the landowner's only two points of access to a public road. In the case at issue, none of the LLC's land was taken. In National Auto Truckstops a permanent taking of land occurred which caused the size and boundaries of National Auto's property to change. In the present case, the boundaries and size of the LLC's commercial property are unchanged. ¶55 Unlike the taking in National Auto Truckstops, the temporary limited easement at issue did not cause the LLC to lose direct access and proximity to 118th Avenue. In the present case, not only was no land taken, but by providing the LLC with a permanent additional driveway pursuant to the temporary limited easement, the LLC gained more, not less, access to 74th Place. The temporary limited easement at issue did not cause the relocation of 118th Avenue nor did the LLC lose direct access and proximity to 118th Avenue because of the easement. Therefore, compensation due for this temporary limited easement does not properly include damages for the commercial property's diminution in value based on its lost direct access and proximity to 118th Avenue, which resulted from the relocation of 118th Avenue. ¶56 Hence, Carazalla II, Jantz, Schneider, and National Auto Truckstops all comport with the plain language of Wis. 30 No. 2012AP2784 Stat. § 32.09(6), which allows compensation for damages caused by a partial taking of property. See Wis. Stat. § 32.09(6). In each case, the allowable damages were caused by the claimed taking. These cases, however, do not stand for the proposition that the LLC may recover the damages sought here when no property was taken from the LLC, its property's boundaries remained intact, and its claim is for the taking of an easement. At its core, this commercial property's diminution in value resulted from its loss of direct access and proximity to a relocated road, not because of the temporary limited easement. No case supports the notion that the LLC's claim under § 32.09(6g) for a temporary limited easement would include the near half million dollar diminution in value which resulted from 118th Avenue being relocated. ¶57 We conclude that Carazalla II, Jantz, Schneider, and National Auto Truckstops can be reconciled in the present case, and in fact, produce consistent analyses. Carazalla II, Jantz, and Schneider stand for the principle that damages for a partial taking cannot include damages for the impact caused by loss of access to a highway if the loss of access resulted from the relocation of the highway, rather than from the taking. National Auto Truckstops recognized that there are circumstances under which damages for loss of direct access to a highway could be recoverable. However, those circumstances are glaringly absent in the case at issue. Thus, we conclude that Carazalla II, Jantz, and Schneider are more compelling. We agree with the circuit court that the LLC's loss of direct access and proximity 31 No. 2012AP2784 to 118th Avenue was caused by the vacation of the street [118th Avenue], not by the taking of any property from the plaintiff. Damages are allowed under § 32.09(6g), Stats., only for loss which was a consequence of the particular taking. The circuit court's analysis is consistent with the case law. See Jantz, 63 Wis. 2d at 412 (holding that the circuit court correctly limited damages in a partial taking claim to damages sustained as a consequence of the taking). Contrary to the LLC's suggestion, an award for a temporary limited easement, such as the one at issue, cannot serve to bootstrap damages that emanate from this road relocation, especially when, as here, no land has been taken and the property's boundaries are unchanged. See Carazalla II, 269 Wis. at 608c (holding that compensation for a partial taking cannot include damages for interwoven loss of point of access to a road because the taking did not cause the loss of the access point). ¶58 Whether the LLC may recover damages for its loss of direct access and proximity to 118th Avenue under a different theory is reserved for another day. According to the DOT, No one disputes that loss of access can be compensable. It is just not compensable here. We agree. We conclude that the subject loss is not recoverable under Wis. Stat. § 32.09(6g) because this temporary limited easement did not cause those damages. Cf. Jantz, 63 Wis. 2d at 411-12. Simply stated, under these facts, the temporary limited easement did not cause the LLC to lose direct access and proximity to 118th Avenue; therefore, the LLC's damages for the commercial property's diminution in value 32 No. 2012AP2784 are not recoverable in its § 32.09(6g) temporary limited easement claim. ¶59 Accordingly, we hold that the LLC's claim under Wis. Stat. § 32.09(6g) for the temporary limited easement may not include evidence of damages for the commercial property's diminution in value caused by the relocation of 118th Avenue. The circuit court did not err by excluding that evidence. Because our holding is dispositive, we decline to address the other issues presented.