Opinion ID: 2116768
Heading Depth: 1
Heading Rank: 4

Heading: compensation for private crossings

Text: The commission determined that WCL's compensation for the private crossing should consist of two components: (1) compensation for the right of crossing, which is measured by the diminution in value of the right-of-way after installation of WSG's pipeline; and (2) compensation for the consequential damages that result directly from the construction and maintenance of the utility's crossing. WCL argues that using the diminution in value approach misinterprets sec. 196.04(4), Stats. WCL claims that if the legislature had intended diminution in value as the appropriate measure, it would have made an express provision in the statute as it did in sec. 32.09(6g), Stats., which specifies the compensation to a property owner for a utility easement. WCL maintains that the broad equitable and reasonable standard requires that WCL be compensated for the benefit to the utility of the crossing as well as WCL's loss. WCL attacks the consequential damages component as being outside the scope of the commission's authority. The commission distinguished between direct and indirect costs and ordered WCL to bill WSG only for direct costs, including reasonable overhead. WCL argues that the language of the statute neither warrants the distinction nor should it preclude recovery of administrative costs which WCL cannot identify on a one-for-one basis with specific license agreements. [7] As discussed above, sec. 196.04(4), Stats., grants broad discretion to the commission and we may not reverse its order unless we find that it has acted in an arbitrary or capricious manner. We now apply this standard to the commission's method of compensation. The commission selected the diminution in value measure after considering the testimony of the parties' two experts on valuation. The commission regarded it as the method which best comports with the statutory `equitable and reasonable' standard. The commission also noted that the supreme court had selected diminution in value as the appropriate compensation to a rail-road when a new highway was constructed across its tracks, a situation analogous to the case at bar. See Green Bay & W.R.R. v. Public Serv. Comm'n, 269 Wis. 178, 189-91, 68 N.W.2d 828, 833-34 (1955). These considerations provide a rational basis for the diminution in value approach. Furthermore, the commission's overall method of compensation reasonably balances competing interests and achieves several important objectives. First, it permits WSG to provide natural gas service in a cost-efficient manner, which in turn benefits the ratepayers. Second, it ensures that WCL is in no worse an economic position as a result of the pipeline crossing. Finally, it is consistent with the legislative intent underlying the statute. [3] [8] We conclude that the commission's method of compensating WCL for the private crossing represented a reasonable exercise of its discretion under sec. 196.04(4), Stats.
[9, 10] WCL argues that the commission's finding of negligible diminution in property value at the private crossing is not supported by substantial evidence. The substantial evidence test is met if the evidence and the inferences from that evidence are such that a reasonable person might have made the same finding the commission did. Gibson v. State Pub. Defender, 154 Wis. 2d 809, 813, 454 N.W.2d 46, 48 (Ct. App. 1990). Substantial evidence may support conflicting findings. If it does, we must accept the commission's choice, notwithstanding the reasonableness of contrary findings. Id. The commission's finding of negligible diminution in value was largely based on the testimony of the utilities' expert witness, Dr. Karvel. Dr. Karvel, a professor of real estate at St. Cloud State University, testified that when a public utility seeks an easement or license, the appropriate measure of compensation would be the difference between the highest and best use of the land before the lines are installed and the highest and best use after the lines are installed. According to Dr. Karvel, the benefit of the easement or license to the grantee should only be considered if the grantee is not a regulated utility. Dr. Karvel also stated that he inspected the four crossings in this case the day before he testified, and that, using what he termed an observable condition methodology, he found that there was no difference in the highest and best use of the land as a result of WSG's pipeline extensions. On cross-examination, Dr. Karvel stated that he did not belong to the American Institute of Real Estate Appraisers (AIREA), but that he had taught courses for the organization. He admitted to having limited knowledge of railroad operations and that he had not prepared a written report to support his valuation opinions. On surrebuttal, Mr. Dorchester, WCL's valuation expert and past president of AIREA, testified that contrary to Dr. Karvel's claim, the observable condition methodology was not consistent with AIREA standards. Furthermore, he noted that the AIREA code of ethics requires an appraiser offering expert testimony on valuation to first prepare a report that documents the data and reasoning behind his or her opinion. [11] WCL claims that Dr. Karvel's testimony was so contradicted, impeached and undercut that it simply cannot provide the type of substantial evidence that is needed to support the [c]ommission's finding that there was no diminution in the value of WCL's property. The impeachment and surrebuttal go to Dr. Karvel's credibility and the weight to be given his testimony. It is not the role of this court to evaluate either the weight or credibility of evidence. Tatum v. LIRC, 132 Wis. 2d 411, 417, 392 N.W.2d 840, 842 (Ct. App. 1986). [12] Based on the evidence as a whole and the reasonable inferences from that evidence, we conclude that a reasonable person could have reached the same conclusion as the commission. Therefore, the commission's finding of negligible diminution in value must not be disturbed.