Opinion ID: 1738699
Heading Depth: 2
Heading Rank: 2

Heading: Relocation Assistance[10]

Text: ถ 15 The relocation assistance benefits to which property occupiers may be entitled as a result of eminent domain proceedings are set out in Wis. Stat. ง 32.19(2), (3) [11] and (4m). [12] As we explain briefly below, these benefits are purely statutory and are not required in order to satisfy the constitutional mandates for just compensation to those whose property was taken for a public use under the United States Constitution or under the Wisconsin Constitution. [13] ถ 16 It is well settled law that the Fifth Amendment of the United States Constitution [14] and Article I, Section 13 of the Wisconsin Constitution [15] require the government to pay just compensation when private property is taken for public use. United States v. Welch, 217 U.S. 333, 339, 30 S.Ct. 527, 54 L.Ed. 787 (1910); Sonday v. Dave Kohel Agency, Inc., 2006 WI 92, ถ 22 n. 5, 293 Wis. 2d 458, 718 N.W.2d 631. However, the United States Supreme Court has determined that consequential losses, including relocation expenses, are not part of just compensation that the government is required to pay to private property owners. United States v. Petty Motor Co., 327 U.S. 372, 377-78, 66 S.Ct. 596, 90 L.Ed. 729 (1946) (concluding that evidence of loss of profits, damage to good will, the expense of relocation and other such consequential losses are refused in federal condemnation proceedings). The Court explained, it has come to be recognized that just compensation is the value of the interest taken. This is not the value to the owner for his particular purposes or to the condemnor for some special use but a so-called `market value.' Id. at 377, 66 S.Ct. 596. Since the market value to which the owner is entitled does not fluctuate with the needs of [the] condemnor or condemnee but with [the] general demand for the property, the Court determined that relocation expenses and other consequential losses are not considered in just compensation. Id. ถ 17 We have recognized that much authority exists for the proposition that the constitution does not require compensation for consequential losses. Luber v. Milwaukee County, 47 Wis.2d 271, 277, 177 N.W.2d 380 (1970). Contrary to this general proposition, in Luber, pursuant to the 1965 version of the statutes, we determined that under property concepts one's interest in rental income is such as to deserve compensation under the `just compensation' provision of the Wisconsin Constitution. Id. at 279, 177 N.W.2d 380. It was undisputed that the pendency of the condemnation was the sole cause of the appellants' rental loss. Id. Since we determined that compensation for rental loss was constitutionally required under the just compensation clause of the Wisconsin Constitution, we held that Wis. Stat. ง 32.19(4) (1965), insofar as it limited compensation for the taking to 12 months of rental losses, was unconstitutional. Id. at 283, 177 N.W.2d 380. [16] ถ 18 In a subsequent examination of this issue, the court of appeals concluded that Luber does not constitutionally mandate unlimited recovery for all consequential damages in eminent domain actions. Hasselblad v. City of Green Bay, 145 Wis.2d 439, 442, 427 N.W.2d 140 (Ct.App. 1988). In Hasselblad, the court of appeals determined that Wis. Stat. ง 32.19(4m), setting a $50,000 limit on business replacement damages for owner-occupied businesses, was not unconstitutional because there is no constitutional right to compensation for relocation expenses. Id. at 440-41, 427 N.W.2d 140. The court recognized that Luber was a radical departure from the prevailing rule that condemnation provides no recovery for consequential or incidental damages. Id. at 442-43, 427 N.W.2d 140. The court also stated that there was a rational basis for distinguishing the incidental damages awarded in Luber because [r]ental losses bear a direct relationship to fair market value that business replacement expenses do not. Id. at 444, 427 N.W.2d 140. ถ 19 The dissent of Justice Prosser disagrees that CC Midwest's argument has no constitutional just compensation component. He relies heavily on Kimball Laundry Co. v. United States, 338 U.S. 1, 69 S.Ct. 1434, 93 L.Ed. 1765 (1949), for the proposition that the United States Supreme Court modified its rule of denying consequential losses as part of just compensation. Justice Prosser's dissent, ถถ 83-87. However, the dissent misinterprets Kimball Laundry. In Kimball Laundry, the Court explained the different effects of a taking when it is only temporary and the owner is unable to transfer its business goodwill to another location. What, then, are the circumstances under which the Fifth Amendment requires compensation for such an intangible? Not, indeed, those of the usual taking of fee title to business property, but the denial of compensation in such circumstances rests on a very concrete justification: the going-concern value has not been taken. Such are all the cases, most of them decided by State courts under constitutions with provisions comparable to the Fifth Amendment, in which only the physical property has been condemned, leaving the owner free to move his business to a new location. . . . It is true that there may be loss to the owner because of the difficulty of finding other premises suitably situated for the transfer of his good will, and that such loss, like the cost of moving, is denied compensation as consequential. Kimball Laundry, 338 U.S. at 11-12, 69 S.Ct. 1434. ถ 20 Accordingly, to fall within the rule set out in Kimball Laundry, the condemnor must take over the business opportunity, at least on a temporary basis, as well as taking the real property, such that the business owner could not move his business to a new location and may be required to renew his business at a location temporarily taken if the government quits the condemned site before the expiration of the condemnee's lease term. See United States v. Westinghouse Elec. & Mfg. Co., 339 U.S. 261, 264-65, 70 S.Ct. 644, 94 L.Ed. 816 (1950) (concluding that where there is only a temporary occupancy by the condemnor, the cost of temporary removal of the owner is a compensable loss under the Fifth Amendment). Therefore, we disagree with Justice Prosser's dissent, as we have concluded that the usual rule that consequential damages are not part of constitutionally required just compensation applies here. This is so, in part, [17] because there are no facts to pull CC Midwest's claim into the rule set out in Kimball Laundry or Westinghouse Electric. See also United States v. 50 Acres of Land, 469 U.S. 24, 33, 105 S.Ct. 451, 83 L.Ed.2d 376 (1984) (recognizing that absent a temporary taking, the Fifth Amendment does not require compensation for consequential damages arising from condemnation); Cmty. Redev. Agency of L.A. v. Abrams, 15 Cal.3d 813, 126 Cal.Rptr. 473, 543 P.2d 905, 913, 916 (1975) (concluding that when a condemnor takes the fee upon which a business is conducted and does not by the nature of its action wholly preclude the condemnee from transferring its going-concern or goodwill value to another location, just compensation is not due for the costs of moving the business, and also suggesting that any remedy for relocation costs lies with the legislature); Heir v. Del. River Port Auth., 218 F.Supp.2d 627, 641-42 (D.N.J.2002) (concluding that a Mobile Oil franchise that was lost as the result of condemnation was not a compensable taking under the Fifth Amendment). [18] ถ 21 In summary, we agree with the court of appeals' interpretation in Hasselblad and conclude that the relocation assistance benefits provided by Wis. Stat. ง 32.19(3) and (4m) do not have a direct relationship to the fair market value of a tenant's interest, and therefore, are incidental or consequential damages that are not considered in the constitutional requirement for just compensation. Consequently, CC Midwest's affirmative defenses to the City's petition for a writ of assistance present us with questions of only statutory, not constitutional, interpretation.