Court Opinion

ID: 9738271
Source: CourtListenerOpinion
Date Created: 2023-08-26 19:47:23.265891+00
Date Added: 2024-06-11T07:24:05.100079
License: Public Domain

*118DAVID T. PROSSER, J.
¶ 48. (dissenting). At trial, a jury found that E-L Enterprises, Inc. (E-L) suffered $309,388 in damages caused by the Metropolitan Milwaukee Sewerage District (MMSD). The majority does not dispute the accuracy of these findings. Rather, it concludes that E-L may not collect the damages awarded because they are "consequential damages" that are not available to an injured party under Wisconsin takings law.
¶ 49. Put in context, this ruling not only overturns a reasonable jury verdict but also deprives E-L of any meaningful remedy for its injury. This case, then, is important beyond the specific issues decided. It exposes the chasm between government wrongdoing and citizen redress. For the reasons stated below, I respectfully dissent.
I
¶ 50. In the 1980s, MMSD undertook construction of deep tunnels to hold sewage until it can be treated, thereby reducing water pollution. As part of this project, MMSD constructed the Cross Town 7 Collector System (CT-7) tunnel, which was located next to E-L's property. Before construction, MMSD detected the presence of groundwater in the vicinity. To construct the tunnel, project managers deemed it necessary to remove groundwater from the trench that would house the tunnel.
¶ 51. In the process of removing groundwater from the soil around the tunnel, MMSD also removed groundwater from E-L's property. The loss of groundwater caused 14 wood piles that were supporting E-L's building to rot. The jury determined that $309,388 was just compensation for E-L's costs to repair the piles.
*119¶ 52. On June 23, 2004, after repairing the piles, E-L filed suit against MMSD and CNA Insurance Companies, the insurers for the private contractors that participated in the construction of the deep tunnel project. E-L's complaint alleged five causes of action: (1) negligence against MMSD; (2) continuing nuisance against MMSD; (3) inverse condemnation;1 (4) negligence against CNA; and (5) continuing nuisance against CNA. E-L settled with CNA prior to the trial of the case.
¶ 53. E-L did not enumerate five causes of action to increase its damages. E-L pled five causes of action because it was confronted with the challenge of grounding its claim for recovery in traditional legal theory. Because the facts of the case were unusual, the appropriate theory for the case was uncertain.
¶ 54. In its complaint, E-L presented its inverse condemnation claim as follows:
51. MMSD's operation and maintenance of the Deep Tunnel and the 48 inch sewer pipes which were constructed as a part of the Cross Town 7 Collector System physically took portions of the woodpiles which rendered them unusable and damaged the E-L Building.
52. MMSD's conduct constitutes a taking of E-L Enterprises' property for public use. Specifically, MMSD's conduct constitutes a physical invasion that *120deprived and continues to deprive E-L Enterprises of all beneficial use of the wood piles in violation of the Fifth Amendment of the United States Constitution and Article I, Section 13 of the Wisconsin Constitution.
(Emphasis added.)
¶ 55. By the time the case went to the jury, E-L had shifted the theory of its takings claim: MMSD did not "take" E-L's wood piles; MMSD "took" E-L's groundwater, thereby causing damage. The jury ultimately answered "yes" to the verdict question: "Was the District's removal of groundwater from E-L's property a taking?"
II
¶ 56. E-L also claimed negligence and nuisance. Both of these claims were dismissed by the circuit court. Initially, in March of 2006, the circuit court refused to dismiss these claims on grounds of governmental immunity. At the summary judgment stage, MMSD argued that its acts were "discretionary," not "ministerial," and therefore it was immune from liability. E-L, on the other hand, pointed to DNR-approved and -mandated groundwater depletion specifications, which prohibited MMSD and its contractors from lowering groundwater below existing levels.
¶ 57. Based on E-L's argument, the circuit court initially concluded that "the act for which E-L seeks to hold MMSD liable — exceeding the groundwater depletion limitation — constitutes a transgression in which MMSD had no discretion to engage." Relying on Lister v. Board of Regents of the University of Wisconsin System, 72 Wis. 2d 282, 301, 240 N.W.2d 610 (1976), the court concluded that "nothing remained] for judgment or discretion." The court, therefore, denied MMSD's summary judgment motion.
*121¶ 58. In February of 2007, nearly one year after denying MMSD's motion for summary judgment and six months before the case proceeded to trial, the court revisited its earlier decision. In the course of deciding other motions, the court acknowledged a different provision in the same DNR-approved and -mandated specification. This provision required the contractor to control groundwater to perform work in the trenches in the dry, and to remove water when concrete is being placed and pipe is being laid. The circuit court concluded that "[discretion is conferred [by the specification] because MMSD must exercise some judgment on how to obey both the duty to keep the excavation dry and safe as well as its duty not to draw the water down too low." Acknowledging that it made this ruling "relatively late in the game," the court dismissed both the negligence and nuisance claims. As a result, the parties proceeded to trial on the inverse condemnation claim alone.
¶ 59. Query: Isn't the natural remedy for the wrong in this case to be found in the law of negligence? Not if the court persists in unreasonably broad notions of governmental immunity and unreasonably narrow exceptions for tort recovery.2 In any event, because the jury awarded E-L damages under a different legal theory from negligence, questions about governmental immunity were not raised in the petition for review, and the case before us involves only questions pertaining to the inverse condemnation claim.
Ill
¶ 60. In the absence of an adequate remedy in tort law, the only remedy available to E-L comes from the *122Takings Clauses of the United States and Wisconsin Constitutions.3 Yet the majority rejects E-L's takings claim, reasoning that, even if the removal of E-L's groundwater was a taking, the damages E-L seeks are consequential damages, which are unavailable under takings law. In my view, this analysis interprets the scope of damages under takings law too narrowly.
¶ 61. In Luber v. Milwaukee County, 47 Wis. 2d 271, 276, 177 N.W.2d 380 (1970), this court rejected the argument that consequential damages arising from a taking were "to be suffered in legal silence." The court noted that the rule against consequential damages in eminent-domain cases had been attacked on the grounds that the rule ignores the "economic implications of the situation." Id. at 279 (quoting Frank A. Aloi & Arthur Abba Goldberg, A Reexamination of Value, Good Will, and Business Losses in Eminent Domain, 53 Cornell L. Rev. 604, 631 (1968)). The court held:
The importance of allowing recovery for incidental losses has increased significantly since condemnation powers were initially exercised in this country. During the early use of such power, land was usually undeveloped and takings seldom created incidental losses. Thus the former interpretation of the 'just compensation' provision of our constitution seldom resulted in the infliction of incidental losses. The rule allowing fair market value for only the physical property actually taken created no great hardship. In modern society, however, condemnation proceedings are necessitated *123by numerous needs of society and are initiated by numerous authorized bodies. Due to the fact people are often congregated in given areas and that we have reached a state wherein re-development is necessary, commercial and industrial property is often taken in condemnation proceedings. When such property is taken, incidental damages are very apt to occur and in some cases exceed the fair market value of the actual physical property taken.
Id. at 279-80.
¶ 62. In this case, although E-L seeks recovery for damages beyond the value of the groundwater, it does not go so far as to seek the kinds of consequential damages sought in Luber. Luber dealt with consequential damages beyond the reduction in "fair market value" of the property — the landowner sought lost rent. In this case, however, the jury awarded E-L the reduction in fair market value of its property. The circuit court instructed the jury:
If the government takes private property for a public use, the government must pay the owner the fair market value of the property that is taken. If only part of an owner's property is taken, and if taking part of the property reduces the value of the property that remains, the government must pay the difference between the fair market value of the property before the taking and the fair market value of the property after the taking.
¶ 63. Based on this instruction, the jury determined that E-L should be compensated in the amount of $309,388. Even though E-L presented this evidence in terms of the cost of repairing the piles, the cost of these repairs amounted to the reduction in value to E-L's property that resulted from MMSD's taking. The majority now reverses the decision of a properly in*124structed jury that determined the amount of compensation based on the evidence before it.
¶ 64. This point is further emphasized by E-L's initial claim that the "taking" was the taking of "portions of the wood piles" supporting the building. Whether MMSD "took" the wood piles or "took" the groundwater, the result was the same: MMSD took a portion of E-L's property, causing a reduction in fair market value to the remainder of that property.
¶ 65. Two early Wisconsin cases support the conclusion that damages are available in the circumstances here. In Damkoehler v. City of Milwaukee, 124 Wis. 144, 145, 151, 101 N.W. 706 (1904), the city removed the lateral support for a building when grading an adjacent street, causing portions of the lot "to subside and slide into the excavated street." The court rejected the argument that the damages caused by the excavation of highways were "purely consequential," and permitted recovery under the Takings Clause. Id. at 152. The same situation arose in Dahlman v. City of Milwaukee, 131 Wis. 427, 439-440, 111 N.W. 675 (1907), and the court adopted the holding in Damkoehler for the proposition that "where a substantial part of the adjoining owner's land falls into the street by reason of the removal of its lateral support in the course of grading, there was a taking of the soil for public purposes and not a mere consequential damage." Id.
¶ 66. In upholding the jury verdict in the present case, the court of appeals correctly saw "no logical basis to distinguish between the removal of soil providing lateral support and the diversion of groundwater performing essentially the same function — that is, supporting the structural integrity of a building like that owned by E-L Enterprises." E-L Enters., Inc. v. Milwaukee Metro. Sewerage Dist., 2009 WI App 15, ¶ 11, 316 *125Wis. 2d 280, 763 N.W.2d 231. In neither Damkoehler nor Dahlman were the landowners seeking compensation for the specific physical property "taken" by the city: in both cases, the damage was caused by the city's act of grading a street. In both cases, like this case, a pattern of events took place: (1) the government performed an action that "took" part of the landowner's property; and (2) the direct consequence of that taking was a reduction in the value of the landowner's property.
¶ 67. The majority distinguishes Damkoehler on grounds that the landowner lost the entire value of the property. The court in Damkoehler, however, did not limit its holding in that way. It required that the city, in grading a street, "cause no unnecessary damage to an adjoining landowner," and asserted that the city's actions resulted in a taking "to the extent of such injury." Damkoehler, 124 Wis. at 150-51 (emphasis added).
¶ 68. Furthermore, the court in Dahlman held that a takings claim could be maintained "where a substantial part" of the property fell into the street. Dahlman, 131 Wis. at 440-41. In Dahlman, the jury found that the loss of soil "caused no depreciation in the value of the premises." Id. at 439. Yet the court permitted the landowner to recover nominal damages against the city. Id. at 440. This case is legally indistinguishable from Dahlman, save that the jury here determined that the fair market value of E-L's property was reduced by $309,388.
¶ 69. The Damkoehler case has been cited in other jurisdictions, including South Carolina. In White v. Southern Railway Co., 140 S.E. 560, 564 (1927), the South Carolina court wrote:
The word "taken" in the constitutional provision cited is not limited in its meaning and application to cases in *126which there is an actual physical seizure and holding of property, but is broad enough to include cases in which the access to abutting premises is obstructed by the change of grade of a highway or there is such physical injury to property as results in destruction or substantial impairment of its usefulness. See 20 C.J. 697, and the following cases therein cited: Nevins v. Peoria, 41 Ill. 502, 89 Am. Dec. 392; Tinker v. Rockford, 36 Ill. App. 460; Hendershott v. Ottumwa, 46 Iowa 658,26 Am. Rep. 182; Offutt v. Montgomery County, 94 Md. 115, 50 A. 419; Vanderlip v. Grand Rapids, 73 Mich. 522, 41 N.W. 677, 3 L.R.A. 247, 16 Am. St. Rep. 597; Broadwell v. Kansas, 75 Mo. 213, 42 Am. Rep. 406; Mosier v. Oregon Nav. Co., 39 Or. 256, 64 P 453, 87 Am. St. Rep. 652; Stearns v. Richmond, 88 Va. 992, 14 S.E. 847, 29 Am. St. Rep. 758; Kincaid v. Seattle, 74 Wash. 617, 134 P 504, 135 P 820; Damkoehler v. Milwaukee, 124 Wis. 144, 101 N.W. 706; Forbes v. Orange, 85 Conn. 255, 82 A. 559; Walters v. Baltimore [& Ohio R.]R. Co., 120 Md. 644, 88 A. 47, 46 L.R.A. (N.S.) 1128; Coyne v. Memphis, 118 Tenn. 651, 102 S.W. 355; Hamilton County v. Rape, 101 Tenn. 222, 47 S.W. 416.
IV
¶ 70. At the end of the twentieth century, the United States Supreme Court observed that the Takings Clause of the United States Constitution prohibits government "from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole." Dolan v. City of Tigard, 512 U.S. 374, 384 (1994) (quoting Armstrong v. United States, 364 U.S. 40, 49 (1960)). The Damkoehler court said much the same thing 90 years earlier:
We are not unmindful that other jurisdictions hold that damages resulting from landslides caused by excavations on highways in the course of improving them for public use are purely consequential, and not recover*127able by the owner. We find the doctrine of liability under such circumstances more consonant with reason and justice ....
Damkoehler, 124 Wis. at 152 (emphasis added).
¶ 71. Because the majority expects E-L to suffer in legal silence, I respectfully dissent.

 "Inverse condemnation" describes "a cause of action against a governmental defendant to recover the value of property which has been taken in fact by the governmental defendant, even though no formal exercise of the power of eminent domain has been attempted by the taking agency." U.S. v. Clarke, 445 U.S. 253, 257 (1980) (quoting D. Hagman, Urban Planning & Land Development Control Law 328 (1971)).

 See Umansky v. ABC Ins. Co., 2009 WI 82, ¶¶ 37-81, 319 Wis. 2d 622, 769 N.W.2d 1 (Prosser, J., concurring).

 See U.S. Const, amend. V ("[N]or shall private property be taken for public use without just compensation"); Wis. Const, art. 1, § 13 ("The property of no person shall be taken for public use without just compensation therefor."). The majority decides that E-L's damages are not compensable under both the United States and Wisconsin Constitutions. Majority op., ¶ 24.