Here’s the Wisconsin Supreme Court’s 4-3 opinion in a case we’ve been following, Christus Lutheran Church of Appleton v. Wis. Dep’t of Trans., No. 2018AP 1114 (Apr. 1, 2021). Even though it was close, after oral arguments, we were hoping for a more positive result.

This is the case in which the Court of Appeals concluded that DOT’s jurisdictional offer was not based on the “full narrative appraisal” required by the statute. The offer was for $403k, but the appraisal on which it was based valued the compensation at $133k.

Wait, you ask, how so? True, the DOT offer was more than its appraisal, but it didn’t back up the increase with any appraisal other than its $133k appraisal. The increase was the result of DOT’s internal administrative review. Read that again: no appraisal supported the $403k offer.

Follow along: DOT’s appraiser opined that the owner incurred no severance damages from the partial take, and therefore did not include any in the appraisal. His letter appraised compensation for the property taken at $79k. But DOT offered the owner more, a total of $133k. Its initial offer identified $79k for the land, about $1k for “easement rights,” and the balance for “loss of various site improvements” (as the court phrased it. But “[n]otably, the initial offer letter did not identify severance damages as a line item for compensation.”

When the parties could not agree on a voluntary acquisition, and in anticipation of condemnation, DOT went back and took a second look at valuation. And after further internal review, DOT thought it should offer more. Eventually, DOT revised its offer to $403k, more than three times its initial offer. It increased the per-acre value of the land, added $75k to remedy impacts to a parking lot, and specified $159k in severance damages.

But the owner declined, and asserted DOT’s jurisdictional offer was not supported by a “full narrative appraisal” as required by the eminent domain statutes. The court of appeals agreed, concluding that even though DOT’s valuation went up, the offer of $403k was not “based on” a full narrative appraisal explaining how DOT ended up with that amount. The only appraisal it produced was the one for $133k.

The Wisconsin Supreme Court disagreed. Four Justices concluded that “based on” does not mean a dollar-for-dollar match, but rather means that the $133k appraisal merely had to be some “fundamental ingredient” of the jurisdictional offer. You read that right: in other words, as long as the appraisal is some part of the offer, no sweat. But wait, you ask, didn’t the appraisal conclude that the property suffered no severance damages? How did the majority conclude that DOT’s offer (which omitted severance damages) was a “fundamental ingredient” of an offer that included severance damages? By concluding that the appraisal “considered” severance damages, but eventually concluded there were none. See slip op. at 21.

And to the majority it was important that DOT’s valuation increased. “A side-by-side comparison shows that no allocation decreased between the initial appraisal and the jurisdictional offer.” Slip op. at 21.

The significant changes between the initial appraisal and the jurisdictional offer, as a result of DOT’s internal administrative revision process, included increased allocations for: (1) severance damages because of the proximity of the new right of way; (2) compensation for the cost to replace the 26 lost parking spaces; and (3) compensation to add a retention pond. Adding these new amounts to the initial appraisal valuation does not make the initial appraisal something other than a foundation for the jurisdictional offer. To the contrary, the fact that most of the allocations remained unchanged from the beginning to the end of the process demonstrates that the appraisal served as the foundation for the offer.

Slip op. at 21-22. It might have been easier for the majority simply to label this rule, “if we think there’s been no harm, there’s no foul.” 

But wasn’t there some harm, we ask? The point of the requirement that the jurisdictional offer be based on a full narrative appraisal isn’t to give DOT the leeway to become more generous if it is so inclined, but to ensure that the owner understands why DOT’s jurisdictional offer is a certain amount. In other words, that the owner knows what the jurisdictional offer is “based on.” How does the $133k appraisal help in understanding what the eventual $403k jurisdictional offer was based on? It doesn’t.

The dissent by Chief Justice Roggenback was particularly sharp and zeroed in on this problem. It accused the majority of “missing” the interconnection between the two statutes at issue, “erroneously” reading a prior decision, and “creating” facts to support the conclusion. Ouch, especially that last one, a fairly rare accusation in the staid world of judicial opinion writing.

The Chief Justice and two other Justices would have affirmed, and concluded that DOT’s offer was not actually based on the earlier appraisal, because the numbers just didn’t line up:

¶70 The majority opinion also creates facts to excuse the Single Source appraisal’s failure to include any value for severance damages, parking replacement or a retention pond and its gross undervaluation for landscaping and acreage taken. It does so in part by repeatedly misstating facts. For example, the majority opinion says: “Most of the allocations in the final offer were either identical or close to the initial appraisal valuation.” “[T]he fact that most of the allocations remained unchanged from the beginning to the end of the process demonstrates that the appraisal served as the foundation for the offer.”

¶71 I do not agree that $159,574 is “identical or close to” the $0.00 that Single Source allocated for severance damages. And, the numbers tell us that the facts did change during a process that started with a $133,400 initial offer to purchase and was followed by a $403,200 jurisdictional offer.

¶72 The record shows that all totaled, Single Source valued the property taken at $269,800 less than DOT’s jurisdictional offer.

Dissent at 39-40.

What do you think about this one?

Christus Lutheran Church of Appleton v. Wis. Dep’t of Trans., No. 2018AP1114 (Wis. Apr. 1, 2021)