WDOT: What Do You Pay for My Property?

Recently, in Spanbauer v. State of Wisconsin Deptartment of Transportation, the Wisconsin Court of Appeals declined to adopt a bright-line rule mandating that:

Where there exists evidence of comparable sales not impacted by a public improvement project, any sale alleged to be comparable that was purchased after the project plans were known, and which is located in whole or in part within the project footprint must be excluded as a matter of law.

No. 2008AP1165, 2009 WL 1457167, slip op. at ¶ 30 (Wis. Ct. App. May 27, 2009).

Defendant Spanbauer’s property was taken by the Wisconsin Department of Transportation («DOT») to be used for a highway project. The lawsuit that followed focused on opposing experts’ valuations of Spanbauer’s property. The DOT’s expert determined that a comparable purchase of land by Kwik Trip after plans for the highway had been announced fell under the project influence rule and should be excluded from the valuation. Spanbauer’s expert concluded that the Kwik Trip sale complied with the project influence rule because it:

• Was within the market range of sales prices in the area
• Was not the highest valued comparable sale considered in the valuation, and uncertainty surrounding the highway project minimized the likelihood of project influence

At trial and on appeal, the DOT argued that the Kwik Trip sale should be excluded from trial as a matter of law. Spanbauer argued that the question was a matter of fact, and the differing expert opinions should be admitted at trial. In affirming the trial court’s decision to allow the disputed testimony, the Court of Appeals noted «under the laws of Wisconsin, when there is factual dispute regarding whether project influence existed, it was the proper exercise of discretion to admit the evidence of comparable sales for the jury to consider and pursuant to a jury instruction to follow the project influence rule.» Spanbauer at ¶ 28.

The DOT eventually requested the court to create a bright-line project influence rule excluding all purchases made after project plans are known. Spanbauer responded that adopting the DOT’s proposed rule would rewrite Wis. Stat. § 32.09(5)(b) (the project influence rule) altogether, a proper task for the legislature, not the courts. The Court of Appeals agreed with Spanbauer that it would be improper for the court to adopt the proposed bright-line influence rule and they declined to do so.