Court of Appeals: Yes, The Statutes DO Allow Condemnors to Pay More Than the Appraised Amount for Property

In a new opinion recommended for publication, Otterstatter v. City of Watertown, the court of appeals affirmed that, yes, condemnors can pay more than the appraised amount to acquire land for public projects.

The City condemned Otterstatter’s property for an airport project. Otterstatter sued the City challenging the City’s right to take his property. Otterstatter claimed that the City’s jurisdictional offer – the last, best offer and the final step before a taking – was defective because it was $30,000 higher than the City’s appraisal. In effect, Otterstatter argued the City paid him too much.

The trial court rejected Otterstatter’s arguments and ruled in favor of the City in all respects. The court of appeals affirmed.

As the appeals court found, nothing in the statutes requires the jurisdictional offer to equal the appraisal. Instead, the statutes establish a process of a “required opportunity for negotiation” in recognition of the public policy that encourages the settlement of eminent domain controversies “without resort to litigation.” The City’s appraisal was a “supporting part” and “fundamental ingredient” of the jurisdictional offer. This was sufficient to satisfy the City’s obligation to provide an appraisal upon which the jurisdictional offer is based.

What is baffling is why Otterstatter advanced this claim in the first place. Why file a lawsuit to force a condemnor to pay less compensation? While not discussed in the court of appeals decision, the answer is attorney fees. Section 32.28 of the Statutes allows landowners to recover attorney fees and costs if a jury or commission award exceeds the jurisdictional offer by 15% (and $700). So, the lower the offer, the greater the chance of recovering attorney fees.

In a separate discussion, the court concluded that the City gave Otterstatter a valid 90-day notice to vacate the property. The court found that sec. 32.05(8), Stats., is unambiguous. The statute requires 90 days’ notice before “the intended vacation date.” There is no language in the statute requiring that the 90-day notice be provided after the condemnor has acquired title to the property, as Otterstatter argued.

If you regularly represent condemnors or landowners, the whole decision is worth a careful read.