Landowner Loses Claim That the Condemnor Paid Him Too Much

November 2, 2016

Every once in a while, we are asked to defend a condemnor in a right-to-take action where the landowner claims he or she was paid too much money for whatever land rights were taken.  The most recent attempt to make such a claim was addressed by the Jefferson County Circuit Court in Case No. 16-CV-93.  As in every other case we are aware of, the claim was unsuccessful.  But why would the landowner make such a claim in the first place?

Wisconsin’s fee-shifting statute for condemnation claims is contained in § 32.28.  It allows landowners to recover litigation expenses (all reasonable costs incurred) if they ultimately recover at least 15% (and at least $700) more than the condemnor paid for the land rights or, in some instances, what the condemnor offered to pay for the land rights.  So, it is in the landowners’ interest to keep the amount paid, or the amount offered, as low as possible if they intend eventually to contest the amount of compensation.

This statutory scheme sometimes results in wasteful and unnecessary litigation.  For example, it is common for landowners, presumably on advice of counsel, to refuse to negotiate and accept the first offer made by a condemning authority, then appeal for more compensation, a right granted by Chapter 32.  Chapter 32 requires the condemnor to negotiate in good faith, but imposes no such obligation on the landowner.  In such a case, the condemnor’s offer may not account for project impacts that are unknown at the time the offer is made, but would typically surface during the give-and-take of negotiations.

Another bizarre consequence of the § 32.28 threshold for litigation expenses played out in the Jefferson County case mentioned above.  The facts are simple.  The airport acquired four properties in fee for Runway Protection Zone and approach protection, and to clear the properties of FAA-identified obstructions.  The airport’s appraiser valued the commercial property at $240,000.  The landowner indicated that he thought the offer was far too low and rejected it.  He did not avail himself of the opportunity to have his own appraisal done at the airport’s expense.  The airport raised its offer to $270,000 which again was rejected by the landowner, so the airport issued a Jurisdictional Offer for that amount.  The airport eventually filed an Award of Damages for $270,000, paid the money into the Court and took title to the property.

The landowner brought a right-to-take action under § 32.05(5), claiming that the airport failed to “provide the owner with a full narrative appraisal upon which the jurisdictional offer was based.”  He sought a judicial declaration to that effect and an injunction prohibiting the airport from taking possession of the property.  The airport quickly moved for summary judgment, claiming that the jurisdiction offer was, in fact, based on the appraisal it had prepared and presented to the landowner.  The Court agreed, finding that the airport’s decision to offer the landowner more than the appraised value “was a reasonable approach in negotiation.”

The landowner recently appealed, so we will hopefully have the benefit of a Court of Appeals decision on the issue sometime soon.