The $267 Inverse Condemnation Claim

April 28, 2016

This is an odd case on several levels. The Wisconsin Court of Appeals’ decision on the law was entirely predictable. The odd thing is that the appeal was taken in the first place.

The Village of Cross Plains took 703 square feet of Kenneth Ransom’s property to build a road. The award of damages was $6,650. Ransom appealed, claiming he was entitled to $11,300 in just compensation. The Village then apparently submitted an appraisal concluding that Ransom was actually entitled to $11,400, more than he thought for the partial taking. So, the Village moved for summary judgment that would give Ransom the higher value.

Ransom opposed the motion. He thought he was entitled to more money, not because of the fee taking, but because the Village used a portion of his property as a temporary construction easement. The Village did not deny using Ransom’s property for a temporary easement, but argued that Ransom was required to file an inverse condemnation claim to recover the value of the temporary easement. The trial court agreed.

The Court of Appeals affirmed, finding that the just compensation due to Ransom for the fee taking was controlled by Wis. Stat. § 32.09(6). That statute sets just compensation as the greater of the fair market value of the property taken or the difference between the before and after values of the property. And because the subject of the appeal was the amount of just compensation due to Ransom for the March 2014 partial (fee) taking, Ransom would have to commence a separate inverse condemnation action under Wis. Stat. § 32.10 in order to recover just compensation for the temporary construction easement taking.

Ransom argued that it was unreasonable to expect him to file a separate inverse condemnation claim in a case where the Village admits taking the temporary construction easement and failing to pay for it. He also argued that forcing him to bring an inverse condemnation claim is bad public policy because it encourages condemnors to avoid paying for temporary easements. The Court of Appeals noted that these arguments “are better directed at the legislature.”

What is odd about this case is that the Court of Appeals noted that the amount in dispute appeared to be no more than $267. Although Ransom claimed the temporary easement was worth $2,900, it appears that dollar amount had no support in fact.  In any event, Ransom could have filed an inverse condemnation claim, easily succeeded, and recovered not only the just compensation but all of his litigation expenses under Wis. Stat. § 32.28(3)(c).

And knowing that, why would the Village not offer to pay a reasonable amount for the temporary easement immediately, then wrap it into the settlement of the just compensation case,  to save not only the legal costs associated with the appeal, but also the litigation expenses involved in the inverse condemnation suit?  And that would include its own legal costs as well as those of Ransom.

The decision did not explain why on earth both sides would waste so much money on an appeal when the claim could, and should have, been resolved with two or three minutes of hard negotiation.  If we find anything in the briefs, we will let you know.