Wisconsin Supreme Court Addresses Town’s Duty to Construct a Replacement Road in Takings Lawsuit

March 27, 2020

The Wisconsin Supreme Court decided an eminent domain case, DSG Evergreen Family Limited Partnership v. Town of Perry, that addressed a Town’s duty to construct a replacement road when a taking removes access to the property.

The Town of Perry condemned a portion of agricultural property belonging to the DSG Evergreen Family Limited Partnership that resulted in the property being left landlocked.  To address that issue, the Town committed itself to building a replacement road over part of the acquired property.  DSG claimed that the Town failed to build the road to the standards required by either the condemnation petition or Wis. Stat. § 82.50, which imposes specific design standards for Town roads.  DSG filed suit against the Town seeking a declaratory judgment establishing the Town’s road-building obligations or in the alternative, damages sufficient to allow it to build the promised road which amounted to nearly $300,000.

The Supreme Court first rejected the Town’s argument that DSG’s claim for failing to properly build the road were barred by collateral estoppel.  The Court held that DSG was not required to raise  this claim in the just compensation proceeding because the jury was required to assume completion of the road project when determining damages under Wis. Stat. § 32.09.

The Supreme Court next held that DSG did not have a claim for declaratory relief because Wis. Stat. § 82.50 provides the Town with a certain level of discretion in building and designing roads.  In particular, the statute allowed a Town to apply to the DOT for a deviation of the standards in the statute.  Because the Town had some discretion with respect to the building of the road, declaratory relief was not appropriate since the rights of the parties were not yet fixed.   The Supreme Court also rejected DSG’s claim for damages as there was no clear expression of intent in Wis. Stat. § 82.50 creating a private cause of action for failing to comply with the provisions of the statute.

The Supreme Court’s holding puts a landowner, such as DSG in a precarious position.  They cannot seek a declaration or damages for a Town’s failure to properly construct a Town road but it is also questionable that such a claim can be asserted in a just compensation proceeding.  Pursuant to Wis. Stat. § 32.09, the court or jury determining just compensation must assume the completion of the public improvement.  In other words, the court or jury must assume the Town would build the road as promised in the condemnation petition.  It will be interesting to see how landowners adapt to this ruling and attempt to assert claims against governmental entities for failing to properly construct a road as part of an eminent domain proceeding.

Read the case here.