State Supreme Court sides with advertising co. in eminent domain case (UPDATE)

Listen to this article

When the state cut Nels Naslund and his partners a $1.9 million check for a chunk of prime real estate off Highway 41, he said he never expected to have to share it with a renter.

In October 2008, the Wisconsin Department of Transportation used eminent domain to take Naslund’s 76,628-square-foot property at the corner of Highway 41 and Highway 21 in Oshkosh for a widening project on 41. Naslund and his partners, working under the business name Country Side Restaurant, were renting the property out for a restaurant by the same name, a car dealership and a billboard.

Baton Rouge, La.-based Lamar Advertising Co. owned the billboard. In 2009, WisDOT paid Lamar $83,525 for the value of the sign as well as removal and moving costs.
The other renters did not receive payment because they had no ownership stake in the buildings they were using.
But Lamar sued Country Side for between $65,000 and $120,000 because, Lamar claimed, it had a property interest in the land.

Naslund disagreed.

“I’ve never seen a situation where a sign company has any real property interest,” he said. “I would have thought they were taken care of by the state already.”

A message seeking comment from Lamar’s in-house attorney, Jim McIlwain, was not immediately returned Friday afternoon.

The Winnebago County Circuit Court and the District 2 Court of Appeals agreed with Naslund.

But the Wisconsin Supreme Court on Friday reversed those decisions and ruled Lamar isn’t barred from seeking more compensation just because it received the initial state payment.

“Lamar has a right to seek not only payment for relocation expenses,” according to an opinion from Justice Annette Ziegler, “but also its share of the award for the fair market value of the property taken.”

The Supreme Court remanded the case to Winnebago County Circuit Court to determine how much money Lamar will receive from the $1.9 million payment.

The ruling clarified the rights of outdoor billboard owners to stake claim to compensation beyond the costs to build a sign, move it and take it down, said Lamar attorney Tom Hornig, of von Briesen & Roper SC, Madison.

Consistent with its policy of paying property owners and billboard companies in eminent domain cases, WisDOT had issued a joint check for $1.9 million to Country Side and Lamar with the expectation the parties would negotiate a settlement for Lamar’s permitting rights.

While the majority of the payment went to Country Side, the parties fought over $120,000 that was deposited with the Winnebago Clerk of Courts.

According to a WisDOT appraisal, the value of the permitted sign site was $65,100, which Lamar claims it is owed.

“Theoretically, the check should cover those interests anyway,” Hornig said. “Hopefully, going forward, it will.”

He said the ruling shouldn’t strain future relationships between property owners and billboard companies because the decision doesn’t diminish the amount landowners can recover in eminent domain situations.

“Property owners can always appeal the amount,” Hornig said.

In Country Side’s case, the assessed value of the property was close to the $1.9 million, Naslund said. But Naslund, who had co-owned the Country Side property since 1992, said the case certainly strained his relationship with Lamar.

In the future, he said, he will make sure any lease agreements with billboard companies clearly define the renter’s right to compensation in the case of eminent domain.

“I was stunned to see Lamar’s name on the check,” Naslund said. “But I think this will lead to more detailed agreements with sign companies in the future.”