Eminent domain stressed in driveway dispute

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A Kenosha landowner is urging the state Supreme Court to reject the Wisconsin Department of Transportation’s attempt to avoid paying damages after removing a driveway.

Port Washington-based 118th Street Kenosha LLC sued WisDOT in 2011, challenging the amount of money the state offered as compensation related to the reconstruction of Highway 50 at Interstate 94.

During that project, the state moved 118th Avenue, eliminating the driveway to a shopping center, which 118th Street Kenosha LLC owns. The shopping center has another driveway, which connects to nearby 74th Place, and WisDOT during the project built a second driveway to that same road. To accomplish that driveway construction, WisDOT took a temporary, limited easement.

WisDOT paid the property owner damages for that easement, but did not offer compensation for eliminating the driveway.

118th Street Kenosha LLC tried to persuade a Kenosha County Circuit judge to force the state to increase the payout, arguing that losing the driveway permanently reduced the parcel’s value by at least $400,000. The judge, however, barred 118th Street Kenosha LLC from presenting evidence to support that argument and then dismissed the case.

The property owner appealed, and the 2nd District Court of Appeals reversed the lower court’s ruling and remanded the case back to Kenosha County so 118th Street Kenosha LLC could present the evidence.

WisDOT, however, sought a state Supreme Court review, which was granted in March.

According to WisDOT’s opening brief filed with the state Supreme Court, the agency used its police power when eliminating the driveway, meaning 118th Street Kenosha LLC is not entitled to compensation.

But Susan Sager, an attorney with Milwaukee-based Michael Best & Friedrich LLP, who represents the property owner, rejected that argument. According to her response filed Wednesday to WisDOT’s brief, the agency’s “proclamation of a ‘separate and distinct’ police power act is just that — a proclamation without any factual or legal support and belies reality.”

Matt Fleming, an attorney with Madison-based Murphy Desmond SC, said the distinction between police power and eminent domain is not always clear, but the compensation requirements for the two are far different. Fleming specializes in eminent domain disputes but is not involved in the Kenosha case.

“Some people say it’s really a matter of semantics,” he said, “that eminent domain is really just another aspect of the police power.”

A police power action is usually one that is necessary to protect the public’s safety, Fleming said, but it must leave a property owner with reasonable access to the parcel.

If that access is not reasonable, he said, a property owner could argue the state should have used eminent domain and paid for the property. In general, Fleming said, a commercial property has reasonable access if there are two entrances, but “reasonable” must be defined based on the circumstances.

“I think there’s probably still room in the case law,” Fleming said, “to develop when that line is crossed.”

But in the case of 118th Street Kenosha LLC, Sager said, WisDOT cannot argue it used police power.

“There’s no evidence to support that,” she said, “and it’s contrary to all the documentation.”

When WisDOT began the Highway 50 reconstruction project, Sager said, the department indicated it would use the eminent domain law in Chapter 32 of state statutes to move 118th Avenue. Therefore, she said, the state cannot avoid paying damages.

“Having invoked the powers of Chapter 32 to take property,” according to Sager’s Supreme Court brief, “the DOT is not in a position to deny the Property Owner rights under the same law.” Follow @bkevit