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'Parcel' includes all contiguous farmland

Hon. Gregory A. Peterson

In determining whether property is part of a "parcel" of land exempt from special assessments as "eligible farmland," all contiguous property of an owner should be considered as one, rather than looking to legal descriptions, the Wisconsin Court of Appeals held on Oct. 1.

Special Assessment

In 1999, the Town of Kronenwetter approved a resolution to extend sewer and water services along County Highway X. A group of property owners along the highway indicated it was not interested in the extension if it would mean special assessments against them.

The town authorized Richard Schneider, the town engineer, to negotiate the granting of easements by owners to the town, but did not authorize that any compensation be paid for the easements.

Nevertheless, according to the owners, Schneider represented that, by granting the easements, they would not have to pay any special assessments; however, the grants did not contain, nor did the board approve, any such reservation.

The owners brought suit challenging the special assessments, but Marathon County Circuit Court Judge Raymond F. Thums largely upheld them. Both the town and the owners appealed various holdings of the court.

The town appealed an order denying them litigation costs, and a holding that, as to one of the owners, Dale Howard, the assessment was reasonable only as to water, but not sewer, services.

The owners appealed seven holdings: the denial of a jury trial on their fraud and breach of contract claims; that the town was not bound by Schneider’s representations; dismissal of their fraud claim; that only part of owner Dale Howard’s property was exempt as "eligible farmland"; the denial of their motion to file an amended notice of appeal from the assessment; the denial of their claim that the town is estopped from denying the oral contract; and a holding that the special assessment was reasonable.

In a decision by Judge Gregory A. Peterson, the court of appeals affirmed on all issues, except as to Howard’s property, all of which, it concluded, was "eligible farmland."

Legal Expenses

First, the court affirmed the holding that the town is not entitled to recover legal expenses incurred in litigating the special assessment.

Section 66.60(5) (renumbered 66.0703(2)) allows municipalities to add to special assessments, "the cost of any architectural, engineering and legal services, and any other item of direct or indirect cost which may reasonably be attributed to the proposed work or improvement."

Rejecting the town’s claim that this statute permits the recovery of legal expenses from property owners, the court held, "The legal expenses the town is seeking to add to the assessment are not reasonably attributed to the work or improvement. They do not aid in its creation or development, but arise after completion of the engineering report and after the municipality has published its final resolution. They are instead attributed to an appeal from the special assessment. While the town would be entitled to legal costs for establishing the project, the statute does not allow for the addition of legal expenses that are speculative and uncertain, and merely the result of a legal challenge. We therefore affirm the circuit court’s decision not to allow the inclusion of litigation costs."

What the court held

Case: Richard Bender, et al. v. Town of Kronenwetter, No. 02-0403.

Issue: Can a town include litigation costs in a special assessment levy? Is a taxpayer who alleges fraud and breach of contract in a challenge to a special assessment entitled to a jury trial? Can a town be bound by unauthorized representations made while its agent is negotiating an easement? In determining whether a "parcel" is "eligible farmland" exempt from a special assessment, is "parcel" defined by legal description?

Holding: No. Litigation costs do not directly aid in development? No. Where only equitable relief is sought, no jury right exists. No. A town board must authorize an agreement to be bound by it
. No. All contiguous property is considered one parcel.

Counsel: Russell W. Wilson, Wausau; Julie M. Falk, Wausau, for appellant; Gary R. McCartan, Wausau, for respondent.

Jury Trial

Second, the court affirmed the denial of a jury trial on the owners’ contract and fraud claims.

Although the court acknowledged that claims for fraud and breach of contract are actions at law, which carry a right to a jury trial, it held the right not present here, reasoning that the owners are, "simply challenging the special assessment. They have not actually filed any claims for fraud or breach of contract requesting monetary damages. Instead, they have asked to have the assessment voided, in part, because of conduct they allege amounts to fraud and breach of contract. They are seeking equitable relief and are therefore not entitled to a jury trial."

Oral Contract and Fraud

Third, the court affirmed that the town was not bound by any oral representations of Schneider concerning exemptions from the assessments.

Section 66.605(1)(renumbered 66.0715(2)) states that a town may defer special assessments "on such terms and in such manner as prescribed by its governing body." The owners argued that the town’s grant of authority to Schneider to negotiate and draft easements on its behalf included the authority to bind the town to any contracts he made.

Rejecting that argument, the court held that Schneider was not authorized to exempt or defer special assessments, and therefore, the town could not be bound by any oral contract doing so.

The court rejected the owners’ fraud claims, as well, finding no evidence that the town intended to use fraud to obtain the easements. The court also affirmed the reasonableness of the special assessments, and the trial court’s refusal to estop the town from denying the validity of the oral contract. The court further found it unnecessary to consider whether the owners should have been permitted to amend their notice of appeal.

Definition of "Parcel"

One of the owners, Dale Howard, prevailed on one issue, however, as the court held that his property, a tree farm, is exempt from the special assessment as "eligible farmland" under sec. 66.60(6m)(renumbered 66.0721).

The statute defines "eligible farmland" as, "a parcel of 35 or more acres of contiguous land which is devoted exclusively to agricultural use which during the year preceding the year in which the land is subject to a special assessment under this section produced gross farm profits, as defined in sec. 71.58(4), of not less than $6,000 or which, during the 3 years preceding the year in which the land is subject to a special assessment under this section, produced gross farm profits, as defined in s. 71.58(4), of not less than $18,000."


Wisconsin Court of Appeals

Related Article

Case Analysis

Howard owns two contiguous parcels, one 38.7 acres and the other 23.9 acres. Because the statute only exempts parcels of 35 acres or more, the trial court held that only the 38.7-acre parcel was exempt.

The court disagreed, holding that the land should be considered as one exempt 62.6 acre parcel. The court acknowledged that "parcel" is defined in Wis. Admin. Code Tax 18.05 as, "land, contained within a single legal description."

However, the court noted that the statute makes no reference to any special definition of "parcel," and concluded that it should apply the plain meaning of "parcel" from Black’s Law Dictionary instead – "a tract of land."

Using that definition, the court concluded, "this suggests that any contiguous portion of land greater than thirty-five acres would constitute ‘eligible farmland,’ regardless of the number of parcels into wh
ich it might be divided for tax purposes. … The statute’s requirement that land be greater than thirty-five acres is not dependent on how land is allocated in a property tax bill."

Accordingly, the court reversed on this one issue.

Click here for Case Analysis.

David Ziemer can be reached by email.

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