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Condemnor must offer comparable property

By: dmc-admin//February 1, 2006//

Condemnor must offer comparable property

By: dmc-admin//February 1, 2006//

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What the court held

Case: City of Janesville v. CC Midwest, Inc., No. 2004AP267

Issue: If no comparable replacement properties exist for a condemned business, can the condemnor obtain a writ of assistance to remove the owner?

Holding: No. The statutes only allow a writ to issue if some comparable property is made available by the condemnor.

Counsel: Alan Marcuvitz, Waukesha; Andrea H. Roschke, Milwaukee; Susan M. Sager, Milwaukee, for appellant; Waldemar H. Klimczyk, Janesville; Mark J. Steichen, Madison, for respondent.

If a condemning authority cannot make comparable replacement property available to the owner, it cannot obtain a writ of assistance to remove the owner, the Wisconsin Court of Appeals held on Jan. 26.

CC Midwest, Inc., is a division of a corporation that owned approximately nine acres of land in the City of Janesville. CC Midwest rented the property and operated a trucking terminal there.

On Feb. 7, 2003, the City acquired the property as part of a transportation project. In October 2002, the City had sent CC Midwest a letter advising that it would need to relocate, would receive a 90-day advance notice of when it had to move, and would be eligible for relocation assistance. The letter also listed several comparable replacement properties.

On Feb. 6, 2003, the City notified CC Midwest that it would have until May 8, 2003, to vacate the property. Later that month, the City notified CC Midwest of eight more possible relocation sites. However, CC Midwest informed the City in March that none of the suggested sites were comparable.

On April 14, the City advised CC Midwest that it had to physically vacate the property by May 16. CC Midwest did not vacate, and the parties subsequently entered into an occupancy agreement defining the terms under which CC Midwest could occupy the property while the City sought a writ of assistance requiring CC Midwest to vacate the property.

The City then initiated an action seeking a declaration that it had complied with its obligations under Chapter 32 and was entitled to a writ of assistance directing the sheriff to remove CC Midwest from the property. CC Midwest opposed the writ on the ground that the City had not made available a comparable replacement property, as required by sec. 32.05(8)(b) and (c).

Rock County Circuit Court Judge John W. Roethe granted the writ, and CC Midwest appealed. The court of appeals certified the case to the Supreme Court, but certification was declined. The court of appeals then reversed in a decision by Judge Margaret J. Vergeront.

No Comparable Property

On appeal, the City conceded that none of the replacement properties were “comparable,” within the meaning of sec. 32.19(2)(c), but contended that it nevertheless met its statutory obligations, relying on Dotty Dumpling’s Dowry, Ltd., v. Community Development Authority of the City of Madison, 2002 WI App 200, 257 Wis. 2d 377, 651 N.W.2d 1.

The court disagreed, finding the statute unambiguous, and Dotty Dumpling’s distinguishable.

Section 32.05(8)(c) provides, in relevant part, “The condemnor may not require the persons who occupied the premises on the date that title vested in the condemnor to vacate until a comparable replacement property is made available.”

The court concluded, “there is nothing in the language of Wis. Stat. sec. 32.19(3) or (4m), or any other subsection of Wis. Stat. secs. 32.05 or 32.19, that supports the City’s position that it need not make available a comparable replacement property meeting the definitions of sec. 32.19(2)(b)-(d), but instead need only identify property that could be made comparable and offer the payments required by sec. 32.19(3) and (4m).”

Distinguishing Dotty Dumpling’s

The court then distinguished Dotty Dumpling’s. In that case, the owner argued that a comparable replacement property had not been “made available” within the meaning of sec. 32.05(8)(b) and (c) because it would cost $1 million more than the condemnation award and the relocation payments to purchase and remodel the only property identified that met the criteria.

In rejecting that argument, the court of appeals rephrased the owner’s position as, “a court may not grant a condemnor possession of condemned premises until a replacement property deemed acceptable by the condemnee is procured, regardless of its acquisition costs, all of which the condemnor must bear or tender.” Dotty Dumpling’s, at par. 26. The court rejected this position as unreasonable because it placed an open-ended obligation on the condemnor to provide relocation payments in order to make the owner whole and made numerous specific payment caps in sec. 32.19 meaningless.

In the case at bar, the City argued that, just as it was unreasonable to impose an open-ended financial obligation on the condemnor, despite statutory limits on relocation costs, it would be unreasonable to deny a writ of assistance because no comparable replacement property exists.

The court disagreed, explaining, “A requirement that a condemnor identify a comparable replacement property meeting the applicable definition in Wis. Stat. sec. 32.19(2)(b)-(d) before making an occupant vacate does not impose an ‘open-ended’ financial obligation on the condemnor and does not render the provisions for payments in sec. 32.19 meaningless. It is not inconsistent for the legislature to provide that an occupant may not be required to vacate unless the condemnor has identified a comparable replacement property meeting the statutory definition, even though the condemnor’s financial obligations to assist the occupant are limited by the provisions for payments in sec. 32.19.”

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Case Analysis

The City maintained that it would be absurd and would impose too great a barrier to necessary public projects if comparable replacement property had to be provided, and no such property existed. The City argued in favor of a construction that would allow a writ to issue, “so long as the condemnor has identified some property that could be made comparable and has offered all the payments to which the occupant is entitled under sec. 32.19 and all other assistance to which the occupant may be entitled under statute and regulation.”

The court acknowledged that its construction, requiring comparable property, may impose significant impediments to public projects when no such property exists, but found nothing absurd in the result.

The court wrote, “While there are important public policies that favor facilitating the condemnation of property and removal of occupants when the property is necessary for projects that benefit the public, there are also important public policies that favor ensuring that displaced occupants have a comparable property to move to. It is for the legislature to decide the proper balance… The legislature could reasonably decide that a condemnor should not be able to remove an occupant if there is no comparable replacement property for it to move to, even if this means modifying, or even not going ahead with, a desirable public project.”

Finding that the plain language of the statute requires comparable property before a writ of assistance can issue, and that no such property was made available by the City, the court reversed, and remanded the case with instructions to deny the writ.

Click here for Case Analysis.

David Ziemer can be reached by email.

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