Water rights can’t be reserved

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It is generally understood that sec. 30.133 prohibits a lakefront property owner from selling access to the water without the underlying property.

However, a July 17 opinion by the Wisconsin Court of Appeals expands the scope of the statute -– to also prohibit the conveyance of the lakefront property, while reserving an easement to access the water.

The court acknowledged that the statute says no such thing.

Nevertheless, it held, “To permit the reservation by easement of riparian rights upon transfer of title to riparian lands would be contrary to the [L]egislature’s policy choice.”

Daniel M. Berkos, who is one of the partners in the restaurant and the attorney who argued the case, said he expects to seek review in the Wisconsin Supreme Court.

“I didn’t ‘convey’ anything, by any definition of ‘conveyance,’” Berkos said. “If we appeal, we will ask for review on the meaning of the statute -– that this was not a ‘conveyance.’ If the Legislature wants the statute to apply to a reservation of riparian rights, they should change the statute.”

“I guess it is my mistake,” Berkos added. “I should have kept 10 feet of land on the water for the restaurant.”

However, Jonathon V. Goodman of Milwaukee, who represented the condominium association, disagreed.

“I don’t think the statute is ambiguous,” he stated. “Even if it is, the legislative history indicates the intent to prevent severance of riparian rights from the land, whether by a conveyance or a reservation.”

C & B Investments, which owned property on Castle Rock Lake in Juneau County, created the Shipwreck Bay Condominium Association and built condominiums on the lakefront edge of the property.

It then relinquished ownership of all common areas of the property to the association, including the shoreline, but reserved for itself the right to regulate the placement and use of piers and docks.

C & B also owned a bar and restaurant on property that was adjacent to the condominium property, but did not abut the lake.

When C & B was unable to place piers in the lake for its restaurant, it brought suit against the association.

Juneau County Circuit Court Judge Guy D. Dutcher granted summary judgment in favor of the association, holding that the reservation of riparian rights violated sec. 30.133(1).

C & B appealed, but the Court of Appeals affirmed in a decision by Judge Paul B. Higginbotham.

The statute provides, “no owner of riparian land that abuts a navigable water may convey, by easement or by a similar conveyance, any riparian right in the land to another person, except for the right to cross the land in order to have access to the navigable water. This right to cross the land may not include the right to place any structure or material in the navigable water.”

The court acknowledged that the statute only prohibits the CONVEYANCE of riparian rights without the land, not the RESERVATION of riparian rights when selling the land.

However, the court concluded that the legislative history demonstrates intent to prohibit both.

In Stoesser v. Shore Drive P’ship., 172 Wis.2d 660, 494 N.W.2d 204 (1993), the Wisconsin Supreme Court held that riparian rights could be sold apart from riparian land.

In less than a year, the Legislature responded by enacting sec. 30.133. The Wisconsin Supreme Court, in ABKA Ltd. P’ship. v. DNR, 2002 WI 106, 255 Wis.2d 486, 648 N.W.2d 854, has since interpreted the statute as an abrogation of Stoesser.

Stoesser, like the case at bar, involved a reservation of riparian rights.

Accordingly, the court held the reservation in this case was barred by the statute.

The court reasoned, “Like the nonriparian owners in Stoesser, C & B seeks to reserve riparian rights by easement. Thus, to interpret sec. 30.133 in a manner that would allow C & B to reserve riparian rights by easement would preserve Stoesser. Such an interpretation is contrary to ABKA’s understanding of the legislature’s intent in adopting sec. 30.133.”

Analysis

The opinion in this case is a good candidate for reversal in the Supreme Court.

Admittedly, the Supreme Court has stated that the legislative intent in enacting sec. 30.133 was to abrogate its own opinion in Stoesser. ABKA, 648 N.W.2d at 866.

However, in the next paragraph in ABKA, the court explained Wisconsin law as follows:
“Wisconsin’s approach under sec. 30.133 has been identified as unique: ‘Many people assume that one can convey the riparian rights apart from the land just as readily as one could convey riparian land without the appurtenant riparian rights … More and more states have now come to accept that such grants are effective to some extent, with the effect varying, depending on whether the rights sought to be conveyed relate to consumptive or nonconsumptive uses. WISCONSIN, ON THE OTHER HAND, HAS NOW EXPRESSLY PROHIBITED THE CONVEYANCE OF RIPARIAN RIGHTS EFFECTIVE APRIL 9, 1994. Presumably this means apart from the conveyance of riparian land.’ WATER AND WATER RIGHTS at sec. 7.04(a)(3), pp. 7-97-7-98.” Id.

The final sentence of the statement is noteworthy and astute -– the statute is so poorly drafted that, read literally, it bans the sale of riparian rights, period. Because a sale of waterfront property generally includes the sale of those rights, a literalist interpretation of the statute bans the sale of all lakefront property.

Read literally, conveying the land, while reserving the riparian rights, is the only type of transaction that is allowed under the statute.

Since that interpretation is absurd, it is only by “presumption” that it can be read as prohibiting the sale of riparian rights without the underlying land.

However, it is the first sentence of the statement that is relevant to the case at bar. The sentence clearly distinguishes between two types of transfers: a conveyance of the rights while keeping the land; and a conveyance of the land while keeping the riparian rights.

The third sentence of the statement interprets the statute as prohibiting only the first type of conveyance, without even addressing the second type.

By citing this language in its analysis in ABKA with approval, the Supreme Court has implicitly acknowledged that the two types of transfers are different, and the statute only prohibits the conveyance of the rights without the land.

Whatever the legislative intent may have been when the statute was adopted, the actual language of the statute does not apply to the transaction in the case at bar; and the only Supreme Court opinion to address the statute recognizes this.

Accordingly, should the court accept review in this case, it could affirm only by ignoring or withdrawing its own language in the ABKA opinion.

One more consideration makes this case particularly appropriate for review in the Supreme Court — despite the decision in ABKA, the court has never actually been presented a case that involved the meaning of sec. 30.133.

Neither the parties in ABKA, nor any of the numerous amicus curiae, briefed the meaning of the statute. Nor was it discussed at oral argument
, save for one brief question by the author of ABKA, Justice Ann Walsh Bradley.

The merits of the court’s reasoning in ABKA is beyond the scope of this analysis. However, as one who read the briefs and attended the oral argument, I can attest that Justice Diane S. Sykes was correct when she wrote in dissent, “The majority has adopted an analysis that will in large part be unrecognizable to the participants in this proceeding.”

ABKA, 648 N.W.2d at 871.

While the Supreme Court may have issued an opinion interpreting sec. 30.133 in ABKA, it has never actually read competing briefs from interested parties as to its meaning.

This case would provide it an excellent opportunity to do just that.