Condemnee not entitled to litigation expenses

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Unless a jurisdictional offer is made by a condemnor, property owners cannot recover their litigation expenses.

The Wisconsin Court of Appeals held on Aug. 10 that, even though the condemnation commission awarded more than the owners agreed to accept, while reserving the right to appeal the amount, the owners are not entitled to expenses.

The court acknowledged that the property owners have valid policy arguments as to why they should be able to recover the expenses, but held that the plain language of sec. 32.28(3)(d) does not allow them.

American Transmission Company, LLC, sought an easement to place high-voltage electric transmission lines across property owned by Mark and Jeanne Klemm.

ATC’s appraisal indicated the easement would decrease the value of the property by $7,500.

The Klemms accepted the offer, reserving the right to appeal. The condemnation commission awarded the Klemms just compensation in the amount of $10,000. The Klemms then sought litigation expenses under sec. 32.28(3)(d), and the circuit court awarded them.

ATC appealed, and the Court of Appeals reversed in an opinion by Judge Michael W. Hoover.

The statute provides that litigation expenses shall be awarded to the condemnee if “[t]he award of the condemnation commission … exceeds the jurisdictional offer or the highest written offer prior to the jurisdictional offer by at least $700 and at least 15% ….”

The court acknowledged that a property owner may seek an award from the condemnation commission in two ways: (1) negotiate an agreed price and transfer the property, while reserving the right to challenge the amount; or (2) reject the condemnor’s jurisdictional offer, and petition the circuit court for a determination of just compensation by the commission.

But the court held the plain language of the statute only permits an award of litigation expenses in the latter scenario.

The Klemms argued that, because either route leads to a commission hearing, fees can be awarded in either case.

They also argued that the phrase “highest written offer prior to the jurisdictional offer” does not require that a jurisdictional offer actually be made, but merely specifies the mandatory negotiation stage of the process.

But the court disagreed. “Under § 32.28(3)(d), the condemnee is entitled to litigation expenses only if the commission award ‘exceeds the jurisdictional offer or the highest written offer prior to the jurisdictional offer ….” (Emphasis added by court). The use of the article ‘the’ anticipates that there is, in fact, a jurisdictional offer. For example, the statute does not say prior to ‘any jurisdictional offer’ or ‘the jurisdictional offer, if any,’ nor does it expressly reference the ‘agreed price’ under subsec. (2a).”

The court acknowledged that permitting litigation expenses might further the legislative goal of making property owners whole when forced to litigate the issue of just compensation.

But the court concluded the policy arguments cannot trump the plain language of the statute. “While the Klemms’ policy arguments certainly have appeal, they are properly directed to the legislature, not the courts. We cannot ignore the statute’s plain language.”

David Ziemer can be reached at [email protected].