Court again reverses in takings case

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The property remaining after a partial taking need not be entirely worthless to constitute an “uneconomic remnant” entitling the owner to full compensation.

For the second time, the Wisconsin Court of Appeals has reversed a circuit court’s dismissal of an inverse condemnation claim brought by Walworth County property owners after a high voltage line was built on their property.

The court also held on May 25 that whether the remainder is an uneconomic remnant, as defined in sec. 32.06(3m), is a question for the court, rather than the jury, to decide.

American Transmission Co. condemned part of a property owned by Scott and Lynnea Waller to construct a high-voltage transmission line in 2008.

After receiving a jurisdictional offer of $99,500 for the partial taking, the Wallers filed a complaint seeking full compensation under sec. 32.06(5), alleging that the portion left after the taking is an uneconomic remnant.

The condemnation commission issued an award of only $90,000, and the Wallers appealed to the circuit court, which dismissed the uneconomic remnant issue, concluding it could not be raised in a sec. 32.06(5) proceeding.

The Court of Appeals reversed that holding, and remanded with instructions to the circuit court to determine whether the partial taking created an uneconomic remnant. Waller v. American Transmission Co., LLC, 2009 WI App 172, 322 Wis.2d 255, 776 N.W.2d 612.

On remand, the circuit court deferred the uneconomic remnant issue until after the jury determined the amount of just compensation.

The jury awarded the Wallers $94,000 in damages, finding that the property declined in value from $132,000 to $38,000.

Because the present fair market value is more than zero, the circuit court held the property was not an uneconomic remnant, and dismissed that claim.

The Court of Appeals again reversed the circuit court.

Property remaining after a partial taking is an uneconomic remnant under the statute, “if the property remaining is of such size, shape or condition as to be of little value or of substantially impaired economic viability.”

Because the circuit court failed to address whether the remaining property was “substantially impaired,” the Court of Appeals reversed. “The circuit court focused only on the first part of sec. 32.06(3m) — the ‘little value’ component — rather than addressing the full scope of the statute.”

Holding that the uneconomic remnant issue is a factual one, for the circuit court to decide, the court added, “A $10 million property subjected to a partial taking leaving a $100,000 property might be an uneconomic remnant, whereas the partial taking of a $150,000 property leaving a $100,000 property might not be an uneconomic remnant. The reverse could also be true depending upon the facts and circumstances of each case.”

Finally, the court instructed that the issue is a procedural one for the circuit court to decide before the issue of just compensation is submitted to the jury, and directed the lower court to vacate the jury verdict if it finds that the property is an uneconomic remnant.

What the court held

Case: Waller v. American Transmission Co., LLC, No. 2010AP1447

Issues: Must property remaining after a partial taking be completely worthless to constitute an “uneconomic remnant” under sec. 32.06(3m)?

Holdings: No. Under the statute, it is enough if its economic viability is substantially impaired.

Attorneys: For Plaintiffs: Hugh Braun, Milwaukee; For Defendant: Mark Steichen, Katherine Stadler, Bryan Cahill, Madison.

David Ziemer can be reached at [email protected].