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Supreme Court hears another case about DOT property damage

The Wisconsin Supreme Court is considering its second case of the week involving property damage allegedly caused by a Wisconsin Department of Transportation project.

At issue in the case in front of the justices on Wednesday is Wis. Stat. § 88.87(2)(c), which permits a property owner with flooded or water-soaked land because of highway construction to file a claim within three years after the alleged damage occurred.

Southport Commons owns about 45 acres of undeveloped land near Interstate 94 in Kenosha County. From 2008 to 2009, the Wisconsin Department of Transportation moved an I-94 frontage road to bisect the property.

In 2016, Southport received a survey of its property indicating that wetlands had significantly increased. Southport blamed the road construction for the increase and filed a notice of claim against the DOT in 2017 for alleged damage to property. The DOT didn’t respond, and the claim was disallowed by inaction.

Southport then filed an inverse-condemnation lawsuit. The DOT moved for judgment because the claim came more than three years after the damage occurred. Southport argued that the three-year limitation period didn’t begin until it discovered the damage in the 2016 survey. The circuit court disagreed and granted the DOT’s motion.

The case went to the Court of Appeals, which also rejected Southport’s argument. The court concluded that the Legislature chose “occurred” and not “discovered” to signify the trigger for the statutory-limitation period.

Southport then petitioned the state Supreme Court for review, arguing the lower courts’ decision converted 88.87(2)(c) into a statute of repose. That’s unreasonable, Southport said, because wetlands creation and other types of damage take years to develop.

Much of the questioning during oral arguments on Wednesday was about when the damage allegedly occurred. Smitha Chintamaneni, who appeared on behalf of Southport, said the company hasn’t established when the damaged occurred and did not believe it was required to determine that date under the claim made.

“We have viewed 88.87 as a notice-of-claim statute, not necessarily a statute of repose per se,” Chintamaneni said. “We have determined under the plain language of 88.87 and other cases interpreting it as a notice-of-claim statute, as well as the Prune case, that discovery would start a property owner’s obligation to file a claim within the three-year period.”

Jennifer Vandermeuse, attorney for the DOT, said the circuit court decided that the damage occurred upon completion of the project in 2009, and Southport didn’t refute that in front of the Court of Appeals.

“As a result of that, there was no development of any argument as to whether that should be an error that we should go back and develop facts on,” Vandermeuse said. “And now here we are in 2021, 11 years after this project was completed. To go back now would be prejudicial to the department.”

She said the statute gives property owners “ample time” to discover damages and make claims. Chief Justice Pat Roggensack asked Vandermeuse how the court could interpret the statue if no one knew when the damages occurred.

“There are ways to interpret ‘occurred’ in the way that the Legislature intended that sometimes may need a factual determination,” Vandermeuse said, giving the examples of a landowner talking at a town hall meeting about damage from a heavy rainstorm on a certain date or the need to hire experts.

Roggensack repeated the court’s question about the date of the damage to Alan Marcuvitz, who gave the rebuttal for Southport.

“Did you concede that the damage occurred at some specific date, or did you fail to argue that you didn’t know when the damage occurred?” Roggensack asked Marcuvitz.

“We did not know the circuit court’s position until the circuit court issued a decision, and that’s the very first time that assumption was presented to us, that it had to have occurred when the project was completed.” Marcuvitz said. “All a property owner can do under these circumstances is when they first learn that they’ve been damaged, they file a timely claim and put the department on notice.”

This was the second case involving damage to property by the DOT that the court heard this week. The justices heard arguments on Tuesday about the statutory scope of “lands” and if it was synonymous with “property.”

About Michaela Paukner, [email protected]

Michaela Paukner is the legal reporter for the Wisconsin Law Journal. She can be reached at (414) 225-1825 or by email at [email protected]

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