Eminent Domain

300ablan02Government expansion in reaction to public demand has caused an increase in the need for government to acquire real estate for housing and other areas of public concern. Unfortunately, in order to accomplish these ends the government acquires real estate owned by individuals or businesses. It does so by exercising its right under what is called the power of eminent domain. The government has to first establish that there is a public necessity for use of such land and then it has to compensate the individual for the “taking”. Most of these litigation centers on the compensation issue but on occasion the judiciary branch of government, ever cognizant of the shrinking size of privately owned land, have seen fit to accept challenges to the public necessity issue.

The government’s power to take private property originated in the Wisconsin Constitution, Art. IX, sec. 3. The Legislature has delegated this power by statute to numerous authorities and has specified the purposes for which such power can be used. Generally, departments, municipalities, boards, commissions, public officers, and various public and quasi-public corporations are delegated this power. Some of the purposes for which the Legislature has specified that condemnation can be used are highway construction or improvement, reservoirs, dams, public utility sites, waste treatment facilities, city redevelopment, and energy lines.

1. First contact

First you will be contacted by the acquiring authority; you will receive a full narrative appraisal of the property which is conducted by an appraiser hired by the government. Typically, they have one or two appraisers that they can rely on. The government’s motive is to get the best price available and their appraisers know that. Even though the law requires the appraiser to confer with the owner or the owner’s representative, if reasonably possible, when making the appraisal, this is usually little more than meeting the owner for a walk through. After you have received the appraisal, you can present it to your own private appraiser and request an independent appraisal or simply have your appraiser identify the shortcomings of the government’s appraisal. If your appraisal is done according to statute, you can request that the government pays a reasonable cost provided you provide them with the appraisal within 60 days of the government’s appraisal. The decision to submit your full narrative appraisal is technical. There are significant strategy reasons for not submitting the appraisal and instead only submitting a rebuttal appraisal as indicated above. You should consult with your attorney on this decision. Either type of appraisal will be considered during negotiations.

You have the right to challenge the public necessity of the taking. Investigation and research into the project is essential. Different agencies have different procedures. The public service commission gets a formal determination of public necessity but most other governmental authorities make their own determinations. These records are available for public inspection. Agricultural impact statements are required if the project involves a farming operation and environmental impact statements are required in nearly all other circumstances. These statements are available for inspection and often provide great insight into the issue of public necessity. You must challenge public necessity within 40 days of being served with the jurisdictional offer or the postmark date of the certified letter jurisdictional offer. You cannot accept money from the government if you intend to challenge public necessity.
In addition, you may challenge any defects in the procedure the authority has used.

2. Negotiation

After appraisals are completed, the government is required to negotiate with the owner, usually through its legal representative. Condemnation has not started yet, only negotiations. In my experience, government usually does not negotiate strenuously. Generally, a few offers are exchanged but no more. In some takings the owner is displaced and is entitled to relocation expenses. During the negotiation these relocation expenses are on the table. Generally these are resolved rather expeditiously. During negotiations, the acquiring authority must provide a map showing all property affected by the proposed project. Along with this map, you must be given the names of at least 10 neighboring landowners to whom offers are being made. If you reach an agreement during the negotiation stage, proper real estate documents (“date of acquisition/evaluation”) will be recorded along with a certificate of compensation. From the date of filing of the certificate of compensation, you have six months to appeal to the circuit court in the county, challenging compensation.

3. Partial acquisitions

In partial acquisitions, fair market value is the greater amount of either the fair market value of the part acquired or the difference between the value of your property before the acquisition and its value after, giving effect to severance damages set forth in the Wisconsin Statutes. Sometimes property owners are left with an uneconomic remnant, which the government is required to buy. There are similar rules involving a taking for an easement over your land.

4. The jurisdictional offer

Once the negotiations have ended and an agreement is not reached, the government will either personally serve or sent by certified mail what is known as the jurisdictional offer. This is a critical stage in the eminent domain process. This does not mean that negotiations have ended, but it has some significant impact on your rights and responsibilities. The offer contains the amount of compensation offered, a statement of the nature of the project and a statement of the proposed date the acquiring authority will occupy the property. You have 20 days to accept or reject this offer. If you accept, you will receive your money within 60 days. If you reject the offer, you should do so in writing, but if you do nothing within the 20 day period the government may petition the court to have a hearing on compensation. The government will file a legal document so that the property effectively cannot be sold to anyone else. You may also file a petition in which you can challenge both compensation and public necessity. You have the option of taking the case directly to the circuit court or you may wish to ask the circuit court to remove it to a condemnation commission hearing. The condemnation commission is comprised of citizens of the county and usually includes at least one lawyer and one real estate agent. These commissioners are appointed by the circuit court and although there may be as many as 6 to 10 commissioners usually only three will sit on your case. The award of the condemnation commission can be appealed to the circuit court also.

5. The condemnation commission hearing

A hearing on the petition the acquiring authority has filed with the court must be held at least 20 days after the date the petition was filed. If the court finds that the authority has a right to condemn your property, the court may and usually will assign the matter to the condemnation commissioners for a hearing. They cannot be told what the amount of the jurisdictional offer is for fear that it may affect their judgment.

The procedure and the hearing are somewhat informal as compared to a trial in the Circuit Court. You are still required to provide evidence. This can include not only your appraisal, but your rebuttal appraisal along with studies that you may have done concerning the surrounding properties or other comparable properties. You are allowed to introduce statistical data concerning real estate trends and you are allowed to present evidence showing that your property is unique. You can also have your appraiser appear in person. Once all the evidence and arguments are in the commissioners meet and decide on the compensation by vote of the majority. This then is known as the award. The award is then filed with the circuit court. The government has 30 days to abandon the acquisition, but this is rarely seen. Once they make payment for the property this passes title.

If neither party appeals, within 60 days of the condemnation commission’s award, and the award exceeds the jurisdictional offer, interest is paid on the amount of the increase for the period from the date of acquisition until the date of the commission award, if the amount of the increase is paid within 14 days of the commission award.

6. Circuit court

Your attorney should take the lead role when appealing to the circuit court. There are certain statutory requirements and deadlines that can be detrimental if not complied with. The procedure is in sec. 32.06 (10) of Wisconsin statutes, and you have the right to a jury trial. The court will determine the fair market value of the property. If it is determined that market value is greater than the condemnation commission award you will receive interest on the excess, and the government has an additional 40 days after the filing of the judgment to abandon the acquisition. Each party has the right to appeal to the Wisconsin Court of Appeals. If neither party appeals, the judgment must be paid within 60 days after it is entered or interest will be assessed.

7. Litigation expenses

Litigation expenses are commonly awarded. This is a wonderful negotiating tool as well as providing you with net market value of your property. If your attorney has taken the case on an hourly basis or on a contingency fee arrangement, the government has to pay that fee if you fit into one of the following categories:

  • if the proceeding is abandoned by the acquiring authority;
  • if it is determined by a court that the acquiring authority does not have the right to condemn;
  • if the award of the condemnation commission is greater than the jurisdictional offer, or the highest written offer prior to the jurisdictional offer, by at least $700 and 15%, and the award is not appealed;
  • if the property owner appeals an award of the condemnation commission which exceeds the jurisdictional offer or the highest written offer prior to the jurisdictional offer, by at least $700 and 15%, and the court approved jury verdict exceeds the award of the condemnation commission by at least $700 and 15%;
  • if the acquiring authority appeals an award of the condemnation commission, and the court-approved jury verdict is $700 and 15% greater than the jurisdictional offer or the highest written offer prior to the jurisdictional offer;
  • if the property owner appeals an award of the condemnation commission which is not 15% greater than the jurisdictional offer or the highest written offer prior to the jurisdictional offer, and court-approved jury verdict is at least $700 and 15% higher than the jurisdictional offer or highest written offer prior to the jurisdictional offer.

The Legislature has provided “costs” (statutorily determined payments to successful parties in proceedings challenging just compensation) to litigants who are successful but who do not fit into any of the categories mentioned above. If the just compensation awarded by the court or condemnation commission exceeds the jurisdictional offer or the highest written offer prior to the jurisdictional offer, the property owner will be deemed the “successful” party. “Costs” are defined in Ch. 814 of Wisconsin statutes.

If all or part of your property is in danger of being taken by the government and if you are looking for an experienced eminent domain lawyer to maximize the remedies that you have available to you and to reach the highest possible award for you or if you wish to compromise, negotiate, or effectively deal with the government authority we, the Michael Ablan Law Firm, LLC., can help you. We have been serving real estate clients since 1974. With an experienced and aggressive yet honest, trustworthy and friendly legal team consisting of a lawyer with 35 years of experience, specialized paralegals, and a tax accountant, the Michael Ablan Law Firm, LLC. in La Crosse, WI can help you. We also have offices in LaCrescent, Minnesota and Hayward, Wisconsin. Contact us for a free consultation. Our expert legal services are available to you anywhere in the State of Wisconsin, including but not limited to the counties of La Crosse, Trempealeau, Monroe, Pierce, Crawford, Vernon, Grant, Sawyer, Jackson or any other county in Wisconsin or in the state of Minnesota, including all counties surrounding La Crescent, MN, such as Houston and Winona and any other county.