Supreme Court: WisDOT properly used eminent domain to take church property for highway project

The Wisconsin Department of Transportation properly used eminent domain to obtain property from a Fox Valley church, the Wisconsin Supreme Court ruled on Thursday.

WisDOT and Christus Lutheran Church of Appleton have been in a legal battle since 2017 over the acquisition of about 6 acres of land in Greenville. Christus owns and operates a church that abuts State Trunk Highway 15, and WisDOT needed the land for a project to improve and reconstruct part of the highway.

How it happened

The process to acquire the property started in 2016 with a jurisdictional offer to purchase issued to Christus. The letter included an estimated fair market value of the property of $133,400, based on a third-party appraisal, and informed Christus that it could obtain an additional appraisal at WisDOT’s expense within 60 days. A WisDOT official also called the church’s attorney to encourage another appraisal.

The 60-day deadline passed, but WisDOT continued efforts to negotiate with the church with no response. In January 2017, WisDOT asked if there had been a decision on the initial offer, and a few days later, Christus’ attorney said the church council wouldn’t agree to a voluntary sale.

WISDOT decided to start an internal administrative revision process, which included obtaining additional estimates and information in order to review the initial appraisal and offer. This time, WisDOT focused on severance damages related to the building’s increased proximity to the right of way, the cost to replace the loss of 26 parking spaces and the cost to move a retention pond.

As a result of the new estimates and a conversation with Christus staff, the DOT increased its offer to $403,200. The increase came from the addition of the three items considered on the second review.

In April 2017, WisDOT sent the church a letter stating that due to failed negotiations, it was proceeding with a jurisdictional offer to purchase; Christus again didn’t respond.

A month later, WisDOT advised the church that it was acquiring the property through the eminent domain process and sent Christus a check for $403,200. Shortly after, Christus hired a new attorney who told WisDOT that the church was interested in negotiating. However, it was too late, as the check had already been mailed.

Christus then filed a lawsuit accusing WisDOT of violating a state law that requires a jurisdictional offer to be based upon the appraisal of the property. An Outagamie County judge granted summary judgment to WisDOT, concluding that the jurisdictional offer was based on the appraisal because the valuation of core line items retained a similar valuation.

The Court of Appeals disagreed and reversed that decision, reasoning that the jurisdictional offer wasn’t based on the appraisal because it contained a new line item for severance damages.

Majority: WisDOT made valid offer

The state Supreme Court then assessed whether the offer was valid under state law. Justices Jill Karofsky, Ann Walsh Bradley, Rebecca Dallet and Brian Hagedorn determined that it was. Karofsky explained the majority’s reasoning in an opinion released on Thursday.

She said most of the allocations in the final offer were either identical or close to the initial appraisal valuation. A difference in dollar amounts between the initial appraisal and the jurisdictional offer doesn’t mean the offer wasn’t “based upon” the appraisal, the majority concluded.

“That is, ‘based’ ‘upon’ does not mean ‘equal to,'” Karofsky wrote.

The majority also said the Court of Appeals was wrong in ruling that the appraisal failed to satisfy the “all property” requirement under state law. The appellate court said the offer violated the requirement because it included compensation for severance damages not found in the initial appraisal.

“In reaching this conclusion, the court of appeals conflated ‘property’ and ‘damages,'” Karofsky wrote.

Dissent: WisDOT violated law

Chief Justice Pat Roggensack, Justice Rebecca Bradley and Justice Annette Ziegler disagreed with the majority’s conclusions. In her dissent, Roggensack wrote that she agreed with the appellate court because WisDOT ignored obligations under state law that are necessary to condemn the property.

Roggensack said she didn’t agree that the $159,574 listed for severance damages was identical or close to the $0 that had been originally allocated. With that conclusion, the dissent reasoned that the offer wasn’t based on the initial appraisal.

“After condemnation, the church building would be only 9 feet from Highway 15’s right-of-way,” Roggensack wrote. “Certainly, having trucks rumble-by only 9 feet from where church services are being conducted removed a significant sound buffer and safety barrier that the land DOT is taking had provided to religious service participants.”