Warehouse II, LLC v. State Department of Transportation

2006 WI 62, 715 N.W.2d 213, 291 Wis. 2d 80, 2006 Wisc. LEXIS 355
CourtWisconsin Supreme Court
DecidedJune 6, 2006
Docket2003AP2865
StatusPublished
Cited by27 cases

This text of 2006 WI 62 (Warehouse II, LLC v. State Department of Transportation) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Warehouse II, LLC v. State Department of Transportation, 2006 WI 62, 715 N.W.2d 213, 291 Wis. 2d 80, 2006 Wisc. LEXIS 355 (Wis. 2006).

Opinions

PATIENCE DRAKE ROGGENSACK, J.

¶ 1. This case requires us to decide whether Wis. Stat. § 32.28(3) (b) (2003-04)1 entitles a successful condemnee to litigation expenses when the basis for the circuit court ruling in its favor is that the condemnor failed to negotiate in good faith before issuing the jurisdictional offer.2 Good faith negotiation prior to issuing a jurisdictional offer to purchase3 is not merely a technical obligation, but rather, it is a fundamental, statutory requirement necessary to validly commence condemnation and confer jurisdiction on the condemnation commission and the courts. Therefore, because it is uncontested that the Department of Transportation (DOT) did not negotiate in good faith prior to issuing the jurisdictional offer, the DOT did not commence a statutorily sufficient condemnation. As condemnation is a purely statutory procedure, the DOT lacked the right under the statutes to condemn Warehouse II, LLC's (Warehouse) property. Accordingly, Warehouse is entitled to litigation expenses pursuant to § 32.28(3)(b), as set out in § 32.28(1). Therefore, we reverse the decision of the court of appeals and remand to the circuit court to determine reasonable litigation expenses.

[86]*86I. BACKGROUND

¶ 2. The facts are undisputed. The DOT commenced condemnation proceedings against property-owned by Warehouse. After the DOT issued its jurisdictional offer to purchase, Warehouse challenged the condemnation under Wis. Stat. § 32.05(5) in the Winnebago County Circuit Court,4 asserting that because the DOT had failed to negotiate in good faith prior to issuing the jurisdictional offer, it lacked the right to condemn Warehouse's property.

¶ 3. The circuit court held an evidentiary hearing; ruled that the DOT had not negotiated in good faith; and concluded that the DOT'S jurisdictional offer to purchase was invalid and all subsequent DOT actions were null and void.5 It awarded Warehouse litigation expenses pursuant to Wis. Stat. § 32.28(3)(b). Warehouse submitted an itemization of litigation expenses to the DOT and the DOT refused to pay. Warehouse then moved the circuit court to order the DOT to pay. However, after consideration of the parties' positions, the circuit court accepted the DOT's contention that the circumstances of the case did not fall under § 32.28(3)(b), so no [87]*87litigation expenses were due. Warehouse appealed; the court of appeals affirmed; and we granted Warehouse's petition for review.

II. DISCUSSION

A. Standard of Review

¶ 4. Our review requires us to construe a statute and apply it to the facts of the case. Statutory interpretation and the application of a statute to the facts found are questions of law that we review without deference to the circuit court. State v. Reed, 2005 WI 53, ¶ 13, 280 Wis. 2d 68, 695 N.W.2d 315. However, we benefit from the analyses of the previous courts' decisions. State v. Cole, 2003 WI 59, ¶ 12, 262 Wis. 2d 167, 663 N.W.2d 700. Whether a defect in failing to follow a statutory directive is fundamental or technical is also a question of law for our independent review. Schaefer v. Riegelman, 2002 WI 18, ¶ 25, 250 Wis. 2d 494, 639 N.W.2d 715.

B. Jurisdictional Offer

¶ 5. Wisconsin Stat. § 32.05(2a)6 requires that a condemnor negotiate with the property owner in good faith before issuing a jurisdictional offer to purchase. It is not contested for purposes of this review that the DOT did not do so.

[88]*88¶ 6. In Arrowhead Farms, Inc. v. Dodge County, 21 Wis. 2d 647, 124 N.W.2d 631 (1963), we discussed the effect of failing to negotiate in good faith before making a jurisdictional offer to purchase. Id. at 651-52. We explained that "such negotiation is a necessary condition of conferring jurisdiction upon the administrative body and the court to determine just compensation . . . ." Id. at 652. We grounded the requirement of good faith negotiation in a primary purpose of statutory condemnation: to provide just compensation to the property owner. Id. at 651.

¶ 7. In Herro v. Natural Resources Board, 53 Wis. 2d 157, 192 N.W.2d 104 (1971), we reaffirmed that a failure to negotiate before issuing the jurisdictional offer is "a jurisdictional defect." Id. at 171 (citations omitted). We explained the nexus between good faith negotiation prior to issuing a jurisdictional offer and the ability to exercise the power of eminent domain:

[ U]nless there is a bona fide attempt on the part of the condemnor to induce the owner to sell the land at a reasonable figure, the condition under which the power is granted is not fulfilled, and in such case any attempted exercise of eminent domain is unauthorized and consequently void and of no effect....

Id. (quoting 6 Nichols, Eminent Domain § 24.62(1) at 85 (3d ed.).

¶ 8. In examining the negotiation efforts made in Herró, we reiterated that ch. 32 provides the exclusive procedure in condemnation actions, including the requirement to negotiate before making a jurisdictional offer to purchase. Herro, 53 Wis. 2d at 171. We explained that we strictly construe the portions of ch. 32 that apply to condemnation by requiring that the condemnor complete all of the statutory steps because [89]*89condemnation is in derogation of the common law. Id. (citing City of Madison v. Tiedeman, 1 Wis. 2d 136, 83 N.W.2d 694 (1957) and Schroedel Corp. v. State Highway Comm'n, 34 Wis. 2d 32, 148 N.W.2d 691 (1967)).

¶ 9. It cannot be disputed that the DOT must issue a jurisdictionally sufficient jurisdictional offer to purchase before it has the statutory right to proceed with the condemnation of property. Wisconsin Stat. § 32.05(4) establishes that requirement. It states, in relevant part:

How notice of jurisdictional offer is given. The giving of such notice is a jurisdictional requisite to a taking by condemnation. ... Such notice shall be called the "jurisdictional offer."

¶ 10. However, not every defect in a jurisdictional offer to purchase is a jurisdictional defect. Jurisdictional defects are fundamental defects. Schaefer, 250 Wis. 2d 494, ¶ 25. Other defects in a jurisdictional offer to purchase may be merely technical defects. See id. In order to rise to the level of a fundamental defect, the error must go to the "primary purpose" underlying the statute that required the action. See id., ¶¶ 26, 28 (citing Am. Family Mut. Ins. Co. v. Royal Ins. Co. of Am., 167 Wis. 2d 524, 533, 481 N.W.2d 629 (1992); Schlumpf v. Yellick, 94 Wis.

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Bluebook (online)
2006 WI 62, 715 N.W.2d 213, 291 Wis. 2d 80, 2006 Wisc. LEXIS 355, Counsel Stack Legal Research, https://law.counselstack.com/opinion/warehouse-ii-llc-v-state-department-of-transportation-wis-2006.