What Happens When the State Takes Your Driveway?

The Wisconsin Supreme Court recently announced that it granted review of nine cases, out of about 100 petitions it considered. One of the nine cases affects businesses and concerns a business that had driveway access to a public highway, [enhanced version available to lexis.com subscribers].

The case, 118th Street Kenosha, LLC v. DOT, 2012AP2784, arose out of a large road-construction project in Kenosha. One aspect of the project involved DOT relocating part of 118th Avenue. Before the construction, a four-store shopping center had two driveways—one providing access from 118th Avenue and one providing access from a private road. DOT’s relocation of 118th Avenue eliminated the access from the public road to the shopping center. DOT also took a temporary limited easement (“TLE”), which it used to add a second driveway that provided an additional access point to the shopping center from the private road. Thus, there were still two driveways providing access to the property, but both were on the private road rather than on the public highway. This loss of access lowered the value of the shopping center.

DOT recorded a small eminent-domain damages award for the easement. The LLC owner of the property challenged the award in circuit court, arguing that the loss of access was a compensable taking measured by the resulting lower property value. The circuit court decided a motion in limine in DOT’s favor, excluding evidence of the change in property value. The parties then stipulated to a judgment that preserved the property owner’s right to appeal.

The court of appeals reversed and remanded for further proceedings, [enhanced version available to lexis.com subscribers]. It held that the property owner could present evidence regarding the effect of 118th Avenue’s relocation on its property value.

The DOT petitioned for review. The issues before the court are (1) the methodology for valuing a TLE; (2) whether a property owner challenging a TLE valuation can present evidence regarding other damages caused by the same project; and (3) whether DOT, in exercising police power to relocate a highway, needs to compensate property owners for the decrease in their property value caused by the loss of access to their property.

Oral Argument will likely be scheduled for fall. A decision is expected by July 2015.

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