May 8, 2012 – In a unanimous decision, the Wisconsin Supreme Court recently clarified that a billboard owner who leases land to post a billboard is entitled to just compensation, in addition to relocation expenses, when the government takes the land for public use.
The Lamar Company (Lamar), which helps businesses advertise, leased land in Oshkosh to post billboard advertisements along Highway 41. Country Side Restaurant Inc. (Country Side) owned the land, but leased it to Lamar on a 10-year term at $5,400 per year.
In 2008, the Wisconsin Department of Transportation (DOT) took a 76,628 square-foot parcel of land through its eminent domain power, offering $2 million as just compensation.
Country Side owned the land, which included the location of Lamar’s billboard. A DOT appraiser valued the permitted sign site at $65,100, and the billboard structure at $65,000.
DOT issued a check to Country Side and Lamar for $2 million, less taxes, as damages for just compensation. All but $120,000 went to Country Side. The remainder was deposited, on agreement of the parties, with the circuit court clerk for later distribution.
Country Side appealed the $2 million award. Lamar did not join the appeal. Meanwhile, Lamar submitted an application to DOT for billboard relocation expenses under Wis. Stat. section 32.19, which identifies additional items that are payable when the government takes property.
Under that provision, the DOT paid Lamar $83,525, representing the cost of building a new billboard in a different location, as well as takedown and relocation costs. In return, Lamar waived future claims for damage or loss involving the billboard.
Arguments and decision
The parties could not agree on division of the $120,000 still on deposit in the circuit court. Ultimately, Country Side asked the circuit court to distribute the full amount to Country Side, arguing that Lamar had no interest in the land on which the billboard was situated.
Country Side also argued the Lamar was only entitled to compensation for the billboard structure, and it already received that amount through relocation compensation.
The circuit court ruled that Lamar lost its right to claim a portion of the $120,000 because it did not join Country Side’s appeal of the $2 million award. An appeals court affirmed, but concluded that Wis. Stat. section 84.30(8) was Lamar Company’s exclusive remedy.
That provision allows landowners to seek just compensation through condemnation proceedings if the government and landowner cannot agree to a price for removal and relocation of certain outdoor advertising signs upon a government taking. But DOT and Lamar agreed on a price ($83,525), the appeals court concluded, and it was paid to Lamar.
But in Country Side Restaurant Inc. v. The Lamar Company, 2012 WI 46 (May 4, 2012), the Wisconsin Supreme Court reversed, concluding that Lamar was entitled to seek just compensation for its property interests, in addition to relocation expenses.
“The DOT’s payment for Lamar’s relocation expenses is distinct from the DOT’s award for the fair market value of the property taken,” Justice Annette Ziegler wrote for a unanimous court.
Section 84.30(8) was not Lamar’s exclusive remedy, the supreme court explained, because that provision regulates nonconforming signs. “Because Lamar’s billboard was conforming, § 84.30(8) is simply not implicated in this case,” Ziegler wrote.
The court also concluded that Lamar did not relinquish any right to just compensation by applying for and receiving its relocation payment of $83,525, noting that just compensation “is distinct from the condemnor’s liability for relocation payments under Wis. Stat. § 32.19(3).”
“Lamar has a right to seek not only payment for relocation expenses but also its share of the award for the fair market value of the property taken,” wrote Justice Ziegler, noting that Lamar had property interests derived from its lease and billboard permit. The value of those interests depends on location, the court explained, which in turn drives the rent that lessees pay.
Finally, the unanimous court explained that Lamar Company did not lose any rights by not joining Country Side’s appeal challenging the $2 million award. The court reversed and remanded the case so Lamar can institute its claim for partition of the $120,000.
Thomas Hornig and Kraig Byron of von Briesen & Roper S.C., Madison, represented The Lamar Company. Hugh Braun and Nicholas Diulio of Godfrey, Braun & Frazier LLP, Milwaukee, represented Country Side Restaurant Inc. Assistant Attorney General Kathleen Batha filed an amicus curiae brief on behalf of the Wisconsin Department of Transportation.
Joe Forward is the Legal Writer for the State Bar of Wisconsin