March 25, 2015 – The state transportation department knew that a land developer did not intend to “dedicate” a right-of-way for a state highway project but took the land without paying, based on a drafting error in a certified survey map. Now the state must pay the property owner just compensation, plus attorney’s fees, costs, and interest.
In Somers USA LLC v. State of Wisconsin Department of Transportation, 2014AP1092 (March 25, 2015), a three-judge panel for the District II Wisconsin Court of Appeals ruled that “a governmental body cannot rely upon a known, material mistake as a basis upon which to take private property without paying just compensation.”
Somers USA LLC (Somers) bought about 47 acres abutting Interstate-94 in Kenosha to build a truck stop. At the time of purchase, Somers knew the Wisconsin Department of Transportation (DOT) was planning a highway improvement project in that area.
Somers knew the state would take about 9.5 acres of Somers’ property for a frontage road and about three acres for a highway on-ramp. Somers contracted for a certified survey map (CSM). An initial draft “reserved” the land for future DOT right-of-ways.
Ultimately, Somers recorded a final certified survey map with the Kenosha County Register of Deeds that “reserved” the three acres for a frontage road and “dedicated” the 9.5 acre right-of-way for the on-ramp. The “dedication” language was a mistake.
Dedications are donations for public purposes, but Somers never intended to dedicate any property. In addition, the DOT knew that Somers did not intend to dedicate any property, the appeals court noted after examining the record in the case.
However, the DOT built the frontage road and the on-ramp without paying Somers just compensation, which is required when the government takes property under both the U.S. and Wisconsin constitutions. But DOT argued the “reservation” and “dedication” language in the CSM allowed DOT to take the property without paying Somers.
Sommers filed an action for just compensation. The DOT eventually conceded that a “reservation” of land does not convey title and that it must pay just compensation.
It also conceded that it knew the “dedication” language in the certified survey map (CSM) was a mistake but argued that it was entitled to rely on the CSM anyway.
Ultimately, the state acknowledged it must pay Somers something but challenged the amount owed. The circuit court ordered a stipulated dismissal if DOT agreed to pay Somers $500,000 as just compensation, plus attorney’s fees, costs, and interest.
On appeal, the state reasserted its argument that it was not required to pay just compensation because the survey map included a “road dedication.” It said that document, once recorded, meant DOT owned the 9.5 acres in fee simple.
DOT pointed to Wis. Stat. section 236.29(1), which says that when a plat designating a “dedication” is certified, acknowledged, and recorded, it vests fee simple title.
“The major fault in the State’s argument is that statutory dedication requires compliance with statutory procedure,” wrote Judge Paul Reilly for the three-judge appeals panel.
For a dedication to be “conveyed,” it must be properly “dedicated” under section 236.34(1m)(e), the appeals court panel noted. That provision says certified survey maps may be used to dedicate property for public purposes, but the governing city council, village, or town in which land is located must approve the dedication or grant.
“No governmental board involved in Somers’ development approved any road dedication or land grant for inclusion in the [certified survey map],” wrote Judge Reilly, also noting that a dedication cannot occur unless there’s “intent to dedicate.”
“Undeterred by evidence that no dedication was ever intended or approved, the State proffers the absurd argument that it can still take Somers’ property without compensation as it was entitled to rely on an invalid dedication in a CSM,” Reilly wrote.
The panel noted that equitable estoppel requires a party to “reasonably rely” on another’s party’s actions or inactions to recover for losses based on that reliance.
But the panel said DOT’s reliance on the “dedication” language was not reasonable, since DOT knew Somers did not intend to dedicate the 9.5 acres and no governmental body approved the dedication, which is a requirement under section 236.34(1m)(e).
The panel also rejected DOT’s argument that Somers’ error on the certified survey map that was recorded required the state to incur detrimental litigation expenses.
“These litigation expenses, however, are the fault of the State for continuing to defend its position against a concededly defective dedication,” wrote Judge Reilly.
The panel noted that DOT also took the three acres noted as “reserved” for the frontage road without paying just compensation, even though “reservations” don’t convey land.