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  • Litigation Section Blog
    August 17, 2021

    The State Removed Access to Your Clients’ Property. Now What?

    Ryan R. Simatic

    What happens when the State removes access to your clients’ property? That property’s value and use can be drastically and negatively impacted by the removal of access. Ryan Simatic discusses the remedy, inverse condemnation, and how it can be used to compensate property owners.
    road closed sign

    For real estate to have value, you have to be able to get to it. The right of ingress and egress to the public roadways from a property is called “access,” or an “easement of access.” Access is an inherent property right. Any property abutting a public roadway has an easement of access to the road, even without an express deed or grant.

    Yet, a property’s access rights are not unlimited. The State (and municipalities) have a legitimate governmental interest in maintaining safe and efficient roads. In managing this interest, the State will often restrict access to specific points. Often, the State will accomplish this restriction by requiring abutting landowners to apply for driveway permits.

    But what happens when the State revokes this permit, or otherwise removes access? A property’s value and use can be drastically and negatively impacted by the removal of access.

    The remedy is inverse condemnation. Because inverse condemnation claims for loss of access are nuanced both legally and factually, those impacted by a loss of access must approach this type of litigation thoughtfully and carefully.

    Attorneys advising clients regarding any type of access change, including permitting, must be attuned to how and when to claim compensation or seek outside counsel.

    About Inverse Condemnation

    When the State takes access from property to the abutting roadway, that property may be substantially devalued.

    Ryan Simatic Ryan Simatic , Mitchell Hamline 2011, is an attorney with Biersdorf & Associates in Minneapolis, where he practices in eminent domain and real estate litigation.

    The legal strategy to address a loss of access will vary depending on the type of roadway, the type of property, and the extent to which the State’s actions impact its access.

    Regardless of the facts, if there is a viable cause of action, it will be in inverse condemnation.

    Although the term is almost universally recognized by courts, “inverse condemnation” is a bit of a misnomer since the plaintiff is not condemning anything.

    Inverse condemnation actions are started by a landowner. But the defendant is the government entity that has taken (i.e., condemned) one of the landowner’s property rights for a public purpose without exercising its power of eminent domain.

    Wisconsin statutorily provides for an inverse condemnation action under Wis. Stat. section 32.10. But an inverse condemnation action is also viable under the Wisconsin Constitution (Wis. Const. art. I § 13) and the U.S. Constitution (U.S. Const. amend. V).

    Sticky Point: When Does the Loss of Access Happen?

    Under Wisconsin property law, access is a property right. Because it is a property right, the State cannot just take that property right without paying compensation.

    As straightforward as that sounds, successfully obtaining just compensation for an owner impacted by a loss of access can be a litigation minefield –because of the realities of how the State removes access and because the law pertaining to access is incredibly nuanced.

    As noted above, the State can restrict access to roads via its permitting power (Wis. Stat. section 86.07(2)). At first glance, the State asking an owner to obtain a driveway permit can seem like a reasonable and minimal burden. After all, roadways could hardly function if abutting landowners could put any type of driveway anywhere along the road.

    But an owner must be wary of the permitting process because of the State’s access management tactics.

    Imagine a scenario: Assume the owners have a commercial property abutting a state roadway with an existing commercial driveway. The State may approach the owners and tell them that the State is restricting access on the owner’s entire frontage, but allowing the existing driveway to stay. The State asks that the owners apply for a driveway permit to maintain the existing driveway. This request could even be accompanied by a token payment for the acquisition of existing access rights.

    The State allows the driveway to remain for 10 years. Then, the State, as part of a road project, revokes the permit it had previously issued. The State replaces the former access with undisputedly inferior access at a different location via a secondary road. When the owners seek compensation, the State claims that it had the police power to revoke the driveway permit and thus no compensation is due.

    This scenario is not idle speculation. The State has argued its ability to do just this.

    The State has undoubtedly taken the owners’ access rights to the primary road. But when?

    First, the State has taken the position that it takes all access rights, just by limiting the access to an existing driveway and converting the existing driveway to a permitted driveway.

    Second, the State has also taken the position that the revocation of the driveway permit removes the access. But, the State has argued, this second option is not a “taking” under the constitution. Instead, it is just the State using its permitting power to regulate the roadway.

    If the State prevails on the first argument, the owners never considered the taking to be effective, because they still had a driveway. The owners may have already been paid, and, in any event, the statute of limitations for inverse condemnation has passed.

    If the State prevails on the second argument, the owners will not receive compensation unless the replacement access is so poor as to almost completely devalue the property.

    The State has taken both of these positions – in the same litigation. Hence, the minefield.

    Loss of Access Claims Are Both Legally and Factually Nuanced

    Whether the owners suffer a compensable taking from a loss of access will also depend on the type of roadway the affected property abuts.

    The State may designate a limited number of miles of highway as “controlled access.”1 On controlled access roads, the State does not owe abutting owners compensation for the removal of access if any access remains.2

    But if the roadway is an interstate highway or freeway, the State must provide replacement access via a frontage road, or pay the owner for the damages caused by the loss of access. Frontage road access, however, is not per se reasonable, and the owners could still obtain compensation if the replacement access is unreasonable for the use of the property.

    Finally, there are State (and local) roads that are neither controlled access nor a freeway. If the State must provide frontage road access (that is reasonable) on even interstate highway projects, it seems obvious that the State would have to pay compensation where it takes all of an abutting owners’ access to the principal roadway where the road is neither controlled access nor an interstate.

    Yet, the State has argued3 that it never has to pay for taking access if any access remains, even for removal of access on local roads that happen to be State roads. If the State had its way, it would never be required to pay for removing access along a property’s principal roadway, even if the State removed all of it.

    Again, it is a minefield.

    Pleading Issues

    As if this was not complicated enough, there are pleading issues.

    Wisconsin’s inverse condemnation statute states that an owner may petition the circuit court for redress where “property has been occupied by a person possessing the power of condemnation and if the person has not exercised the power.”4

    Where the alleged taking only involves a loss of access, is that an “occupation” of the owner’s property? After all, the road is the State’s property.

    The State has argued that the removal of access is not a physical “occupation.” If that is accepted as legally accurate, Wis. Stat. section 32.10 may not provide a viable remedy in access removal cases. If an owner asks a court for relief for loss of access, the owner must be careful to allege what has been taken, how it was taken, and under what law the owner seeks compensation.

    Conclusion: It’s Worth Getting to Know These Laws

    Although this is a niche area of law, the loss of access is something experienced by hundreds of citizens across Wisconsin.

    As Wisconsin redesigns its roads and highways, citizens will continue to lose access. Any attorney whose clients have land on a public road should thus be passingly familiar with these laws, or consult with an attorney with adequate experience.

    This article was originally published on the State Bar of Wisconsin’s Litigation Section Blog. Visit the State Bar sections or the Litigation Section web pages to learn more about the benefits of section membership.

    Endnotes

    1 Wis. Stat. § 84.25.

    2 This is the Wisconsin Supreme Court’s interpretation of the controlled access statute. The U.S. Constitution may provide broader protections.

    3 This issue is presently before the Wisconsin Court of Appeals in EQK Bridgeview Plaza v. DOT, 2021AP646. The author is appellate counsel.

    4 Wis. Stat. § 32.10.





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    Litigation Section Blog is published by the State Bar of Wisconsin; blog posts are written by section members. To contribute to this blog, contact Matthew Lein and Nelson Phillips III and review Author Submission Guidelines. Learn more about the Litigation Section or become a member.

    Disclaimer: Views presented in blog posts are those of the blog post authors, not necessarily those of the Section or the State Bar of Wisconsin. Due to the rapidly changing nature of law and our reliance on information provided by outside sources, the State Bar of Wisconsin makes no warranty or guarantee concerning the accuracy or completeness of this content.

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