Review of a decision of the Court of Appeals. Reversing and remanding
Beilfuss, C.j. Shirley S. Abrahamson, J. (in Agreement). Ceci and Bablitch, JJ., took no part.
The opinion of the court was delivered by: Beilfuss
This is a review of an unpublished opinion of the court of appeals which reversed the trial court's order, Judge J. Tom Merriam of Washington county, presiding. The trial court's order denied the defendant's motion to dismiss the plaintiff's complaint.
The plaintiff, Rose Zinn, is the owner of a parcel of real estate in the Town of Erin in Washington county. This real estate completely surrounds McConville Lake, *fn1 giving Zinn sole riparian rights to the lake. McConville Lake is a public navigable lake which has a surface area of approximately 14 acres and a maximum depth of 30 feet. On January 7, 1976, a petition was filed with the Department of Natural Resources (DNR) by William McConville, a neighbor of Zinn. The petition sought a declaratory ruling on the applicability of secs. 30.10(1) and 30.10(4) (b), Stats., to McConville Lake, which, in turn, required a determination of the ordinary high water mark (OHWM) of the lake.
Following a hearing before a DNR employee, the DNR, on July 22, 1977, issued Findings of Fact, Conclusions of Law and a ruling determining that the existing level of McConville Lake corresponded to Contour 980 of the United States Geological Survey, Merton Quadrangle, while the OHWM of the lake corresponded to Contour 990. Between the elevations of Contour 980 and Contour 990 lie approximately 200 acres of Zinn's property. The effect of the ruling was to increase the surface area of the lake, on paper, to more than 1900 acres and extended the OHWM beyond the boundaries of Zinn's property, thus depriving Zinn of the sole riparian rights she had enjoyed until this ruling. The 200 acres of Zinn's dry land that was declared to be within the OHWM were, according to the plaintiff's complaint, titled to the state in trust for the public pursuant to sec. 30.10(1), Stats.
Because the ruling threatened Zinn with the loss of approximately 200 acres of her land for public use, she petitioned the DNR for a rehearing which was granted on August 29, 1977. A rehearing was held and on March 14, 1979, the DNR issued an order rescinding and withdrawing the Findings of Fact, Conclusions of Law and ruling issued on July 22, 1977. An amended ruling was also issued establishing the OHWM of McConville Lake at 980.3 mean sea level datum, and thus restoring Zinn as sole riparian owner on McConville Lake. A subsequent Petition for Judicial Review filed by McConville was dismissed by the Washington County Circuit Court in December of 1979.
On November 20, 1980, Zinn commenced this action against the State of Wisconsin, alleging that the above facts constituted an unconstitutional taking of her property for public use without just compensation in violation of Art. I, sec. 13 of the Wisconsin Constitution. The complaint alleged that the original DNR ruling was "unlawful, unreasonable, arbitrary, capricious, and clearly contrary to the physicial facts" and that the ruling "unduly relied" on the testimony of a DNR employee whose opinion that the OHWM of the lake corresponded to Contour 990 "could not have been made in good faith or without a high degree of negligence." The complaint further alleged that the ruling deprived the plaintiff of all reasonable use of her property between July 22, 1977 (original DNR ruling) and March 14, 1979 (original ruling rescinded), and that during this period the state had possession and use of her land. The complaint requested damages for this "inverse condemnation," including $50,000 in compensatory damages and $15,000 for litigation expenses necessary to effect the reversal of the original DNR ruling.
The state moved to dismiss on a number of grounds, including failure to state a claim upon which relief could be granted and the doctrine of sovereign immunity. The trial court denied the motion, holding that the complaint stated a claim based on the "just compensation" clause of the Wisconsin Constitution, finding that the original DNR ruling constituted a temporary taking of the Zinn property for public use. It also held that the defense of sovereign immunity was unavailable to the state when an unconstitutional taking is alleged and that under ch. 32, Stats., the state had consented to such suits even though the inverse condemnation remedy of sec. 32.10 could not be practically applied to a temporary taking.
The court of appeals reversed. The court held that the case was governed by this court's decision in Howell Plaza, Inc. v. State Highway Comm., 92 Wis. 2d 74, 284 N.W.2d 887 (1979). Interpreting Howell Plaza, the court of appeals held that no taking occurs when the landowner is deprived of property only for a temporary period and that a taking may occur, absent physical invasion by the government, only if there is a legally imposed restriction on the property use. Applying this analysis, the court found that because the rehearing was granted just one month after the original DNR ruling, she was deprived of the use of her property only temporarily and therefore no taking occurred. It further held that the complaint did not allege any restrictions placed on the property by the DNR. We granted the plaintiff's petition for review.
This review comes before this court on a motion to dismiss. Thus the sole issue before the court is whether the plaintiff's complaint states a claim upon which relief can be granted. In determining whether the complaint was properly dismissed by the court of appeals, "we apply the familiar test that the pleadings are to be liberally construed to do substantial Justice between the parties, and the complaint should be dismissed as legally insufficient only if it appears to a certainty that no relief can be granted under any set of facts that the plaintiff can prove in support of her allegations." Strid v. Converse, 111 Wis. 2d 418, 422, 331 N.W.2d 350 (1983).
The plaintiff's complaint alleges that the erroneous ruling by the DNR that the OHWM of McConville Lake was at 990 rather than the existing lake level resulted in the state temporarily taking title to approximately 200 acres of Zinn's dry land as trustee for the public of all lands within the OHWM of navigable waters. The complaint further alleges that the plaintiff was not justly compensated for the period in which such land was titled to the state and in the public domain. We hold that under the facts alleged the plaintiff has stated a claim for relief under Art. I, sec. 13 of the Wisconsin Constitution.
Art. 1 sec. 13 of the Wisconsin Constitution provides:
"The property of no person shall be taken for public use without just compensation therefore."
Governmental action which merely causes damage to private property is not the basis for compensation under this provision of the state constitution. DeBrunin v. Green County, 72 Wis. 2d 464, 470, 241 N.W.2d 167 (1976). Rather, in order to trigger the "just compensation" clause there must be a "taking" of private property for public use. Id. A "taking" in the constitutional sense occurs when the government restriction placed on the property "'practically or substantially renders the property useless for all reasonable purposes.'" Howell Plaza, Inc. v. State Highway Comm., 92 Wis. 2d 74, 85, 284 N.W.2d 887 (1979), quoting Buhler v. Racine County, 33 Wis. 2d 137, 143, 146 N.W.2d 403 (1966). A taking can occur short of actual occupation by the government if the restriction "deprives the owner of all, or substantially all, of the beneficial use of his property." Howell Plaza, Inc. v. State Highway Comm., 66 Wis. 2d 720, 726, 226 N.W.2d 185 (1975). However, " taking can occur absent physical invasion only where there is a legally imposed restriction upon the property's use." Howell Plaza, 92 Wis. 2d at 88.
Thus, the threshold question is whether the plaintiff's property was "taken." This involves the difficult determination of whether an erroneous ch. 227 administrative decision by the DNR can result in the "taking" of private property thus triggering the just compensation clause.
In order to determine whether the DNR's declaratory ruling amounted to a taking, we must examine the authority of the DNR to make the ruling and the effect of that decision on Zinn's property. The declaratory ruling was made pursuant to a petition filed by William McConville, who apparently owned land near McConville Lake, which requested the DNR to declare the applicability of secs. 30.10(1) and 30.10(4) (b), Stats. 1975, *fn2 to Lake McConville. At the time of this petition Zinn had sole riparian rights to the lake. Pursuant to its authority under sec. 227.06(1), Stats. 1975, *fn3 the DNR issued a ruling declaring that the OHWM of McConville Lake was at Contour 990, rather than at the existing lake level which was found to be at Contour 980. Because of the location of Zinn's property in relation to these contours, the ruling had the effect, on paper, of placing approximately 200 acres of Zinn's dry land within the declared OHWM of the lake. The placement of the OHWM at Contour 990 extended McConville Lake beyond the boundaries of Zinn's property and into Waukesha county. Because the DNR had the authority to make this ruling which was binding on Zinn pursuant to sec. 227.06(1), and because all land lying within the OHWM of a navigable lake is titled in the state in trust for the public, sec. 30.10(1), the ruling had the legal effect of converting approximately 200 acres of Zinn's ...