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CED Properties, LLC v. City of Oshkosh

Supreme Court of Wisconsin

April 3, 2018

CED Properties, LLC, Plaintiff-Appellant-Petitioner,
City of Oshkosh, Defendant-Respondent.

          Submitted on Briefs: oral argument: November 1, 2017

          REVIEW OF A DECISION OF THE COURT OF APPEALS Reported at 373 Wis.2d 767, 895 N.W.2d 855 John A. Jorgensen Judge

         REVIEW of a decision of the Court of Appeals. Reversed and the cause remanded to the circuit court.

          For the plaintiff-appellant-petitioner, there were briefs filed by Erik S. Olsen, Joseph J. Rolling, Andrew D. Weininger, and Eminent Domain Services, LLC, Madison. There was an oral argument by Erik S. Olsen.

          For the defendant-respondent, there was a brief filed by Richard J. Carlson and Silton Seifert Carlson, SC, Appleton. There was an oral argument by Richard J. Carlson.


         ¶1 CED Properties, LLC (CED) challenges the special assessment imposed by the City of Oshkosh (City)[1] following the reconfiguration of a traditional traffic light intersection into a roundabout.[2] We review the unpublished court of appeals decision, CED Properties, LLC v. City of Oshkosh, No. 2016AP474, unpublished slip op. (Wis. Ct. App. Jan. 18, 2017), affirming the circuit court's grant of summary judgment in favor of the City.[3] CED raises two issues: (1) whether the term "special benefits" in Wisconsin's eminent domain statute has the same meaning in Wisconsin's special assessments statute, and if so, whether the City's denial of the existence of any special benefits during the earlier eminent domain proceeding precludes the City from asserting the conferral of special benefits in the later special assessment action; and (2) whether CED raised genuine issues of material fact precluding summary judgment.

         ¶2 We hold that "special benefits" has the same meaning under both statutes. Although the failure to raise the issue of special benefits in an eminent domain action does not necessarily preclude a municipality from later doing so in a special assessment action, a municipality's admission that special benefits are non-existent in the context of an eminent domain proceeding constitutes relevant evidence in a later challenge to the special assessment.

         ¶3 We further hold the court of appeals erred in concluding CED failed to overcome the presumption of correctness afforded the City's special assessment and to establish sufficient genuine issues of material fact. The affidavit of CED's expert raises material factual issues in dispute, including whether the roundabout project conferred a local rather than a general benefit, whether the project conferred any special benefits on CED's property or actually diminished its value, and whether the amount of the special assessment was fair and equitably apportioned among the commercial properties involved as well as proportionate to the benefits accruing to the property. Because we conclude CED overcame any presumption of correctness by presenting competent evidence to the contrary, we reverse the decision of the court of appeals and remand to the circuit court for a trial.

         I. BACKGROUND

         ¶4 CED owns property located on the northeast corner of the intersection of United States Highway 45 and State Highway 76. Locally, United States Highway 45 is called Murdock Avenue and State Highway 7 6 is called Jackson Street. A Taco Bell franchise has operated on the property since 1992.

         ¶5 In January 2008, the City and the Wisconsin Department of Transportation entered into an improvement plan agreement to reconstruct and install a multi-lane roundabout at the Jackson-Murdock intersection. The reconstruction plan proposed the removal of traffic signals, concrete and asphalt paving, concrete driveway approaches, sidewalk replacement and repair, sanitary and storm sewer laterals, and the improvement of streetscaping and landscaping. The plan required the City to take about six percent of CED's property to ensure enough space to build the roundabout. The City used its power of eminent domain under Wis.Stat. ch. 32 to do so. In April 2012, after lengthy litigation, the City and CED agreed the City would pay CED $180, 000 just compensation for the taking. During that litigation, the City filed with the circuit court the appraisal of its expert, Patrick Wagner. According to Wagner's report, the City's partial taking caused CED's property to decrease in value by $38, 850, and he testified during his deposition that the taking did not confer any "special benefits" on CED's property under Wis.Stat. § 32.09(3) (2015-16).[4]

         ¶6 In July 2010, the City passed a resolution that levied special assessments upon CED's property and other commercial properties pursuant to its police power under Wis.Stat. § 66.0703(1) (a)[5] to help fund the intersection improvement project. CED challenged the special assessment, but the City argued the challenge was untimely. That dispute ended after this court ruled that CED's appeal of the assessment was timely and its complaint sufficient; we instructed the circuit court to grant summary judgment in favor of CED. See CED Properties, LLC v. City of Oshkosh, 2014 WI 10, 352 Wis.2d 613, 843 N.W.2d 382');">843 N.W.2d 382');">843 N.W.2d 382');">843 N.W.2d 382 [hereinafter "CED I"].[6]

         ¶7 Following this court's decision in CED I, the City reassessed CED pursuant to Wis.Stat. § 66.0703(10), [7] imposing a special assessment of $19, 486.36 based on CED's frontage along Jackson Street and $20, 616.67 based on CED's frontage along Murdock Avenue for a total special assessment of $40, 103.03.[8]The City issued a final resolution authorizing the re-assessment and a report describing the special benefits conferred upon CED as: "a substantial increase in accessibility, which includes safer, lower cost, and shorter travel times for customers, deliveries and employees. These special benefits are different in kind than those enjoyed by the public for through traffic." The City said additional special benefits were conveyed by correcting sidewalk defects in sections contiguous with the property, which "provide[d] a safe corridor for pedestrians to access the site, " and by improving the streetscape, which enhanced the property's overall aesthetics.

         ¶8 The City's report further explained that the project improved the intersection's primary function of moving and carrying traffic (a "community benefit") as well as the secondary benefit of providing access to traffic flow (a "special benefit" to abutting property owners, like CED). According to the City, this intersection served about 25, 000 vehicles each day, with 1, 973 (or about 7.9 percent) of those vehicles tied to stops at the Taco Bell on CED's property. The City's analysis indicated that before the roundabout, it took a vehicle 37.9 seconds to travel through the intersection; this was reduced to 10.5 seconds per vehicle after the project.

         ¶9 CED again appealed the special assessment to the circuit court, claiming the project conferred only community or general benefits of better traffic flow and no local or special benefits at all. CED further claimed the assessment was unreasonable because it had no nexus between the linear feet upon which the property was assessed and the alleged benefits conferred.

         ¶10 The City moved for summary judgment. It acknowledged the improvement conferred public benefits, but asserted that the improvement also conferred special benefits assessable against CED, that the resulting assessment was reasonable, and that CED failed to overcome the presumption of correctness afforded the City's assessment.

         ¶11 CED opposed the motion, arguing that because the City conceded "special benefits" did not accrue to CED's property during the Wis.Stat. ch. 32 eminent domain action, the City forfeited the opportunity to assert "special benefits" during the later special assessment appeal. Alternatively, CED argued that even if asserting special benefits during the eminent domain action was not a condition precedent to asserting them during the ch. 66 special assessment action, the improvements were not local in nature, no special benefits accrued, and the assessments' costs were unreasonably apportioned among the abutting property owners. CED also argued that the special assessment violated the equal protection clause of the Wisconsin and United States Constitutions.[9]

         ¶12 In support of its arguments, CED submitted the affidavit and appraisal of its expert witness, James C. Johnson. According to his affidavit, Johnson is a certified general appraiser who was previously employed by the Wisconsin Department of Transportation as an "access specialist." During his time with that department, he "served on the committee that established the 'Special Benefits Criteria' which were implemented and used by the [department] for assessing whether benefits were general benefits or special benefits." He cites to cases on which he acted as an "access expert ... on the issue of reasonable access." He served as the department's "litigation coordinator, " training the department's consultant appraisers "on evaluating general vs. special benefits." "[A]11 requests for changes in the amount of compensation due to landowners in the southwest region were reviewed by [Johnson] . . . includ[ing] consideration of any access issues, general benefits, and special benefits."

         ¶13 Having personally inspected CED's property, Johnson believed that "absolutely no benefit to [CED's property], let alone a special benefit" arose from any of the improvements. In fact, Johnson opined that the roundabout was a detriment to CED's property, explaining: "Retail fast food sites like the subject are more valuable when they are on controlled intersections" since "[g]reater time at the intersection is desirable for the subject because the subject is an impulse stop." According to Johnson's appraisal, as of October 29, 2009, the roundabout project caused the fair market value of CED's property to decrease $251, 370.

         ¶14 CED also submitted an affidavit from its attorney, attaching, as material here, Wagner's appraisal and the page from Wagner's deposition where he said no special benefit accrued to CED's property in the eminent domain action. CED asserted in its brief opposing summary judgment that Wagner's appraisal and testimony precluded the City from later specially assessing CED for "special benefits."

         ¶15 The circuit court granted the City's motion for summary judgment. It did not address whether genuine issues of fact remained regarding the existence of a special benefit, whether the benefit was local or general, or whether the assessment was reasonable.

         ¶16 CED appealed and the court of appeals affirmed, with Judge Mark Gundrum dissenting. CED Properties, LLC v. City of Oshkosh, No. 2016AP474, unpublished slip op. (Wis. Ct. App. Jan. 18, 2017) . The court of appeals' majority ruled CED failed to prove "a genuine issue of material fact to show that it has overcome the presumption of correctness" and failed to prove the special assessments were not reasonable. Id., ¶29. Judge Gundrum disagreed, concluding that CED's expert's affidavit setting forth reasons why the project made vehicle access to CED's property "worse, not better" was sufficient evidence that "could support a finding by a reasonable jury that a special benefit does not exist." Id., ¶34 (Gundrum, J. dissenting) (quoting First State Bank v. Town of Omro, 2015 WI.App. 99, ¶20, 366 Wis.2d 219, 873 N.W.2d 247). Judge Gundrum said "a jury issue exists as to whether the Jackson-Murdock Project conferred special benefits on the CED property, " and the "matter should be returned to the circuit court for a jury trial on the issue." Id., ¶¶30, 34. CED petitioned for review in this court, which we granted.


         ¶17 This case requires us to review a grant of summary judgment against CED. "We independently review a grant of summary judgment using the same methodology of the circuit court and the court of appeals." Water Well Sols. Serv. Grp., Inc. v. Consol. Ins. Co., 2016 WI 54, ¶11, 369 Wis.2d 607, 881 N.W.2d 285. The law governing summary judgment is well-known. Summary judgment is appropriate when there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. Wis.Stat. § 802.08(2). Summary judgment must be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Id.

         ¶18 We apply a two-step test to make this determination. Garza v. Am. Transmission Co. LLC, 2017 WI 35, ¶21, 374 Wis.2d 555, 893 N.W.2d 1 (citing Green Spring Farms v. Kersten, 136 Wis.2d 304, 314-15, 401 N.W.2d 816 (1987)). First, this court asks if the plaintiff stated a claim for relief. Id. Second, this court applies Wis.Stat. § 802.08(2), asking if any factual issues exist that preclude a grant of summary judgment. Id. It is undisputed here that CED's complaint states a claim for relief. The parties' dispute focuses on whether CED presented sufficient evidence to create any material issues of fact to overcome the presumption of correctness.

         ¶19 "Summary judgment is a drastic remedy; therefore, the moving party must clearly be entitled to judgment as a matter of law." Genrich v. City of Rice Lake, 2003 WI.App. 255, ¶6, 268 Wis.2d 233, 673 N.W.2d 361 (citing Vill. of Fontana-Qn-Geneva Lake v. Hoag, 57 Wis.2d 209, 214, 203 N.W.2d 680 (1973)). In reviewing a grant of summary judgment, we view the facts in a light most favorable to CED, the nonmoving party. See Genrich, 268 Wis.2d 233, ¶6. Any doubts as to whether a genuine issue of material fact exists should be resolved against the City as the moving party. Id.

         ¶20 This case also involves the interpretation and interplay of two statutes, Wis.Stat. §§ 32.09 and 66.0703(1) (a) . The interpretation of statutes presents a question of law we review de novo. State v. Talley, 2017 WI 21, ¶24, 373 Wis.2d 610, 891 N.W.2d 390.

         III. ANALYSIS

         ¶21 CED and the City disagree on whether the term "special benefits" has the same meaning in both Wis.Stat. ch. 32 and ch. 66. CED argues that if it has the same meaning, then the City cannot take the position that no special benefits exist in a ch. 32 action but later assert special benefits exist in a ch. 66 action. We hold the term "special benefits" has the same meaning in both statutes, but that it is used differently in each context. Accordingly, the City is not barred from imposing a special assessment on CED's property to pay for improvements, provided the City establishes the improvements were local, conferred special benefits on CED's property, and were fair, equitable, and in proportion to the benefits accruing to the property. These issues involve questions of fact for the trier of fact to resolve.

         A. The Meaning and Application of "Special Benefits"

         ¶22 We begin with the language of the statutes. See State ex rel. Kalal v. Cir. Ct. for Dane Cty., 2004 WI 58, ¶45, 271 Wis.2d 633, 681 N.W.2d 110 (quoting Seider v. O'Connell, 2000 WI 76, ¶31, 236 Wis.2d 211, 612 N.W.2d 659). Except for technical or specially-defined words or phrases, "[s]tatutory language is given its common, ordinary, and accepted meaning. ..." Id. Additionally, because "[c]ontext is important to meaning. . . . statutory language is interpreted in the context in which it is used; not in isolation but as part of a whole; in relation to the language of surrounding or closely- related statutes; and reasonably, to avoid absurd or unreasonable results." Id., ¶46 (citations omitted). "Statutory language is read where possible to give reasonable effect to every word, in order to avoid surplusage." Id.

         ¶23 Wisconsin Stat. §§ 32.09 and 66.0703 (1) (a) both use the term "special benefits." Wisconsin Stat. § 32.09 governs "all matters involving the determination of just compensation in eminent domain proceedings." Section 32.09(3) provides:

Special benefits accruing to the property and affecting its market value because of the planned improvement shall be considered and used to offset the value of property taken or damages under [Wis. Stat. § 32.09(6)], but in no event shall such special benefits be allowed in excess of damages described under sub . (6) . [10]

(Emphasis added.) Section 66.0703 governs the general rules applicable to special assessments imposed by a city, town or village. Section 66.0703(1)(a) provides:

Except as provided in s. 66.0721, [11] as a complete alternative to all other methods provided by law, any city, town or village may, by resolution of its governing body, levy and collect special assessments upon property in a limited and determinable area for special benefits conferred upon the property by any municipal work or improvement; and may provide for the payment of all or any ...

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