In Christus Lutheran Church of Appleton v. DOT (2018AP1114), the Court of Appeals District III held that when the Department of Transportation (DOT) independently decides to include additional items of compensation in a jurisdictional offer for property condemnation, DOT must obtain a new appraisal supporting the new items in the offer.

DOT sought to take several acres of Christus Lutheran’s land to expand a state highway. DOT provided Christus Lutheran with an initial offer of $133,400 for the land, supported by an appraisal. The appraisal considered but did not include severance damages, which cover the loss of value to the remaining property after the taking.

After Christus Lutheran did not accept the offer, DOT sent a revised offer of $403,000, which did include $159,574 in severance damages. Christus Lutheran did not accept the revised offer and advised DOT to proceed with the acquisition by eminent domain.

Finally, DOT provided Christus Lutheran with a jurisdictional offer similar to the revised offer, and the property was transferred to DOT. Christus Lutheran filed this lawsuit seeking to void the offer and prohibit the acquisition because DOT failed to provide an appraisal supporting the jurisdictional offer.

2017 Wisconsin Court of Appeals case Otterstatter v. City of Watertown found, based on Wis. Stat. § 32.05(2)(b) and (3)(e), that an appraisal must be a “supporting part or fundamental ingredient of the jurisdictional offer.” In this case, the court found in favor of Christus Lutheran that the initial appraisal did not support the offer because the initial appraisal did not include the severance damages. Because DOT decided to include the severance damages independently of an appraisal, DOT violated the statutory requirements and intent that the state provide the property owner with a transparent, narrative appraisal of the taking.

Thus the court found that DOT must obtain a new appraisal in jurisdictional offers where it believes additional compensation beyond the bounds of the initial appraisal is warranted.