United America, LLC v. DOT (Nonstructural Damages in DOT Takings)

*This case is recommended for publication.

 

In United America, LLC v. DOT (2018AP2383), the Court of Appeals District III held that nonstructural damages to private property are not compensable when the Department of Transportation (DOT) makes a change of grade to an abutting street.

When DOT changes the grade of a street or highway, landowners nearby may make claims for damages related to the change of grade, even if their land was not taken (Wis. Stat. § 32.18).

In this case, United America operated a gas station and convenience store on the property at issue. DOT completed a project that raised one of the streets at the intersection near United America’s property to match the grade of an overpass. The overpass significantly reduced vehicular access to United America’s gas station and convenience store, causing it to lose approximately 90 percent of its business. United America subsequently made a claim under § 32.18.

United America argued that “damages” under that statute include nonstructural damages such as reduction in commercial property value resulting from the change of grade. DOT argued that only structural, physical damages due to the change of grade are compensable under the statute.

The court agreed with DOT. The plain language of § 32.18 states that landowners can make claims for “any damages to said lands” from a change of grade. United America’s argument that “any damages” includes nonstructural damages – such as loss of business – would render the phrase “to said lands” superfluous. The Legislature did not specifically provide for damages for diminution in value in change of grade damages claims, as it has in other takings statutes. Therefore, non-physical damages related to lost property value or lost business are not compensable under § 32.18.

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