March 12, 2020 – The Wisconsin Supreme Court has unanimously ruled that claim preclusion did not bar a private landowner’s claim that a new agricultural field road the town agreed to build, under a condemnation petition, was not up to snuff.
In DSG Evergreen Family Limited Partnership v. Town of Perry, 2017AP2352 (Feb. 27, 2020), the supreme court ruled the claim was not barred because the parties did not litigate the actual standards the town was obligated to follow in building the new road.
“But that is all we decide in this portion of our opinion,” Justice Daniel Kelly noted. “We note that the Town dedicated a significant amount of its brief to the construction standards required by the condemnation petition and how the field road satisfies them.”
Kelly noted that the construction standards required by the condemnation petition were not addressed by the circuit court, which had ruled claim preclusion barred the issue.
“Therefore, we express no opinion on the construction standards required by the condemnation petition, nor the current field road’s compliance with them,” he noted. That issue will go back to the circuit court.
However, the supreme court also ruled that the town’s designation of the road as a “town parkway” did not statutorily obligate the town to improve the field road under “town road” standards, at least not through a declaration of rights at this time.
Finally, the supreme court also ruled that the Wisconsin statute governing town road design and construction did not create a private right of action for the private landowner to obtain damages in order to rebuild the road if the town refused to do so.
Town Takes Road
DSG Evergreen Family Limited Partnership (DSG) owned approximately 90 acres of land in the Town of Perry, located in Dane County southwest of Madison.
The town used its eminent domain power to take about 12 acres of DSG’s agricultural land for a historic district park abutting a county highway. The park replaced a field road that DSG previously used to access its agricultural land from the county highway.
Joe Forward, Saint Louis Univ. School of Law 2010, is a legal writer for the State Bar of Wisconsin, Madison. He can be reached by email or by phone at (608) 250-6161.
To prevent land-locking DSG, the town’s condemnation petition promised to build a new field road along a northern boundary of the park, with permanent access rights for DSG.
The condemnation petition said the new field road “will be built to the same construction standards as the existing field road.” DSG resisted a voluntary sale before the town invoked its eminent domain power through a jurisdictional offer.
DSG lost a first round a litigation that challenged the town’s right to acquire the property. Litigation continued to determine just compensation owed to DSG.
The fair market value evidence presented to a jury had to assume that the new field road would be built under the terms of the condemnation petition.
DSG introduced an engineering report that questioned the town’s ability to build a new field road – within the easement provided – that would meet town, county, state, and federal requirements. But DSG did not offer testimony or present it to the jury.
The jury awarded the town an amount of just compensation greater than the jurisdictional offer, and the town took title to the property. The town build the road.
Town Builds Road
Round three of litigation, the present matter, commenced after the town completed the new field road. DSG informed the town that the new road was not suitable for heavy machinery. The town fixed the road in compliance with the town driveway ordinance.
After that, the town adopted a resolution to establish the field road as the Hauge Parkway for the benefit of the public (DSG still had a permanent easement to use it).
DSG argued the parkway still did not meet the same construction standards of the previous field road. Specifically, DSG said it was too narrow, sloped too steeply, and lacked other features. DSG also said the road did not meet the standards required by Wis. Stat. 82.50(1), which contains design and construction standards for town roads.
DSG sought a circuit court declaration that would require the town to meet the specifications of the prior road, as required by the petition, or to fix the road in line with town road standards established in Wis. Stat. section 82.50. In the alternative, DSG sought judgment of $288,000 so DSG could fix it under the applicable standards noted.
The town argued that DSG did not have a private right of action to enforce town road standards, and the circuit court agreed.
The circuit court also ruled that claim preclusion barred DSG’s claim that the condemnation petition imposed road-building standards that the town did not meet.
That is, the court said DSG should have contested the road standards in the just compensation phase and now that claim is barred. An appeals court affirmed.
No Claim Preclusion
The Wisconsin Supreme Court reversed on the issue of claim preclusion, concluding that DSG may proceed to argue that the town’s newly constructed field road did not meet the standards of the prior field road, as required by the condemnation petition.
However, as noted, the supreme court rejected DSG’s alternative arguments: that the town was obligated to redo the field road under “town road” standards prescribed in section Wis. Stat. 82.50(1), or that DSG could collect damages for failure to do so.
“We hold that neither the Right-to-Take Case nor the Just Compensation Case bars DSG’s claims in this case,” Justice Kelly wrote.
“However, we also hold that Wis. Stat. § 82.50(1) does not impose road-building obligations on the town that are susceptible to a declaration of rights, nor does it create a private cause of action by which DSG can recover damages for failure to improve the Parkway to town road standards.”
