Jan. 2, 2024 – State law bars claims by landowners who filed a lawsuit within three years of discovering flooding on their property but 15 years after the culvert that allegedly caused the flooding was installed, the Wisconsin Court of Appeals has ruled in Ricciardi v. Town of Lake, 2022AP1567 (Dec. 5, 2023).

On Sept. 1, 2015, Carl and Phyllis Ricciardi bought a piece of land in the Town of Lake.

The Ricciardis lived on the land and operated a mobile home park there. The Ricciardis’ land lies adjacent to Ash Street, which was last resurfaced in 1990.

In the fall of 2015, Carl Riccardi saw water gushing from a culvert beneath Ash Street. The water pooled on the Ricciardis’ land, threatening the mobile homes and the buildings on the Ricciardis’ property.

Faulty Culvert?

Ricciardi discovered that the culvert was installed in such a way that its mouth sends water onto the Ricciardis’ property.

Carl Ricciardi made multiple complaints to the town about the culvert and flooding in 2015, 2016, and 2017.

Notice of Claim

On March 5, 2018, the Ricciardis gave the town a written notice under Wis. Stat. section 893.80(1d)(b). That statute requires a party to give a notice of claim to a municipality before filing a lawsuit against it.

On March 14, 2019, the town disallowed the notice.

Lawsuit Follows

On Sept. 12, 2019, the Ricciardis sued the town in Price County Circuit Court. They claimed negligence, private nuisance, and inverse condemnation.

The inverse condemnation claim was based on a theory that the flooding was caused by the town’s faulty repair or reconstruction of Ash Street.

In an affidavit, the town said that it didn’t know about any flooding from 1990 to 2015 – the period when the previous owners owned the Ricciardis’ land.

Summary Judgment for Town

The circuit court concluded that section 88.87(2) was the exclusive remedy under Wisconsin law for flooding related to road construction and maintenance.

The circuit court also concluded that the Ricciardis had not met the requirements of that subsection because they filed a notice of claim with the town under section 893.80(1d) instead of section 88.87(2)(c).

The circuit court granted summary judgment for the town. The Ricciardis appealed.

Parsing the Statue

On appeal, the Ricciardis argued that section 88.87(2) did not bar their claims because, they argued, subsection (2)(d) was a savings clause that allows a claim even if the plaintiff has failed to provide the notice required in subsection (2)(c).

Writing for a three-judge panel, Presiding Judge Lisa Stark concluded that Ricciardis’ reading of section 88.87(2) was mistaken. Subsections (2)(c) and (2)(d) must be read together, Stark explained.

“The Ricciardis are adding … other remedies to para. (2)(d) that the legislature did not include,” Judge Stark wrote.

“Had the legislature intended a different result as to available remedies between paras. (2)(c) and (2)(d) … the legislature would have specifically provided for that result.”

Stark also reasoned that the Ricciardis’ interpretation of section 88.87(2) would lead to absurd results.

“Under the Ricciardis’ interpretation, if a property owner strictly complies with the express terms of Wis. Stat. section 88.87(2)(c) and files a notice of claim … recovery is limited to claims under inverse condemnation and in equity, but if the property owner does not comply with para. (2)(c), then he or she is entitled to bring claims for the full panoply of causes and action and damages resulting from the government’s violation of the statute,” Judge Stark wrote.

How to Define ‘Damage?’

The Ricciardis argued that their claim for inverse condemnation was not barred by the three-year-notice provision in section 88.87(2) because it was the date of the alleged damage, and not the date of the allegedly defective construction, that triggers the running of the period.

But Judge Stark concluded that that argument was foreclosed by the Wisconsin Supreme Court’s holding in Southport Commons, LLC v. DOT, 2021 WI 52, 397 Wis. 2d 362, 960 N.W.2d 17.

In Southport Commons, the Supreme Court interpreted the word “occurred” in section 88.87(2)(c) and concluded the running of the three-year period begins when the alleged damage occurs, and not when it’s discovered by the person making the claim.

The Ricciardis argued that under Southport Commons, the damage to their property first occurred in the fall of 2015, less than three years before they filed the notice of claim with the town.

They also argued that “damage” as used in section 88.87(2)(c) meant the damage caused by the flooding.

But Judge Stark reasoned that because section 88.87(2)(a) requires governments to build roads in a way that does not impede the flow of surface water in an unreasonable manner, “damage” as used in section 88.87(2)(c) meant the damage caused when the town installed the culvert in 1990.

“The loss or injury to property happens or takes place – in other words the damage occurs – when the governmental entity fails to construct or maintain a highway … pursuant to Wis. Stat. 88.87(2)(a),” Stark wrote.

“Regardless of when the water accumulation is discovered, the damage occurred when the governmental entity failed to act properly pursuant to section 88.87(2).”

‘Entirely Open-ended’

That interpretation, the Ricciardis argued, meant that any property owner worried about damage caused by a government’s improvement to a road adjacent to his or her property would be forced to file a claim as soon as the improvement was completed, even if the property had yet to suffer any damage, lest any damage to the property later occur.

But Judge Stark relied upon the converse to conclude that Ricciardis’ argument missed the mark.

“Absent the three-year time limit, there would potentially be no time limit to the governmental entity’s liability for the failure to properly construct or maintain the roadway,” Stark wrote.

“The legislature deemed three years to be sufficient. Any other conclusion would render the notice of claims period entirely open-ended.”