Opinion
No. 2012AP626.
2014-08-28
In re Acquisition of Property of Forbes SRE II, LLC. FORBES SRE II, LLC, Petitioner–Appellant, v. STATE of Wisconsin, DEPARTMENT of TRANSPORTATION, Respondent–Respondent. Forbes SRE, LLC, Petitioner–Appellant, v. State of Wisconsin, Department of Transportation, Respondent–Respondent.
We exercise our discretionary reversal power “only in exceptional cases.” State v. Cuyler 110 Wis.2d 133, 141, 327 N.W.2d 662, 667 (1983).
Appeal from a judgment of the circuit court for Dane County: Richard G. Niess, Judge. Affirmed.
Before BLANCHARD, P.J., HIGGINBOTHAM and SHERMAN, JJ. ¶ 1 HIGGINBOTHAM, J.
This is a condemnation case. The Wisconsin Department of Transportation (“DOT”) condemned property owned by Forbes SRE, LLC and Forbes SRE II, LLC (collectively, “Forbes,” except when otherwise noted), located along U.S. Highway 151, including a private gravel driveway that connected the property to the highway. A jury trial was held to determine the value of the Forbes' properties before and after their taking. In pre-trial motions in limine, Forbes sought to exclude testimony from the DOT's expert appraiser that the taking of the driveway did not affect the value of the subject property because the DOT had authority to require the owner of the property to obtain a permit in order to change the use of the driveway, and that the DOT likely would have declined to issue such a permit. Forbes also sought to admit evidence regarding the amount the DOT and others had previously paid for property across the highway from the Forbes property, which also had access to Highway 151. The circuit court denied both motions.
¶ 2 On appeal, Forbes renews the arguments made in the circuit court. Forbes also contends that the real controversy has not been fully tried, and therefore requests that we exercise our discretionary power to reverse under Wis. Stat. § 752.35. For the reasons we explain below, we conclude that the circuit court properly exercised its discretion in making its evidentiary rulings and that the real controversy has been fully tried. Accordingly, we affirm.
All references to the Wisconsin Statutes are to the 2011–12 version unless otherwise noted.
¶ 15 The circuit court has broad discretion in determining whether to admit or exclude evidence regarding the fair market value of property in a condemnation case. Id. ¶ 12. “[A]ny factor affecting the value of property that could influence or sway the decision of a prospective buyer should be considered in the valuation of property in a condemnation proceeding.” Id. ¶ 15 (citation omitted).
¶ 16 As we explained, the issue in this case is the value of the subject property before and after the taking. In determining the value of the property, the jury was to consider the value of the portion of property taken by condemnation and the diminution in value of the remaining property, which is known as “severance damages.” Narloch v. DOT, Div. of Highways, Div. II 115 Wis.2d 419, 422 n. 2, 340 N.W.2d 542, 545 (1983). Severance damages include the “damage to remaining property from the deprivation or restriction of access rights to the highway from abutting property.” Id. at 433, 340 N.W.2d 542.
¶ 17 To determine the value of the Forbes' property, the jury had to consider whether the loss in access rights to Highway 151 diminished the value of the remaining property. The jury heard testimony from Rolling, the DOT's expert witness, that the subject property's loss in access rights to the Highway did not result in any diminution in value. As previously discussed, Rolling testified to his research which indicated that the DOT had authority to require a change in use permit, and this testimony was evidence that assisted the jury in making its determination of the property's value.
¶ 18 Our supreme court has stated that as long as a proper foundation is laid, “[e]xpert testimony concerning diminution in value of remaining land due to loss of access rights is admissible. The weight to be given this evidence is for the trier of fact.... The experts' opinions including their theory and basis of value are for the jury to evaluate.” Id. at 434, 340 N.W.2d 542; see also Bear v. Kenosha Cnty. 22 Wis.2d 92, 97, 125 N.W.2d 375 (1963) (“The opinions of the experts including their theory and basis of value [of property] were for the jury to evaluate.... We do not consider an opinion of the value of real estate should necessarily be disregarded because of different evaluations of the factors upon which such opinion is predicated.”). Following our supreme court's holding in Narloch we conclude that the circuit court properly exercised its discretion in admitting Rolling's challenged testimony that there was no diminution in the value of the Forbes property as a result of the taking of access as well as the underlying assumptions on which Rolling based his opinion.
In Narloch we held that:
[A] condemnee seeking severance damages due to a taking of access rights must establish a foundation that prior to the taking, there was a reasonable potential in the foreseeable future for developing his or her property in accordance with its highest and best use, and that this potential for development has been diminished because of the loss of access rights. Once that foundation is established, evidence of expert testimony concerning diminution in value of remaining land due to loss of access rights is admissible. The weight to be given this evidence is for the trier of fact. As we stated in Bear the experts' opinions including their theory and basis of value are for the jury to evaluate against any contention by the state that these access rights were so impaired, restricted, and controlled as to have little or no value.
Narloch v. DOT, Div. of Highways, Div. II 115 Wis.2d 419, 434, 340 N.W.2d 542, 550 (1983). Although Narloch addressed whether an expert on behalf of a condemnee may testify regarding the diminution in the value of property due to loss of access rights, we see no reason why the general rule of admissibility set forth in Narloch does not also apply where a expert on behalf of a condemnor testifies regarding whether there has been any diminution in value of the property as a result of the loss of access rights.
¶ 19 In essence, Forbes is challenging the underlying assumptions on which Rolling based his opinion that the loss in access rights to Highway 151 did not diminish the value of the property. However, Forbes fails to acknowledge that it had ample opportunity at trial to cross-examine Rolling regarding those assumptions. Indeed, Forbes' counsel asked Rolling on cross-examination the basis for his opinion, and specifically questioned Rolling's contention that Wis. Admin. Code § Trans. 231 would have required Forbes to obtain a driveway permit before the driveway could be used for commercial purposes, and that the DOT likely would have denied a request for such a permit. It was for the jury to determine how much weight, if any, to give the assumptions Rolling relied on in forming his opinion that the loss in access rights did not affect the value of the subject property. It was not for the circuit court, nor is it for this court, to determine whether, as a matter of law, Rolling's assumptions were correct. Accordingly, we need not address Forbes' challenge to Rolling's underlying assumptions.
¶ 20 In sum, we conclude that the circuit properly exercised its discretion in admitting Rolling's testimony that the DOT had the authority to require Forbes to obtain a driveway access permit in order to change the use of the existing driveway, and that the DOT likely would have denied a request for such a permit. II. Whitson–Swift Parcel
¶ 21 Forbes contends that the circuit court erroneously exercised its discretion in excluding evidence regarding the amount of money the DOT paid to acquire the access rights to the driveway connecting the Whitson–Swift parcel to U.S. Highway 151 and the total amount paid for the Whitson–Swift parcel. Forbes maintains that, because a central issue at trial was the value of the driveway connecting the subject property to Highway 151, the admission of evidence regarding the amount paid for the Whitson–Swift parcel, including the amount paid by the DOT for the access rights to Highway 151, was highly relevant to determining the value of the subject property and that its exclusion was unfair and prejudicial to Forbes.
¶ 22 The DOT responds that the circuit court properly excluded evidence regarding the amount paid for the Whitson–Swift parcel because, under Blick v. Ozaukee Cnty. 180 Wis. 45, 46, 192 N.W. 380 (1923), and Pinczkowski v. Milwaukee Cnty. 2005 WI 161, ¶¶ 17–20, 286 Wis.2d 339, 352, 706 N.W.2d 642, 648, the price that the condemning authority has paid for other property in the area is inadmissible. We agree.
¶ 23 As we have explained, a circuit court's decision to admit or exclude evidence is entitled to great deference. State v. Head 2002 WI 99, ¶ 43, 255 Wis.2d 194, 219, 648 N.W.2d 413,425. Thus, we uphold a circuit court's decision to admit or exclude evidence unless it has erroneously exercised its discretion. State v. Jackson 2014 WI 4, ¶ 43, 352 Wis.2d 249, 272–733, 841 N.W.2d 791, 802. “A circuit court erroneously exercises its discretion if it applies an improper legal standard or makes a decision not reasonably supported by the facts of record.” Id.
¶ 24 We conclude that the circuit court properly exercised its discretion in excluding evidence regarding the amount paid for the Whitson–Swift parcel, including the amount paid for the access rights to Highway 151. Our supreme court held in Blick and reaffirmed in Pinczkowski that “the price paid in settlement of condemnation proceedings, or the price paid by the condemnor for similar land, even if proceedings had not been begun, where the purchaser has the power to take by eminent domain is not admissible.” Blick 180 Wis. at 45, 192 N.W. at 380; Pinczkowski 2005 WI at ¶ 17, 286 Wis.2d at 352, 706 N.W.2d at 648. Applying this rule to the undisputed facts, we conclude that the amount paid for the Whitson–Swift parcel was inadmissible and therefore the circuit court properly exercised its discretion in excluding the evidence. III. Discretionary Reversal
¶ 25 Finally, Forbes contends that, even if the circuit court did not erroneously exercise its discretion in making its evidentiary rulings, we should exercise our discretion under Wis. Stat. § 752.35 and reverse on the ground that the real controversy has not been fully tried because the court's rulings prevented the jury from hearing all of the evidence bearing on the value of the driveway access to Highway 151. This argument is without merit.
¶ 26 Wisconsin Stat. § 752.35 provides in relevant part:
In an appeal to the court of appeals, if it appears from the record that the real controversy has not been fully tried ... the court may reverse the judgment or order appealed from.
We exercise our discretionary reversal power “only in exceptional cases.” State v. Cuyler 110 Wis.2d 133, 141, 327 N.W.2d 662, 667 (1983).
¶ 27 We conclude that Forbes has failed to demonstrate that the real controversy was not fully tried and therefore this is not an exceptional case. As the DOT correctly points out, the circuit court's admission of Rolling's testimony allowed the controversy over the value of the subject property to be more fully tried, not less so. Moreover, the circuit court's decision to exclude evidence regarding the amount paid for the Whitson–Swift parcel was based on an application of a well established rule of law and therefore the exclusion of that evidence did not prevent the real controversy from being tried. For these reasons, we do not exercise our discretionary power to reverse.
CONCLUSION
¶ 28 Based on the foregoing, we affirm.
Judgment affirmed.
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