Court: State wrong on farm deal Challenge clarifies rules for valuation in eminent domain

They say it doesn't pay to fight "city hall." But Bernice Spiegelberg went three rounds with Wisconsin's Department of Transportation over a land-take dispute and wound up undefeated.

Last month, the Wisconsin Supreme Court sided with the 89-year-old town of Winchester farmer owner, who filed a civil suit in 2003 arguing the DOT offered too little for about 11 acres of her 150-acre farm, land in the way of the planned expansion of U.S. Highway 10.

"This has been going on for five years, and she was left with the impression of why wouldn't the state -- why wouldn't they be honest," said Rick Luedtke, who farms Spiegelberg's land and has been speaking on her behalf throughout the court fight.

In taking the case to the high court and prevailing there, Spiegelberg not only got her price for the land, but may have established case law that strengthens the hands of other Wisconsin landowners in government versus property-owner spats.

The DOT needed pieces of three Spiegelberg parcels in the path of the planned and now-completed expansion of U.S. 10 through northern Winnebago County. It offered $18,900 for the land, priced as "one unit."

But Spiegelberg, unlike many property owners, wasn't satisfied. The first appraisal actually dates to 2001. She got a second-opinion appraisal, as allowed under eminent domain law. It calculated the land value as individual pieces: $84,200 total.

In November 2003, Spiegelberg's civil suit landed in Winnebago County Judge Robert Hawley's courtroom. Hawley sided with Spiegelberg, no jury trial needed. The state DOT appealed.

The dispute over how to value separate tax parcels under eminent domain represented uncharted territory, the appellate court reasoned. It advanced the case straight to the Wisconsin Supreme Court, citing "important public policy concerns," according to court records.

The high court ended a three-year-old court dispute two weeks ago. Spiegelberg won. She'll get $84,200 for the land.

"She was elated she won, but she wanted a fair price. She farmed all her life, and they split the farm in half (with Highway 10), and they gave her farmland prices," Luedtke said.

The state Department of Justice declined to comment on the court decision as a matter of policy. The attorney who represented the state in the case, Robert Jambois, was on vacation last week and unavailable for comment.

Big Picture Issues

It's unclear whether the court's ruling will send an inadvertent message to owners of larger, undeveloped chunks of property in the way of roads or public improvements: Divide it, and get more per acre from government.

In Spiegelberg's decision, the court ruled that "sale of the property as separate tax parcels would have been more advantageous, or the highest and best use, as compared with the sale of the property as a single unit. It would have also garnered a greater payment for Spiegelberg."

Spiegelberg's land was in smaller pieces for decades, Luedtke said. But does the court decision suggest farmers or property owners with an inkling that a road might cross their land someday are wise to start chopping big hunks into smaller tax parcels? Would they get more green out their greenspace from state or local government?

Dan Biersdorf, Spiegelberg's attorney, said he scoured the United States for laws and court decision with analogous questions and resolutions. Biersdorf said he could find none.

"We researched the whole country to find any other courts who had addressed this before," he said. "Obviously, it hadn't been done in Wisconsin. We couldn't find one in the whole country. So, this decision dealing with the tax-parcel issue is the first of its kind in the country. It's pretty significant coming out of Wisconsin."

Eminent domain has been a hot-button issue in recent years. In 2005, the U.S. Supreme Court issued its controversial "Kelo vs. New London" decision. In the case, the property owners challenged the city of New London, Conn. over the condemnation of ublighted, residential land. The court ruled in favor of the city. Critics fear a precedent giving government greater power in condemnation, able to more-easily rationalize the taking of citizens' lands.

Biersdorf said Spiegelberg's case, in a way, starts where Kelo ends.

Once government has cleared a condemnation, it must make every attempt to compensate the property owner based on the land's highest and best use. That, as the new court decision suggests, includes factoring the inherent value of more-developable pieces, escalating those parcels' individual values based on the division alone.

Closer to home, it's hard to say if that bodes well for land owners in a county rife with highway expansion projects, from U.S. Highway 41's conversion to six lanes through Oshkosh to plans for State Highway 45 and reconstruction of local roads.

"Now, even when they can legitimately take it from us, we know that the courts might be sympathetic to the plight we're facing as property owners," Biersdorf said. "That's the big message that's going to go to the layman."

Power to Fight

Biersdorf said a hearing was scheduled in Hawley's court on Thursday. There, his firm and state attorneys will begin the process of settling the bill for Spiegelberg's fight.

Because Wisconsin allows a victorious property owner fighting legal condemnation matters to have his or her court costs paid, the Wisconsin is on the hook for Bernice Spiegelberg's legal bills.

Biersdorf said while it's rare for a property owner to mount a legal fight against eminent domain condemnation, Wisconsin nevertheless empowers property owners with the legal-costs provision. The winner is covered by the loser.

Biersdorf said he wouldn't be present Thursday for the motion hearing, and was unsure what Spiegelberg's official tab would be.

The court case didn't flare up until 2003, when Spiegelberg got her second-opinion appraisal. But the eminent domain matter really dates back to 2001, when the first appraisal was made.

The U.S. 10 expansion through Spiegelberg's property has come and gone.

Spiegelberg's Oshkosh appraiser feels pretty good about the high court's decision. It essentially verified that his work was right, the DOT's was wrong. But Kurt Kielisch sees the final win as a bigger victory for the little guy.

Kielisch, president of Appraisal Group One, said the court's decision in favor of his valuation of Siegelberg's land would force state governments to more-closely heed the "best use" rationale when valuing individual tracts of private land under eminent domain.

Kielisch suggests the David and Goliath angle of Spiegelberg's also shows property owners aren't powerless.

"To me, that was just, like, huge." Kielisch said. "Her case has actually created a new law for appraisers to follow, which benefits the property owner, which eminent domain law is supposed to do... We don't get too many Supreme Court decisions coming out of little Winnebago County."

Alex Hummel: (920) 426-6669 or @thenorthwestern.com">

Copyright © Oshkosh Northwestern. All rights reserved. Reproduced with the permission of Gannett Co., Inc. by NewsBank, inc.