In a recent Wisconsin Supreme Court decision, Southport Commons, LLC v. Dep’t of Trasp., the Wisconsin Supreme Court once again restricted the ability of property owners to recover damages when they are negatively impacted by state road projects. Unfortunately, I think the Court got this one wrong. But it will be up to the Legislature to fix this result and ensure that property owners are justly compensated. It is also a cautionary tale for attorneys (and their clients) in drafting proper papers to start a lawsuit.
Southport owned vacant land in Kenosha County served by an 1-94 frontage road. In 2008-2009, the DOT relocated the frontage road from being entirely east of the property to bisect the property. In 2016, Southport wanted to develop the property. So, it obtained a survey and wetland delineation report. The wetlands report showed that the DOT’s construction created three new wetland areas on Southport’s property and expanded three existing wetlands. Southport claimed that it did not know of the wetland creation or expansion until it received the wetland report.
Southport filed a claim under Wis. Stat. 88.87. Section 88.87 allows property owners affected by flooding due to road grade changes to file a claim against the government. An owner must file a claim under Section 88.87 within three years.
Southport argued that Section 88.87 allowed an owner to file a claim within three years of discovering the flooding. The DOT argued that Southport had to file its claim within three years of the damage occurring. The DOT’s position mirrors the language of Section 88.87, which also states that the owner must file the claim within 3 years of when the damage “occurred.” The Court agreed with the DOT.
Although the Court’s holding may have been correct from a strict textual analysis, the effect of the holding is to make flooding claims against the government legally distinct from other torts (e.g. trespass, nuisance) and even legally distinct from a similar claim against a private citizen. For most torts, the statute of limitations begins to run as soon as the injured notices the injury. This makes sense. How could a person know to sue if he has yet to discover the injury? But the Court’s decision here makes Section 88.87 into a statute of repose. The government is protected from suit, even if it admittedly flooded the owner’s property and the owner does not notice, just from the passage of time.
The Court’s strict textual holding misses a practical reality of flooding claims – they often happen slowly, over time. In other words, even if the start date of the statute of limitations is when the damage “occurs,” when the damage is a slow transformation of the land, when does the damage “occur?” When a construction project redirects surface waters, its impact is not always readily apparent. Different surfaces and soils infiltrate water differently. And some years are just wetter than others. It often takes years for flooding damages to manifest, as formerly arable or developable land turns to wetlands and marsh. In fact, that is exactly what happened to Southport.
To this, the Court said that Southport had not sufficiently raised the issue of the unknown date of damage in its papers initiating its lawsuit. In fact, Southport did not allege in its pleadings when the damage to its property actually occurred. It is unclear from the Court’s opinion as to whether Southport attempted to rectify this issue before the trial court. In any event, it merely emphasizes the point that any landowner should carefully select an attorney familiar with the nuances of flooding claims in Wisconsin before proceeding.
Learn more about the eminent domain law in the state of Wisconsin.