Wisconsin Business Law Blog : Waukesha, New Berlin, Oconomowoc Corporate & Real Estate Lawyer & Attorney

The following was posted by Thomas Kertschner of the Journal Sentinel on July 5, 2010:

Oak Creek - The Common Council, which was hit by a storm of denunciation after it considered using eminent domain to acquire a 94-year-old farmer's property, will be asked Tuesday to pay the man's $9,081 legal bill.

The request comes from Michael Schober, the attorney who represents Earl Giefer.

Giefer's family has said it has no interest in selling the farm at 10523 S. Howell Ave., which has been in family since the 1800s.

City officials had argued that the 25-acre property would impede plans for a business park nearby and believe the farm qualifies as blighted.

The council decided June 1 to stop discussions of the possible use of eminent domain.

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The 2009 Wisconsin Budget Bill contains proposed changes in condemnation law which may substantially impact on the ability of business property owners to successfully challenge condemnation or contest the amount of compensation awarded.

The Wisconsin Department of Transportation is sponsoring the proposed modifications.  Currently, an owner of land subject to condemnation may recover attorneys fees incurred in litigation with a condemnor.  The DOT's proposal would limit the amount of an owner's attorneys fees paid by the condemnor to 1/3 of any increase in the amount proposed as an award by the condemnor prior to an attorney's involvement.  For example, if an owner is offered $50,000 for property, and through litigation the award is increased by settlement or judgment to $200,000, resulting in an increase of $150,000, the amount of attorneys fees for which the condemnor is liable will be $50,000.

The DOT claims that this change in the law will not result in any decrease in the amount an owner receives for the property being taken.  However, the likely result will be that property owners will be less likely to contest condemnation and condemnation awards, and more willing to accept the amount they are initially offered.

The fact that the law currently allows the owners of business property to recover all their attorneys fees provides owners with a great deal of leverage in negotiating successful compensation awards when their property is taken by the state.  If the law is changed as proposed, the governmental entity seeking compensation will be placed in a much better position, and property owners will be much more inclined to accept the governments offer rather than contest the matter through litigation.

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