Court Holds Condemnation is Not Mandatory

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In Chojnacki v. Wisconsin Public Service Corporation (“WPS”), a Wisconsin Circuit Court case venued in Portage County, WPS negotiated an easement for a gas main on Mr. Chojnacki’s property. WPS simply negotiated a price for the easement rather than following Chapter 32 condemnation procedures.  Chojnacki sued, alleging he is entitled to more money for the easement, and WPS should have followed condemnation procedures by, among other things, having an appraisal completed, giving him the opportunity to have an appraisal done at WPS’s expense, negotiating in good faith, and serving a jurisdictional offer.

WPS recently filed a motion for summary judgment, framing the issue as follows: “Does Wis. Stat. § 32.02 allow Wisconsin Public Service Corporation to purchase a property interest from a land owner at an agreed price without proceeding through eminent domain?” The new easement was required to make room for a DOT road project.  WPS claims it would have located the easement off of Mr. Chojnacki’s property had he not agreed to the transaction. In its summary judgment brief WPS stated: “While Mr. Chojnacki alleges he believed he was required to sell the easement or else WPS would condemn his property, there was no threat or indication that WPS would in fact condemn the property.”

The basis for WPS’s summary judgment motion was very simple. First, Wis. Stat. §180.0302 provides that a Wisconsin corporation has the power to do all things necessary or convenient to carry out its business, including, but not limited to, the power to purchase property, or any legal or equitable interest in property. Second, §196.796(3)(a)6 authorizes the public utility to acquire property or an interest in property if the acquisition is related to the operation of a public utility.  Third, § 32.02 gives public utilities the power to condemn for the purposes stated in the statute “in case such property cannot be acquired by gift or purchase at an agreed price.” Thus, WPS argued that it can exercise its condemnation powers only if it cannot acquire the necessary land rights through an agreed price.

Mr. Chojnacki asserted a number of policy arguments in his response brief, but they aren’t particularly helpful in resolving the statutory issue raised by WPS, that is, when does Chapter 32 require a public utility to follow condemnation procedures. Still, the policies expressed in the statutes meant to protect the landowner (during an actual condemnation) are compelling.

On December 30th circuit judge Thomas Flugaur ruled in favor of WPS, dismissing the lawsuit.  He issued an oral decision, apparently following WPS’s argument and reasoning. According to counsel for Mr. Chojnacki, an appeal is likely.

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