Hoffer Properties, LLC v. State of Wisconsin

This is a review of an unpublished decision of the court of appeals affirming a grant

of partial summary judgment to the Department of Transportation

(DOT).1 Pursuant to Wis. Stat. § 84.25 (2007-08),2 DOT eliminated

Hoffer Properties, LLC's (Hoffer's) direct driveway connections

to State Trunk Highway 19 (STH 19), a controlled-access highway.

DOT also separately exercised its power of eminent domain to 1 Hoffer Props., LLC v. DOT, No. 2012AP2520, unpublished slip op. (Wis. Ct. App. May 1, 2014).

2 All subsequent references to the Wisconsin Statutes are to the 2007-08 version unless otherwise indicated.

acquire .72 acre of Hoffer's land in order to extend Frohling

Lane westward so as to connect Hoffer's property to the highway.

Hoffer received $90,000 in compensation for the .72 acre taken

to construct the Frohling Lane extension. Hoffer is challenging

the amount of compensation awarded.

¶2 Hoffer does not claim that the $90,000 was inadequate

compensation for the .72 acre itself. Hoffer concedes that DOT

properly designated STH 19 as a controlled-access highway.3

Additionally, Hoffer agrees that the designation of a highway as

"controlled-access" is a valid exercise of the police power and

further agrees that such exercises are not compensable under the

eminent domain statutes.4 Hoffer argues, however, that because

there was a partial taking of some portion of its property under

eminent domain, the damages attributable to the loss of direct

access to STH 19 are compensable pursuant to the partial takings

subsection of the just compensation statute, Wis. Stat.

3 When asked in the trial court whether there was any dispute that STH 19 was a controlled-access highway, Hoffer responded "No argument, your Honor. As [the attorney for DOT said], the Department properly caused it to be or declared it to be a controlled-access highway."

4 In its brief to this court, Hoffer states:

In accordance with Wis. Stat. § 32.09(6)(b), DOT can deprive or restrict an abutting owner's right of access to a highway 'without compensation under any duly authorized exercise of the police power.' The only way that DOT can acquire an abutting owner's access rights under the police power and without the payment of compensation is by declaring the highway in [sic] to be a controlled-access highway under § 84.25.

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§ 32.09(6)(b). Consequently, Hoffer contends, compensation for

the .72 acre must include the diminution of value of the

property due to the loss of its direct access to the highway.

¶3 Hoffer appealed the amount of compensation to the

Jefferson County circuit court, Honorable William F. Hue,

presiding. At the circuit court, Hoffer argued that DOT owed him

additional compensation for diminution of the value of the

property due to the loss of direct access to STH 19 if a jury

determined the access provided by the Frohling Lane extension is

unreasonable. DOT argued that because it exercised its police

power to eliminate Hoffer's direct access to STH 19 and because

Hoffer has alternate access to the property through the Frohling

Lane extension, Hoffer has reasonable access as a matter of law

and no compensation is due. The circuit court agreed and granted

partial summary judgment to DOT.

¶4 The court of appeals affirmed, concluding that under

our holding in Surety Savings & Loan Ass'n v. DOT, 54

Wis. 2d 438, 195 N.W.2d 464 (1972), when DOT acts pursuant to

the controlled-access highway statute "the inquiry is merely

whether alternate access was provided." Hoffer Props., LLC v.

DOT, No. 2012AP2520, unpublished slip op., ¶7 (Wis. Ct. App. May

1, 2014) (citing Surety Savings, 54 Wis. 2d at 444-45). The

court of appeals determined that the circuit court's grant of

summary judgment was proper because DOT provided alternate

access to Hoffer's property. Id.

¶5 We consider two issues. First, whether DOT is duly

authorized by Wis. Stat. § 84.25 to eliminate an abutting

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owner's direct access to a controlled-access highway and replace

it with more circuitous access.5 Second, whether the provision or

existence of some access to the abutting property obviates the

need for a jury determination of "reasonableness" because the

abutting property owner is precluded from compensation pursuant

to Wis. Stat. § 32.09(6)(b).

¶6 First, we hold that Wis. Stat. § 84.25(3) authorizes

DOT to change Hoffer's access to STH 19 in whatever way it deems

"necessary or desirable." Such changes, including elimination of

direct access points, are duly authorized exercises of the

police power and are not compensable under Wis. Stat. § 32.09 as

long as alternate access is given that does not deprive the

abutting owner of all or substantially all beneficial use of the

property. Second, we hold that when DOT changes an abutting

property owner's access to a controlled-access highway but other

access is given or exists, the abutting property owner is

precluded from compensation pursuant to Wis. Stat. § 32.09(6)(b)

as a matter of law and no jury determination of reasonableness

is required. Reasonableness is the wrong standard to apply

because the provision of some access preserves an abutting

property owner's right of access to a controlled-access highway,

and thus no taking compensable under Wis. Stat. § 32.09(6)(b)

occurs. Accordingly, Hoffer is precluded from compensation under

5 Neither the circuit court nor the court of appeals addressed this issue because Hoffer did not raise it before either court.

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Wis. Stat. § 32.09(6)(b) because alternate access to the

property was provided by the Frohling Lane extension. We

therefore affirm the court of appeals.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

¶7 Hoffer Properties, LLC, owns the subject property, a

9.90 acre parcel of land located west of Watertown. The

property's northern boundary is State Trunk Highway 19. Prior to

2008, the property had direct access to STH 19 via two

driveways. The property consists of a single-family dwelling,

the first floor of which is Hoffer's real estate office; a barn

that is rented for storage; and a machine shed that is partially

rented as a workshop. On June 14, 2002, DOT designated 13.76

miles of STH 19 a "controlled-access" highway pursuant to Wis.

Stat. § 84.25.6 The portion of STH 19 that was designated 6 Wis. Stat. § 84.25, the controlled-access highway statute, consists of several subsections that outline the powers of DOT to regulate traffic on the highway and the rights of users, abutting landowners, and the general public after that declaration is made. The procedures DOT must follow to make a valid declaration of controlled-access are stated in section 84.25(1):

The legislature declares that the effective control of traffic entering upon or leaving intensively traveled highways is necessary in the interest of public safety, convenience and the general welfare. The department is authorized to designate as controlledaccess highways the rural portions of the state trunk system on which, after traffic engineering surveys, investigations and studies, it shall find, determine and declare that the average traffic potential is in excess of 2,000 vehicles per 24-hour day. Such designation of a portion of any state trunk highway in any county as a controlled-access highway shall not be effected until after a public hearing in the matter (continued)

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"controlled-access" included the portion that bounded Hoffer's

property.

¶8 In 2008, DOT undertook a highway improvement project

that involved relocating STH 26, which was to intersect with STH

19 to the west of Hoffer's property. DOT determined that it was

necessary to change the access points to STH 19 in the vicinity

of the relocated STH 26 as part of the project. To that end, on

December 29, 2008,7 DOT eliminated Hoffer's direct access to STH

19. DOT acquired through eminent domain both .72 acre of

Hoffer's land as well as a temporary limited easement in order

to create alternate access to Hoffer's property. DOT tendered to

has been held in the county courthouse or other convenient public place within the county following notice by publication of a class 3 notice, under ch. 985, in a newspaper published in the county. If the department shall then find that the average traffic potential is as provided by this subsection, and that the designation of the highway as a controlled-access highway is necessary in the interest of public safety, convenience and the general welfare, it shall make its finding, determination and declaration to that effect, specifying the character of the controls to be exercised. Copies of the finding, determination and declaration shall be recorded with the register of deeds, and filed with the county clerk, and published as a class 1 notice, under ch. 985, in the newspaper in which the notice of hearing was published, and the order shall be effective on such publication. Not more than 1,500 miles of highway shall be designated as controlled-access highways under authority of this section.

7 Hoffer's brief to this court states that the date of this taking was December 28, 2009; the Deed by Corporation indicates the date as December 29, 2008.

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Hoffer $90,000 for this taking. Hoffer's existing direct access

to STH 19 was replaced by extending Frohling Lane (a north-south

roadway that intersects with STH 19) westward to Hoffer's

property. DOT constructed a new driveway north from this

extension to restore vehicular access to Hoffer's property.8

Hoffer's replacement access requires vehicles to travel roughly

1,000 feet to reach STH 19.

¶9 On May 29, 2009, Hoffer appealed the amount of

compensation it received to the Jefferson County circuit court

pursuant to the eminent domain statutes, Wis. Stat. ch. 32.9

Hoffer claimed that because there had been a partial taking of

its land, Wis. Stat. § 32.09(6)(b)10 required DOT to include in

8 Payment for the driveway is not at issue because Hoffer conceded at oral argument that DOT had constructed and paid for the new driveway.

9 Pursuant to Wis. Stat. § 32.05(2)-(7), DOT must have an appraisal of the property taken prior to condemnation. DOT must then negotiate with the property owner for purchase of the property. If no agreement can be reached, DOT makes a jurisdictional offer to purchase which describes the nature of the project, the property to be taken, the proposed date of occupancy, the amount of compensation offered, the right of the property owner to accept or reject the offer, and an explanation of how to appeal the amount of compensation offered. Wis. Stat. § 32.05(3). If the property owner rejects the offer, the amount of compensation offered can be appealed to a judge of the circuit court for the county in which the property is located. See Wis. Stat. § 32.05(9)(a).

10 Wis. Stat. § 32.09 governs just compensation in eminent domain proceedings. Subsection (6) governs partial takings. Subsection (6)(b) allows for compensation for diminution of value to the rest of the property caused by "deprivation or restriction of [an] existing right of access to [a] highway from abutting land, provided that nothing herein shall operate to (continued)

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the amount of compensation paid for the taking the amount by

which the value of the property was diminished due to the loss

of its direct access to STH 19. Hoffer conceded that DOT

properly designated STH 19 a "controlled-access" highway

pursuant to Wis. Stat. § 84.25.11 Hoffer contended, however, that

Wisconsin law requires DOT to pay compensation if DOT does not

provide reasonable access between the highway and Hoffer's

property. Citing our decision in National Auto Truckstops, Inc.,

v. DOT, 2003 WI 95, 263 Wis. 2d 649, 665 N.W.2d 198, Hoffer

filed a motion in limine seeking an order that reasonable access

was a jury question and that Hoffer was due compensation if a

jury decided that the Frohling Lane access was unreasonable.

¶10 DOT moved for partial summary judgment, arguing that

pursuant to our holding in Surety Savings "there is no

compensable taking when direct access to a controlled-access

highway is denied, where other access is given or otherwise

exists." Surety Savings, 54 Wis. 2d at 443. DOT stated that

because there was no dispute that it had acted pursuant to Wis.

Stat. § 84.25, the controlled-access highway statute, and

because the Frohling Lane extension had provided "other access"

to the property, Hoffer's access was reasonable as a matter of

restrict the power of the state . . . to deprive or restrict such access without compensation under any duly authorized exercise of the police power."

11 See n.3.

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law, so any claim for damages resulting from a change in

Hoffer's access was barred.

¶11 Following a hearing, the circuit court denied Hoffer's

motions and granted partial summary judgment to DOT. The circuit

court found that the elimination of Hoffer's direct access to

STH 19 was a noncompensable exercise of the police power and

that reasonable access had been given as a matter of law.

Thereafter, the circuit court granted Hoffer's motion to dismiss

the action but preserved Hoffer's right to appeal.

¶12 On appeal, Hoffer argued that our holding in National

Auto Truckstops required DOT to compensate the owner of abutting

land if 1) DOT eliminates the property's direct access to a

controlled-access highway; and 2) a jury determines that the

replacement access is unreasonable. In an unpublished per curiam

opinion, the court of appeals affirmed the circuit court. Hoffer

Props., LLC, No. 2012AP2520, unpublished slip op. The court of

appeals distinguished National Auto Truckstops by noting that

the highway at issue there was not a controlled-access highway.

Id., ¶6. The court of appeals determined that Surety Savings

controlled, and "reject[ed] Hoffer's argument that the question

of whether the alternate access was reasonable was required to

be decided by a jury, because reasonableness is not the correct

legal standard to apply. Under Surety Savings, the inquiry is

merely whether alternate access was provided." Id., ¶7. The

court of appeals determined that because alternate access to

Hoffer's property was provided, no compensable taking had

occurred. See id.

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¶13 Hoffer petitioned this court for review, which we

granted on February 10, 2015.

II. STANDARD OF REVIEW

¶14 This case requires us to construe the controlled

access highway statute, Wis. Stat. § 84.25, and the just

compensation statute, Wis. Stat. § 32.09. "The interpretation

of a statute is a question of law that we review de novo." Crown

Castle USA, Inc., v. Orion Constr. Grp., LLC, 2012 WI 29, ¶12,

339 Wis. 2d 252, 811 N.W.2d 332. "We interpret statutes

independently, but benefit from both our prior analyses and that

of the lower courts." Id. (citation omitted).

III. STATUTORY INTERPRETATION

¶15 Statutory interpretation "begins with the language of

the statute. If the meaning of the statute is plain, we

ordinarily stop the inquiry." State ex rel Kalal v. Circuit

Court for Dane Cty., 2004 WI 58, ¶45, 271 Wis. 2d 633, 681

N.W.2d 110. "Statutory language is given its common, ordinary,

and accepted meaning, except that technical or specially-defined

words or phrases are given their technical or special

definitional meaning." Id. "We attempt to give reasonable effect

to every word, avoiding both surplusage and absurd or

unreasonable results." Crown Castle USA, 339 Wis. 2d 252, ¶13

(citing Kalal, 271 Wis. 2d 633, ¶46). Further, "the context and

structure of the statute are important, and we interpret the

statute in light of 'surrounding or closely-related statutes.'"

Masri v. LIRC, 2014 WI 81, ¶30, 356 Wis. 2d 405, 850 N.W.2d 298

(quoting Kalal, 271 Wis. 2d 633, ¶46).

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IV. DISCUSSION

¶16 We first discuss whether the elimination of an

abutting property owner's direct access to a controlled-access

highway is an exercise of the police power duly authorized by

Wis. Stat. § 84.25. We hold that it is, because the statute

authorizes DOT to change access to such a highway as DOT deems

"necessary or desirable." We then consider whether the provision

of some alternate access to an abutting property owner's

property obviates the need for a jury determination of

"reasonableness" in controlled-access highway cases. We hold

that reasonableness is the wrong standard to apply because when

DOT changes an abutting property owner's access pursuant to Wis.

Stat. § 84.25, no taking compensable under Wis. Stat.

§ 32.09(6)(b) occurs. Thus, in controlled-access highway cases

abutting property owners are precluded from compensation for a

change in access pursuant to Wis. Stat. § 32.09(6)(b) as a

matter of law. However, exercises of the police power cannot

deprive the owner of all or substantially all beneficial use of

the property without compensation. If the replacement access is

so circuitous as to amount to a regulatory taking of the

property, then compensation is due and the abutting property

owner may bring an inverse condemnation claim pursuant to Wis.

Stat. § 32.10.

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A. ELIMINATION OF AN ABUTTING PROPERTY OWNER'S DIRECT ACCESS TO A CONTROLLED-ACCESS HIGHWAY IS A DULY AUTHORIZED EXERCISE OF THE POLICE POWER

¶17 The Fourteenth Amendment to the United States

Constitution states that no person shall be deprived of property

without due process of law. U.S. Const. amend. XIV, § 1. The

Wisconsin Constitution provides that "[t]he property of no

person shall be taken for public use without just compensation

therefor." Wis. Const. art. I, § 13. "It has long been settled,

however, that these constitutional provisions interpose no

barrier to the exercise of the police power of the state." State

ex rel. Carter v. Harper, 182 Wis. 148, 151, 196 N.W. 451

(1923). In other words, "injury to property resulting from the

exercise of the police power of the state does not necessitate

compensation." Surety Savings, 54 Wis. 2d at 443. A state acts

under its police power when it regulates in the interest of

public safety, convenience, and the general welfare of the

public. See Nick v. State Highway Comm'n, 13 Wis. 2d 511, 513

14, 109 N.W.2d 71 (1961). Government action such as a regulation

can amount to a compensable taking absent a physical occupation,

however, "if [the effects of the governmental action] are so

complete as to deprive the owner of all or most of his interest

in the subject matter." Wisconsin Light & Power Co. v. Columbia

Cty., 3 Wis. 2d 1, 5, 87 N.W.2d 279 (1958) (quoting United

States v. General Motors Corp., 323 U.S. 373, 378 (1945)); see

also Just v. Marinette Cty., 56 Wis. 2d 7, 15, 201 N.W.2d 761

(1972) ("The protection of public rights may be accomplished by

the exercise of the police power unless the damage to the

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property owner is too great and amounts to a confiscation.").

Claims for such "regulatory takings" must be brought under Wis.

Stat. § 32.10, the inverse condemnation statute.

¶18 The primary distinction between the power of eminent

domain and the police power of the state most relevant to the

present case is that government takings by eminent domain are

compensable under Wis. Stat. § 32.09, while government actions

pursuant to the police power are not, except in limited

circumstances. See Wis. Stat. § 32.09(4), (6)(b). While we note

that "[t]he right of access to and from a public highway is one

of the incidents of the ownership or occupancy of land abutting

thereon," 118th Street Kenosha, LLC, v. DOT, 2014 WI 125, ¶30,

359 Wis. 2d 30, 856 N.W.2d 486 (quoting Hastings Realty Corp. v.

Texas Co., 28 Wis. 2d 305, 310, 137 N.W.2d 79 (1965)), we also

note that, provided the damage does not amount to a regulatory

taking of the property, Wisconsin. Stat. § 32.09(6)(b) allows

the state "to deprive or restrict such access without

compensation under any duly authorized exercise of the police

power."

1. DOT Exercises the Police Power When It Designates a Highway "Controlled-Access"

¶19 By means of Wis. Stat. § 84.25, the controlled-access

highway statute, the legislature has authorized DOT to designate

up to 1,500 miles of heavily traveled, rural highways

"controlled-access." This is a tightly circumscribed power, and

the designation can be made only if DOT first takes the specific

steps enumerated in Wis. Stat. § 84.25(1). Among other things,

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DOT must conduct "traffic engineering surveys, investigations

and studies" to determine whether the average traffic potential

for the highway is in excess of 2,000 vehicles per 24-hour day.

Wis. Stat. § 84.25(1). Before the controlled-access designation

can be made, DOT is required to hold a public hearing on the

matter following notice by publication in a county newspaper in

the county in which the highway lies. Id. If, after the required

surveys and investigations and the required public notice and

hearing, DOT then finds that both the traffic potential is above

2,000 vehicles a day "and that the designation of the highway as

a controlled-access highway is necessary in the interest of

public safety, convenience and the general welfare," DOT "shall

make its finding, determination and declaration to that effect,

specifying the character of the controls to be exercised." Id.

Copies of the finding, determination and declaration must be

recorded with the register of deeds and filed with the county

clerk as well as published in the same newspaper as notice of

the hearing. Once the publication has taken place, the

designation of "controlled-access" becomes effective. Id.

¶20 It is this designation of a highway as "controlled

access" that must be "necessary in the interest of public

safety, convenience and the general welfare . . . ." Wis. Stat.

§ 84.25(1). Thus, it is the designation that is an exercise of

the police power. Surety Savings, 54 Wis. 2d at 443 ("The

designation of a highway as a controlled-access highway is an

exercise of the police power."). The designation of a highway as

"controlled-access" serves as a precondition for the operation

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of the other subsections of Wis. Stat. § 84.25, the controlled

access highway statute. These subsections grant DOT expansive

powers after it has properly designated part or all of a highway

"controlled-access," including authority over how the general

public and abutting property owners access the highway. See Wis.

Stat. § 84.25(3)-(5), (7)-(10), (13). Once the highway has been

designated "controlled-access," the statute authorizes DOT to

subsequently change the access points in whatever way it "deems

necessary or desirable."12

2. The Effect of a Controlled-Access Highway Designation on the Rights of Users and Abutting Property Owners

¶21 Wisconsin Stat. § 84.25 explains how the rights of

users and abutting property owners are restricted by the

designation of the highway as "controlled-access." See Wis.

Stat. § 84.25(4)-(6), (11), (12). Pertinent here, the statute

states that "[n]o person shall have any right of entrance

upon . . . any controlled-access highway, or to or from abutting

lands except at places designated and provided for such

purposes, and on such terms and conditions as may be specified

from time to time by the department." Wis. Stat. § 84.25(5). The

12 The statute cannot authorize unconstitutional deprivations of property without just compensation; thus, in order to exercise the police power to change an abutting owner's access to the highway without paying compensation, DOT must provide some access to the property that is not so circuitous as to deprive the abutting owner of all or substantially all beneficial use of the property. Pursuant to Wis. Stat. § 84.25, DOT may change access in whatever way it deems "necessary or desirable" within these constitutional boundaries.

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statute also expressly curtails the access rights of abutting

property owners, so that "[a]fter the designation of a

controlled-access highway, the owners . . . of abutting lands

shall have no right or easement of access, by reason of the fact

that their property abuts on the controlled-access highway or

for other reason, except only the controlled right of

access . . . ." Wis. Stat. § 84.25(6). Pursuant to this

subsection, abutting property owners lose any right to

compensation under Wis. Stat. § 32.09 for a change in access to

the highway, provided some access remains, at the moment DOT

makes the "controlled-access" designation. See Nick, 13 Wis. 2d

at 515 ("The situation regarding the question of damages [for

diminution of value of the property due to a loss of direct

access to a controlled-access highway] was frozen when the

commission declared highway 30 a controlled-access highway.").

¶22 The controlled-access highway statute is unique in its

operation against abutting property owners,13 and consequently

the legislature limited DOT's authority to exercise the police

power and make a "controlled-access" designation. The

legislature prescribed elaborate procedures, including public

13 As will be discussed below, the other statutes that comprise Wis. Stat. ch. 84, the State Trunk Highways chapter, contain different language regarding compensation to abutting property owners than does the controlled-access highway statute. Consequently, the access rights of abutting property owners are affected differently by the designation of the highway as "controlled-access" than by actions taken by the DOT pursuant to other statutes in the chapter.

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notice and hearing, which DOT must follow to designate a highway

"controlled-access." Furthermore, the legislature limited the

amount of highway DOT can designate "controlled-access" to 1,500

miles. DOT cannot change or restrict an abutting owner's

existing access to a State trunk highway14 without paying

compensation pursuant to Wis. Stat. § 32.09 unless DOT has

validly designated the highway "controlled-access" and alternate

access to the highway has been provided. An abutting property

owner's opportunity to object to DOT's exercise of the police

power comes at the time of the hearing on whether to designate

the highway "controlled-access." After a valid controlled-access

designation has been made, however, DOT may change an abutting

owner's access to the highway without compensation, pursuant to

Wis. Stat. § 84.25(3), in whatever way it "deems necessary and

desirable" as long as it provides other access that does not

deprive the abutting owner of all or substantially all

beneficial use of the property. After a valid controlled-access

designation is made, the abutting owner's rights are curtailed——

and the DOT subsequently acts——pursuant to a duly authorized

exercise of the police power.

3. Hoffer's Direct Access was Eliminated Pursuant to an Exercise of the Police Power

¶23 Hoffer concedes that "DOT can deprive or restrict an

abutting owner's right of access to a highway 'without 14 Provided the State trunk highway has not otherwise been designated a freeway pursuant to Wis. Stat. § 84.295 or designated an interstate highway pursuant to Wis. Stat. § 84.29.

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compensation under any duly authorized exercise of the police

power.'"15 Hoffer further concedes that the designation of a

highway as controlled-access is a duly authorized exercise of

the police power and that DOT followed all of the required

procedures in Wis. Stat. § 84.25(1) to designate STH 19 a

controlled-access highway.16 Hoffer argues, however, that the

controlled-access highway statute does not grant DOT the power

to subsequently eliminate its direct access to STH 19 and

replace it with more circuitous access. Rather, Hoffer claims

that Wis. Stat. § 84.25 grants DOT "authority to regulate an

abutting owner's direct access . . . to an existing State trunk

highway without paying compensation to the owner, but such

authority is not granted to eliminate that access." Hoffer's

argument rests on its emphasis of certain language in the

statute which grants DOT authority to prohibit anyone from

entering or leaving the highway "except at places designated and

provided for such purposes" and that abutting owners have no

right of access "except only the controlled right of access."

Hoffer claims that by using the words "except"17 and

15 See n.4.

16 See n.3.

17 Hoffer does not explain how the word "except" is meant to withhold DOT's authority to eliminate access points. Presumably, Hoffer's theory is that by allowing DOT to prohibit anyone from entering the highway "except" at places "designated and provided for such purposes" by the department, the legislature granted DOT authority over the rest of the highway but not over the preexisting access points.

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"controlled," the legislature indicated its intent to withhold

from DOT authority to eliminate an abutting owner's direct

access to a controlled-access highway. Hoffer insists that DOT's

authority to regulate does not include the authority to

eliminate preexisting direct access points and replace them with

more circuitous access to a controlled-access highway.

¶24 Hoffer is mistaken. Its proposed construction is at

odds not only with the plain language of the statutes, but with

the clear holdings of our case law. There are three reasons why

Hoffer's proposed interpretation cannot be correct.

¶25 First, Wis. Stat. § 84.25(3) states that "the

department may use an existing highway . . . for a controlled

access highway . . . and so regulate, restrict or prohibit

access to or departure from it as the department deems necessary

or desirable." This very precise language indicates that the

legislature granted expansive authority to DOT to change access

to a controlled-access highway. By allowing DOT to designate an

existing highway "controlled-access" and thereafter "regulate,

restrict or prohibit access to or departure from it as the

department deems necessary or desirable," the legislature

granted DOT broad control over the entire portion of the

existing highway that has been designated "controlled-access,"

including placement and replacement of access points. Because it

is self-evident that elimination of direct access points is a

means of "restrict[ing] or prohibit[ing] access," Hoffer cannot

be correct when it argues that the statute does not grant DOT

authority to eliminate Hoffer's direct access points.

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¶26 Second, Wis. Stat. § 84.25(5) states that "[n]o person

shall have any right of entrance" to a controlled-access

highway, "or to or from abutting lands," except at places

designated for such purposes "and on such terms and conditions

as may be specified [by the department] from time to time"

(emphasis added). The phrase "from time to time" indicates that

the legislature enabled DOT to periodically change the terms and

conditions by which any person——abutter or otherwise——has access

to a controlled-access highway. See Surety Savings, 54

Wis. 2d at 444-45 (holding that Wis. Stat. § 84.25(5)

"demonstrate[s] the legislature's intent to give the highway

commission continuing power to review and modify its

authorizations for access to or across a controlled-access

highway"). Replacing direct access with a more circuitous route

is inarguably a change of the "terms and conditions" by which an

abutter is allowed to enter the highway. We cannot accept a

construction of a statute that does not "give reasonable effect

to every word, avoiding both surplusage and absurd or

unreasonable results." Crown Castle USA, 339 Wis. 2d 252, ¶13

(citing Kalal, 271 Wis. 2d 633, ¶46). Hoffer's reading of the

statute ignores that part of § 84.25(5) which expressly vests

DOT with authority to change the "terms and conditions" of

access "from time to time." Thus, this argument must be

rejected.

¶27 Third, Wis. Stat. § 84.25(6) states that once a

highway is designated controlled-access, abutting owners "shall

have no right or easement of access, by reason of the fact that

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their property abuts on the controlled-access highway or for

other reason, except only the controlled right of

access . . . ." Wis. Stat. § 84.25(6). This subsection

eliminates an abutting property owner's right to compensation

under § 32.09(6)(b) for a change to existing access at the

moment DOT designates the highway "controlled-access." See Nick,

13 Wis. 2d at 515. Replacement access which results in a

circuitous route rather than a direct one is a lawful——if

regrettable——result of controlling access. See, e.g., Carazalla

v. State, 269 Wis. 593, 71 N.W.2d 276 (1955) (holding that

circuity of travel is not a compensable item of damages); Nick,

13 Wis. 2d at 514 ("if no land is taken for the converted

highway but the abutting landowner's access to the highway is

merely made more circuitous, no compensation should be paid,");

McKenna v. State Highway Comm'n, 28 Wis. 2d 179, 184, 135

N.W.2d 827 (1965) ("There is no taking in the sense required by

the statute, where, as in this case, another access route is

available."); Stefan Auto Body v. State Highway Comm'n, 21

Wis. 2d 363, 369-74, 124 N.W.2d 319 (1963) (noting that in

controlled-access highway cases circuity of travel resulting

from a changed access point is not compensable).

¶28 In the present case, DOT conducted the required

traffic engineering surveys, investigations, and studies to

designate STH 19 "controlled-access." DOT held a public hearing

on the matter on May 4, 2002, at the Milford Town Hall in

Jefferson County after giving notice by three separate

publications in two separate Jefferson County newspapers. It

No.2012AP2520

22

found that the potential traffic on STH 19 exceeded 2,000

vehicles per day and that it was necessary in the interest of

public safety, convenience, and the general welfare to designate

STH 19 "controlled-access." In sum, DOT did everything necessary

to validly designate STH 19 "controlled-access." Upon that

designation Hoffer lost its right to be compensated pursuant to

Wis. Stat. § 32.09(6)(b) for a change to existing access

resulting in circuity of travel. By the time Hoffer's direct

access was eliminated, the controlled-access designation of STH

19 had been made, Hoffer's right of access had been curtailed to

the "controlled right of access," DOT had determined it was

"necessary or desirable" to change Hoffer's access to the

highway, and DOT provided alternate access to Hoffer's property.

¶29 In light of the foregoing, we conclude that DOT's

replacement of Hoffer's direct access with circuitous access to

a controlled-access highway was done pursuant to an exercise of

the police power duly authorized by Wis. Stat. § 84.25.

Consequently the elimination of Hoffer's direct access to STH 19

was not compensable under Wis. Stat. § 32.09(6)(b).

B. IN CONTROLLED-ACCESS HIGHWAY CASES ABUTTING PROPERTY OWNERS ARE PRECLUDED FROM SEEKING COMPENSATION UNDER WIS. STAT. § 32.09(6)(b) FOR DAMAGE TO THE PROPERTY RESULTING FROM A CHANGE IN ACCESS

¶30 As noted above, when DOT designates a highway

"controlled-access," an abutting owner's right to compensation

pursuant to Wis. Stat. § 32.09(6)(b) for a replacement of

existing access is eliminated. The abutting owner's remaining

property right of access is the controlled right of access and

No.2012AP2520

23

not the right to access as it existed prior to or

contemporaneously with the highway's designation as "controlled

access." The right of access

involves only the right to enter and leave the property without being forced to trespass across the land of another. It does not include any right to develop property with reference to the type of access granted or to have access at any particular point on the boundary lines of the property.

Surety Savings, 54 Wis. 2d at 444 (emphasis added). The

controlled right of access is also subject to "such terms and

conditions as may be specified from time to time by [DOT]." Wis.

Stat. § 84.25(5). Requiring an abutting property owner to access

a controlled-access highway by a more circuitous route rather

than directly is a "term[] and condition[]" of access and a

lawful means of "controlling" access. Consequently, this court

has stated that "[w]here access to a highway is controlled under

the exercise of the police power and reasonable access remains,

no compensation is required." Schneider v. State, 51

Wis. 2d 458, 462, 187 N.W.2d 172 (1971) (citing Nick, 13

Wis. 2d 511). In both Schneider and Surety Savings, we held that

because DOT had changed the abutting property owners' access

pursuant to the controlled-access highway statute, the abutting

property owners were precluded from seeking compensation for

diminution of value of the property that resulted from the

changed access. See Schneider, 51 Wis. 2d at 463-64; Surety

Savings, 54 Wis. 2d at 443. Hoffer states that the property

owners in neither case challenged the replacement access as

"unreasonable," and contends that because it has made such a

No.2012AP2520

24

challenge it is due compensation for diminution of value damages

if a jury determines its replacement access is unreasonable. For

the reasons discussed below, we disagree.

1. A Taking Occurs Only if the Access Provided Deprives the Abutting Property Owner of All or Substantially All Beneficial Use of the Property

¶31 A taking must occur before a viable claim for

compensation can arise. Howell Plaza, Inc. v. State Highway

Comm'n, 92 Wis. 2d 74, 80, 284 N.W.2d 887 (1979) (hereinafter

Howell Plaza II). No compensable taking occurs when DOT changes

an abutting property owner's access to a controlled-access

highway if other access is provided that does not deprive the

owner of all or substantially all beneficial use of the

property. Additionally, "duly authorized" acts of the police

power that restrict or deprive access to a highway from abutting

lands are not compensable pursuant to Wis. Stat. § 32.09(6)(b).

When no taking compensable pursuant to Wis. Stat. § 32.09(6)(b)

has occurred, there is nothing for a jury to determine pursuant

to Wis. Stat. § 32.09(6)(b). Thus, in controlled-access highway

cases, abutting property owners are precluded from compensation

under Wis. Stat. § 32.09(6)(b) as a matter of law because no

compensation is possible pursuant to that statute. Making a

claim that the access given is unreasonable does not transform

an act that is noncompensable pursuant to Wis. Stat.

§ 32.09(6)(b) into a compensable one.

¶32 This does not mean, however, that the provision of

alternate access to a controlled-access highway precludes the

No.2012AP2520

25

abutting property owner from compensation in all possible

contexts. Changes in access to a controlled-access highway may

support a claim pursuant to Wis. Stat. § 32.10 for a regulatory

taking of the property. "The protection of public rights may be

accomplished by the exercise of the police power unless the

damage to the property owner is too great and amounts to a

confiscation." Just, 56 Wis. 2d at 15. The abutting property

owner may not be deprived of all or substantially all beneficial

use of his property without compensation by means of an exercise

of the police power or otherwise. See E-L Enterprises, Inc., v.

Milwaukee Metro. Sewerage Dist., 2010 WI 58, ¶37, 326

Wis. 2d 82, 785 N.W.2d 409. "Whether a taking [pursuant to Wis.

Stat. § 32.10] has occurred depends upon whether 'the

restriction practically or substantially renders the land

useless for all reasonable purposes.'" Just, 56 Wis. 2d at 15

(quoting Buhler v. Racine Cty., 33 Wis. 2d 137, 143, 146

N.W.2d 403 (1966)).

¶33 If the access DOT provides to a controlled-access

highway deprives the abutting property owner of all or

substantially all beneficial use of the property, DOT has taken

the property and the change in access may support an inverse

condemnation claim pursuant to Wis. Stat. § 32.10. However,

"even if a highway construction project results in damages that

are compensable under a particular statute, those damages cannot

be recovered in a claim brought under the wrong statute." 118th

Street, 359 Wis. 2d 30, ¶33. The proper mechanism for pursuing

compensation for damages resulting from a change in access when

No.2012AP2520

26

DOT acts pursuant to the controlled-access highway statute is to

bring an inverse condemnation claim under Wis. Stat. § 32.10.

Thus, even had Hoffer's replacement access deprived it of all or

substantially all beneficial use of its property, it could not

recover under the Wis. Stat. § 32.09(6)(b) claim it has pursued

here.

¶34 We recognize that this is a high standard for owners

of property abutting a controlled-access highway to meet.

Controlled-access highways are, however, limited and unique, and

the legislature granted DOT authority to regulate access to them

under the police power in whatever way DOT deems necessary and

desirable provided the abutting property owner retains some

access to the highway. The legislature further codified the

principle that valid exercises of the police power do not

require payment under the just compensation statute, Wis. Stat.

§ 32.09, except in limited circumstances. We will not intrude

upon these legislative choices.

2. It is Presumed that the Legislature Purposefully Omitted a Reasonableness Standard from the Controlled-Access Highway Statute

¶35 An analysis of the surrounding statutes in Wis. Stat.

ch. 84 further compels the conclusion that "reasonableness is

not the correct legal standard to apply" when DOT changes an

abutting property owner's access to a controlled-access highway

and thus no jury is required in controlled-access highway cases.

Hoffer Properties, slip. op., ¶7. "When the legislature enacts a

statute, it is presumed to act with full knowledge of the

No.2012AP2520

27

existing laws, including statutes." Mack v. Joint Sch. Dist. No.

3, 92 Wis. 2d 476, 489, 285 N.W.2d 604 (1979). The freeway

statute, Wis. Stat. § 84.295, states that "reasonable provision

for public highway traffic service or access to abutting

property shall be provided by means of frontage roads . . . or

the right of access to or crossing of the public highway shall

be acquired on behalf of the state" when DOT is undertaking a

freeway project (emphasis added). Identical language appears in

Wis. Stat. § 84.29, the interstate highway statute.

¶36 These statutes command that if DOT does not provide

reasonable access to the highway by means of frontage roads when

undertaking a freeway or interstate highway project, the

abutting property owners are due compensation under Wis. Stat.

§ 32.09 for a taking of their access rights.18 This language is

conspicuously absent from the controlled-access highway statute.

Rather, Wis. Stat. § 84.25(6) states that owners "of abutting

lands shall have no right or easement of access . . . except

only the controlled right of access." We presume that had the

legislature intended to include reasonableness as a component of

Wis. Stat. § 84.25 and allow for compensation under Wis. Stat.

§ 32.09, it would have included this language in the statute, as

it did for freeways and expressways in Wis. Stat. § 84.295 and

for interstate highways in Wis. Stat. § 84.29. 18 Wisconsin Stat. § 990.01(2) governs the construction of Wisconsin laws, and it states that "[a]cquire," when used in connection with a grant of power to any person, includes the acquisition by purchase, grant, gift or bequest. It includes the power to condemn in the cases specified in s. 32.02.

No.2012AP2520

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¶37 The legislature, however, omitted this command from

Wis. Stat. § 84.25. When DOT acts pursuant to the controlled

access highway statute, abutting property owners must be

compensated for DOT's "acquisition" of their property only if

DOT does not provide some access or if the access provided is so

circuitous as to amount to a regulatory taking of the property.

Consequently, when DOT provides alternate, albeit more

circuitous, access to abutting lands from a controlled-access

highway, no taking compensable pursuant to Wis. Stat.

§ 32.09(6)(b) occurs. It is axiomatic that where there is no

compensable taking there will be no compensation. "[T]here must

be a taking before there can be a claim for just compensation."

Howell Plaza II, 92 Wis. 2d at 80; see also Surety Savings, 54

Wis. 2d at 444 ("Since appellants have always had access

available to them, no property right was taken."). The

legislature did not require DOT to either provide reasonable

access to a frontage road or to acquire the access rights of

abutting property owners when it acts pursuant to Wis. Stat.

§ 84.25. Thus, in controlled-access highway cases, provision of

some access preserves the abutting property owner's controlled

right of access to the property; no jury is required to

determine whether the replacement access is reasonable because

in controlled-access highway cases reasonableness is not the

standard to apply to determine if compensation is due pursuant

to Wis. Stat. § 32.09(6)(b).19

19 We reiterate, however, that circuitous access amounting (continued)

No.2012AP2520

29

3. The Cases Hoffer Relies on Are Eminent Domain Cases, Not Police Power Cases

¶38 Hoffer attempts to distinguish Surety Savings and its

predecessors, in which we held that abutting property owners

could not recover diminution of value damages caused by changes

in access to the highway, by arguing that those cases were

abrogated by the decisions in National Auto Truckstops, 263

Wis. 2d 649, and Seefeldt v. DOT, 113 Wis. 2d 212, 336

N.W.2d 182 (Ct. App. 1983). We disagree.

¶39 Both cases are easily distinguishable. In the present

case DOT was exercising the police power pursuant controlled

access highway statute, while in National Auto Truckstops and

Seefeldt it was not. In National Auto Truckstops, the highway at

issue (Highway 12) had not been designated "controlled-access."

Thus, unlike the present case, the change in National Auto

Truckstops' access "was not a 'duly authorized exercise of the

police power.'" National Auto Truckstops, 263 Wis. 2d 649, ¶16

(emphasis in original). Consequently Wis. Stat. § 32.09(6)(b)

applied and a jury determination of reasonableness was required

to a regulatory taking of the property may be compensable under Wis. Stat. § 32.10.

No.2012AP2520

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to determine the amount of compensation due, if any.20 National

Auto Truckstops is inapplicable to controlled-access highway

cases because no compensation is due under Wis. Stat.

§ 32.09(6)(b) when DOT exercises the police power pursuant to

Wis. Stat. § 84.25. In fact, the plaintiffs in National Auto

Truckstops had conceded that if DOT had designated the highway

"controlled-access" under Wis. Stat. § 84.25, no compensation

would be due for the elimination of their direct access to

Highway 12. See id., ¶8. Given that DOT did act pursuant to the

controlled-access highway statute vis-à-vis Hoffer's property,

National Auto Truckstops is unavailing to Hoffer.

¶40 Seefeldt is similarly unhelpful to Hoffer.

Preliminarily, as a court of appeals case, Seefeldt could not

alter the holding of Surety Savings. See Cook v. Cook, 208

Wis. 2d 166, 189, 560 N.W.2d 246 (1997) ("The supreme court is

the only state court with the power to overrule, modify or

withdraw language from a previous supreme court case."). More to

the point, Hoffer's reliance on Seefeldt is misplaced because,

20 We note there is a tension between the language of Wis. Stat. § 32.09(6)(b) stating that in partial takings cases compensation is due for "[d]eprivation or restriction of existing right of access to highway from abutting land [unless restricted by an exercise of the police power]" and our holding in National Auto Truckstops that no compensation is due to an abutting property owner whose existing access has been restricted if reasonable access remains even when DOT has not exercised the police power. Reconciliation of the two is not necessary for the determination of this case and it was neither briefed nor argued, so we will decline to address the matter further.

No.2012AP2520

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like in National Auto Truckstops, Seefeldt did not implicate the

controlled-access highway statute. In Seefeldt, DOT was acting

pursuant to the freeway statute, Wis. Stat. § 84.295. Seefeldt,

113 Wis. 2d at 214-15. As noted above, the freeway statute

contains language that the controlled-access highway statute

does not: when DOT designates a preexisting highway as a

freeway pursuant to Wis. Stat. § 84.295, "reasonable provision

for public highway traffic service or access to abutting

property shall be provided by means of frontage roads . . . or

the right of access to or crossing of the public highway shall

be acquired on behalf of the state." Wis. Stat. § 84.295(5)

(emphasis added). This language in § 84.295(5) requires DOT to

pay compensation pursuant to Wis. Stat. § 32.09 if it does not

provide reasonable access to the freeway. In Seefeldt, DOT had

neither built a frontage road nor acquired Seefeldt's access

rights. Seefeldt, 113 Wis. 2d at 215-16. Consequently, a jury

determination of reasonableness was required to assess how much,

if any, compensation was due under Wis. Stat. § 32.09. Id. at

220-21.

¶41 Unlike in National Auto Truckstops or Seefeldt, in the

present case, DOT exercised the police power pursuant to the

controlled-access highway statute to replace Hoffer's direct

access with circuitous access. As we have explained previously,

Wis. Stat. § 32.09(6)(b) precludes compensation under that

subsection for such exercises of the police power. National Auto

Truckstops and Seefeldt did not alter the rule that the

provision of alternate access precludes compensation pursuant to

No.2012AP2520

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Wis. Stat. § 32.09(6)(b) in controlled-access highway cases

because neither case involved Wis. Stat. § 84.25. Likewise, they

do not apply to this case.

C. HOFFER WAS FULLY COMPENSATED FOR ALL DAMAGE CAUSED BY THE TAKING OF THE .72 ACRE

¶42 Hoffer has never articulated how the diminution of

value caused by the loss of direct access to STH 19 relates to

the compensation due for the taking of the .72 acre.21 Our

21 At the circuit court, Hoffer stated that "this is a partial taking eminent domain valuation case," mentioned that .72 of an acre was taken, and then argued that Hoffer was being "denied his constitutional right to be paid compensation by DOT for its taking of the subject property's access rights to STH #19." In its motions to that court, Hoffer refers only to "the taking" and never differentiates between the loss of access points and the .72 acre.

At the court of appeals, Hoffer again stated that "this is a partial taking eminent domain valuation case" and characterized the case as relating "to compensation for the taking of access rights." Hoffer stated that "DOT's STH #26 project necessitated a partial taking from the subject property" and claimed that elimination of direct access to STH 19 was one of the "aspects" of the taking. Hoffer argued that "[d]ifferent legal standards apply when there has not been a taking as opposed to when there has been a partial taking. . . . In the partial taking situation, in accordance with Wisconsin Statutes, section 32.09(6), the owner is entitled to compensation for damages . . . accruing to the owner's remaining property as a result of the taking." (Emphasis added).

In its brief to this court, Hoffer states that "[t]his is a partial taking eminent domain valuation case. . . .The issue in this case relates to compensation for the taking of access rights." Hoffer then states that "DOT's STH #26 project necessitated a partial taking from the subject property" and again characterized the termination of its direct access to STH 19 as an "aspect" of the taking.

No.2012AP2520

33

formulation of Hoffer's argument is as follows: the taking of

the .72 acre and the termination of Hoffer's direct access to

STH 19 are not two distinct acts, but rather a single "taking."

According to Hoffer this single taking resulted in a diminution

in value of its property for which it is owed compensation.

Thus, (the argument runs), the elimination of its direct access

is compensable under Wis. Stat. § 32.09(6)(b) even though

Hoffer's direct access points were not on the land taken because

some portion of Hoffer's land was taken by eminent domain.

¶43 Hoffer mistakenly styles its argument upon eminent

domain when in actuality it prosecutes a separate and distinct

claim based upon a challenge to DOT's exercise of the police

power.22 Hoffer is not challenging the reasonableness of the

$90,000 valuation of the .72 acre of land taken pursuant to

eminent domain; rather, it is challenging the kind of remedies

available for the state's legitimate exercise of the police

power. Hoffer attempts to characterize this argument as a matter

of compensation, but it is really a matter of whether it had a

property interest in direct access to the highway.

¶44 Our decisions in 118th Street and Jantz v. DOT, 63

Wis. 2d 404, 217 N.W.2d 266 (1974) illustrate why Hoffer's

argument is unavailing.

22 At oral argument, Hoffer stated it was only seeking compensation for loss of direct access to STH 19 and claimed that the difference between a taking under eminent domain and the police power was just "a label."

No.2012AP2520

34

¶45 In 118th Street,23 we held that "compensation for a

taking cannot include damages for a lost point of access to a

highway if the point of access was lost because of an act

separate from the taking, such as the highway's relocation." 359

Wis. 2d 30, ¶46. There, we cited with approval Jantz, 63

Wis. 2d 404, a case almost directly analogous to Hoffer's case.

See 118th Street, 359 Wis. 2d 30, ¶¶47-48. In Jantz, a

restaurant owner sought compensation for diminution of value of

his business after DOT took .38 acre of Jantz's land in order to

expand the highway. DOT also relocated his access to the

highway. Jantz, 63 Wis. 2d at 407-09. The .38 acre taken was

separate from Jantz's highway access point. Id. We held that the

diminution of value was properly excluded from the compensation

for the partial taking "because those damages were not 'a

consequence of the taking of .38 acre of land . . . .'" 118th

Street, 359 Wis. 2d 30, ¶48 (quoting Jantz, 63 Wis. 2d at 412).

¶46 Here——just like the property owners in 118th Street

and Jantz——Hoffer did not lose its direct access points to the

highway because of the taking of the .72 acre of its land;

rather, it lost its direct access points due to DOT's decision

to restrict access to STH 19 as part of the STH 26 relocation

23 The issue in 118th Street was whether diminution of value caused by the relocation of (and the LLC's consequent loss of direct access to) 118th Street should be included in the compensation for the taking of a temporary limited easement under Wis. Stat. § 32.09(6)(g) when the temporary limited easement was used to create additional access to the property.

No.2012AP2520

35

project. Two separate acts occurred: (1) the taking of Hoffer's

.72 acre, and (2) the elimination of Hoffer's direct access

points to STH 19 pursuant to the police power. None of Hoffer's

access points were on the land taken. Hoffer has consistently

argued that the diminution of value to the property was caused

by the loss of direct access to STH 19, not by the taking of the

.72 acre. The diminution of value of Hoffer's property was not a

consequence of the taking of the .72 acre, and accordingly those

damages should not be included in the compensation for the .72

acre taken.

V. CONCLUSION

¶47 First, we hold that Wis. Stat. § 84.25(3) authorizes

DOT to change Hoffer's access to STH 19 in whatever way it deems

"necessary or desirable." Such changes, including elimination of

direct access points, are duly authorized exercises of the

police power and are not compensable under Wis. Stat. § 32.09 as

long as alternate access is given that does not deprive the

abutting owner of all or substantially all beneficial use of the

property. Second, we hold that when DOT changes an abutting

property owner's access to a controlled-access highway but other

access is given or exists, the abutting property owner is

precluded from compensation pursuant to Wis. Stat. § 32.09(6)(b)

as a matter of law and no jury determination of reasonableness

is required. Reasonableness is the wrong standard to apply

because the provision of some access preserves an abutting

property owner's right of access to a controlled-access highway,

and thus no taking compensable under Wis. Stat. § 32.09(6)(b)

No.2012AP2520

36

occurs.

Accordingly, Hoffer is precluded from compensation under Wis. Stat. § 32.09(6)(b) because alternate access to the property was provided by the Frohling Lane extension. We

therefore affirm the court of appeals. The decision of the court of appeals is

affirmed.