McKee Family I, LLC v. City of Fitchburg
2017 WI 34
| Wis. | 2017Background
- McKee owned two undeveloped lots (53 and 54) rezoned by Fitchburg from a Planned Development District (PDD) to Residential-Medium (R-M) after a proposed 128-unit apartment plan drew neighborhood opposition.
- The PDD and a General Implementation Plan (GIP) had been approved in 1994 for senior-oriented multifamily development; lots 10 and 11 were later developed consistent with that plan, but lots 53 and 54 remained undeveloped and were conveyed to McKee in 2007.
- In 2008 McCormick (prospective purchaser) prepared a Specific Implementation Plan (SIP) for 128 apartments and hired consultants, but no building permit application was submitted.
- Fitchburg rezoned the two lots to R-M in 2009, reducing the maximum units from the PDD level to 28 under R-M, after public petitions and council action.
- McKee sued seeking declaratory relief, damages and injunctive relief, alleging the rezoning was unlawful, that it had vested rights and that the rezoning effected a taking; the circuit court granted summary judgment for Fitchburg and the court of appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether McKee had vested rights in the PDD zoning | McKee: vested rights arise from substantial expenditures and reasonable expectations created by government action and need not await a building permit | Fitchburg: Wisconsin law requires a conforming building permit application before rights vest; no permit was filed | Held: No vested right — Wisconsin follows a bright-line building-permit rule; McKee never applied for a conforming permit |
| Whether PDD zoning created a contractual right enforceable against the city | McKee: PDD (negotiated zoning) and ordinance language ("agreement") created enforceable expectations and contractual obligations | Fitchburg: Legislative enactments presumptively do not create contracts; no clear indication city intended to be contractually bound | Held: No contractual right — strong presumption against treating ordinances as contracts; McKee failed to overcome it |
| Whether rezoning constituted a Fifth Amendment taking | McKee: contingent takings claim if vested rights existed | Fitchburg: takings claim fails because no vested rights/contractual entitlement | Held: Not reached on merits — takings claim contingent on vested-rights claim and fails because no vested right |
Key Cases Cited
- Lake Bluff Hous. Partners v. City of South Milwaukee, 197 Wis. 2d 157, 540 N.W.2d 189 (1995) (establishes Wisconsin's bright-line rule that rights vest only after a conforming building permit application)
- Zealy v. City of Waukesha, 201 Wis. 2d 365, 548 N.W.2d 528 (1996) (no vested right where developer made no expenditures and did not apply for a building permit)
- Dunn v. Milwaukee County, 279 Wis. 2d 370, 693 N.W.2d 82 (Ct. App. 2005) (reiterates strong presumption that legislative enactments do not create contractual rights)
- Nat'l R.R. Passenger Corp. v. Atchison, Topeka & Santa Fe Ry. Co., 470 U.S. 451 (1985) (federal principle that statutes are not treated as contracts absent clear indication of intent to bind future legislative action)