*1 Vivid, Petitioner- Inc., corporation, a Wisconsin
Respondent,† v. Depart Secretary of the Wisconsin R.
Ronald Fiedler, Department Transportation and Wisconsin ment of Respondents-Appellants-Petitioners. Transportation,
Supreme Court 8, 1998. July argument April 96-1900. Oral No. Decided 644.) (Also reported in 580 N.W.2d 21,1998. August for reconsideration denied †Motion *5 For the respondents-appellants-petitioners Larson, Robert W. cause argued by assistant attorney general, with whom on the briefs was James E. Doyle, attorney general.
For the there petitioner-respondent was a brief by Thomas S. Marc T. Hornig, Brennan, McCrory Steil, Basting & MacDougall, S.C., Janesville and oral argument by Thomas S. Hornig. WILLIAM A. BABLITCH,
¶1. J. This case involves question proper determination just compensation for outdoor advertising signs, owned by Vivid, Inc. (Vivid), the State of Wisconsin removed in 1989 in conjunction with a highway improvement project along Interstate 90. Three issues 1) are presented. Does Wis. Stat. 84.30 provide the exclusive for remedy just compensation for these signs? 2) We conclude it does. Does just compensation for the of these
taking signs include the value of the location of 3) We signs? conclude it does. What is the appropri- ate method for determining just case? Three of us conclude that the use of a Gross (GIM) Income Multiplier method, other among valua- methods, tion was appropriate. Accordingly, although four concur in justices the result but with the disagree analysis regarding GIM, we affirm the court of appeals' decision on these However, issues. the court of also appeals attorney allowed fees to Vivid. Because fees, we reverse attorney does not allow 84.30 on that issue. of appeals court *6 HISTORY PROCEDURAL AND FACTUAL history and long complex has a 2. This case ¶ is a com- in some detail. Vivid review warrants advertising signs. Typically, outdoor owns pany roads and traveled heavily land to adjacent rents Vivid on constructs billboard Vivid then highways. rents the land on which Vivid Although rented land. (the site), Vivid owns sign is located the billboard display to with businesses itself. Vivid contracts sign a certain term. for on the billboard advertising their Transpor- the State Department In State) (DOT signs, two notified Vivid tation or next to located sign, and the "Trucks" "Antiques" sign near interchange Road 90 and the Avalon Interstate of a highway removed as part had to be Janesville nine-year had and eight- Vivid project. improvement and 36-month left on the property leases sign site on the signs. contracts advertising to own- compensation The State offered 4.¶ The were located. signs the land on which ers of to according relocation benefits also offered Vivid State (1987-88)1 Admin. Code and Wis. Stat. 32.19 Wis. offered included The relocation benefits ILHR 202.64. as signs to relating moving expenses reasonable exceeding expenses or reasonable well as actual sites. searching for new $1,000 per if the could not be signs Vivid that State informed actual, Vivid for the moved, the State would reimburse property predicated loss of its tangible personal direct Statutes are to the 1987-88 All references to Wisconsin noted. version unless otherwise on the lesser of the units' depreciated in-place value or their estimated moving cost. Vivid did not respond to either the State's offer for Vivid to in the participate offered to the to landowners nor State's offer for relocation assistance. The State removed the signs April, 2,1989, 5. On June filed a notice of injury
and notice of State, claim with the pursuant 893.80(1) Stat. and 893.82. Vivid claimed that it suf- §§ fered a $54,000 total of an damages, amount Vivid claimed reflected the fair market value of the razed signs. Vivid also interest requested loss of reve- nues from April, when were destroyed, as well as attorney fees. The State did not respond 16, 1989, these notices. On October Vivid filed an *7 action, that inverse condemnation requesting рroceed- be commenced ings pursuant to Wis. Stat. 32.10. § action, With this Vivid requested just compensation under 32.10 for the that the State removed and § other costs and including attorney disbursements fees to Wis. Stat. 32.28. according § 6. The circuit court the State's motion granted
¶ for summary judgment dismissed Vivid's petition for an inverse condemnation Vivid proceeding. appealed. 7. The court of appeals reversed the circuit
¶ court's order the State granting summary judgment and remanded the cause for further under proceedings Vivid, Stat. Fiedler, 32.10. See Inc. v. 174 Wis. 2d § (Ct. 1993) (hereinafter 142, 147, 497 N.W.2d App. I). referred to as Vivid 8. This court the State's granted petition
review. The issue presented was whether Vivid was entitled to for its The State compensation signs. argued only it need Vivid relocation benefits pay argued § that it enti- 32.19. Vivid was
under Wis. Stat.
variety
just compensation
theories,
under a
tled to
including
appeals,
§
84.30. Like the court
Wis. Stat.
pay
had to
that the State
this court concluded
just compensation
to determine
and remanded
just compensation.
Vivid,
Fiedler,
v.
See
Inc.
amount
(1994) (hereinafter
71, 73,
boards were removed 84.30(5), proceeding, than sec. domain rather under signs, governs nonconforming irrel- which removal 84.30(6) requires express language evant. The of sec. just compensation 'regardless payment of whether Id. at removed because of this section.'" was 84.30(6)). remanding (quoting In Wis. Stat. circuit court for determination of case to the just compensation, directed the amount of this court 84.30(7), Stats., circuit court to "refer to section just compensation and section discusses the measure of 84.30(8), agreed price Stats., and adds which discusses 32.05, under section is determined agree- fail reach Stats., if the DOT and the owner compensation." ment on the amount of Id. at 81 n.8. *8 County remand, Court,. Rock Circuit 10. On Judge, proceed Lussow, as if John H. allowed Vivid one condemnation under Wis. the case were for inverse objection, § the State's the circuit Stat. 32.10. Over testify valuing expert to court allowed Vivid's about using approach billboards an income which considers taking projected the income of the before income after the taking, and a comparable sales or market approach which looks to comparable sales (GIM) a Gross Income using Multiplier to determine the amount of income an produced by individual sign. The circuit court also allowed State's evidence regarding cost approach which values the sign structure using cost-less-depreciation and then adds that to the leasehold The jury value. determined that the two billboards a fair $37,800, had market value of an amount far the amount calculated exceeding under the State's cost Vivid then filed approach. a motion for on judgment the verdict. The circuit court concluded that Vivid was entitled to on judgment the verdict of $37,800 as just for the signs, interest on in the judgment $13,230 amount of pursuant 32.05(ll)(b), Wis. Stat. and litigation expenses including attorney $166,261 fees of pursuant to Wis. 32.28, Stat. for a total judgment $217,292 together statutory with interest. 11. The State the circuit appealed court's Vivid,
order. In an decision, Inc. v. Fied- unpublished (Wis. ler, 96-1900, No. unpublished Ct. slip op. App. 1997) (hereinafter Oct. III), referred to as Vivid court of appeals affirmed the circuit court's order. How- ever, the court of determined appeals the circuit court erred allowing testimony the GIM. regarding id., See at unpublished slip op. They 13-14. determined the income was the valua- approach appropriate id., tion method in this case. See at unpublished slip op. 15. The court of appeals determined that the error of evidence admitting regarding harmless; the GIM was they therefore concluded that need not they reverse and remand the judgment because result would probably be more favorable to the DOT under the income than current jury ver- *9 rights not affect the substantial
diet —remand would (refer- id., at See 19 slip op. unpublished the parties. 805.18(2)). to Wis. Stat. ring § for the State's granted petition 12. This court decision, Vivid court of appeals review of this second III, on December 16,1997.2 BILLBOARD AND
JUST COMPENSATION
VALUATION
is whether Wis.
The first
issue presented
remedy
Stat.
84.30
the exclusive
provides
Vivid's
Resolution
taking
signs.
for the
84.30. A ques-
requires interpretation
of this issue
is a
of law
question
tion of statutory interpretation
v.
Hughes
reviews de novo. See
court
which this
978,
Motors
973,
197 Wis. 2d
542
Chrysler
Corp.,
(1996).
in statutory
148
Our primary goal
N.W.2d
See
discern the
intent.
legislature's
is to
interpretation
2
outset,
right
argues that the State waived its
At the
a
trial because it failed
appellate
review and remand for new
"
jury
after the
verdict.
'Motions after verdict
to file motions
apprise
particularity
alleged
error so as to
must state with
alleged
give
opportunity
and
it an
the trial court of the
errоr
it,
thereby
costly
time-consuming
avoiding
correct
487, 497, 228
Corp., 68
2d
appeal.'" Calero v. Del Chemical
Wis.
(1975) (quoting
v. Milwaukee & Subur
N.W.2d 737
Kobelinski
517,
504,
Transport Corp.,
ban
56
2d
¶
just
Vivid was entitled to
under Wis.
compensation
84.30(6).
II,
See Vivid
”[W]e
Stat.
¶ Beautification Act Highway of the federal adaptation (HBA), legislature 23 U.S.C. 131. The Wisconsin § to the federal act to avoid a counterpart state adopted "If funding. reduction in federal Wisconsin highway aid act, does not it will lose about million federal $6.7 Sign Reg- Outdoor Larsen, funds." Robert W. highway Wisconsin, 1972 Wis. L. Rev. 153, ulation in Eden and 28, 1971, Journal, Milwaukee Feb. (citing Note at 164 1). 22, at col. part Wis. Stat. argues although 16. Vivid it just compensation, 84.30 that Vivid is due provides
§ 775 under either 84.30 or Wis. Stat. 32.10 may proceed § § for determination because the just compensation action is an eminent domain We proceeding. disagree. of 84.30 indicate that it language framework § remedy determining just is the exclusive compensa- meet criteria tion for removed 84.30(6). § above, 17. As noted we discern the intent of the first to the
legislature by turning plain language Anderson, statute. See 2d at 25. The plain Wis. of Wis. Stat. 84.30 models 23 U.S.C. language § and sets forth the overall framework for recovering just (6) below)3 compensation. (reprinted Subsection sets 84.30(6) provides Stat. as follows: *11 compensation. (6) department pay just compen- The shall Just upon 18,1972, sation the removal or relocation on or after March any followingsigns conformity ofthe which are not then in with section, regardless sign of whether the was removed because of this section: (a) Signs lawfully 18,1972. in existence on March (b) Signs lawfully adjoining any highway in existence on land 18,1972. primary highway made an interstate or after March (c) lawfully 18,1972. Signs erected on or March after Any sign way any that is visible from the main-traveled highway interstate or federal-aid and maintained or in erected any adjacent area to and within 660 feet of an interstate or 18,1972 highway after March or outside this area after June conformity in except 1976 is not with Wis. Stat. 84.30 § following: (a) (b) signs; signs advertising directional or other official sale or (c) located; property upon they signs advertising
lease of
which
are
(d)
property
they
located;
activities conducted on the
on which
are
(e)
signs
18,1972;
signs
located in business areas on March
erected
18,1972,
subsequent
comply
in business areas
to March
which will
(f)
84.30(4);
signs
adjacent
with
located in urban areas outside the
(footnote
(h)
omitted); (g)
signs;
signs
area
landmark
outside the
adjacent
purpose
being
area not erected for the
read from the
(i)
way;
signs
buildings
promote
main traveled
on farm
a
for
signs
just
forth the criteria for the
types
(7) (reprinted
is allowed. Subsection
compensation
below)4
if
the measure of
just compensation
provides
(6).
(8)
meets the criteria of subsection
Subsection
sign
below)5
sets forth the
recover-
(reprinted
procedure
in
in this
signs
The
ing just compensation.
question
84.30(6)
they
meet the criteria of
were noncon-
case
§
—
18,1972.
in
on March
forming signs lawfully
existence
84.30,
Therefore,
the framework
following
§
(7)
under subsection
must be measured
(footnote omitted).
signs
agricultural product,
Vivid's
Wisconsin
they
nonconforming under sec. 84.30
do not fit within
are
because
any
categories.
of these
84.30(3)).
II,
(referring
(7) department paid person entitled thereto. If the shall be to the agreement compensation and the reach on the amount owner relocation, any payable respect the to such owner in removal or thereby department may pay compensation to the owner and such require rights purchase. If or interests or terminate the owner's agreement department as to such and the do not reach the owner may compensation, department institute or owner amount of the compensation determined under s. 32.05. an action to have such and recovered under subsec- following procedure (8). tion 18. that argues although signs may Vivid
¶ 84.30(6), the criteria of Stat. this statute is meet Wis. § asks this remedy. essentially exclusive court to At oral ignore statutory language. argument Vivid stated that this case is whether question the "little amendment that was onto the end of grafted 84.30(6) makes an eminent domain case become mag- § Act ically Highway Beautification removal case.” Vivid characterizes as a "little amendment" that What onto the end of a is legislature "grafted" statute 1978, critical intent. In determining legislative 131(g) just U.S.C. was amеnded to add that compen- § sation must for removed "whether or not paid signs be removed to or because of this section." The pursuant Wisconsin followed suit and amended legislature 84.30(6) 1979, the similar adding language: § of whether the "regardless sign was removed because this section." See Ch. Laws of 1979. 84.30(6) Wis. Stat. By amending to add § that the DOT shall
language provides pay just compensation "regardless whether sign was section," removed because of this the legislature pro- vided that just compensation paid type whether is removed because of eminent domain, HBA, ordinance, a local or other rea- any son. It does why not matter Vivid's were removed. signs Following 84.30, the framework of if the meet § 84.30(6), the criteria of must be § 84.30(7) as measured paid under following proce- 84.30(8). dures of § if Additionally, Vivid were allowed to rely 84.30(6)
on Stat. only for the determination *13 just compensation place, in the first but it is entitled to determining Stat. ch. 32 for then turn Wis. just compensation, § in become, 84.30 would amount nullity. Every party essence, a whose meet the 84.30(6) chapter § criteria of would nonetheless use chap- determining just compensation for because litigation expenses including attorney for ter allows pro- § See Stat. 32.28. Section 84.30 does not fees. Wis. attorney no therefore, vidе for fees and all likelihood rely one would on that statute. following language Accordingly, and § 84.30, conclude that
framework of Wis. Stat. we remedy determining just § 84.30 is the exclusive for signs meeting compensation for the criteria 84.30(6). §
B. Having determined that Wis. Stat. 84.30 remedy provides for the exclusive for signs meeting statutory requirements, the removed just appropriate question constitutes remains: what 84.30(7) "[t]he provides compensation? Section (6) compensation required by paid shall be sub. (a) following: taking of such The from the owner sign, right, to the all title and interest in and 84.30(7). relating Stated thereto. ..." his leasehold requires way, plain language of the statute another compensated of all for the value that the right owner be sign, title, the value of the in the the value of the sign, lease- and the value of the interest and to the language plain the statute does hold interest. constitutes the value of not, however, define what sign," "right, it in and to the nor does title and interest of the leasehold. We define constitutes value what mean- therefore turn to extrinsic aids to determine the *14 and the ing compensable. these terms interests "Just the fair market is compensation"
¶ value, value of the "Fair market as in property. any case, other is measured as the type ordinarily price lease, the asset —the and aggregate permit sign in the in a bring marketplace voluntary —would a knowledgeable buyer, sale to all relevant considering Domain, factors." 8A Nichols on Eminent at 23.04[1] (footnote omitted) (3d 1997). 23-47 ed. 24. The State that under argues Wis. Stat. 84.30(6) (7), and the only interests are compensable
the sign value of the structure and the value of the leasehold interest. The State asserts that the value of the leasehold interest the value of the encompasses Vivid, hand, site. on the other sign argues that compensable value of an outdoor is advertising sign wood, nails, more than and just paint that make up structure. sign sign "[A] built of teak and is ebony no more valuable to a than sign company one built from pine." brief at 42. Respondent's agree We with of an value outdoor advertising is more than sign sign structure and leasehold value of the land on which the sign sits. An important aspect of outdoor advertising is the value of the location. As Vivid argues, materials do not influence sign Rather, its value. location is paramount importance outdoor advertising. locations,
[B]illboard compared as to billboards themselves, unique. Depending are upon the view- direction, able distance in either the amount of location, passing traffic type viewing public, particular a location of a may billboard have a value over and above its nuts and In bolts value. sense, industry, virtually it the billboard is location from the impossible separate structure. Co., Eller City Advertising Scottsdale v. Outdoor 1978). (Ct. 590, Ariz. A located near sign P.2d App. Janesville and next to Interstate a main east-west interstate more valuable than a highway, certainly near Janesville but adjacent County located A. In outdoor the loca- Highway vahiing advertising, See, e.g., in and of Donald T. tion has a value itself. Advertising Outdoor Sutte, Appraisal of MAI, ("[L]ocation (1994) is as Signs, Appraisal Institute it of real estate." types to a as is to other important (at locations, for their 17); are "Signs purchased themselves, and the land leases structures signboard *15 (at stand." that run with the sites on which 18)). of the sum, 26. In consists just compensation
¶ In regard fair market value of the taken. property of the advertising, outdoor we conclude value from the location of the largely sign. is derived sign Therefore, "all title and interest in and to right, thereto" must include not sign relating and.. .leasehold structure and leasehold only value the location. value, but also the value of C. the State must Having determined
¶ for the structure only Vivid not compensate for the location of the we now sign, leasehold but also determining methods for such consider the valuation compensation. just leg- in the nothing plain language, 28. There is Stat. context or Wis. history, scope, purpose
islative 131, that federal 23 U.S.C. counterpart, 84.30 or its § § to a valuation method to particular restricts courts determine as with dis- just compensation. Ideally, any can resolve their differences pute, parties without How- regarding just compensation litigation. ever, and the do not reach department "[i]f owner as to such amount of agreement compensation, may or owner institute an action to have department such determined under s. 32.05." Wis. 84.30(8). Stat. § case, In this the DOT and Vivid did
reach an agreement
just
as to the amount of
compensa-
tion.
either
could
Accordingly,
party
institute an action
determination
under
Stat.
32.05 for
com-
§
32.05,
Under
pensation.
parties must comply
However,
with several
either
procedural
steps.
party
may
a determination
ultimately appeal
just compen-
32.05(10)(a).
sation to the circuit court. See Wis. Stat. §
The issue of just compensation must be tried
aby jury
See id.
jury
unless
trial is waived
both
parties.
Gеn-
erally,
"any
professionally
accepted
appraisal
.
methodology.
.will be admissible in such cases with
objections normally
to the
not the
going
weight,
compe-
on
Nichols
Eminent
tency of the
8A
testimony."
(footnote omitted).
Domain,
See also
23.04 at 23-52
Co.,
Eller Outdoor Adver.
782 31. There are three meth recognized valuation ods for billboards: cost income approach, approach Domain, See 8A Nichols on Eminent market approach. 23-51 In through case, 23.04[4] at 23-59. the present the State evidence presented cost regarding approach. presented Vivid evidence both the regarding income and market Admission approaches. of evidence circuit court. See Leathem is left to the discretion of State, Smith Inc. v. Lodge, 409, 94 2d 288 (1980). N.W.2d Three of us conclude that the cir cuit court did not exercise its erroneously discretion evidence from admitting both the State and Vivid regarding different valuation methods for the jury determine method is which more credible and more reflects adequately just compensation.6 32. Under the cost valuing bill boards, State, advocated by sign structure and the leasehold interest in the site are valued sign first separately. The structure cost by using is valued considers cost of less-depreciation simply (the etc.) wood, bolts, as new reproducing See, e.g., Soo Line R. Co. v. minus Dept of depreciation. (Ct. Revenue, 331, 350, 278 89 Wis. 2d N.W.2d 487 App. 1979) railroad). tax (regarding assessment of property The value of leasehold interest the difference concurring really opinion, which should have been majority opinion, written as the reaches out and resolves an appropriateness approach. issue not before us: the of the cost raised, argued This issue neither nor was briefed Vivid. challenge admissibility Because did not State's Vivid of the approach, the us cost three of would not determine whether approach adequately compensates
cost the value signs; location of the neither should the concurrence. *17 sign company is the contractual rent that the
between paying and market at the the land the rent owner 750.303(c) (1989). appraisal. 23 See CFR time sign the leasehold inter- The value of the structure and as measure of are then combined est compensation. put on no value the leasehold State case there was no difference interest because rent. contractual rent and market between Vivid's only sign Thus, State in effect valued structure.7 testimony regarding both 33. Vivid offered approaches. income The market
market and
by looking to the
uses the
to value the billboards
GIM
reasonably
property.
e.g.,
comparable
See,
Rosen
sale
Milwaukee,
653, 662,
72
242
681
v.
Wis. 2d
N.W.2d
(1976)
assessment)
(regarding property
(quoting
tax
Enterprise Realty
Swiderski,
ex
v.
269
State
rel.
Co.
(1958)).
645,
A
unit
8A Nichols on Eminent 23.04[4] at 23-58. 9 appraiser a Vivid's looked at of recent number sales of sign signs comparable and proper and businesses narrowed the that, professional judgment, ties to four in his were the most comparable. sales, group comparable Within that of four the appraiser "bracketing" is, used a he method. That identified one comparable of involving property the four sales as that was signs being better the appraised. prop than The for GIM that erty high comparable set the limit. He also identified a of sale property good signs being as appraised that was not as the Then, the from set using profes GIM that sale the low limit. his judgment, appraiser sional an appropriate the determined that signs being GIM to for the appraised high use was between the and low limits.
Specifically, high in the limit this was the of GIM case sale group signs Rockford, a of well-mаintained smaller near Illinois Dividing which well the of price group were located. sales this of $125,000 signs $29,268, gross of the annual rental income of in GIM was 4.27. The low limit GIM this case was the of sale a older group signs, of some of which were on Interstate Dividing $225,000 by price gross the sales of the annual rental $80,820, income of the GIM for this sale 2.78. A third was comparable sale the sale an in company was entire Madison, Dividing price $4,900,000 by sales Wisconsin. gross $1,338,890, the annual rental income of the GIM for this sale this was 3.38. Because sale entire business assets, personal property appraiser included some testified adjust by percent that he would down so the GIM would be 3.2. Finally, appraiser signs, considered the sale of none signs highways being on interstate as were the were appraised. Dividing $550,000 by price the sales the annual gross $194,412, rental income of the GIM for this sale was 2.83. Thus, high the low limit GIM was 2.78 and the limit GIM was comparable 4.27. from these sales Given GIMs calculated argues in the mar- the GIM used a method because it ket valid valuation actually market a will- measures the fair value —what buyer pay willing ing Three of us to a seller. would industry, experience appraiser pro- used his and his appropriate that an judgment fessional determine GIM averаge an GIM for case would be 3.5. He testified that However, usually signs in a area 3 to 3.2. because rural would be interstate, bring higher rent signs, located on the these labor, appraiser determined a GIM of 3.5 least amount of appropriate. was more appraiser applied then the GIM 3.5 to the
being appraised by multiplying gross income the the rental of sign by Accordingly, he appraised the the value of the GIM. $21,000, by "Antiques" sign multiplying as the calculated $6,000 gross by the annual rental income of GIM of 3.5. sign, appraiser Regarding the "Trucks" the testified that erroneously appraisal, gross when he did the he used an annual $9,480 sign per the $790 rental income for which was month error, however, for 12 He testified that this was in months. sign sign the because contract the "Trucks" was for two faces only by face sign Accordingly, and one was removed the DOT. at gross monthly the trial he testified that the rental income sign $550. attributable to the "Trucks" should be He at arrived figure by looking sign rent "Antiques" for the facing directly was across interstate but the other direction. signs in He testified that the were similar condition and size. He per in testified that he attributed an extra month rental $50 sign income to the "Trucks" because it was illuminated which higher usually generates Using monthly gross revenue. gross $550 rеntal income of an annual or rental income $6,600, appraiser testified that the value of the "Trucks" $23,100, by multiplying gross was calculated the annual $6,600 by rental income of the GIM of 3.5. signs,
The total two compensation amount for the using appraiser's approach $43,100. Vivid's was market/GIM $37,800. jury The awarded Vivid agree. just compensation, Vivid is entitled to see Vivid just II, 2d and at is the fair property taken, case, market value of the in this two buyer willing Fair billboards. market value is awhat willing pay being would to a seller, neither com- under pulsion. 23.04[1] Domain, See on Eminent SANichols ample evidence, at Here 23-47. there not contra- advertising State, dicted the outdoor industry signs uses the toGIM determine the value of willing buyer willing in a a transaction between and a seller. purchase "in 35. Because the market for the buyers negotiate of billboards, sale and sellers
price produce,____" as function a income the gross appraisers developed 23-58, id. at income multiplier price as the best means determine the willing buyer pay willing would to a seller. See id. Multiplier approach appears .[Income] Gross. .
particularly appropriate where the evidence estab- lishes that involved in the condemnation remаining property cannot be relocated onto the or elsewhere the immediate area. This best measures value of the location inherent aggregate lease, permit the value asset of the *20 predicated and it on billboard because is income produced by location, at the avoiding the the shortcoming ignores approach of the cost the altogether. location (footnotes omitted). weighs
Id. at
A
23-59
factor which
heavily in a
decision to
of the
court's
admit evidence
approach
market
and GIM is the assertion that
the
e.g.,
See,
billboard cannot be relocated.
Eller Outdoor
Co.,
Adver.
extremely important part The a billboard. approach using of the the GIM takes the value market It fair market consideration. reflects the location into buyer willing willing pay a a would value —what advertising outdoor seller—the measure used the Accordingly, industry practice. three of itself in actual using approach the is us conclude that market GIM jury’s appropriate an valuation method for the consid- Certainly, given the nature of the billboard eration. industry, willing price a to reflect the seller would set questions Three of us believe that value regarding location. appraiser appropriateness of what the comparable GIM, to uses as sales determine the length questions other such as leasehold jury interest, are to factors for consider. argues
¶ 37. The State
that the
GIM
an
valuation method as a matter of law because
invalid
below)10
(explained
non-compensable
profits
business
inextricably
are
intertwined
with
valuation.
part
State relies in
on a 1993 memorandum from the
(FHWA)
Highway
regional
Federal
Administration
profits
profits
are the
to the
Business
attributable
labor
Lodge,
and skill of the business owner. See Leathern Smith
Inc.
(1980).
406,
416,
State,
412,
v.
94 Wis. 2d
stitutes lost business In contrast to a resort profits. which labor requires day-to-day owners and see, employees, Smith, Leathem 94 Wis. at e.g., 2d little if labor to any required billboard, maintain a except occasionally light With changing bulb. to outdoor three us respect advertising, discern little any if attributable to the skill profits labor and of Vivid. Profits are largely attributable the location sign. ulti- Regardless jury determination
mately concludes reflects the proper circuit court must instruct compensation, jury exclude evidence lost business or any profits expected lease or contract renewals. See Dusevich v. Co., 641, 642, & Wis. 51 Light Power N.W.2d (1952) (regarding lost Reibs v. profits); business *22 County 252 Commission, Park
Milwaukee (1948) (regarding expectation 148-49, 31 190 N.W.2d renewal).11 present case, the circuit In the of lease jury correctly the that it could court instructed Using profits. method, the GIM consider lost business appraiser that the fair market value Vivid's testified jury signs $43,100. The returned a for two was the special awarding $37,800 as com- verdict, Although pensation signs. of us for both three believe profits in to lost business that it is difficult discern advertising and the State has outdoor valuation jury pointed particular profits, lost the to no business non-compensable may measure, have, taken in some awarding profits lost into consideration in an business resulting the amount than that from GIM lower calculation. of the 40. Three us conclude that market valuing
approach advertising, using to outdoor the appropriate As GIM is an valuаtion method. the stan- industry valuing signs, for dard used in the GIM agree reflects fair market While we that lost value. profits compensable determining are not business concurring opinion The concludes that the GIM could improperly compensate expectation for of lease See renewal. However, concurring op. concurring opinion at 802. deter compensate using mines that the GIM in this case did not for expectation "[t]he of lease renewal because of 3.5 estab GIM equivalent lishes the valuation the billboard at the of 3.5 years ground on earnings, question but the leases years." Concurring had eight op. a term at least more at 802. however, recognize, The concurring opinion fails remaining choosing a length of the lease is consideration in proper comparable properties from which the GIM is deter Sutte, MAI, T. Appraisal mined. See Donald The Outdoor Advertising Appraisal (1994), Signs, Institute at 45-46. three of discern just compensation, us no lost business with associated outdoor profits advertising. value of billboards, once and in constructed place, largely location, function of the not the labor and skill Three of company. say us cannot the circuit court erroneously exercised its discretion in admitting evidence of market approach using GIM.12 41. The State also challenges Vivid's introduc tion of evidence the income regarding values on "the basis property prior income proposed by bring The solution the three of us would an *23 problems guaranteed end to the concurring to result from the opinion. concurring opinion problems The creates more than it It will confusion in circuit to solves. create the courts as how and apply when to GIM. the Circuit courts will not know what to do appeals' with the in regarding court of decision this case the analysis. Accordingly, inevitably valuation will to it lead future II, litigation. I, III, today had and We have Vivid Vivid surely Vivid IV. Vivid will now follow. V concurring opinion the tells circuit courts that GIM is not, acceptable, provides gui- little sometimes sometimes but good dance to may provide as to when allow it. This case a example concurring failing. Here, of the opinion's State argues may that is it compensate the GIM invalid because for fails, however, any profits. provide lost business The State support argument. evidence to its The State failed introduce any portion of the generated evidence to show what revenue question thе billboards in is to the attributable efforts FHWA, Similarly, business rather than location. its memorandum, regarding explanation offered no what consti- agree profits. tutes lost the three of business While us that profits not are that compensable, persuaded are we not business GIM, profits compensated especially lost business are under the argument, support when neither its the FHWA in the State memorandum, case, support of its nor the concurrence in contrary. provide any enlightening guidance can to the after the Leathem taking." income taking and projected at introduced this evi Smith, 94 2d 411. Vivid but dence, signs, not valuation method these as as a the market using a check on the valuations determined in a valuation The income resulted approach. $39,300. billboards is rule, 42. income evidence not general As there is evidence of comparable admissible where are, however, See at 413. There three excep- sales. id. 1) 2) labor; profit tions: is without owner's produced from the use are the chief profits property's derived 3) value; unique source its is so property data id. at sales is not available. See comparable agree We with court of that valuation of appeаls falls within the second exception: profits billboards derived the use of the is the chief from billboard source (Of course, above, in the of its value. as discussed bill- are determined industry profits largely by board location.) may fall within Valuation billboards also third to introducing income evidence: the exception
billboard is so sales data unique comparable However, as above, available. mentioned the question regarding the of what appropriateness appraiser *24 as uses sales is a for the comparable question jury. 44. The income has been criticized as
¶ "a veiled to attempt non-compensable recover business Nevertheless, damages. nearly every court that has confronted to argument been with this has held the contrary and allowed the com- jury, assessing just generated to consider income pensation, by the the rental of the faces the 8A to advertisers." Nichols Domain, 23.04[4] on Eminent at 23-56 State v. (citing
792
(Ala. 1981);
Waller,
37,
395
2d.
41-42
So.
Arkansas
Highway
Cash,
676,
State
Comm'n v.
590 S.W.2d
678
(Ark.
1979);
App.
Co.,
Ct.
Eller Outdoor Adver.
579
City
597-98;
at
P.2d
Norton Shores v. Hiteco
of
(Mich.
1994);
App.
Metrocom,
Ct. National Adver. v. State Co. (Fla. Dept. of Transp., App. 611 So. 2d Dist. Ct. 1992)). sum, In three of us conclude that circuit properly parties
court allowed the to introduce evi- regarding dence different valuation methods jury weigh determining appropriate to com- signs. pensation correctly for the The circuit court also jury profits. instructed the not to consider lost business Finally, argues ¶ 46. the State the circuit excluding testimony court erred in Vivid's own before City Reedsburg Board Review. The State operations manager wanted to cross-examine Vivid's regarding testimony representatives at made proceedings using before Board of Review cost- less-depreciation approach value to structures in Reedsburg purposes. for tax The State also wanted Property admit Vivid's Statement of Personal showed Vivid's self-assessments values using cost-less-depreciation valuation method for property purposes. tax The State wanted to use these impeach and truth statements witness for the the matter asserted. The court circuit excluded appeals irrelevant, evidence as court of affirmed. admissibility Questions of evidence are
questions within the circuit court's discretion. See *25 533, Daun, 541-42, v. 213 2d 570 N.W.2d
Grube
(1997) (citing
342,
Pharr,
115
State v.
Wis. 2d
(1983)).
this court is asked
dence of of Vivid's before of or its for its State- Board Review self-assessments Property ment Personal was relevant. Because already undisputed testimony State had introduced using regarding the cost structure, the value approach, tax evidence Vivid's assessments was say § See Wis. Stat. 904.03. We cannot cumulative. erroneously the circuit court exercised its discretion Accordingly, it affirm when excluded this evidence. we appeals the court on this issue. FEES
ATTORNEY finally must determine 49. We whether Vivid including litigation expenses attorney allowed fees for argues using § 32.05 action. Vivid Wis. Stat. just compensation to determine the amount of converts the action into one under Wis. Stat. ch. 32. We disa- 84.30(8) gree. only parties Stat. Wisconsin authorizes and the use court to 32.05 to determine the amount just agree parties when on a cannot Using compensation. § 32.05 to determine just compensation amount of does not make the action chapter governed one under 32. The action is still *26 Acсordingly, allowing litiga- § § 32.28, 84.30. Wis. Stat. expenses including attorney tion fees for actions under chapter applicable. 32, is not
¶ 50. Because we determine that Wis. Stat.
provides
remedy
§84.30
the exclusive
when the State
signs
requirements
§ 84.30,
removes
that meet the
of
attorney
we must determine whether
fees are allowed
provision
§
§
under
84.30. No
of 84.30 authorizes an
attorney
award of
appeal.
fees either at the circuit court or on
Gottsacker Real Estate
State,
Co. Inc. v.
Cf.
(Ct.
1984) (liti-
App.
264, 270,
Wis. 2d
fees. The court of decision affirming judgment the circuit court's Vivid's favor litigation expenses pursuant § for to 32.28 is reversed. argument
Therefore, we need not address State's attorney by fees and are costs barred the doctrine sovereign immunity.
CONCLUSION pro- ¶ sum, In we hold that Wis. Stat. 84.30 remedy determining vides the exclusive compensation when the State takes or removes outdoor signs advertising statutory requirements that meet the regardless why signs § 84.30, In were removed. requirements case, 84.30; Vivid meets the provides therefore, this statute Vivid's exclusive rem- edy just compensation for determination of for the removed the State. right, title, 52. We also conclude that all sign interest in and to the and the leasehold interest only includes the value of the structure itself value, also the value of the loca- and leasehold but parties us conclude that the Therefore, three of tion. may they case, evidence, did in this introduce as jury regarding methods for the different valuation just compensa- weigh determining appropriate signs. tion for part Accordingly, we affirm jury upheld appeals' verdict
court of decision which signs. modify However, three of us to the value of the as reasoning appeals. us of the court of Three of disa- gree appeals that the circuit court with the court of *27 admitting of the GIM valuation erred in evidence Although § method. remedy, Wis. Stat. 84.30 is the exclusive agree parties amount cannot on the
when just compensation, just determination of the com- jury hearing pensation by is made a after evidence on including methods, the GIM. various valuation Finally, just compensa- ¶ 54. we determine that § does not convert the tion under Wis. Stat. 32.05 under Wis. Stat. ch. 32. The action action one § § remains under Wis. Stat. 84.30. Because 84.30 does litigation expenses, expеnses includ- not allow for ing attorney such Accordingly, we
fees are available. part appeals' of the court of decision which reverse entry judgment litiga- affirmed the circuit court's expenses pursuant § 32.28. tion to Wis. Stat. We entry judg- remand the cause to the circuit court for eliminating portion judgment ment of the which litigation expenses. awarded By appeals the Court.—The decision of the court of part, part, in is affirmed reversed and remanded directions. with {concurring). BRADLEY, I 55. ANN WALSH J.
agree opinion's with the lead determination that the legislature provide intended Wis. Stat. 84.30 to statutory by advertising an exclusive company may means compensation
obtain for billboard agree opinion's I ordered removed. also with the lead determination that Wis. Stat. 84.30 does not author- attorney's Nevertheless, I ize an award of fees. write opin- separately I lead because do not subscribe to the approval gross carte blanche of the income ion's multiplier (GIM) determining just aas method of com- opinion's interpretation pensation or to the lead cost method of valuation.1 only compensation compensate
¶ 56. Just is to property, for the value of the not for the value of the many application Yet, in of the GIM business. cases profits will result for loss of business expectation and for the value of of lease renewal. Com- specifically prohibited by pensation for such items is prior our cases. testimony trial, 57. At Vivid offered the of both expert appraiser
an
and Vivid's Chairman as to the
proper
valuation of the
ordered removed
(DOT).
Transportation
Department
Both individuals
*28
a
offered valuations of the billboards based on valua-
technique
tion
participants,
often used in sales between market
See 8A
on Eminent
GIM.
Nichols
majority
support
1A
of a
of
concurrence which receives
participating
justices
particular
opinion
on a
issue becomes the
Dowe,
issue. See State v.
192,
2d
of the court on that
120 Wis.
Elam,
see also State v.
194,
(1984);
797
(1997).
Domain,
at 23-52
One offered a
23.04[4]
Sec.
four, and
$50,400
of
based on a
of
multiple
valuation
$44,100
a
other
a valuation of
based on
offered
are obtained
of 3.5. Valuations with
GIM
multiple
the sales
of a
by dividing
price
"comparable" property
the annual
of the
enterprise by
gross earnings
prop-
or
sold. The
ratio is then
erty
resulting
multiplied against
is being
the annual
of the
earnings
property
See id. at 23-58.
an
Accordingly,
GIM is
appraised.
valuation
earnings-dependent
technique.2
strongly objected
prof
58. The DOT
to Vivid's
fer
The DOT's objections
of the GIM based valuations.
novel,
to the GIM valuation were not
since states and
advertising
fighting
have been
over the
companies
years,
merits of GIM valuations
with
victo
sporadic
Adver.
v.
Compare National
Co.
ries
to each side.
going
(Fla.
State
566,
Dept.
Transp.,
611 So. 2d
Ct.
of
1992) with State ex. rel. Missouri
&
Hwy. Transp.
App.
(Mo.
Quiko,
Comm'n v.
1996);
798 income that should be to the attributed billboard and portion marketing should be attributed to the aspects Highway other of and the business." Federal Department Transportation, Administration, U.S. Attachment, Memorandum and the Guidance on Valu- Billboards, 20,1993.3 ation Oct. appeals
¶ 60.
DOT
and the court of
cite two
significant
justifications
legal
for their claim that use
valuing
signs
improper.
the
First,
of GIM in
Vivid's
was
argues
automatically
DOT
that
the
the
gives
use of
GIM
compensation
prof
for the loss of "business
problematic
its." Such a
is
Wisconsin,
result
because in
"just compensation"
states,
like other
does
include
profits."
for the loss
"business
See
Light Co.,
641,
Dusevich v.
Power &
260 Wis.
Wisconsin
(1952).
profits"
to increase not to the existence of property Lodge, See Smith itself. Leathem Inc. v. (1980). State, 406, 416, 288 2d N.W.2d 808 appeals, court however, 61. The rested its profits" reversal of the circuit court not on a "business problem, on but rather that court's belief that GIM compensates an for had "Achilles Heel:" the GIM expectation of an a will value leasehold be through If GIMs in cases of this were nature derived leases, comparable еxisting sales of use individual with may give opinion's on I some credence to the lead reliance remaining length consider proposition "the lease is However, choosing proper . as comparable. ation . ." demonstrate, Earnings multiples facts here that is not case. apparent at are best an inexact method of valuation. Where it compensates from the face of the evidence that the GIM law, something rejected. as a be barred matter of the GIM must *30 expec of such the value Like profits, business renewed. v. Milwaukee See Riebs not compensable. tations N.W.2d Comm'n, 252 Wis. 144, 148-49, 31 Park County that Vivid (1948). indicated in this case Testimony on the two its leases certain" that "95% was be renewed. would that in its brief acknowledged 62. Vivid that court of appeals concern of the compensation"
"just a lease renewing may possibility value the GIM a concern correct," that such argued but was "generally 25. case. See Respondent's brief at not exist in this did the DOT's contradict Moreover, directly did not Vivid compensation included that use of GIM assertions real only Vivid's profits. lost business for Vivid's that "its business that the record showed was response was than what Vivid higher significantly losses were See id. at for just compensation." seeking all of its business because argues apparently should the court being are not compensated, losses are profits fact that some of its business ignore untenable being compensated possibly —an proposition. to the concerns responds The lead opinion both sub- appeals the DOT and the court
raised lead opinion stantively procedurally. concerns over com- dismisses the DOT's substantively it by indicating for profits lost business pensation are associated 'business profits' "fail[s] to discern what is in once advertising an outdoor with to main- any "little if labor is required and that place" a billboard, occasionally changing except tain a Thus, in the lead opinion's Lead at 790. light op. bulb." is "largely of the GIM in this case view, the value is no and there sign," attributable to the location for lost business profits. ¶ 64. case, The facts of however, illustrate my may concern that the use of the GIM in some cases potential compensate prof- have the for lost business its. The Chairman of Vivid testified that Vivid is not merely corporate entity physical which owns the compre- structure of Rather, the billboards. Vivid is a advertising enterprise actively hensive markets availability employs billboards, its an artist to advertising copy create the clients, for its and creates placed the actual advertisement materials on the bill- board. The Chairman also testified that in some cases *31 changes the artwork on its billboards on a monthly basis for the same Thus, client. Vivid's involvement with its business also involves the management ongoing skill and of an concern.
¶ appeals' 65. INext consider the court of focus potential on the "Achilles' Heel" of the GIM, the com- pensation for lease renewal. Vivid concedes that the generally requires use of the in GIM billboard cases scrutiny may compen- close since the valuation include expected sation for the value of an lease renewal. Despite appeals' the court concern in this case with problem, appears such it from the facts of this case problem that no such exists here. The GIM of 3.5 estab- equivalent lishes the valuation for the billboard at the years earnings, ground of 3.5 signs but the leases on the question eight
in had a term of at least more years. appeals Thus, while the court of was correct in theory highlighting problems in inherent with the compensation problem GIM, the it raised does not earnings affect thе outcome of this case because the beyond used in the valuation are not attributable present terms of the leases. highlighted
¶ 66. Both of the concerns above potentially problematic demonstrate the nature of the generally Although mar- used in the the GIM GIM. purposes, in this ketplace inherent for valuation earnings-dependent the same are method of valuation parties acknowledged by general both of concerns appeals compensating for loss the court as well as — just compensation.4 by in included cannot law be potential addressing com- Instead of using "just compensation" beyond pensation when opinion directly, that it is for determines the lead GIM acceptability of jury, court, to evaluate acknowledging Apparently the GIM valuation. compen- includes the GIM cases which there will be profits" and leasehold renewal for "business sation expectancies, opinion that all the determines the lead jury com- to avoid do is instruct circuit court need uncompensable This pensating items. those Vivid for presented procedural the dilemma resolution of proper role of the valuations misconstrues GIM and the trier of fact. сourt evidentiary court acts as the The circuit recog- accordingly
gatekeeper court has at trial. This significant discretion courts retain nized that circuit Daun, v. at trial. See Grube of evidence the admission (1997). How- 533, 541-42, 570 N.W.2d 213 Wis. 2d *32 repeatedly noted, circuit ever, court has also as this erroneously it discretion when exercises that court 4 divergent opinion adopt and the lead This concurrence court to consider quandary. require I the circuit to this solutions uphold barring compensa on its face and law the evidence renewing a profits expectancy and the for loss of business tion lease, methods. The lead in the face of technical valuation even hand, the circuit court to abdicate the other allows opinion, on enhancing compensation, responsibility prevent to unlawful its a choice appellate review. Given prospect of additional positions, I chose the former. the two between applies wrong legal standard to the facts at hand. See id. at 542.
¶ above, 69. As noted for lost busi- profits expectancy ness improper and the of leasehold renewal is Dusevich,
as a matter of law. See atWis. 642; Riebs, 252 at 148-49. If a circuit court can determine from the facts that a GIM valuation in a particular components case includes which are not oth- compensable part "just compensation," erwise as court, then it is for the fact, the trier of to bar the any evidence. To reach other conclusion would allow responsibility precluding circuit courts to abdicate jury swayed being by from inadmissible evidence. opinion's Next, I address the lead misinter- pretation approach.5 of the cost To further buttress its adoption opinion GIM, ofthe the lead indicates that the approach any component cost does not include ofvalua- sign. opinion states, tion for the location of the The lead "[hjaving compensate determined that State must only sign Vivid not for the structure and leasehold but sign." opinion also for the location of the The lead addi- tionally right, "[w]e title, notes: also conclude that all sign and interest in and to the and the leasehold inter- only sign est includes not the value of the structure value, itself and leasehold but also the value of the op. location." Lead at 796-97. approach However, under the cost already
value of location is considered in the value of the leasehold. The leasehold value is defined as the difference between the contractual rent that the opinion's Despite interpretation the lead of events to the contrary, solely respond I I con address this issue what sider to be an attack on the cost used the lead analysis. opinion's opinion to buttress its GIM But for the lead tactic, use of this I need not write on this issue.
company paying to the landowner and the market is appraisal. See 23 CFR rent at the time of the 750.303(c) (1989). location. 72. The amount of rent is affected higher location, Thus, the rent. better suggests opinion is incorrect when it that location lead always approach in the must be considered cost and the leasehold addition to value of The value of the location is not addition to value. already rather it is included value of the leasehold but in the of the leasehold because the value of the value by comparison leasehold is determined of rents. opinion's implicit ¶ 73. While the lead dissatis- may approach appropriate in faction with the cost be general proposition, case, as a the cost is accepted Thus, to the also an method valuation. оpinion it, extent the lead disclaims that disclaimer is opinion's justification with the lead inconsistent generally accepted continued use of the GIM—it is a method of valuation. opinion's sum, In the lead carte blanche recognize
approval of GIM fails that the GIM has may question certain inherent flaws which call into its particular granting just compensation use in cases. In may actually valuation, based on a GIM the State be paying compensable for items are not as a mat- ter of law.
¶ I While do believe remand on this issue necessary particular general case, in this I as a rule require proffers would circuit courts to first scrutinize of GIM valuations to determine whether the GIM valu- compensable ation includes for items not cases, as a matter of In such law. GIM valuation go jury. emphasize Moreover, cannot to the I also *34 acceptable the cost is an method valuation in most cases. separately I 76. While write for the reasons dis- join opinion declaring I above,
cussed the lead statutory pur- Stat. ch. 84 to be the exclusive means of suing just compensation join opinion's the lead statutorily determination that Vivid is not entitled to attorney's Accordingly, respectfully fees. I concur. I am authorized to state that Chief Justice Shirley Abrahamson, S. Steinmetz, Justice Donald W. join opinion. and Justice Janine P. Geske