Appraisal of quarry property at issue in lawsuit.

• Date: 27 February 2002

Byline: David Ziemer

In a condemnation case appraising quarry property, evidence using the income approach is inadmissible where the market approach can be applied using the sales of neighboring quarry properties, a divided Wisconsin Court of Appeals held on Feb. 20.

Hunting Quarry

Bruce W. Rademann and Oakfield Stone Company, Inc. (hereinafter Rademann) were adjacent owners of three parcels of real estate in Fond du Lac County. The middle parcel contained an active, operating stone quarry. Another had buildings used in the quarry operation, and the third was suitable for quarrying, but was not yet being so used.

The Department of Transportation exercised its power of eminent domain to acquire a total of approximately ten acres from the three parcels for highway improvement purposes.

The Department obtained appraisals from three appraisers, each of whom used the income approach to value the properties. Their respective values were $229,800; $331,000; and $360,000. Adopting the highest value, the Department paid $360,000 as its Award of Damages.

Rock Bottom Value

Rademann appealed, and obtained an appraisal valuing the condemned property at $3,860,000. At trial, the Department did not present its earlier appraisals, but an appraisal of $57,500, which valued the property based on sales of neighboring properties.

Rademann and Oakfield moved to exclude the Departments appraisal, and the Department moved to exclude Rademanns. Judge Dale L. English agreed with the Department, allowing only the Departments market approach to be considered.

Having limited the evidence to the Departments appraisal, English found the property worth $57,500, and accordingly ordered Rademann to pay the difference between that amount and the award of damages, $302,500, back to the department, plus interest.

Rademann appealed, but the Court of Appeals affirmed in a decision written by Judge Harry G. Snyder and joined by Judge Neal P. Nettesheim. Judge Richard S. Brown dissented.

Highway Robbery

The Court held that the sales supporting the Departments market approach appraisal were comparable, and thus are not merely admissible, but prohibit admission of appraisals using the income approach.

The sales at issue involved fourteen properties that contained building stone deposits, and were purchased by quarry operators from local farmers. Five of the properties, although owned by farmers, were being leased to quarry operators and had active quarry operations at the time of...