The Wisconsin Department of Transportation is seeking to change the rules and reduce the fees lawyers can earn representing property owners appealing low-bid WisDOT offers to buy their homes or businesses to make way for highways and other transportation projects.
WisDOT is getting ready to launch two major Milwaukee projects — rebuilding the Zoo Interchange and expanding North-South I-94 – that will require major property acquisitions.
The department is proposing that attorney’s fees in litigated compensation cases be limited a maximum of 1/3 of the increased purchase price awarded that amount is at least $700 and 15% higher than WisDOT’s offer. When that 1/3 increase is less than $5,000, attorney’s fees would be limited to a maximum of $5,000.
The agency makes clear that it would like to keep lawyers out of the cases.
“Litigating land purchases consumes more time and resources within the Department compared to negotiating directly with landowners,” the department said in its 2009-11 budget request. “It could adversely affect the timeline of highway construction projects. Securing land can be a first step in a project and any delays can impact final completion and overall project cost.”
The department said in its budget request that property acquisition and litigation costs increased From $5 million in 2004 to $11 million in 2007, but did not say how much property was acquired in each of those years, and how much of the spending increase went to property acquisition and how much went to litigation costs.
“The average litigation attorney fee paid for five property acquisitions between September, 2002 and June, 2006 was $65,700 compared to only $39,700 for the compensation increase paid to the owner,” the department said.
WisDOT does not say why it picked those five particular litigated cases or why the department lowballed its offers by more than $40,000 each or why it did not settle with the property owners before attorney’s fees reached the levels they did.
“The intent of these modifications is to help government agencies acquire property efficiently and reduce taxpayer costs while encouraging property owners to bring to the table their legitimate concerns,” WisDOT said. “They will encourage presenting differences of opinion and other pertinent information during the negotiation stage in order to reach an agreement before going to litigation. For the Department, minimizing litigation efforts will help highway improvement projects stay on schedule and reduce costs.”
Property owners’ rights will not be affected, WisDOT said.
“Because attorney fees are a separate reimbursable cost, establishing limits on these fees will not affect the amount an owner receives for real estate acquired by the Department,” the agency said.
