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Wisconsin
Zoning

Olson v Town of Cottage Grove, 749 NW2d 211 (Wis 2008).

Facts:Plaintiff Olson was a real estate developer who owned 69.72 acres of land (property) in the Town of Cottage Grove (town) in Dane County (county). On December 27, 2001, Olson filed a zoning petition (petition 1) with the county to rezone his property from A-1 Ex Exclusive Agricultural to R-1 Residential, which precludes residential development, in order to subdivide the property into 15 residential lots. On June 7, 2002, Olson submitted a preliminary plat of his proposed subdivision development to the town pursuant to Wisconsin Statutes Section 236.11(1)(a). On July 15, 2002, the town amended its Land Division and Planning Code to include a new section, Section 15.15, entitled "Transfer of Development Rights Program" (TDR).

The TDR program was designed, among other things, to preserve farmland and rural areas and direct new residential developments to areas of existing development. Some land use districts are designated as "sending areas" and others as "receiving areas." Persons hoping to develop property in a receiving area must acquire a requisite number of transfer development rights (TDR's), which amount to ownership interests in sending area property. Owners of land in sending areas may sell TDR's to owners of land in receiving areas. A TDR easement is then established by deed entered into among the developer, the town, and the county. Through these easements, land interests from sending areas are "sent" to receiving areas to make up for the subsequent increase in density due to residential development in receiving areas.

Under the TDR program, the property fell within the Medium Density Residential District. On October 28, 2002, Olson filed a second, separate zoning petition (petition 2). Petition 2 still sought to rezone the property, but increased the number of proposed lots from 15 to 58. On January 14, 2003, the County Zoning and Natural Resources Committee (ZNR) reviewed petition 2 and recommended approval. On January 23, 2003, the county board adopted the ZNR's recommendation, granting Olson conditional rezoning effective February 14, 2003. The petition was granted subject to two conditions: Olson was required to (1) withdraw petition 1, and (2) record a final plat in the office of the County Register of Deeds within one year of rezoning approval by the county.

On September 19, 2003, Olson submitted a final plat application for the property with the town. The town conditionally approved this final plat, subject to the requirement that Olson acquire ten TDR's and transfer them to the town and county to comply with Section 15.15. Olson did not then own, and claimed that he was unable to acquire the ten TDR's necessary to satisfy the ordinance. He claimed that to acquire the 10 TDR's would require him to purchase 350 acres of farmland in a sending area at a cost of approximately $750,000. He also claimed that to finish his development would require the total acquisition of 700 acres of farmland.

Subsequently, Olson did not record a final plat by February 14, 2004, as was required by the town's conditional approval of his final plat application. On February 5, 2004, the county board "rescind[ed] action on [petition 2]." On September 13, 2004, Olson filed a declaratory judgment action against the town to challenge the validity of Section 15.15. Olson alleged, inter alia, that the town required him to obtain TDR's at an expense he couldn't afford and that the town had no legal or constitutional authority to impose the ordinance. The suit would clarify for him whether the ordinance was valid, which subsequently would require him to purchase the TDR's. Otherwise, he could save himself the expense if the ordinance was invalidated. The trial court granted the town's motion for summary judgment, holding that the controversy between Olson and the town was not justiciable, noting that Olson had not suffered actual injury. The court held that the action was not ripe based on the fact that the county's conditional rezoning approval had been rescinded at the time Olson filed his suit. Therefore, the ordinance was of no consequence because Olson had not submitted a new petition for rezoning with the county after the delayed effective date for conditional approval of petition 2 had expired.

The court of appeals reversed, holding that the standard of review was de novo because the circuit court's decision was based upon a question of law, namely ripeness. The court of appeals also held that Olson's claim was ripe for adjudication, and therefore justiciable. The court of appeals concluded that the declaratory relief sought by Olson would resolve the uncertainty Olson and other developers will continue to face in the future development of their properties: whether Section 15.15 valid and whether compliance with the ordinance required before obtaining final plat approval. The town appealed.

Holding:Affirmed and Remanded. The Supreme Court of Wisconsin noted that the purpose Wisconsin's Declaratory Judgment Act (Act) is to settle and to afford relief from uncertainty and insecurity with respect to rights, status and other legal relations. Therefore, it held that Olson's suit would serve the useful purpose of settling the uncertainty that town landowners face with regard to whether they must first comply with Section 15.15 to obtain a final plat approval and, subsequently, rezoning approval. The court held that the act does not require Olson to have actually suffered injury to enjoy its protection.

The court addressed the disagreement over whether petition 2 was rescinded at the county board meeting on February 5, 2004, holding that the county board rules state that rescinding an "action" reopens consideration of that petition. The court held that this demonstrates that Olson, possessing conditional rezoning approval, was subject to compliance with Section 15.15. This shows that his efforts to rezone, subdivide, and develop the property were directly impacted by application of Section 15.15 when he filed his suit. Because Olson was impacted by the ordinance, his suit was justiciable. If, in the remanded proceedings, Section 15.15 is declared valid, Olson will have to choose between: (1) acquiring the TDR's to receive final plat and rezoning approval, or (2) not acquiring the TDRs and abandoning his plans for development. If the ordinance is declared invalid, Olson will be saved the expense of having to purchase the TDR's to obtain final plat approval. Either outcome will have direct and immediate financial impact on Olson. Therefore, this uncertainty affords Olson a cause of action for a declaratory judgment without having suffered injury. The Supreme Court remanded the case for proceedings consistent with the holding that the suit was ripe.

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