Lot Consolidation Case Before the Supreme Court

A taking occurs where a forced merger of two lots cancels out the separate development opportunities for one of them

Murr v. State of Wisconsin and St. Croix County
Contact: John M. Groen

Status: The U.S. Supreme Court granted the Petition for Writ of Certiorari on January 15, 2016. Opening brief on the merits was filed on April 11, 2016.

Summary: The Murrs contend that forced merger of their two adjoining lots results in a compensable regulatory taking.  The Court of Appeals of Wisconsin rejected the takings claim, proclaiming that “contiguous property under common ownership is considered as a whole regardless of the number of parcels contained therein.”  As amicus, PLF argues that a regulatory taking occurs where a lawfully created and discrete legal lot is precluded from separate development because of a forced merger with the adjoining lot.

A taking occurs where a forced merger of two lots cancels out the separate development opportunities for one of them

Status: The U.S. Supreme Court granted the Petition for Writ of Certiorari on January 15, 2016. Opening brief on the merits was filed on April 11, 2016.

Summary: The Murrs contend that forced merger of their two adjoining lots results in a compensable regulatory taking. The Court of Appeals of Wisconsin rejected the takings claim, proclaiming that “contiguous property under common ownership is considered as a whole regardless of the number of parcels contained therein.” As amicus, PLF argues that a regulatory taking occurs where a lawfully created and discrete legal lot is precluded from separate development because of a forced merger with the adjoining lot.

http://www.pacificlegal.org/case—murr-4-1540

Factual Background:
The Petitioners are Donna Murr, Joseph Murr, Michael Murr, and Peggy Heaver (collectively, the Murrs). They are siblings. In 1960, their parents purchased Lot F. This lot was created by a Certified Survey Map and recorded on July 21, 1959.

Lot E sits adjacent to Lot F. Both are waterfront parcels approximately 100 feet wide, and over one acre in size. Lot E was also created by a Certified Survey Map and recorded 6 days later, on July 27, 1959.

There is no dispute that as originally created, each parcel was a separate and distinct legal lot, and each was allowed to be separately developed, used, and sold.

The Murrs’ father was a plumber and he ran his own business, William Murr Plumbing, Inc. He was advised by his accountant to place title to Lot F in that business entity, which he did. Soon after purchasing Lot F, the Murrs’ parents built a three bedroom recreational cabin, approximately 950 square feet. And so began a family legacy of enjoying many summers, long weekend holidays, birthdays, and 4th of July celebrations at the lake. Of course, the siblings grew up. They started their own families and soon the next generation of kids were enjoying the lakeside cabin. For the Murr family, the cabin has been the family gathering place.

The Murrs’ parents had foresight. Recognizing the long-term potential of the area, they decided in 1963 to purchase a second parcel, the above-mentioned Lot E. Lot E has remained vacant and undeveloped to this day, but not so for the rest of the St. Croix Cove Subdivision. Almost all of the other waterfront parcels have been developed with homes and most are occupied year round by full-time residents.

Title to Lot E was in the Murrs’ parents own names, rather than the plumbing company. There is no dispute that they bought this adjacent parcel for investment purposes. When the investment ripened, they planned to develop it separately from Lot F, or sell it to a third party.

In 1994, the parents transferred title to Lot F with the cabin to their six children. This was a gift to all of them; a way to keep the family legacy intact. In 1995, the investment Lot E was also transferred to the children; also a gift. Subsequently, two of the children quitclaimed their interests to their four siblings, again without any exchange of money. These four siblings are the current owners and the parties to this action.

In 2004, the Murr siblings began exploring the possibility of upgrading the cabin, including elevating it to diminish the threat of flood. They planned to sell investment Lot E, and use the proceeds from the sale to fund their project. It was then that they learned from government officials that they could no longer separately develop and sell Lot E.

Development of Lot E was precluded by regulations adopted in 1975 that required a “net project area” of at least one acre. Lot E is approximately 1.25 acres in overall size, but the ordinance requires subtracting areas for slope preservation zones, floodplains, road rights-of-way, and wetlands, thereby yielding a net project area for development of Lot E of 0.5 acres.1 But this half acre project area is not enough under the ordinance. There is no dispute that the remaining half acre has a suitable building site for a single family residence that meets the setback requirements. Nevertheless, because of the “net project area” deductions imposed by government, the parcel no longer meets the zoning requirements.

In short, when Lot E was created in 1959, and purchased in 1963, it was of sufficient size, width, and zoning to allow development of a single family house. Indeed, that is the use allowed for all the parcels within the St. Croix Cove Subdivision. However, because of the restrictions that came into place in 1975, the parcel was now defined as “substandard.”

Despite being defined as substandard, Lot E would still be allowed to be developed if it was owned by anyone other than the Murr siblings. Under the ordinance, a grandfather clause provides that any lot created prior to January 1, 1976, as was Lot E, may still be developed as a single family residence but only if the lot “is in separate ownership from abutting lands.”

Of course, the Murrs own the abutting parcel, Lot F. Because the Murrs own both parcels, this grandfather exception does not apply to them. Had anyone else owned Lot E, that owner would be allowed to build a single family residence. Regrettably, the ordinance also precludes the Murrs from selling Lot E to anyone else unless it is combined with Lot F.

Lot F also had a similar net project area of .48 acres. Accordingly, it was also defined as substandard under the 1975 regulations.

 

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