2002 WI 106
NOTICE
No. 99-2306
This opinion is subject to further editing and
modification. The final version will
appear in the bound volume of the official reports.
(L.C. No. 96 CV 00436, 96 CV 00438, 96 CV 00602,
96 CV 00605, 96 CV 00607)
STATE OF WISCONSIN : IN SUPREME
COURT
ABKA Limited Partnership, an Illinois limited partnership,
Petitioner-Appellant-Petitioner,
The Abbey Harbor
Condominium Association,
Ltd., a Wisconsin nonprofit
corporation,
Petitioner-Co-Appellant Petitioner,
v.
Wisconsin Department of Natural
Resources, FILED
Respondent-Respondent
Petitioner, JUL 16, 2002
Geneva Lake Conservancy, Inc., and Oneida
County,
Cornelia G.Clark
Clerk of Supreme Court
Respondents-Respondents.
Wisconsin Realtors Association, Inc.,
Petitioner-Appellant-Petitioner,
v.
Wisconsin Department of Natural
Resources,
Respondent-Respondent
Petitioner.
ABKA Limited Partnership, an Illinois limited partnership,
Petitioner-Appellant-Petitioner,
The Abbey Harbor
Condominium Association,
Ltd., a Wisconsin nonprofit
corporation,
Petitioner-Co-Appellant Petitioner,
v.
Wisconsin Department of Natural
Resources,
Respondent-Respondent
Petitioner.
Wisconsin Association of Lakes, Inc.,
Petitioner-Appellant,
v.
Wisconsin Department of Natural
Resources,
Respondent-Respondent
Petitioner.
Wisconsin Realtors Association, Inc.,
Petitioner-Appellant-Petitioner,
v.
Wisconsin Department of Natural
Resources,
Respondent-Respondent
Petitioner.
REVIEW of a decision of the Court
of Appeals. Affirmed.
¶1 ANN WALSH BRADLEY,
J. This
case comes before
us upon three petitions for review
of a court of appeals decision
reversing the circuit court order that affirmed an administrative law judge (ALJ) decision allowing
ABKA Limited Partnership to proceed with a "dockominium" project.1 The court of appeals concluded that the conversion of a marina
to a dockominium form of ownership as proposed by ABKA and the
Abbey Harbor Condominium Association violates
the public trust doctrine because it transfers
ownership of public
waters to private individuals.
¶2 We agree with the court of appeals that the ALJ erred
and that ABKA's conversion of its marina to a condominium form of ownership
violated the public trust doctrine. However, we determine that the reason ABKA violated the public
trust doctrine was because
it attempted to convey condominium property contrary to
Wis. Stat. § 30.133
(1995-96),2 which prohibits
1 See ABKA Ltd. P'ship v. DNR, 2001 WI App 223, 247 Wis. 2d
793, 635 N.W.2d
168 (reversing an order
of the Circuit Court for
Walworth County, Michael
S. Gibbs, Judge).
The court of appeals defined "dockominium" as a "dockside community
of privately owned boats moored in slips that are purchased for year-round living" or "[a] slip in such
a community." Id. ¶44.
2 Wisconsin Stat.
§ 30.133 provides:
certain transfers of riparian rights.
Accordingly, albeit with
a different rationale, we affirm the court of appeals.
I
¶3 Development of the Abbey Harbor marina began in 1962
after a permit was granted
for the dredging of uplands and dry marsh abutting Lake Geneva.
Specifically, the permit was "to
construct an enlargement of Geneva Lake as described herein, subject to the condition that the artificial waterway so constructed shall be a public
waterway." The permit
also stated that "a
marina and boat-storage will be developed
in the constructed waterway."
¶4 ABKA purchased the marina in 1973. Over time, and
after additional permits, the marina came to include
407 boat slips. These permits
provided: "The Department may change
or revoke this permit
if the project . . . becomes detrimental to the public interest." Until 1995, the slips were rented to the
public on a seasonal basis.
¶5 In 1995, ABKA filed a condominium declaration in order to convert
the marina
into the
condominium form of ownership
Prohibition against conveyance of riparian
rights. (1) Beginning on April
9, 1994, no owner of riparian land that abuts a navigable water
may convey, by easement or by a similar conveyance, any riparian right in the land to another person, except for the right
to cross the land in order to have access
to the navigable water.
This right to cross the land may not
include the right to place any structure or material
in the navigable water.
All subsequent references to the Wisconsin Statutes
are to the 1995-96
version unless otherwise indicated.
under Wis. Stat. ch.
703. The declaration provided
for the creation of 407 units, with a unit defined
as a four-by-five-by six- inch "lock box" to be located
in the Harbor House. The configuration was similar to a set of small post-office boxes. The unit definition in the declaration also provided that each unit would include
"as an appurtenance, standard riparian rights of
owners of waterfront real estate under
Wisconsin Law, and the use of an assigned boat slip
corresponding
to
the unit designation as a part of the common elements of THE ABBEY HARBOR CONDOMINIUM."
¶6
ABKA and the
Department of
Natural Resources (DNR)
agreed that ABKA would apply to the
DNR for a permit authorizing
the conversion of the marina into condominium property. The DNR received an objection to the permit application, alleging
that the project
violated
Wis. Stat. ch. 30, the
public
trust doctrine, and the Wisconsin
Constitution. Thus, a contested
case hearing was held before an ALJ, pursuant to Wis. Stat. ch.
227.
¶7 In addition
to ABKA and the DNR, a number
of other
entities and
persons were made parties to the
proceedings, including the Wisconsin Realtors
Association, Inc., and the Wisconsin Association of Lakes (WAL).
The Condominium
Association became a co-applicant.
¶8 ABKA maintained that the DNR had no jurisdiction to regulate the conversion of its
existing boat slips to a condominium form of ownership. The ALJ disagreed.
Referring to the language
in previous permits,
the ALJ determined that "the
DNR has jurisdiction over this matter
given the plain language in
the permits ('The Department may change or revoke this permit
if the project obstructs navigation or becomes detrimental to the public
interest.'[])." Also, relying
on
the
DNR's regulatory authority pursuant to ch. 30, the ALJ determined that if all 407 boat slips were converted to private "dockominiums," the
marina would exceed
its reasonable use of the riparian frontage. In addition, the ALJ determined that the blanket approval of such a conversion would be detrimental to the public interest
within the meaning of Wis. Stat. § 30.12.3 Accordingly, the ALJ granted a permit, but required that 287 of the slips remain as rentals.
In reaching
its decision, the ALJ observed,
"[t]o some degree the dockominium concept
involves a legal fiction:
that ABKA is selling
the lock-box condominium units, rather than the pier slips, for nearly $50,000."
¶9 The circuit court affirmed
the ALJ, but the court of
appeals reversed.
The court of
appeals did not address the question of DNR jurisdiction because it determined that ABKA had waived
the right to challenge jurisdiction by agreeing to apply for a permit.
In addressing the merits of the case, the court
3 Wisconsin Stat. § 30.12(2) provides in part:
PERMITS TO PLACE STRUCTURES
OR DEPOSITS IN NAVIGABLE WATERS;
GENERALLY. The department, upon application and after proceeding in accordance with s.
30.02(3) and (4), may grant to any riparian owner a permit to
build or maintain for the owner's use a structure
otherwise prohibited under sub. (1), if the structure
. . . is not detrimental to the public interest.
of
appeals concluded that by permitting the conversion of the marina
to private dockominiums as ABKA proposed, the DNR allowed
control over navigable waters to be vested
in
private individuals in violation of the public trust doctrine.
¶10 The DNR, ABKA and the Condominium Association jointly
(hereinafter "ABKA"), and the Realtors Association
all petitioned this court for review. Several entities filed briefs as
amici curiae.
II
¶11 Chapter
30
embodies
a
system
of
regulation
of Wisconsin's navigable waters pursuant
to the public trust doctrine.
Gillen v. City of Neenah, 219 Wis. 2d 806, 828, 580
N.W.2d 628 (1998); Waukesha County v. Seitz, 140 Wis. 2d 111,
409 N.W.2d 403 (Ct. App. 1987). Although the public
trust doctrine originally existed to protect commercial navigation, it has
been expansively interpreted to safeguard the public's use of navigable
waters for other purposes.
R.W. Docks & Slips v.
State, 2001 WI 73, ¶19, 244 Wis. 2d 497, 628 N.W.2d 781.4
¶12 Regulation and enforcement of this public
trust rests with both the legislature and the DNR. Borsellino v. DNR, 2000
WI App 27, ¶17, 232 Wis. 2d 430, 606 N.W.2d 255 (Ct. App.
1999).
The legislature has delegated to the DNR broad authority
to regulate under the public
trust doctrine and to administer ch.
4 For a detailed discussion of the evolution
of the public trust doctrine, see Muench v. PSC, 261 Wis. 492, 53
N.W.2d 514 (1952).
30. See State
v. Town of Linn, 205 Wis. 2d 426, 443-44,
556
N.W.2d 394 (Ct. App. 1996).
¶13 Section
30.133, as a provision in ch. 30, is included in the public trust doctrine
and forms part of the basis for the DNR's jurisdiction over ABKA's
proposed condominium project. It provides:
Prohibition against conveyance
of riparian
rights. (1) Beginning
on April 9, 1994, no owner of riparian land that abuts a navigable water may convey, by easement or by a similar conveyance, any riparian right in the land to another
person, except for the right
to cross the land in order to have access to, the navigable water. This
right to cross the land may not include the right to place any structure or material
in the navigable water.
¶14 In addition to making other assertions, ABKA renews its
jurisdictional arguments in
this court, contending that neither § 30.133
nor any other part of the public trust doctrine
as embodied in ch. 30 confers jurisdiction on the DNR to regulate
the change in ownership of its marina. Similarly, the Realtors Association contends that the DNR
does not have jurisdiction to "reopen" a valid permit under the public
trust doctrine based only on a change
in ownership.
¶15 Accordingly, this case presents a preliminary issue of the DNR's jurisdiction to regulate ABKA's conversion of its marina
to a condominium form of ownership. Whether the DNR has jurisdiction to regulate is a question of law subject to independent appellate review. Rusk County Citizen Action Group,
Inc. v. DNR, 203 Wis. 2d 1, 6, 552 N.W.2d 110 (Ct. App. 1996). We
determine that the DNR has jurisdiction.
¶16 Contrary
to what ABKA and the Realtors Association assert, this case is not about whether the DNR had authority to "reopen" a permit or whether ABKA had to seek a permit.
These
assertions ignore the DNR's statutory authority to enforce the public trust doctrine, the reality of the regulation process, and the facts
of this case.
¶17 Pursuant to Wis. Stat. § 30.03(4), the DNR may bring an
enforcement action when it learns
of a "possible violation" of the public trust doctrine. Specifically,
§ 30.03(4) provides:
(a) If the department learns of a possible
violation of the statutes relating
to navigable waters or a possible infringement of the public rights relating to navigable waters, and the department determines that the public interest
may not be adequately served by imposition
of a
penalty or forfeiture, the department may proceed as provided in this paragraph, either in lieu of or in addition to any other relief
provided by law. The department may order a hearing under ch. 227 concerning the possible
violation or infringement, and
may request the hearing
examiner to issue an order directing
the responsible parties to perform or refrain
from performing acts in order to fully protect
the interests of the public in the navigable waters.
¶18 Thus, to summarize
the import of this statute
for our purposes here: it provides
that if the DNR "learns of a possible
violation of the statutes
relating to navigable waters," it may pursue an enforcement action
"either in lieu
of or in addition to any other relief provided
by law." The DNR may then request the ALJ to issue
an order directing the
responsible parties to "perform or refrain from performing
acts." Essentially, under § 30.03(4),
the DNR has jurisdiction
to
pursue any "possible violation" of the public trust doctrine
as embodied in ch. 30, and it may request
broad injunctive-type relief.
¶19 There were several possible
violations of the public
trust doctrine, as is apparent
from the issues addressed in the
ALJ's decision. ABKA's dockominium project
may have been exceeding its reasonable use of the State's navigable
waters, may have been detrimental to the public
interest as that concept
is used in ch. 30, or, as illustrated by the arguments
before the ALJ, may have run afoul of § 30.133.
In addition,
as the ALJ determined, two of the permits that ABKA held specifically recognized DNR's jurisdiction to change or revoke the permit
"if the project . . . becomes detrimental to the public interest."
¶20
The DNR explains
in its brief
that despite its
authority under § 30.03(4), in reality it often will agree with a party to proceed under the permit process: "Encouraging
persons to proceed
with the disputed
activities and await
enforcement actions risks inviting damage that cannot be undone by
after-the-fact remedies."
¶21 This apparently is what happened
in this case. After
the DNR received
information about ABKA's dockominium project, counsel for the DNR sent a letter to counsel for ABKA, the key portions of which were as follows:
As you know, the Department received information last week that boat slips at the Abbey Harbor
adjacent to Lake Geneva were being sold as "condominiums." I discussed this with you on November
30, 1994, and indicated that if "condominium units" were defined
in such a way that they
included public
navigable waters
10
this would
be a violation of the public trust
doctrine and would be of concern
to the Department.
.
. . I advised you by phone message
on December 5,
1994,that the Purchase
Agreement did not address our
concerns about the definition of the condominium units
that I had previously discussed with you and asked
that
you
provide to us
the "condominium plat and
condominium declaration."
You
supplied the Abby harbor Condominium Declaration . . . . Upon review of these
materials, it is clear there are significant problems with this condominium declaration since it includes, as part of the condominium units for which
purchasers are purported to be given fee simple title and control,
portions of the public navigable
waters of the State
of Wisconsin.
. . . .
We
have referred this matter to the Attorney General's office and . . . [t]heir initial reaction to these documents is consistent with our interpretation.
The State of Wisconsin
will, if necessary, initiate action to stop the purported
sale of public
trust waters to private
individuals and to have any
transactions which may have already occurred invalidated.
The
Department will also be reviewing the permits which have been issued
for the marina structures in this area.
There are questions
raised by these transactions and proposed transactions relative
to who are "riparian owners
or proprietors" who can continue to maintain pier structures in
this marina area.
(Emphasis added.)
¶22 Pursuant to the DNR's request, ABKA made changes
in its condominium declaration. Relying on the DNR's approval
of the declaration, ABKA
continued with its project and agreed to proceed
with the permit process.
However, the agreement with the
DNR provided: "Nothing in this agreement
limits the
11
authority
of the administrative law judge to hear
and decide this matter on any legal
basis presented at the hearing or by any party or raised sua sponte by
the administrative law judge."
¶23 In the ensuing contested case hearing held
according to ch. 227, the DNR did not
take the position that ABKA’s dockominium project violated §30.133, but intervening parties did. The ALJ resolved the case by determining that
ABKA had exceeded its reasonable use of
the water and that its dockominium project was detrimental to the public
interest. However, consistent with the
possible bases for a violation of the public trust doctrine, the ALJ recognized
that one of the issues was "whether
the Condominium Declaration violates sec. 30.133, Stats."
¶24 What ABKA's and the Realtors Association's
arguments fail to recognize is that for the purposes of our determination of
DNR jurisdiction, it is of no
consequence that ABKA proceeded with the permit process under § 30.12 or that
the ALJ chose to base its decision on one ground or another. The DNR's
jurisdiction was triggered under § 30.03(4) because ABKA's conversion of its marina to a condominium form of ownership presented
several possible violations of the public trust doctrine. 5
5 The dissent, like ABKA and the Realtors Association,
misunderstands the jurisdictional question, and therefore mischaracterizes the
jurisdictional issue as solely one of "jurisdiction
to require a new permit." Dissent at ¶91. The question is not solely whether the DNR has jurisdiction to
require a new permit, but whether its
authority was triggered by a possible violation of the public trust doctrine.
¶25 The court of appeals,
in contrast, concluded that ABKA waived
its right to challenge the DNR's jurisdiction by the act of applying
for a permit. We turn briefly to discuss
the waiver issue.
¶26 None of the parties, including the DNR, supports
the
court of appeals decision
on waiver. We agree with the parties that the court of appeals decision
as to waiver was incorrect. "The jurisdiction of administrative agencies
is always open for judicial review." Kennedy v. DHSS, 199 Wis. 2d 442, 448, 544
N.W.2d 917 (Ct. App. 1996) (citing
Union Indem. Co. v. Railroad
Comm'n, 187 Wis. 528, 538, 205 N.W.
492 (1925)).
¶27 The only case the court of appeals
cited for its
waiver rule was Sterlingworth Condo. Ass' n
Wis. 2d 710,
556 N.W.2d 791 (Ct. App. 1996).
v. DNR,
However,
205
the
portion of Sterlingworth the court of appeals
cited stands only for the proposition that by electing to continue with a permit hearing rather than risking
an enforcement action, the
applicant accepts the burden of proof as to whether
what the applicant
seeks is detrimental to the public interest.
205 Wis. 2d at
726-27. Nothing in Sterlingworth should be read for a rule that a
party is unable to retain the right to challenge DNR jurisdiction upon filing of a permit application.
III
¶28 Having determined that the DNR had jurisdiction, we turn to the merits of this case.
Both the ALJ and the court of appeals majority
discussed ABKA's condominium units as a "legal
fiction." In the ALJ's decision, 29 of the 92 findings
of fact
addressed the condominium form of ownership
and the rights of condominium owners as set forth in the
condominium declaration. The ALJ concluded, however,
that the condominium declaration
was not a violation of § 30.133.
¶29 The central issue we address is whether the
ALJ correctly concluded
that ABKA's attempt
to convey condominium
property did not violate § 30.133.
In addressing this issue, we must
interpret
and
apply
ch.
703, Wisconsin's condominium statute, as well as § 30.133. The interpretation and application of statutes
is a question of law for this court's
independent determination. Auman v. School Dist. of Stanley Boyd, 2001 WI 125, ¶6, 248 Wis. 2d 548, 635 N.W.2d 762.
¶30 Our review of an agency
decision is the same as the circuit
court's. Boynton Cab Co. v. DILHR, 96 Wis. 2d 396, 405,
291 N.W.2d
850
(1980). We are not bound by an agency's conclusions of law. UFE Inc. v. LIRC, 201 Wis. 2d 274, 285, 548
N.W.2d 57 (1996). To the contrary,
"(t]he court shall set aside or modify
the agency action if it finds that the agency has erroneously interpreted a
provision of law." Wis. Stat. § 227.57(5). Although we give due weight or great weight deference to agency conclusions of law
when appropriate, here the interpretation of § 30.133 presents a question that is "clearly one of first impression" and thus
warrants
no deference. UFE, 201 Wis. 2d at 285.
¶31 In resolving the issue before
us, we rely on several statutes in ch. 703, but
principally the statute that defines
a condominium "unit," Wis. Stat. § 703.02(15).
Our interpretation
of the Wisconsin condominium statutes is aided by a comparison to the Uniform Acts, which Wisconsin has not adopted. Applying
these statutes and § 30.133 to ABKA's dockominium project, we conclude
that the ALJ erred
in
approving
the
attempted conversion because the project
was a conveyance of riparian
rights in violation of § 30.133.
A.
¶32 A "condominium" is defined as "property subject
to a
condominium declaration established
under
this
chapter." Wis. Stat. § 703.02(4).
The declaration is "the instrument by which a property becomes
subject to this chapter."§ 703.02(8).
¶33 The basic types of ownership interests in a
condominium consist of the "unit" and the "common elements." The "unit" is:
a part of a condominium intended for any type of
independent use, including one or more cubicles
of air at one or more levels
of space or one or more rooms or enclosed
spaces located on one or more floors (or parts thereof)
in a building.
§ 703.02(15).6 Common elements are "all of a condominium except its units."
§ 703.02(2). A common element is a "limited common element"
if it is "identified in a declaration or on a condominium plat as reserved
for the exclusive use of one or more but less than all of the unit owners."
§ 703.02(10). A
6 "A unit may include 2 or more noncontiguous areas." Wis. Stat. § 703.02(15).
unit, together with its undivided interest in the common elements, constitutes real property. Wis. Stat.
§ 703.04.
¶34 ABKA's declaration language as approved
by the DNR defines a unit as a lock
box that includes, as an appurtenance, riparian rights and the
use of a boat slip.
The "unit" is:
that separate area of· the condominium intended for
independent, private use, comprised of a cubicle
of space defined by a "Lock Box" located within
the Harbor House as shown in the Condominium Plat . . . .
The
dimensions of each unit shall be approximately
four (4) inches
in width, five (5) inches
in height, and six (6) inches
in length. Each unit shall include
as an appurtenance, standard riparian rights of owners of
waterfront real estate
under Wisconsin Law, and the use
of an assigned boat slip corresponding to the unit
designation as a part of the common elements of THE
ABBEY HARBOR CONDOMINIUM.
¶35 The declaration lists the common elements as:
all
of THE ABBEY HARBOR CONDOMINIUM, real property, and real property
interests, improvements and appurtenances as described in this Declaration, except the individual units .
. . and shall include . . . the marina shoreline, sea wall and sidewalk
along said shoreline . . . all docks, boardwalks,
piers
and
pilings contained within
the marina . . . the
Harbor House, outdoor swimming pool,
boat launching
ramp . . . and any and all other parts or elements
of the condominium Property as described in this
Declaration . . . .
The section of the declaration describing which elements are limited
common elements includes the following provision:
Boat Slips. Each unit owner, as a limited
common element appurtenant exclusively to his unit,
shall have riparian rights to use of the space beside the pier
or piers corresponding to his unit number as shown
in the Condominium Plat, for use as a boat slip.
¶36 Examining the condominium statutes in light of ABKA's dockominiums, we begin with the statutory definition
of unit. As previously noted, the statutory definition of unit states that it is a "part of a condominium intended for any type of independent use, including one or more cubicles of air at one or more levels of
space or one or more rooms or enclosed spaces located on one or more floors
(or parts thereof)
in a building."
§ 703.02(15). Our focus is on the language
providing that the
unit must be "intended for any type of independent use."
¶37 The requirement in § 703.02(15) that the unit be
"intended for any type of independent use" must be read with
Wis. Stat. §§ 703.05 and 703.09(1). Section 703.05
states:
Ownership of units.
the exclusive ownership unit.
Section 703.09(1) provides:
A unit owner is entitled to and possession of his or her
(1) A condominium declaration shall contain:
. . . .
(g) Statement of
building and each of restricted as to use.
the purposes for which the the units are intended and
Reading these statutes together, we derive a number of rules and principles.
¶38 First, the types of uses
for which condominiums may be
created are potentially broad, provided that the condominium
otherwise complies with the other statutory requirements. For example, the condominium form of ownership apparently has been applied to aircraft hangars
as well as grain storage
bins.
Wisconsin Condominium Law Handbook
§§ 12.22A and 12.22B, Supp. 12-2 (1997).
¶39 Second, despite the potential
breadth of the statute, its application is limited by statutory language that
the condominium unit be "intended for . . . independent use." The reference to "independent use"
does not operate only to describe the exclusive ownership interest in the
unit. If
that were so, § 703.05 would be
unnecessary. Likewise, § 703.05 shows that the legislature used the term "exclusive,"
not "independent," to refer to an owner’s separate ownership interest. Accordingly, the phrase "independent use"
refers to something more than the concept of exclusive ownership.
¶40 Third, the purpose for which
the units are intended must be stated in
the declaration. That each unit must
have a stated purpose also reinforces the conclusion that "independent use"
in § 703.02(15) refers to something more than exclusive ownership of the unit.
¶41 Any condominium in Wisconsin must
comply with these rules and principles.
In addition, it is axiomatic that the use for which units are intended
along with their purpose as state in the declaration must comply with other
applicable law.
¶42 Our interpretation of
the statutory definition of "unit" and its
application to this case is also aided by a comparison to the Uniform
Condominium Act and its variant, the Uniform Common Interest Ownership
Act. The Uniform Acts have not been
adopted in Wisconsin.
¶43 The Uniform Condominium Act
provides that a "unit" is a "physical portion of the condominium
designated for separate ownership or occupancy." 7 U.L.A. Part II, § 1-103(25), p. 217 (Master
ed. 1997). Similarly, the Uniform common
Interest Ownership Act defines a "unit" as a "physical portion of
the common interest community designated for separate ownership or occupancy."
7 U.L.A. Part I, § 1-103 (31), p. 482.
¶44 More important for our purposes, these
definitions of unit define
"condominium" and "common
interest community" as "real estate," which under the Uniform Acts is "any leasehold or other estate or
interest in, over, or under land," and includes "parcels with or without upper or lower boundaries,
and spaces that may be filled with air or water." 7 U.L.A. Part II, § 1-103(7) and (21), p.
215-16; 7 U.L.A. Part I,
§ 1-103(7) and (26), pp. 479, 481 (emphasis added). Thus,
under the Acts, a unit may be any physical portion of any interest in,
over, or under land, including spaces filled with air or water.
¶45 Wisconsin’s definition of unit
makes the unit a part of the condominium "property," which is defined
in ch. 703 as "unimproved land, land together with improvements on it or
improvements without the underlying land." §
703.02(14). Thus, in addition to providing a qualitatively different definition
of the type of property that may become a unit, Wisconsin’s condominium
statutes are without reference to water or interests in it, unlike the Uniform
Acts.
¶46 Wisconsin’s condominium statutes
were enacted in 1963 and modeled after
the Federal Housing
Authority Model
Condominium Statute of 1961.
Wisconsin Condominium Law Handbook at § 1.4, p. 1-5.
This model statute was designed primarily for high-rise developments. Id.
¶47 In 1977,
the condominium statutes
were replaced to provide more flexibility in the development, creation, and operation of condominiums. Wisconsin Condominium Law Handbook at § 1.4, p. 1-5; see also
ch. 407, Laws of 1977. Nonetheless, the key language in the definition of "unit" remained unchanged. See Wis. Stat. § 703.02(1) (1975).7 The statute
has always required that
the unit be intended for "independent
use."
¶48 In short,
Wisconsin's definition of unit, particularly
when juxtaposed with the Uniform
Acts, reveals no legislative intent to permit a boat slip to be conveyed
as a
condominium unit. Considering this, and applying
the rules and principles
from the condominium statutes, we determine
that four-by-five- by-six inch lock boxes are not "intended for any type of
independent use" within
the meaning of § 703.02(15). Rather,
7 The definition formerly read
in full:
"Unit" means
a part of the property
subject to this chapter
intended for any type of independent use, including one or more cubicles of air at one or more
levels of space, or one or more rooms or enclosed
spaces located on one or more floors (or
parts thereof) in a building, and with a direct exit to a public street
or highway or to a common area or limited common area leading to such a street or highway.
Wis. Stat.
§ 703.02(1) (1975).
they are phantom units that
do not meet with the statutory definition.
¶49 In
contrast to the lock boxes, ABKA's boat
slips clearly are intended for a
type of independent use: docking a boat. However, the slips are
not the units
under ABKA's declaration. They are
limited common elements.
Under ABKA's declaration, the
four-by-five-by-six inch lock boxes are
the units.8 Although the lock boxes may
be intended for exclusive ownership and possession by the unit owner, that does
not mean they are "intended
for any type of independent use" within
the meaning of the statute.
¶50 That the lock boxes are
not intended for any type of independent use is illustrated by the fact
that the declaration lacks a
statement describing the purpose
or use of the
units apart from their appurtenant boat slip.
The declaration states that
the "units and their appurtenant boat slips in THE
ABBEY HARBOR CONDOMINIUM are
designated for either recreational
uses and purposes or commercial
uses and purposes, as set
forth in Section 10
herein." Section 10 provides:
"The Condominium units and appurtenances in THE
ABBEY HARBOR CONDOMINIUM are
intended for and restricted to
marina, storage, boat slip and related
recreational uses as
governed by the
terms and
conditions contained herein and the By-Laws of the Association."
8 A photograph of the lock boxes is attached at the
end of this opinion.
¶51
It is a sham to suggest that these four-by-five-by-six inch lock boxes are being conveyed
for such independent uses as stated in the declaration.
They exist for the purpose of conveying the common elements
and appurtenant riparian
rights. A unit cannot serve primarily as a conduit
for another use.
¶52 Any assertion that the four-by-five-by-six inch cubicles are intended for any type of independent use is belied by
ABKA's marketing materials
for the dockominiums. Marketing materials used by ABKA do not feature
or even describe the lock boxes. Rather, they refer to "slip ownership" and include a brochure promoting "a place on the lake . . . to call your own . . . ." The brochure prominently features
a definition of "dockominium" as "individual ownership
of the right to use the waterway bordered by a pier and catwalks
held in joint dominion (as in a marina)."
¶53 We agree with the ALJ's finding:
Unlike other condominium units, the lock
box itself does not inherently have much value. The value of the "dockominiums," as the
Abbey has marketed these unique condominium units, is largely due to the other amenities that are at this location
and are part of
the individual common area.
(Citations omitted.) The court of appeals majority also agreed.
It concluded that "unlike most condominium units,
the lock-box itself has no inherent
value; rather, the appurtenant rights attached to the conveyance are the valuable
commodity." ABKA Ltd. P'ship v. DNR, 2001 WI App 223, ¶43, 247 Wis. 2d 793, 635
N.W.2d 168.
¶54 As
WAL notes, ABKA at one time platted
the boat slips themselves as the "units" for its condominium project. This fact also persuades us that the lock boxes are not intended
for any type of independent use by the owner.
¶55 In
short, ABKA's condominium declaration as approved by the DNR fails to create valid units under §
703.02(15) because the units defined in ABKA's declaration have no independent use. Because there are no valid units, there is not
a valid condominium conveyance of real property.
B.
¶56 Without a valid condominium unit, the transfer of
riparian rights that ABKA's declaration purports to accomplish
is in violation of § 30.133,which provides that "no
owner of riparian land that abuts a navigable water
may convey, by easement
or by
a similar conveyance, any riparian right in the land to another
person, except for the right to cross the land in order to have access to the navigable water." In analyzing why the transfer that ABKA
has attempted violates
§ 30.133, some additional background on riparian rights
law is necessary.
¶57 Riparian owners are those
who have title
to the ownership of land on the bank of a body of water. Ellingsworth v. Swiggum, 195 Wis. 2d 142, 148, 536 N.W.2d
112 (Ct. App.
1995). A riparian owner
is accorded certain
rights based upon
title to the ownership of shorefront property. Sea
View Estates Beach Club,
Inc. v. DNR, 223 Wis. 2d
138, 157, 588 N.W.2d 667 (1998).
These rights
are well defined
and, though subject
to
regulation, include the right to use the shoreline and have
access to the waters, the right to reasonable use of the waters
for domestic, agricultural and recreational purposes, and the right to construct a pier or similar structure
in aid of navigation. See id. A riparian owner is entitled to exclusive
possession to the extent necessary to reach navigable
water and to have
reasonable access for bathing
and swimming. Id.
¶58
One water
rights treatise explains,
"every state has accepted at least some form of transferring riparian
rights apart from the land that gave rise to the rights. Water and Water Rights § 7.04,
p.
7-91 (Robert E. Beck,
ed. 2001). However, "most courts have not accepted
the full transferability
of riparian rights." Id. at 7-92. Instead, "courts have
evolved complex rules that vary from state to state to define
the extent to which riparian rights
might be transferred and to protect the interests of those who will be affected by the
transfer even though
not direct parties to the transfer." Id.
¶59 With that background on riparian rights
law in mind, we turn to § 30.133 and the proper application of its language prohibiting the transfer
of riparian rights
"by easement or by a similar
conveyance." We begin by noting that riparian rights have been characterized to be, in some
senses, like an easement:
Under common law in most states,
the riparian rights are an interest
in real estate, somewhat like an easement, that is, the right to use land. Unlike an easement, however, riparian
rights in many states
can be severed from the uplands
to which they were originally appurtenant, and can be sold
to others.
Gurdon H. Buck, Dockominium Documents, C833
ALI-ABA 261, 264 (1993). The way that the quoted source distinguishes riparian rights from an easement
goes to the heart of § 30.133.
¶60 Section 30.133 was the legislature's response to
Stoesser v. Shore
Drive P'ship, 172 Wis. 2d 660, 668,
494
N.W.2d 204 (1993),
in which this court concluded
that "Wisconsin follows
the general rule that riparian
rights can be conveyed to non-riparian owners by easement." The legislature did not agree with
the court's conclusion. The fiscal
analysis in the drafting file for the act that created § 30.133 notes that while the statute would have little or no fiscal effects, it had
"significant policy implications."
¶61 Wisconsin's approach under § 30.133 has been
identified as unique:
Many people assume
that one can convey the riparian rights apart from the land
just as readily as one could convey riparian land without the appurtenant riparian rights. More
and more states have now come to accept that such grants are effective to some extent, with the effect varying, depending on whether the rights sought to be conveyed
relate to consumptive or nonconsumptive uses. Wisconsin, on the other hand,
has now
expressly
prohibited
the
conveyance
of
riparian rights, effective
April 9, 1994. Presumably this means
apart from the conveyance of riparian land.
Water
and Water Rights at § 7.04(a)(3),
pp.
7-97 7-98 (footnotes omitted)
¶62
Nonetheless,
ABKA asserts that § 30.133 does not apply because its
dockominium owners own riparian property
in common. Similarly, the Realtors Association asserts that § 30.133 has
nothing to do with the condominium form of
ownership. We disagree with both
assertions.
¶63 ABKA's
argument implicitly recognizes that § 30.133 prohibits the conveyance of
riparian rights apart from riparian property.
It relies on the premise that the purchasers of its phantom units own
riparian property in common in asserting
it has not violated § 30.133. However
the purchasers of ABKA's phantom units do not own
riparian property in common because there
has been an incomplete condominium conveyance under the condominium statutes
under § 703.04,9 it is the "unit, together with
its undivided interest in the common elements" that constitutes "real
property." Without a valid unit,
the unit "owners" do not hold real property, and the declaration is
left to convey nothing more than riparian rights unattached to any real
property interest.
¶64 Without a valid unit, that is, a
unit with an independent use, what is left is an attempt to convey riparian
rights not by easement, but "by a similar conveyance" in violation of
§ 30.133. Under § 30.133, riparian
rights must be conveyed as attached to something; here, they are attached to
nothing. ABKA is attempting to convey
riparian rights qua riparian rights.
Conveyances of property and
property rights are circumscribed by state statutes and regulations.
______________________
9 Wisconsin stat. § 703.04 provides in full:
A
unit, together with its undivided interest in the common elements, for all
purposes constitutes real property.
¶65 Here, contrary to
what ABKA and the Realtors
Association asserts, ABKA's conveyance of riparian rights
to dockominium owners is in violation
of § 30.133.10
The ALJ made an erroneous determination of law when it concluded to the
contrary. See § 227.57(5).
¶66 Under the Uniform Acts and some other states' statutes, such forms of dockominiums may be permissible. For example, the Ohio condominium statutes include the following
provision:
"Unit," in the case of a water slip, means
a part of the condominium property consisting of the land under a portion of
the water in a water slip . . . and designated as a unit in the declaration . .
. . "
Ohio Rev.
Code Ann. § 5311.01(I)(2) (2002).
¶67 Such is
not the state of the law in Wisconsin.
Our
condominium statutes, unlike
the Uniform Acts or the Ohio
statute, require an independent use.
Unlike
other states, Wisconsin also has § 30.133, which greatly limits the transfer of riparian rights separate
from the shoreland to which the rights attach. If the law is to change, the legislature must act. It is free to amend the condominium statutes or § 30.133, though as always, within
constitutional limits.
10 In stating that our decision stands for the proposition
that "a condominium is essentially the equivalent of an easement," the dissent paints with far too broad a brush. Dissent at ¶111. We do not determine that a condominium is "essentially the equivalent of an easement." Our holding
is much narrower: an attempt to transfer
riparian rights attached to invalid condominium units
is an attempt to transfer
riparian rights by a conveyance similar
to an easement, and thus a
violation of § 30.133.
¶68 We note that residential condominium units that
provide for the use of boat slips are
readily distinguishable from ABKA's lock boxes.
Residential condominium units are intended for a type of independent
use. Their true purpose, living space
for human beings, may readily and accurately be stated in a condominium
declaration. Such units would comply with the statutory
definition of "unit," would allow
for
a
valid condominium conveyance, and
would create common interest ownership in riparian property.
Therefore, residential units that provide for the
use of a boat slip would not
contravene § 30.133.
IV
¶69 In sum, we
determine that the DNR had jurisdiction over ABKA's conversion of its marina to a dondominium form of ownership. We also determine that the ALJ erred in
approving this attempted conversion because it was a conveyance of riparian
rights in violation of § 30.133.
Accordingly, albeit on different gournds, we affirm the court of
appeals.
By the Court.-The decision of the court
of appeals is affirmed.
¶70 JON P.
WILCOX, J. did not participate.
¶71 WILLIAM A. BABLITCH,
J. (concurring). First, it is important to note what this case is not about. It is not as one
commentator stated--see Ray Rivard, Who Will Guard the Guards?, Lakeland Times (Minocqua, Wisconsin), June 21, 2002, at 11-12- about whether private docks
and piers belong
to the state or the private owner. This case involves the concept of multi-owners
of one
dock or pier, known as dockominiums, and it does not
touch upon individual docks and piers as they are generally known today.
¶72 Also, it is not about
allowing a non-property owner to
cross private property to access the water, as alleged by the
same concerned commentator. This case does not touch upon the
right of private property owners
to keep whomever they want off
their property.
¶73 What this case is about is the right of joint riparian
owners who are part of a condominium
to place a dockominium, owned jointly by the owners on the public waters abutting
their property. Most significantly, and why I concur, it is about whether condominium owners have a riparian zone significantly smaller than could exist under any other form of real property
ownership, and thereby have a right to construct and operate a dock or docks that
no other private
landowner would be allowed.
¶74 I join the majority opinion, notwithstanding my
belief that the majority
opinion does not go far enough.
I would prefer the holding of the court of appeals: dockominiums are a per se violation of the public
trust doctrine. Putting it another way, I would hold
that the conveyance of dockage
rights
pursuant to a condominium agreement is a conveyance that is
forbidden under Wis. Stat. § 30.133(1). I reach this conclusion
for a simple reason: allowing one riparian owner
to divide the owner's riparian zone and separately
convey legal interest in the resulting "lots" will have significant detrimental effect on the public waters of this state. This
concept was well expressed in the brief
of the Wisconsin Association of Lakes, Inc., which stated: "No statute
has ever expressly authorized a
riparian owner to fractionalize the
riparian zone. . . . Until this case
arose, no court
had ever considered whether a riparian has an implied right
to do so. . . . Subdivision of the riparian zone is beyond the
reasonable use rights of riparian owners."
¶75 The dissent misses the mark when it asserts, in
passing, that the only change
here was a change in ownership.
That is akin to the old saw: "Besides that Mrs. Lincoln,
how did you enjoy
the play?" The
change in ownership is critical because the change involves
going from one owner with riparian
rights to potentially 407 owners with riparian rights of ownership in the dock.
That is a fact that the dissent
minimizes, but to me it is the most significant of
all.
¶76 State law as well as local ordinances mandate
minimum
lot widths on lakes, varying
from 65 feet to 200 feet or more.
This of course greatly limits
the number of piers and docks
allowable on the shoreline. The concept of allowing a riparian
owner to fractionalize the owner's riparian rights
subverts this policy. Again,
as stated by the Wisconsin Association of Lakes,
Inc., "excessive fragmentation of the riparian
zone is detrimental to the public interest."
¶77
It is axiomatic that the public
water of this state
belong to the public. The public is entitled to the full reasonable
use and enjoyment of these waters, including the enjoyment that comes with the
natural beauty of the waters. One can
easily imagine the damage to the aesthetic appeal of our public waters if this
concept is allowed. Most lakes in this
state are far smaller than the 5,262 acres of Geneva Lake. Imagine the damage to the aesthetic appeal of
allowing a single property owner on a 250-acre lake the right to condominiumize his or her 200 feet of
frontage and then provide his or her riparian rights of dockage to the resultant numerous owners. The court avoided the fundamental issue this
time, but it will be back.
¶77 It is a very slippery slope ABKA invites us to
navigate. I would respectfully refuse
the invitation.
¶79 DIANE S. SYKES, J. (dissenting). A majority of this court, like the majority
in the court of appeals,
has completely invalidated the Abbey Harbor
Condominium Declaration. The majority in the court of appeals
did so by declaring the entire "dockominium" concept to be a per se violation
of the public trust doctrine. The majority here does so because it considers the condominium units to be invalid
under the condominium statute's definition of "unit"
Wis. Stat. § 703.02(15), so that
they are nothing more than "sham" conduits
for the illegal conveyance of riparian rights
"by easement or by a similar
conveyance" in violation of the public
trust principles embodied in Wis.
Stat. § 30.133.
¶80 Although it does not explicitly
say so, by invalidating the condominium declaration, the majority
extinguishes the real property rights
of the 185 condominium
owners who purchased "dockominiums" at the Abbey Harbor Marina. According to the majority
opinion, those persons--heretofore
condominium owners--have paid for, mortgaged, recorded title to, paid taxes on, insured,
and (for the last six years) possessed and used, precisely nothing,
because what they might otherwise have reasonably assumed was real property
(because the statutes
say so) was actually nothing
more than a collection of "phantom
units" unrecognized by the law (because
a majority of this court
now says so).
¶81 Incredibly, the majority obliterates the property
rights of these condominium owners
in the context of a Chapter
227 judicial review of a DNR permit proceeding under
Wis. Stat. §
30.12—a proceeding which the DNR had no statutory jurisdiction or authority to convene
in the first place (more about that later).
The majority has therefore not confined
itself to merely affirming or reversing a
regulation, restriction, or condition on a real property owner's use or improvement of his property, which is
the usual business of land use regulatory agencies like the DNR, and which ordinarily
defines the legitimate boundaries
of judicial review of an agency's actions. The majority has instead used
this permit proceeding as a vehicle to invalidate the entire condominium declaration
itself, and therefore has eliminated each condominium owner's entire real property interest.
¶82 The majority has adopted an analysis that will in
large part be unrecognizable to the participants in this proceeding. Certainly the court has the discretion to decide a case on grounds not advanced by the
parties, but it should generally do so only
when the law clearly requires
it, which is hardly the case
here. In any event, doing so in
this case
is
simply not credible.
¶83 The DNR never argued that Wis. Stat. §
30.133 outright prohibits these condominiums,
much less provides a basis for its exercise of permit
jurisdiction. The Wisconsin Association of Lakes referenced Wis. Stat. § 30.133 only in passing in its brief in this court, and did not argue it here as grounds for denial of the permit. The Lake Monona Sailing Club, in its amicus curiae brief, invoked the statute with a little more
fanfare, but not much. The administrative law judge
("ALJ")
firmly rejected
any suggestion that Wis. Stat. § 30.133
was implicated at all--either as a
basis for the DNR's permit jurisdiction or substantively. And not a single party in this multiple-party, hotly contested
permit proceeding ever argued
that the condominium
units at the Abbey Harbor
Marina did not meet the definition of
"unit" under Wis. Stat. § 703.02(15), or that the condominium declaration was otherwise invalid under
Chapter 703.
¶84 Clearly, the
majority disapproves of
"dockominiums," but apparently could not find anything
persuasive in the arguments of those who oppose this particular form of marina ownership upon which to base its
decision. What else could explain the majority's
excursion into a novel theory asserted
by no one? If anyone thought for a minute that these
condominium units were invalid under Wis.
Stat. § 703.02 (15),
we surely would have heard about it. The DNR and the ALJ both rejected the idea that Wis. Stat. § 30.133 was at all significant: it occupies two
numbered paragraphs of the ALJ's
opinion, which otherwise contains 92 numbered paragraphs of factual findings and 26
numbered paragraphs of legal
conclusions, as well as a lengthy analysis.
¶85 We accepted
review in this case on three highly important
issues of state-wide impact, roughly paraphrased as follows: 1) does the
filing of a permit application with an
administrative agency
while
specifically objecting to the
agency's jurisdiction
and having obtained the agency's express agreement that
the jurisdictional issue
is not waived,
nevertheless waive any objection
to the agency's jurisdiction;
2) does the DNR have jurisdiction or authority under Wis.
Stat.
§ 30.12 to require the owner of a validly permitted marina to apply for a new permit when the
ownership of the marina changes to condominium form; and 3) is the condominium form
of ownership or the condominium declaration in this case inconsistent
with the public trust doctrine? The majority properly answers the first question "no." The
majority's resolution of the latter two issues
is seriously flawed.
¶86 The
majority omits some important factual and procedural background, and sidesteps
much of the legal analysis necessary to a proper resolution of the jurisdictional and public trust
doctrine issues in this case. Abbey Harbor is a private, not public, marina, although it has always maintained a public boat
launch. The marina's 407 boat slips were
built pursuant to properly-issued permits that were not conditioned on
maintaining seasonal rentals, not dependent in any
way on the marina's ownership form, and not subject to any particular
restrictions as to use or operation
of the marina.
¶87 A majority of boaters who rented slips did so year after year; 85 percent of the slips had been rented for
more than one year, 42 percent for more than ten years, 20 percent for more than 15
years. In addition to the docks,
piers, and boat launch, the marina also
includes 20 acres of upland real estate, a Harbor House, a seawall, a sidewalk, parking lots, a swimming pool, and 4,193 feet of shoreline on a man-made lagoon
adjoining Lake
Geneva that was created when the marina was first developed.
¶88 The
condominium conversion involved a change of ownership only. It did not involve
a change in use or any physical
changes whatsoever at the marina. There is no change in the number, size, configuration, or layout of the
marina or its docks, piers, or slips.
No new docks, slips, piers, or
structures of any kind were
placed on the bed of the
harbor as a result of the
condominium conversion. There is
no effect on the size or type of boat that can be moored at the marina. The conversion does not alter or
impede navigational channels or
safety in the harbor. It has no
adverse environmental impact on wildlife, water quality or pollution, flood
flow capacity, fisheries, or the natural scenic beauty of the lake.
¶89 The Abbey Harbor Condominium Declaration defines the condominium "units"
as the individual lock-boxes in the
Harbor House, together with the standard riparian rights associated
with ownership of waterfront property.
It also provides that
condominium
owners own, as tenants in common, all of the real
property and improvements at the marina, including the upland real estate, the shoreline,
the seawall, the Harbor House, the sidewalk, the parking lots, the swimming pool, and the docks and piers,
as condominium "common elements."
The slips are denominated as "limited common elements" for
purposes of allocating the right of exclusive
use of individual slips among the condominium unit owners.
¶90 The
ALJ included all of the
fore going in his findings of fact,
and we are required to review factual findings
deferentially. See Wis. Stat.
§
227.57(6) (reviewing court
"shall not substitute its judgment
for that of the agency
as to the weight of the evidence"
and does not disturb factual
findings that are supported by "substantial evidence in the
record"). "[T]he test is
whether, taking into account all the evidence in the
record, 'reasonable minds could arrive at
the same conclusion as the agency.' "Responsible Use of Rural and Agricultural Land v. Public Service Comm'n and DNR, 2000 WI 129,
¶20, 239 Wis. 2d 660, 676, 619 N.W.2d 888;
see also Sea
View Estates Beach Club v.
DNR, 223 Wis. 2d 138, 148, 588
N.W.2d 667 (Ct. App. 1998).
¶91 ABKA vigorously objected to the DNR's insistence that the condominium conversion required a new permit, inasmuch as nothing was changing at
the marina besides its ownership. The parties negotiated the
following compromise: ABKA
would accede to the DNR's demand
that it apply for a new
permit under Wis. Stat. § 30.12 (the condominium association would later
join as co-applicant); ABKA's objection to the DNR's jurisdiction to require a new permit
was expressly preserved and would be
an
issue before the ALJ; ABKA was authorized to immediately begin selling 292 condominium units; 125 slips would be held back from sale and maintained as seasonal rentals pending the outcome of
the permit proceeding, and if the
ALJ required a greater number
of set-asides for seasonal rental, ABKA would if
necessary buy back the required
number of condominium units.
¶92 At the
time of the hearing, 185 condominium units at
Abbey Harbor had been sold. The permit issued by the ALJ and affirmed by
the circuit court authorized only 120 condominium units, and required ABKA to set aside 287 slips for
seasonal rental, for terms not
exceeding five years, for a
"reasonable fee." The permit
also imposed a requirement that the availability of rental slips be advertised
"in the local newspaper of greatest circulation at least twice each spring,"
and that ABKA maintain a waiting list, and make that waiting list available
for inspection by the
DNR.
¶93 The threshold
jurisdictional issue here is
significant. Rather than deal with it directly, the majority manipulates it in order to facilitate the majority's
preferred resolution, and then has the audacity to suggest that this dissent
"misunderstands
the jurisdictional question." Majority
op. at
¶24 n.5.
¶94 I am
compelled, therefore,
to quote from this court's
order accepting review insofar as it states
the jurisdictional issue: "Has the legislature given the DNR authority
in Wis. Stat. § 30.12 to require the owner of a
permitted marina to apply for a new permit solely because of a
change in the form of ownership of the
property to condominium?" The majority has
contorted this very specific jurisdictional question into a
roving
inquiry into whether there is generic DNR "jurisdiction to regulate"
or "authority to regulate under the
public trust doctrine" in order to give both the DNR and the majority some
vaguely plausible jurisdictional cover. Majority op. at ¶¶12,
15.
¶95 No
matter how it maneuvers, however,
the majority cannot escape the obvious: if there is no statutory permit requirement for a marina condominium conversion that involves
no new placement of structures or deposits in public trust waters,
then the entire administrative proceeding below was without
jurisdiction, superfluous, and void.
¶96 It is an accepted
principle of administrative law that
"'an administrative agency has
only
those
powers
as
are expressly conferred or necessarily implied
from the statutory provisions under
which it operates . . . . '"
Grafft v. DNR,
2000 WI App 187, ¶6, 238 Wis. 2d 750, 756, 618 N.W.2d 897 (quoting Brown County v. DH&SS, 103 Wis. 2d 37, 43, 307 N.W.2d
247 (1981));
see also Wis.
Power & Light v. Public Serv. Comm'n,
181 Wis. 2d 385, 392, 511 N.W.2d
291 (1994). Any doubts as to the existence of an implied
power of an administrative agency must be resolved against
the existence of authority.
Grafft,
2000 WI App 187, ¶6.
¶97 Wisconsin Statute
§ 30.12 contains the legislature's
grant of permitting authority to the DNR pertaining to structures and deposits on the
beds of public trust waters:
30.12 Structures and deposits
in navigable waters prohibited; exceptions; penalty. (1) GENERAL
PROHIBITION. Except
as provided under subs. (4) and (4m), unless a permit has been
granted
by
the department pursuant to statute or the legislature
has otherwise authorized structures
or
deposits
in navigable waters, it is unlawful:
(a) To deposit any material any
structure upon the bed of any water
where no bulkhead line established; or
or
place navigable has been
(b) To deposit
any material or place any
structure upon the bed of any navigable water beyond a lawfully established bulkhead
line.
(2) PERMITS TO PLACE STRUCTURES OR DEPOSITS IN NAVIGABLE WATERS; GENERALLY. The
department, upon application and after proceeding in accordance with s.
30.02(3) and (4), may grant to any riparian
owner a permit to build
or maintain for the owner1 s
use a structure otherwise prohibited under sub. (1), if the structure does not materially obstruct navigation or reduce the effective flood
flow capacity of a stream and is not detrimental to the public interest.
Wis. Stat. § 30.12.
This statute obviously
contains no requirement that pre-existing, properly-permitted boat slips must
be "re-permitted" upon a
change of ownership. More specifically,
Wis. Stat. § 30.12 does not
require
that
an already-permitted marina undergoing conversion to
the condominium form of ownership must obtain a new permit from the DNR where the
conversion is a
legal transaction only and involves no new placement
of structures or deposits
on the lake bed whatsoever.
¶98 The DNR permit proceeding at issue in this case was convened and conducted pursuant
to Wis. Stat.
§ 30.12. The permit at the heart of this case was issued pursuant
to Wis. Stat. § 30.12. Yet the majority
refuses to engage
in any analysis regarding
the applicability of Wis. Stat. § 30.12.
¶99 Instead, the majority
concludes
that
the
DNR's
authority to require a new permit
resides somewhere in "the
DNR's statutory authority to enforce the public trust doctrine"
and "the reality of the regulation process." Majority op. at
¶16. The majority then proceeds to
discover the DNR's
permitting power in Wis. Stat.§ 30.03(4), together with Wis. Stat. § 30.133, which it says "is
included in the public trust doctrine and forms
part of the basis for the DNR's jurisdiction over ABKA's proposed condominium project." Majority op. at ¶13.
¶100 As to Wis. Stat. § 30.133,
the majority's position is remarkable,
since
no
one
else--not
even
the
Wisconsin Association of Lakes or the Lake Monona Sailing Club--relied on that statute as
providing a jurisdictional basis for the DNR's requirement that ABKA
get
a
permit
for
its
condominium conversion. Indeed, Wis. Stat. § 30.133 says nothing at all about
permits. As the majority
correctly notes later in the opinion, Wis. Stat. § 30.133 was the legislative response to this court's decision
in Stoesser v. Shore Drive P'ship, 172
Wis. 2d 660, 494 N.W.2d 204 (1993), and prohibits the transfer of
riparian rights to non-riparians "by
easement or by a similar conveyance." Wis. Stat. § 30.133(1); majority
op. at ¶¶13, 60. Whatever influence this statute might have on these proceedings, it cannot seriously be considered to confer upon the DNR any jurisdiction to require or issue permits when no new structures
or deposits are being placed
on the lake bed.
¶101 The majority refers to the statute's status as being "included in the public
trust doctrine," as if to suggest that the public trust doctrine
itself provides a jurisdictional basis for the DNR's power to require
a permit. Majority op. at ¶13. If that were true, then the DNR would have plenary power to
require a permit anytime
it got a whiff of any activity that it thought
might implicate the public trust
doctrine, whether or not a permit was statutorily required or authorized. This is a radical
departure from traditional administrative agency law, which,
as noted above, requires a legislative grant of authority
or power for administrative agency action.
¶102 Neither can Wis. Stat. § 30.03(4) serve as the source
of the DNR's authority to require a new permit. That statute authorizes the DNR to initiate an enforcement action to enjoin "a possible
violation of the statutes relating
to navigable waters or a possible infringement of the public rights relating
to navigable waters." Wis. Stat. § 30.03(4). It
says nothing about permits.
¶103 Jurisdiction to initiate an enforcement action
is not
the same as jurisdiction to require a property owner to
obtain a permit. If the DNR
had grounds to initiate an enforcement action under Wis. Stat. § 30.03(4), it
certainly would have done so.
Had the DNR taken the majority's position that ABKA's
condominium conversion constituted a violation
of Wis. Stat. § 30.133, it might have initiated an enforcement action under Wis. Stat. § 30.03(4) to stop it. Had
the DNR taken
the court
of appeals' position that ABKA's condominium
conversion constituted a per se violation of the public's
rights under the public trust doctrine, it might have initiated an enforcement action under Wis. Stat. § 30.03(4) to stop it. It did neither. Instead, the DNR invoked
the permit provisions of Wis. Stat. § 30.12 and demanded that ABKA obtain
a new permit,
11
even though the condominium conversion
involved no new placement of structures or deposits
on the lake bed. The DNR had no authority to do so. We are confined
to reviewing what the DNR did, not what it
might have done. The majority's
jurisdictional conclusions are analytically bankrupt.
¶104 Having badly botched the jurisdictional issue, the
majority then evades the significant public trust doctrine questions surrounding both the "dockominium"
concept generally and the ALJ's permit
in particular by simply invalidating the condominium
declaration under the condominium statutes.
The majority concludes that the
lock-boxes have insufficient "independent
use" to
fit the definition
of "unit" in Wis. Stat. § 703.02(15), which defines a condominium "unit" as "a part of a condominium intended for any type of independent
use, including one or more cubicles of air at one or
more levels of space . . . . " Wis. Stat.
§ 703.02(15)(emphasis added).
¶105 The
majority’s interpretation of the statutory definition of "unit" ignores the definition's use of the modifier "any," which means: "in whatever degree; to some extent; at all . . . in any
manner whatever." Webster's Encyclopedic Dictionary of the English
Language (rev. ed. 1996). The majority also ignores
the
only
reported
case
that
specifically construes Chapter
703's definition of "unit," which interpreted the term expansively to include vacant
condominium land upon which nothing
had yet been constructed. Aluminum
Indus. v. Camelot
Trails Condo. Corp., 194 Wis. 2d 574, 582-83,
535 N.W.2d 74 (Ct. App. 1995).
¶106 Finally, and perhaps most glaringly, the majority's interpretation of "unit"
violates the
explicit
rule of construction contained in the condominium statutes:
SUBSTANTIAL CONFORMITY OF CONDOMINIUM INSTRUMENTS AND BYLAWS SUFFICIENT. The provisions
of any condominium instruments and bylaws filed under this chapter shall be liberally
construed to facilitate the creation and operation of the condominium. So long as
the condominium instruments and bylaws substantially
conform with the requirements of this chapter,
no variance from the requirements shall affect the condominium status of the property
in question nor the
title of any unit owner to his or her unit, votes and
percentage interests in the common
elements and in common expenses and common surpluses.
Wis.
Stat. § 703.30(2) (emphasis added); see also Rock Lake Estates Unit Owners Ass'n
v. Lake Mills, 195 Wis. 2d 348, 359,
536
N.W.2d 415 (Ct. App. 1995)
¶107 Despite this legislative
mandate of liberal construction favoring the creation of condominiums, the majority nevertheless concludes that the condominium declaration "fails to create
valid units under § 703.02(15) because
the units defined in ABKA's declaration have no
independent use."
Majority op. at ¶55. True, the lock-boxes are small, and
therefore could not be put
to a significant use. But the statute explicitly sanctions condominium units susceptible of any type of independent use, and the
declaration must be liberally construed so as not to defeat the creation of the
condominium. The majority, however,
concludes that "[b]ecause there
are no valid units, there is not a valid condominium conveyance of real property." Id.
¶108 Having invalidated the condominium declaration, there is really no reason for the majority to go any further,
but it does. It concludes that the invalid
condominium conveyance is tantamount to a conveyance of riparian rights
"by easement or by a similar conveyance" contrary to Wis. Stat. § 30.133.
But if the condominium conveyance is invalid under Chapter 703, how
can it possibly form
the
basis
for
a
violation of Wis. Stat. § 30.133?
Stated
differently, how can a legally
ineffective condominium conveyance be deemed
to
violate Wis. Stat. § 30.133?
¶109 The majority
has invalidated
the condominium
conveyance and therefore extinguished the property interests of the condominium unit owners.
There is nothing left. There
is no need to inquire
into whether a legally
defective condominium conveyance nevertheless accomplishes a conveyance of riparian rights "by easement or by a similar conveyance" in violation of Wis.
Stat. § 30.133, requiring the attention
of the DNR and this court.
¶110 The majority, of course, must reach this issue. Otherwise its jurisdictional house of cards
comes down. Having grounded the DNR's
permit jurisdiction in large part
on the notion that there
is a potential violation
of Wis. Stat. § 30.133 present here, the majority is bound to address the
issue. In order to apply Wis. Stat. § 30.133,
however, we must assume that a valid condominium conveyance occurred. It makes no sense to apply a statute that
makes a certain sort of conveyance illegal to what the majority says is
an already
illegal conveyance; we have to assume an otherwise
legal conveyance, and then
apply the statute.
¶111 What
the majority is really suggesting, then, is that
a
condominium is essentially the equivalent of an easement. This is preposterous.
¶112 A
condominium constitutes a fee simple interest in
real estate and by
statute has the status of real property
"for all purposes." Wis. Stat. § 703.04
(emphasis added)("A
unit, together with its undivided interest
in the common elements, for all purposes constitutes real property."). Under
no credible legal analysis
can a condominium be relegated
to the status of a mere easement or like conveyance.
¶113 An easement is an encumbrance on the property of
another. "An easement 'is a permanent interest in another's
land, with a right
to enjoy it fully and without obstruction.'" Hunter v. McDonald, 78 Wis. 2d 338, 343, 254 N.W.2d
282 (1977). The "cases have repeatedly defined an easement as 'a liberty, privilege or advantage in land, without profit, and existing
distinct from the ownership of the soil.'" Figliuzzi v. Carcajou
Shooting Club of Lake
Koshkonong, 184 Wis. 2d 572, 582,
516 N.W.2d 410 (1994); see also Stoesser, 172 Wis.
2d at 667.
¶114 Noting that the condominium owners collectively own the
land and improvements at the Abbey Harbor Marina,
and that "[u]nder Wisconsin law it is clear that a person 'can not maintain an easement over his own land,'" the ALJ concluded that the
condominium declaration "is not the conveyance by 'easement
or similar conveyance' of riparian
rights within the meaning of
sec. 30.133, Stats." Although the ALJ denominated
this as a finding of fact, I read it as a conclusion of law.
¶115 An agency's conclusions
of
law
are
reviewed by reference to one of three levels of deference: "great weight,"
"due weight," or "de novo." RURAL v. PSC, 2000 WI 129, ¶21.
"De novo review
is appropriate where
there is no evidence that the
agency used any special knowledge
or expertise, the issue is clearly
one of first impression, or the agency's
position on an issue
has been inconsistent." Id. at ¶22. No one has suggested
that the agency lacked expertise
or was inconsistent in its
positions, and the issue of what constitutes an easement or like
conveyance
impression.
can hardly be characterized as one of first
¶116 Accordingly, at least due weight,
or possibly great
weight deference is owed to the ALJ's conclusion that there is no
violation of Wis. Stat. § 30.133 here.
It is very difficult to flunk either
of these standards
of review. Due
weight deference means that any reasonable legal interpretation by an agency will be upheld, unless the court finds a more reasonable
interpretation. Id.
at ¶24 n.12. That is, the agency's
legal interpretation will be upheld even if there is
a different,
equally reasonable interpretation--in other words, a tie goes to
the agency. Great
weight deference means what it says: the
ALJ's determination that Wis. Stat. § 30.133 was not violated must be upheld. Any suggestion that a condominium is akin to
an easement is far from reasonable.
¶117 Apparently the majority
is not bothered one bit by the gaping holes in and circularity of its
analysis. Worse,
by adopting this sua sponte,
terribly misguided approach, the majority
has
completely
failed to address the critically important administrative and water law issues that were actually presented in this case, and therefore has left them for
another day.1 There are a number
of other "dockominium" marinas around
the state. Their legal status--called into question
by the court of appeals' opinion--remains in substantial doubt. The majority has not only trampled on the private
property rights of the individual condominium owners in this case (not to mention ABKA's), it has done
significant
damage
to
the
law
of condominiums, administrative agency jurisdiction, and the public trust doctrine. I dissent.
¶118 I am authorized to state that Justice DAVID T. PROSSER
joins this dissenting opinion.
1 Both the ALJ's resolution of this case and the court of appeals' per se invalidation of the "dockominium" concept
have significant implications for the public trust doctrine in this
state, and also potentially for takings jurisprudence. See ABKA,
Ltd. P'ship v. DNR,
Dec. No. 3-SE-95-0080 (DNR 1996); ABKA, Ltd. P'ship v. DNR,
2001 WI App 223, 247 Wis. 2d 793,
635
N.W.2d 168; see also, R.W. Docks & Slips v. State, 2001 WI 73,
244 Wis. 2d 497, 628 N.W.2d
781, cert. denied, 122 S.Ct. 617
(2001).