Following up on our post here on the Ramsey v. Commissioner case, the Virginia Supreme Court recently reversed a jury verdict in favor of DOT that would have required the owner to repay a portion of the initial offer monies.  The Court ruled that it was error for the trial court to have precluded the owner from introducing into evidence the DOT’s initial appraisal that was almost 2.5 times greater than the appraisal and testimony relied upon by DOT at trial.  The court’s decision reminds us of a familiar quote:  “Government is not completely free to play fast and loose with landowners — telling them one thing in the office and something else in the courtroom.” U.S. v. 320 Acres of Land, 605 F. 2d 762 (5th Cir. 1979).

Good luck on the remand!

Last week, a divided New Jersey Supreme Court ruled that condemning agencies do not have to prove that properties within an area “in need of redevelopment” have a deleterious effect on the surrounding area in order for those properties to be taken via eminent domain.  The 3-2 majority opinion, authored by Justice Barry Albin, concluded that, so long as there is substantial evidence in the record that the legislative definitions set forth in New Jersey’s Local Redevelopment and Housing Law (“LHRL”) are met, a court is bound to affirm a local government’s redevelopment designation.  The decision has stirred debate in the legal community as to whether the criteria for condemning property for redevelopment purposes has been eased, and whether it represents a departure from the Court’s landmark 2007 decision in Gallenthin Realty Development, Inc. v Borough of Paulsboro, 191 N.J. 344 (2007).

The recent case, 62-64 Main Street, LLC v. City of Hackensack, involved a 2008 determination by the Hackensack Planning Board that five downtown properties, consisting of two dilapidated buildings and poorly maintained parking lots, satisfied the statutory criteria of the LRHL set forth in N.J.S.A. 40A:12A-5(a)(b) and (d) for an area “in need of redevelopment”  .  In particular, the Board concluded that the buildings were boarded up, were “substandard and unsafe for occupancy”, and that adjoining parking areas were “unsightly and not well-maintained”.  The Board’s recommendations led to the designation by the Hackensack City Council in 2011 that these 5 parcels, together with 6 others, qualified as an area “in need of redevelopment”. The property owners challenged the designation on the basis that their properties did not meet the constitutional standard for blight set forth in the 2007 Gallenthin decision.  The trial court disagreed, holding that the heightened criteria of Gallenthin only applied to properties designated under N.J.S.A. 40A:12A-5(e), and thus upheld the designation.  In an unpublished opinion, the Appellate Division reversed the trial court’s decision, finding that Gallenthin required a determination that the property in question suffered from “deterioration or stagnation that negatively affects surrounding areas”.  The Supreme Court agreed to hear the case in 2013.

The Supreme Court held that the Blighted Areas Clause of the New Jersey 1947 Constitution is an affirmative grant of authority to local agencies to redevelop and revitalize areas that have become blighted, and that both the framers of the Constitution and the subsequent Legislatures were mindful of the importance of the constitutional property rights at stake, including those who crafted and adopted the LRHL in 1992.  As such, the Court reasoned that the legislative classifications of blight set forth in the LRHL and in prior statutes were adequate, except for the redevelopment/blight classification of N.J.S.A. 40A:12A-5(e), which is limited to “underutilized” properties and was found in Gallenthin to require additional evidence that such underutilized state also negatively affected other properties in order to pass constitutional muster.  Accordingly the Hackensack Court concluded that blight designations under other criteria of the LHRL can and do presume that the blight exists if substantial evidence is presented in satisfaction of that legislative criteria, without having to prove any separate negative effect on the surrounding area.

Chief Justice Stuart Rabner issued a blistering dissent, finding that the Court had taken a step backward from Gallenthin, and that any blight determination should require that both components  of Gallenthin — “deterioration or stagnation” and negative impact upon “surrounding properties” in order to proceed and allow the use of eminent domain.

The impact of the Hackensack ruling is not likely to be felt for some time.  Critics of the opinion have suggested that the criteria for condemning properties under the LHRL has now been eased, and that it may have opened the door for another round of abuse of property rights in New Jersey that was common prior to the 2005 decision of the United States Supreme Court in Kelo v. New London, and more directly the 2007 New Jersey high Court decision in Gallenthin, a variety of other cases which followed where local redevelopment powers were more closely scrutinized and, in many instances, curtailed.  That trend, coupled with the economic recession which started several years ago, caused a dramatic downturn in local redevelopment activity in New Jersey.  Will Hackensack help bring it back?

A copy of the Court’s opinion in the Hackensack case is available here.

Related posts on the topic and decision:

Pacific Legal Foundation (which submitted an amicus brief to the Supreme Court)

New Jersey Law Journal:  Justices Ease Criteria for Condemning Property

Record:  State Supreme Court Sides With Hackensack on Redevelopment Plan

The New Jersey Supreme Court decided Townsend v. Pierre on March 12, 2015.  It was not a condemnation case but is relevant to any civil litigation involving expert witnesses.  The case arose out of a terrible accident involving a motorcycle and an automobile.  The motorcycle t-boned the car and the motorcyclist died.  The decedent’s estate brought a negligence and wrongful suit against numerous defendants, including the owner of the property adjacent to the intersection where the accident occurred.  All defendants were granted summary judgment by the trial court, but the Appellate Division reversed as to the property owner.  The property owner’s negligent maintenance of its landscape trees at the intersection (i.e. failure to trim) allegedly made it impossible for vehicles operating along the right of way to see oncoming traffic from the stop sign and such was the “proximate cause” of the motorcyclist’s death.

Here’s a link to the google map showing the location of the accident at the intersection of Garland Lane and Levitt Parkway. The motorcyclist was traveling east on Levitt Parkway, and the car was making a left hand turn from Garland onto west-bound Levitt Parkway.  It is easy to see how a car would not be able to see oncoming traffic from the stop sign on Garland (even without the untrimmed shrubbery) because it’s too far back.  However, the uncontested evidence was that the driver of the car stopped at the stop sign line, and then inched forward while stopping intermittently (at least 4 times) until she was in a position to see oncoming traffic.  It was only then that she proceeded to make the left turn onto Levitt Parkway with the unintended consequence of the fatal accident.  There was no evidence contradicting these facts.

Plaintiff’s expert noted the following with respect to these uncontested facts:

“I am mindful of the testimony of Noah Pierre regarding her allegedly stopping four (4) times before proceeding. However, given her testimony that the bushes obstructed her view of eastbound traffic on Levitt Parkway, and given that she never saw the approaching motorcycle, I reasonably conclude that she did not have an unobstructed view of Levitt Parkway when she proceeded into the roadway.” [Slip op. at 11].

So, plaintiff’s expert’s opinion was based on a fact that was contradicted by the evidence.  In other words, the fact – unobstructed view before making the turn – was undisputed.  The expert’s opinion that the property owner’s negligence was a proximate cause of the accident turned on the fact that the driver’s view was obstructed by the shrubbery.  Untrue.

The Supreme Court therefore affirmed the trial court’s grant of summary judgment, reasoning, in part, a “party’s burden of proof on an element of a claim may not be satisfied by an expert opinion that is unsupported by the factual record or by an expert’s speculation that contradicts that record.” [Slip op. at 21].  Further, the Court found it improper for the expert to invent the facts needed to support his opinion.  Essentially, the expert opined that the driver of the car must have been mistaken when she testified that her view of oncoming traffic was unimpeded.  Absent fact support for such a statement, the expert’s opinion was rejected as a ‘net opinion’, i.e. one without factual support.

While not so novel a holding, property owners are cautioned to keep their hedges trimmed….

Property owners have won a battle in a long simmering dispute in New York over pending real estate tax appeals.  The case was reported in the BuffaloNews.com.  In short, eight property owners with pending tax appeals against the City refused to let the City’s appraiser in their homes in connection with the preparation of the City’s appraisal reports.  The City countered that they could not make a fair assessment of property value without an interior inspection.  The intermediate appellate court agreed with the property owners reasoning that they were entitled to protection under the Fourth Amendment’s guarantee of privacy.

According to the appellate court,  “the city failed to show that its interest in interior inspections outweighed the homeowners’ Fourth Amendment right to privacy, the appellate court ruled.” (BuffaloNews.com).  The question that immediately comes to my mind, if the cases proceed to a trial, do the property owners get to undermine the City’s appraiser’s testimony based on his failure to conduct an interior inspection?

Apparently all the owners just wanted the cases, which have been pending for six years, to get resolved.  But, the City has vowed an appeal to New York’s highest court, so it does not seem like the end is in sight.

 

Under North Carolina statute, once the department of transportation files  a map depicting a future taking, “no building permit shall be issued for any building or structure or part thereof located within
the transportation corridor, nor shall approval of a subdivision . . . be granted with respect to property within the transportation corridor.” N.C. Gen. Stat. § 136-44.51(a).  The property owners here complained that the filing of the map effectuated a taking of their property without just compensation. Kirby v. North Carolina Dep’t of Transportation (No. Carolina Court of Appeals, Feb. 17, 2015).  The statute provides for three exceptions to the general rule.  The plaintiffs filed complaint alleging takings claims, and further alleging that the administrative remedies set forth in the statute were “inadequate and unconstitutional.”

The question presented:  “In the present case, this Court must consider whether the restrictions of the Map Act that were applicable to Plaintiffs at the time the maps were filed substantially interfered with the elemental rights growing out of Plaintiffs’ ownership of their properties so as to have effected a taking and provided grounds for the trial court to consider Plaintiffs’ claims for inverse condemnation as ripe.”

The conclusion:  “Therefore, with potentially long-lasting statutory restrictions that constrain Plaintiffs’ ability to freely improve, develop, and dispose of their own property, we must conclude that the Map Act is distinguishable from the cases that established the rule that “the recording of a map showing proposed highways, without any provision for compensation to the landowners until future proceedings of condemnation are taken to obtain the land, does not constitute a taking of the land, or interfere with the
owner’s use and enjoyment thereof.”

The holding:  “we hold the trial court erred when it concluded Plaintiffs’ claims for inverse condemnation were not yet ripe based on its determination that Plaintiffs did not suffer a taking at
the time NCDOT filed the transportation corridor maps for the Western and Eastern Loops.”

New Jersey has a “map act.”  But unlike North Carolina, the statute does not expressly limit the owner’s future use or development of the property.  That statutory absence did not provide any relief or comfort to Helen Schnack when the State, Dep’t of Transportation filed a highway alignment map depicting her house within the path of a future highway. Schnack v. State (Docket No. A-4840-76).

Maybe its time to revisit the issue here in the Garden State.

Last week, the New Jersey Supreme Court decided a case brought by property owners to challenge a municipal ordinance that “down-zoned” their property. (A full copy of the decision is here).  The property owners lost before the trial court, won before the Appellate Division, but lost in the Supreme Court.

The Supreme Court held:  “We conclude that the ordinances represent a legitimate exercise of the municipality’s power to zone property consistent with its Master Plan and Municipal Land Use Law (MLUL) goals, and we hold that plaintiffs have not overcome the ordinances’ presumption of validity.” (p. 5).

As is most relevant to our fellow condemnation practitioners, the Supreme Court also “reassert[ed] the importance of exhausting administrative remedies and conclude that plaintiffs’ claim for redress for the down-zoning of their property is better addressed through their inverse condemnation claim, which, as the trial court held, plaintiffs may pursue if they are denied a variance.” (p. 5).  (Speaking of, our colleague, Robert Thomas (writing from sunny Hawaii), beat us to the punch on this one in his Inverse Condemnation blog on the case, found here).

The property owners went from owning (a) a 34 acre tract of land zoned for mixed residential and commercial uses “including use for hotel, retail, medical, and office facilities — on a minimum of one-acre lots, while the R-2 residential zone permitted single-family dwellings, public parks, and nature preserves on a minimum of two-acre lots”, to (b) an Environmental Conservation District with a minimum lot size of twenty acres.  The property owners’ direct challenge to the ordinance was denied based on the lengthy and substantial planning process set forth in the record before adoption.  With respect to the inverse claim, “the court later reinstated plaintiffs’ inverse condemnation claim and ultimately granted the Township’s motion for summary judgment, holding that it was not clear that an application for a variance would be futile. The trial court’s judgment held open the opportunity for plaintiffs to pursue an inverse condemnation claim if a variance were to be sought and denied.”

While this decision may give local government agencies something to cheer about in making land use and zoning decisions, the Supreme Court’s ruling did give the owners’ takings claim a glimmer of hope in the event variance relief is later denied.  Perhaps more will be heard at a later date.

Coming to you from Virginia – care of our Owner’s Counsel colleague Robert Thomas – is the case of Ramsey v. Commissioner of Highways, which involves Virginia DOT’s attempt to change its valuation position at trial. Thomas’ Blog entry here.  In a nutshell, DOT offered the owner $246,292 before trial (based on an appraisal prepared by Mr. Savage), but by the time of trial, Savage had retired and the State proffered a new appraiser who opined that the property was only worth $92,127.  It appears that the trial court condoned the practice, and also precluded the owner from introducing the Savage appraisal at trial on the basis that the initial offer was a non-admissible settlement offer.  The jury awarded $234,032.00 and the property owners’ appealed.

The owners argue on appeal that under Virginia law, the initial offer is jurisdictional and must be considered by the jury in the condemnation valuation proceedings.

The case is now pending before the Virginia Supreme Court.

The good news for Virginia property owners is that New Jersey law provides a yuletide blessing in the form of a case right on point. State v. Fairweather, 298 N.J. Super. 421 (App. Div. 1997).  In that case, the State initially offered $23,000 for the taking, but at the time of trial, offered evidence that the property was only worth $21,000 (the State’s original appraiser had died before trial).  The property owner appealed the verdict complaining of, inter alia, the court permitting evidence of value at less than the State’s original jurisdictional offer.  The Appellate Court agreed.  “Although it is clear that the offers themselves are not evidential under the statute, judicial estoppel prevents the State from taking a different position at trial concerning the value of the property from that which it had assumed when it made its offers and deposited with the court clerk what it considered to be the property’s fair market value.”  (at 425).  The New Jersey courts routinely and consistency apply Fairweather to prevent a condemnor from engaging in such litigation tactics clearly designed to reduce a property owner’s constitutional just compensation.

Hopefully, the Virginia Supreme Court will do the same, and reaffirm what we all know to be true:  Yes, Virginia, there is a Santa Claus.

Merry Christmas and Happy Holidays to all.

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