May 22, 2012

Inverse Condemnation Defeated: Wildwood Property Owner Fails to Exhaust Administrative Remedies

Posted by Joseph Grather under Court Decisions | Tags: , , , , , , |
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On Friday May 18, 2012, a New Jersey appellate court affirmed – and published – the trial court’s decision in Dock Street Seafood, Inc. v. City of Wildwood, ___ N.J. Super. ___ (Law Div. Docket No. L-17056-06).  Plaintiff/appellant owns a vacant parcel of property located at 600 West Baker Ave in Wildwood, N.J. adjacent to its seafood business property on West Montgomery Avenue.  The Baker Ave property was designated “in need of redevelopment” in 2002.  A redevelopment plan was adopted shortly thereafter, and a redeveloper was named – K. Hovnanian.

The property owner never challenged the in need of redevelopment designation.

At some point thereafter,  K. Hovnanian made an offer to purchase the Baker Avenue property for $660,000.  The offer was rejected.  K. Hovnanian backed out of the deal when the market turned in 2007.

The property owner was interested in developing the property itself, but never submitted an application because City officials consistently stated that they would not permit private development within the redevelopment area.  Therefore, in 2006, the property owner filed a lawsuit alleging that the City’s actions resulted in a “taking” of private property without payment of just compensation, i.e. filed an “inverse condemnation” suit.

A Law Division judge tried the case and dismissed the property owner’s takings claim.  The trial judge reasoned that the property owner failed to exhaust administrative remedies by not filing an application for development before filing the lawsuit.  The property owner argued that such efforts would have been futile given municipal officials’ insistent statements that they would not permit private development within the redevelopment area.

The Appellate Division affirmed based upon the opinion below.

While we have yet to learn whether the owner will be submitting its own development plan to “exhaust” its administrative remedies, this opinion appears to have been made based upon the trial court’s factual determination as to whether the administrative remedy of approvals was really available or, whether (as suggested by the owner) those efforts would have been futile.  Not much in the way of new law, which makes it somewhat surprising that the case was approved for publication, but nonetheless, score one for the municipality in this case.

 

May 8, 2012

LBI Town Forum Shopping to Avoid Paying Just Compensation?

Posted by Joseph Grather under In the news | Tags: , , , , , , , |
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The Press of Atlantic City reports that Long Beach Township intends to use eminent domain in its forthcoming beach replenishment cases involving oceanfront properties within its boundaries.  However, unlike its neighbor – Harvey Cedars – Long Beach will apparently be seeking to avoid trials in New Jersey Superior Court, where property owners have received just compensation as due under the New Jersey Constitution.  The Township hopes to adjudicate its takings cases in federal court.

The article says that Long Beach Township Mayor Joseph Mancini believes that the federal courts will look “more favorably” on the beach replenishment project.  Apparently what the Mayor means is that the federal courts may accept the municipality’s argument – already rejected by New Jersey trial and appellate courts – that property owners aren’t entitled to any compensation because the beach replenishment program provides a “special benefit” to those property owners.

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Photo courtesy http://en.wikipedia.org/wiki/Long_Beach_Township,_New_Jersey.

Long Beach’s latest efforts makes us wonder why the owners of private beach-front property on Long Beach Island should not be afforded their constitutionally guaranteed right to just compensation for any damages caused by government’s erection of a sand dunes that will block valuable ocean views.  New Jersey Courts have expressly recognized that such is a taking for which both the Federal and State Constitutions require payment of just compensation.
Now, Long Beach Township wants to try to deny private property owners their constitutional rights by taking their property in federal court.  We’ll see how they make out and keep you posted.
 We blogged about Harvey Cedars complaints back in November of 2011.
And about related beach access issues in May of last year.
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May 3, 2012

Willets Point Takings Abandoned by NYC at Eleventh Hour

Posted by Anthony F. Della Pelle under In the news | Tags: , , , , , |
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The City of New York has withdrawn its efforts to use eminent domain to acquire properties within a 62-acre “Iron Triangle” in the Willets Point section of Queens near Citi Field and downtown Flushing.

The condemnations were scheduled to proceed to hearing next week, but the Bloomberg administration instead halted the takings of several private property owners, represented by our Owners’ Counsel colleague, Michael Rikon.  According to the New York Observer, the City is close to reaching agreement with developers for portions of the property, who hope to provide a mixed-use development in the area.  However, the development will either proceed without the properties owned by Mr. Rikon’s clients, or may include their properties but only if they willingly agree to sell now that eminent domain has apparently been taken off the table.

More on this story is available on our colleague Robert Thomas’s Inverse Condemnation Blog.

Thanks to Robert on his excellent summary, and congratulations to Mike Rikon on yet another victory for private property rights!

 

 

April 18, 2012

Morristown’s Speedwell Avenue Redevelopment Nears Approval

Posted by Joseph Grather under In the news | Tags: , , , , , , |
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(Photo courtesy Dean Marchetto/MorristownGreen.com)

Morristown’s Speedwell Avenue redevelopment project appears to be heading towards approval.  As reported by Maria Pfeifer in MorristownGreen.com, the Planning Board directed special counsel to prepare a resolution approving Phase 1 on the redevelopment plan, which calls for construction of residential units along Speedwell Avenue and Early Street.

One bone of contention was that the to-be approved plan does not address the historical traffic issues at the Spring, Early and Speedwell intersection.  But it appears that the Town would rather jump-start the project now and deal with the traffic issues at a later date.

Its unclear whether the redeveloper has acquired all private property that might be needed to accomplish this redevelopment project.  Of course, absent agreement to sell, the redeveloper would have to request that the Town authorize its power of eminent domain and institute a condemnation action to acquire the private property.  Court proceedings emanating out of a condemnation action are designed to protect the private property rights of owners and allow the property owners a forum to dispute the value of their property and/or question the propriety of taking private property for a redevelopment use.

 We’ll keep you posted.
Click any of these links for prior posts on the same topic.
 

April 5, 2012

Appellate Court Reaffirms Bedrock Condemnation Principles in Dismissing Complaint

Posted by Joseph Grather under Court Decisions | Tags: , , , , , , , , |
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This week, a New Jersey appellate court reversed a trial court judgment allowing a condemnation action to proceed in the face of the property owner’s objection that the government has failed to engage in bona fide negotiations pre-complaint.  New United Corp. v. Essex County Vo-Tech.

There appears to have been a long-standing dispute, prior and pending litigation between the property owner/appellant and Essex County related to the subject property – one of three commercial condominium properties in Newark, the other two being owned by the County.

But, the condemnation aspects of the procedural history are straight-forward.

Once the Board of Education passed a resolution authorizing acquisition of the subject property, an offer was made to the property owner based on a written appraisal supplied with the offer.  Immediately in response to that offer and appraisal, the property owner supplied the condemnor with its own appraisal, leases encumbering the subject property, information about the current zoning, and requested particular information from the condemnor. The property owner then wrote a second letter to the condemnor alleging violations of the Eminent Domain Act.  The condemnor ignored both letters and filed its condemnation complaint.

The Appellate Division found the condemnor’s failures fatal and reversed the judgment authorizing the right to take.  The court relied on long-standing precedent that underscore the jurisdictional requirement of bona fide negotiations, including: County of Morris v. Weiner, 222 N.J. Super. 560; County of Morris v. 8 Court St. Ltd., 222 N.J. Super. 35., and City of Atlantic City v. Cynwyd Investments, 148 N.J. 55.

The policy behind requiring government agencies to conduct bona fide negotiations is rooted in the recognition that property owners do not choose to have their properties taken via eminent domain, that government agencies must deal forthrightly by making their best offers up front, and must exert diligent efforts to avoid unnecessary litigation, leaving condemnation as a last resort.  Once again, these principles prevailed and the government in New United was held to have proceeded too hastily.

 

March 30, 2012

Real Estate Tax Appeal Evidence: Admissible in Eminent Domain Case?

Posted by Cory K. Kestner under Court Decisions, In the news | Tags: , , , , , , , |
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A Kansas property owner recently challenged the $7.5 million award of court-appointed appraisers in an eminent domain matter, only to have the award reduced to $6.95 million at trial based on evidence of the property’s value from a prior tax appeal.  The owner, KC Mall Associates, filed a motion before the trial began to prevent the condemnor from presenting evidence of a 2005 tax appeal.  KC Mall Associates argued that the tax appeal was filed to force the local government to abide by an assessment freeze as part of a revitalization plan.  The government argued that the tax appeal information was not related to the revitalization plan, and was an admission against interest.  The Kansas Supreme Court found “tax appeal evidence was relevant to—both material to and probative of—the fair market value of the subject property.”

In New Jersey, a property’s assessed value is not admissible as proof of a property’s market value.  However, New Jersey Rule of Evidence 803(b)(2) could permit a valuation report, or other valuation evidence, from a property tax appeal to be admitted into evidence as an admission against interest.  Notably, to be admissible, the rule does not require the statement to have been against the party’s interest at the time that the statement was made.  However, the mere existence of an expert report is insufficient to have it admitted against a party, and the report must have been previously relied upon by the party to qualify as the party’s statement.  See Skibinski v. Smith, 206 N.J. Super. 349, 353-54 (App. Div. 1985).

A copy of the Kansas Supreme Court’s opinion in Kansas City Mall Assoc., Inc. v. Unified Gov’t of Wyandotte County/Kansas City, Kansas, No. 102163 (Mar. 16, 2012) can be found here.

For news coverage of the story, please see the following:

Kansas Supreme Court upholds decision in Indian Springs mall case – Wyandotte Daily News

KCK hopes Indian Springs will be its next success story – Kansas City Star

For more blog posts on expert testimony in eminent domain cases, please see the following blog posts:

Expert’s “Gut Feeling” on Costs Survives Dismissal Claim

Experts’ Opinions on Golf Course Valuation Not Up to Par

Discounted Jury Verdict Upheld on Appeal

Court Disapproves Averaging of Comparable Sales

 

March 27, 2012

Greetings from Asbury Park! Courts Deny Property Owners’ Request for Takings

Posted by Joseph Grather under Court Decisions, In the news | Tags: , , , , , , |
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Photo courtesy of www.beebeegrace.blogspot.com

On March 26, 2012, the Appellate Division wrote another chapter in Asbury Park’s redevelopment book, where the final and unwritten chapter conjures images of the City’s ‘glory days’ pictured above. City of Asbury Park v. Springwood Lake, LLC.  Without recounting the entire Asbury Park redevelopment history, the short course in this case is as follows:  Property was designated in need of redevelopment; redeveloper was unable to acquire properties through negotiation.  Then, in 2006, a deal was reached between a group of property owners, the redeveloper, and the City.

The property owners’ expectation was the cases would proceed quickly to a taking and valuation litigation. Not so.

The cases were filed in 2008, but the City did not take title to the properties, and the designated redeveloper never proceeded to acquire title or complete the redevelopment project.  In the Spring of 2010 the property owners moved to compel the takings and cited the City’s agreement with the redeveloper in support of its argument that the City was required to take the properties.  The Law Division denied the property owners’ motion, and they appealed.

The Appellate Division was not persuaded:  ”Appellants’ arguments find no support in the law and fly in the face of the plain meaning of the agreement.  We are unpersuaded by appellants’ invocation of the square corners doctrine and reject their request” to apply judicial estoppel against the City.”

The Appellate Division also affirmed the trial court’s reduction of legal fees requested by property owners’ counsel under the Eminent Domain Act.

For more information, see the Asbury Park Press article on these cases.  The appellate court’s opinion is also available here.

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March 26, 2012

Property Owners’ Prayers Answered by Supreme Court in Sackett Case

Posted by Joseph Grather under Court Decisions, In the news | Tags: , , , , , , , |
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Photo Courtesy: www.peckycox.com

Property owners Michael and Chantell Sackett of Priest Lake, Idaho fought the law, and surprisingly, they won.  On March 21, 2012, the Supreme Court of the United States – in a unanimous decision – sided with the property owners in determining that the property owners had the right to challenge an Environmental Protection Agency (EPA) compliance order in the United States District Court.  Both the District Court and the Circuit Court had sided with EPA.

While the Court did not address the merits of the challenge to the EPA order – which found that the property owners had violated the Clean Water Act by filling in wetlands that were ‘navigable waters’ of the United States – it “conclude[d] that the compliance order in this case is final agency action for which there is no adequate remedy other than APA review, and that the Clean Water Act does not preclude that review.”

The Sacketts do not believe that their property should be subject to the Clean Water Act’s regulation of “navigable waters of the United States” as their property is not adjacent or contiguous to Priest Lake and “lies just north of Priest Lake, [and] is separated by several lots containing permanent structures.”  The EPA issued the compliance Order because the Sacketts had “filled in part of their lot with dirt and rock” in “preparation for constructing a house.”  The Sacketts filed suit in the District Court alleging a violation of the Fifth Amendment’s promise that government not deprive ‘life liberty or property’ of our citizens.

The availability of judicial review for the Sacketts – and other property owners – is a huge victory.  It substantially reduces the size the club that EPA can wield against property owners in the future.  Before this decision, a property owner would either have to comply with the Order or face penalties of $75,000 per day and wait until EPA decided to sue them in an enforcement proceeding.

The Court’s decision is hot news around the nation:

Lawrence Hurley, E & E News

ABA Journal (Court decries ‘notoriously vague’ Clean Water Act).

Washington Post (Supreme Court Allows Idaho Couple to Challenge EPA on Wetlands Ruling).

Federal Society Blog (Supreme Court Unanimously Rules to Protect Landowners’ Right to Take EPA to Court).

Natural Resource Defense Council

Inverse Condemnation Blog

The Foundry Blog

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March 12, 2012

New Jersey Farmer Growing More Dedicated in Fight Against Eminent Domain

Posted by Cory K. Kestner under In the news | Tags: , , , , , , , |
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Today’s Daily Record featured this article by reporter Cara Townsend which highlighted Todd Kuehm, a fourth generation New Jersey farmer, and his fight against the Township of Montville’s use of eminent domain on his 28 acre farm.

Photo Courtesy of Cara Townsend/The Daily Record

The article covers the history of the litigation from the Township adopting ordinances which denied him the ability to install a well despite having permits from the New Jersey Department of Environmental Protection, the entry and dismissal of several injunctions to deny him access to the well, to a recent finding by a New Jersey Superior Court judge that the Township had exceeded its authority and interfered with Mr. Kuehm’s property rights.  The Township later filed an appeal with the New Jersey Appellate Division to challenge the court ruling.

Mr. Kuehm’s story was also recently the subject of Fox News Channel’s “It’s Your Land” series.   The video, featuring McKirdy and Riskin’s Anthony F. Della Pelle, may be viewed here.  Shortly after the TV segment, the Montville Patch also published its own story.

The matter is currently pending on appeal.

For more blog posts on property owners challenging a government’s use of eminent domain, please see the following:

Eminent Domain Abuse Sign is Protected Speech

Jury Awards Double NJ Transit’s Offer for Property Taken by Eminent Domain

Mt Holly Gardens Residents Live to Fight Another Day

Lotta Lettuce J.T.S. Farms, LLC is represented by McKirdy & Riskin, PA as the family’s condemnation counsel.

 

March 1, 2012

House Passes Anti-Kelo Eminent Domain Bill

Posted by Anthony F. Della Pelle under In the news, Legislative Developments | Tags: , , , , , , , , , , |
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The United States House of Representatives this week passed bipartisan legislation that proposes to withhold for two years all federal development funding to states or local governments that take private property for economic development.  The bill, labeled the Private Property Rights Protection Act (H.R. 1443), also bars the federal government from using eminent domain for economic development purposes and gives private property owners the right to take legal action if provisions of the legislation are violated.

A copy of the bill, H.R. 1443, is available here.

The legislation was sponsored by an unusual combination of lawmakers –Wisconsin Republican Congressman James Sensenbrenner and California Democratic Congresswoman Maxine Waters.  It received nearly unanimous support, with only Michigan Democrat John Conyers voicing opposition.  Congresswoman Waters stated that her support for the bill comes in part from the idea that poor people and minorities stand the most to lose from the use of eminent domain for economic redevelopment, where powerful developers or other politically-connected people or companies may prosper at the expense of those who are poor or week.

This is the latest effort by federal legislators to curb the use of eminent domain for economic development, and to minimize abuses of the government’s condemnation power.  A similar bill was passed by the House in late 2005, months after the controversial ruling by the U.S. Supreme Court in City of New London v. Kelo, but did not gain approval in the Senate.

Washington, D.C.’s Institute for Justice wrote an op-ed piece about the anti-Kelo legislation which was published by the Washington Times, and is available here.

The current bill will now move on to the Senate for consideration.  We’ll be watching to see if this version gets any further than its predecessor.

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