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

The families who owned the Mother’s Park and Ridelot in Wayne, New Jersey were awarded $2.6 million in just compensation by  Passaic County jury last week for the taking of their property through eminent domain by NJ Transit.

Courtesy of bing.com

The property was originally acquired by DJ Properties to be converted to a restaurant, but the owner instead leased the property to the New Jersey Department of Transportation in 2002 for the park and ride use.  In a trial in Paterson where New Jersey Superior Court Judge Philip Mizzone, Jr. presided, the jury deliberated two and a half hours before awarding twice the $1.3 million offered by NJ Transit for the property three years ago.  The appraiser for the property owners, DJ Properties, estimated the property’s value at $2.9 million.  For more on this story, please click here for Nick Clunn’s article on NorthJersey.com.

The property owners in this matter were represented by McKirdy & Riskin’s John H. Buonocore, Jr., who was recently named as “Newark Area Best Lawyers Eminent Domain and Condemnation Lawyer of the Year” for 2012 by “Best Lawyers”.  For more on Mr. Buonocore’s designation by Best Lawyers, click here for an article on the Morris News Bee.

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As reported by Donna Weaver in this Press of Atlantic City article, beachfront property owners in Harvey Cedars have recently been paid constitutional just compensation for the taking of their private property rights — private beachfront – by the government.

Harvey Cedars is located on Long Beach Island.  As part of a beach replenishment project designed to provide a benefit to all shore visitors, the municipality needed to take property from the owners of beach-front homes.  Given the necessity of the takings, the New Jersey Constitution mandates payment of just compensation.  Some of the cases have been resolved without the necessity of jury trials, but as noted in the cited article, a jury recently awarded a property owner a substantial sum for the taking of their private property.

Local officials in the Press article complain about the payments made to the property owners, but should bear in mind that these owners did not ask for their property rights to be taken, and are constitutionally guaranteed to receive just compensation.

McKirdy & Riskin’s Tom Olson and Jeff Lewis acted as special condemnation counsel to John and Eileen Troast, who own one of the beachfront properties featured in the Press article. 

Shock Treatment Insufficient to Constitute Inverse Condemnation

Yesterday, a New Jersey appellate court affirmed a jury verdict awarding $195,000 in “nuisance” damages to a Brick Township couple, but refused to reverse the trial court’s finding that an electric utility company’s stray “neutral to earth” voltage running rampant through their backyard was insufficient to amount to taking. Smith v. Jersey Central Power & Light Company (A-2801-08).  Mr. Smith received his first shock treatment back in 2002 when he attempted to get into his hot tub.  The problem persisted to the point where the couple removed their swimming pool, hot tub, and children’s swing set and abandoned use the back-yard altogether for a period of time.

The jury awarded $145,000 for property damage, and $50,000 for interference with the use of the property. Prejudgment interest and a portion of taxed costs were added to the jury verdict.  Immediately after trial, the property owners installed a new swimming pool. JCP&L moved to set aside the verdict on that fact alone. That motion was denied.

The property owners appealed the dismissal of the takings claim, and the denial of taxed costs, suggesting that the circumstances constituted an inverse condemnation.  JCP&L cross-appealed on the denial of its motion to set aside the verdict and raised several trial errors.  The appellate court affirmed on all counts, specifically rejecting the property owners’ claim that a taking occurred.

The full text of the opinion may be found here.

Redeveloped shops along the Asbury Park Boardwalk

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City’s Misconstrued Settlement to Property Owners’ Not Enforceable

 A New Jersey appeals court recently held that a settlement allegedly reached with a property owner in the Asbury Park oceanfront redevelopment area was not enforceable.  Asbury Partners, as the master redeveloper of Asbury Park’s waterfront redevelopment area, had requested that the City condemn certain properties which it was unable to acquire through negotiations.  The redeveloper agreed to repay the City for the cost of acquiring the condemned properties, including property owned by the Estate of Pasquale N. Vaccaro.  The condemnation complaint against the Vaccaro Estate, as well as a second and separate complaint, alleged environmental contamination and sought funds to remediate the property upwards of $2 million at the Estate’s expense.  While the actions were pending, the City extended an offer to the Estate believing the offer was authorized by Asbury Partners.  Under the offer, the City would not seek remediation costs and the Estate could retain the $675,000 held on deposit by the courts as the City’s estimate of just compensation providing the Estate would not seek additional just compensation.  The Estate accepted the offer, but the City quickly changed its position and rescinded the offer.  The correct offer — according to the City and Asbury Partners — required the Estate to waive its rights to the deposited funds in exchange for a nominal sum and being released from any remediation liability.

 The Estate sought to have the original settlement offer enforced, which the trial court did by applying the four-part test in Conduit & Foundation Corp. v. City of Atlantic City, 2 N.J. Super. 433 (Ch. Div. 1949) (test cited here).  Partners, the redeveloper, appealed from the order enforcing the settlement and argued that the settlement was void because City was never authorized to enter into the agreement.  The Appellate Division agreed because it found material factual disputes which required an evidentiary hearing.  The Appellate Division reversed the order enforcing the settlement, and remanded the matter to the Law Division for an evidentiary hearing.

 This case reinforces the need for parties to eminent domain cases and, in particular, redevelopment takings, to ensure that any negotiations regarding a potential resolution involve all interested parties.  Here, while the City had apparently believed that it could amicably resolve the Vaccaro case, any settlement would have required input from the redeveloper who was paying for the property, and also required approval from the governing body.  A copy of the Appellate Division’s opinion in City of Asbury Park v. Estate of Pasquale N. Vaccaro, A-6233-09T4 (May 6, 2011) can be found here.

 For more on redevelopment in Asbury Park, please see the following blog posts and newspaper articles:

 Asbury Park Property Owner Wins Opportunity to Seek Amendment to Redevelopment Plan

 Eminent Domain Moves from Front Page to Big Screen

 iStar Financial takes control of Asbury Park waterfront development – Star-Ledger (12/16/2009)

 The author wishes to acknowledge the assistance of Cory K. Kestner, Esq., of McKirdy & Riskin, PA, in the preparation of this article.

A Morris County jury yesterday awarded $3,750,000 to the owner of the Traveler’s Diner in Dover, as just compensation for the taking of its property by the New Jersey Department of Transportation.  The NJDOT, which acquired the property in 2008 via eminent domain to improve the intersection of Routes 46 and 15, had originally estimated that the value of the property was under $2 million, but prior to trial obtained a revised appraisal which suggested that the value was approximately $2.5 million.  The appraiser for Traveler’s concluded that the value was $3,750,000, a figure accepted by the jury after a week-long trial before Superior Court Judge Rosemary Ramsay.

For more information on this case, read this article by Peggy Wright from the Daily Record, or the article in the Star Ledger by Ben Horowitz.

The property owner in this matter was represented by McKirdy & Riskin’s  John H. Buonocore, Jr. and Joseph Grather.

The New Jersey Schools Development Authority has obtained $6.5 million dollars from three former owners of a 14 acre property in Camden to pay for the cleanup of environmental contamination of the property, which is adjacent to a Camden Elementary School.   The property is the site of the old Stockton Station apartment complex and will be used as a park.

The contamination was alleged to occur more than 50 years ago when various parties were alleged to have dumped hazardous substances there.

The property was acquired by the New Jersey Schools Development Authority in 2007 for $8.1 million through the exercise of eminent domain.   The recent payment for environmental remediation is the result of a settlement between the State of New Jersey and the former owners which was agreed to in May of this year.

For more on this matter, read Matt Katz’s story in the Philadelphia Inquirer.

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