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State v. Willett Holding Co.

Decided: January 25, 1972.

STATE OF NEW JERSEY BY THE COMMISSIONER OF TRANSPORTATION, PLAINTIFF-APPELLANT,
v.
WILLETT HOLDING COMPANY, A CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANT-RESPONDENT



Labrecque, Lane and Lora. Lane, J.A.D. (dissenting).

Per Curiam

The only point raised by plaintiff is that "The costs incurred by the condemnee in obtaining certain finance commitments attributable to its development activities and business venture are noncompensable in a condemnation proceeding." In the context of the facts adduced, we find it to be without merit.

The parcel taken consisted of 20 acres out of a 50-acre tract owned by defendant. It was difficult of access and both parties argued that its highest and best use was as a site for a nursing home. At the time of the taking it was being developed for that purpose and the nursing home itself had been partially completed.

The owner was entitled to recover a sum equal to the value of the parcel taken and the damage to the 30 acres remaining in the tract. On the issue of the value of the parcel taken, the parties stipulated that the reproduction value of the partially completed nursing home, as of the time of the taking, was $314,634. Hendricks, defendant's expert, testified that, without giving consideration to the value of the partially completed nursing home or the financial commitments on the basis of which it was being constructed, the value of the parcel taken and the damage to the remainder amounted to $336,300. In his opinion the full value would be more than the sum of $336,300 and the stipulated $314,634 because of the existence of the mortgage financing arrangements. There was testimony that these financial commitments were assignable. It was therefore proper to permit the jury to consider this factor in arriving at its lump sum award.

Hendricks testified that the mortgage financing arrangements increased the value, as given by him, "by at least the cost of this mortgage financing" (emphasis added) and opined that a prudent willing buyer in a transaction of this type would pay "dollar for dollar" the cost of the mortgage commitments and financing fees. Proof was adduced that the cost of obtaining the mortgage commitments had been $48,883.50 but this figure was later reduced to $43,450 by the court.

Plaintiff challenges the receipt of testimony as to the cost to the owner of such financing and its consideration by the jury. We fail to see how it was thereby prejudiced. Clark, plaintiff's expert, while taking the position that they were not compensable, conceded that the financing arrangements made the property more attractive to a buyer in 1967 and that in 1970 it would have made a "tremendous difference." Had Hendricks testified that in his opinion the land value was $379,750 ($336,300 plus $43,450), it concededly would have been a proper item for consideration by the jury. His testimony that his figure for the bare land, $336,300, was

enhanced by at least the cost of financing ($43,450), and that a willing buyer would pay a willing seller "dollar for dollar" the cost of financing, was no less so.

We are convinced that, considering the charge as a whole and in the light of the unique factual pattern before the court, the jury was correctly instructed as to the manner in which it was to consider this portion of the testimony. We are not prepared to assume that the jury disregarded the court's charge.

As to the cross-appeal, we are in accord that interest should have been allowed for the period from July 1, 1970 to July 31, 1970. The judgment should be modified accordingly to provide for additional interest of $547.50.

The judgment, as modified, is affirmed.

LANE, J.A.D. (dissenting). The State appeals from a condemnation award. The parties stipulated that the highest and best use of the land was for a nursing home on the lands. Before the taking the property owner had obtained construction and permanent mortgage commitments. There was testimony that the commitments were assignable and that the existence of the commitments would increase the value of the land. The trial court allowed the jury ...


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