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Beech Forest Hills Inc. v. Borough of Morris Plains

Decided: April 8, 1974.

BEECH FOREST HILLS, INC., AND MORCAL, INC., CORPORATIONS OF NEW JERSEY, PLAINTIFFS-APPELLANTS,
v.
BOROUGH OF MORRIS PLAINS, DEFENDANT-RESPONDENT



Handler, Meanor and Kole. The opinion of the court was delivered by Kole, J.s.c., Temporarily Assigned.

Kole

Plaintiffs-landowners (hereinafter plaintiff) appeal from a judgment awarding them compensation, purportedly in accordance with Lomarch v. Mayor of Englewood, 51 N.J. 108 (1968). The events in the case arose prior to that opinion.

Our review of the record below satisfies us that, except as hereinafter stated, essentially the court's findings and conclusions are adequately supported by the evidence and the applicable law. Thus, we find no basis for disturbing, among others, its findings that the planning board or borough had not acted in bad faith and did not intentionally seek to deprive plaintiff*fn1 of the use of its land without just compensation prior to the express reservation of the park

area made on October 5, 1966; that the fair market value of plaintiff's property so reserved for park purposes was $175,000 between the period October 5, 1966 -- October 5, 1967; that, except for real property taxes, all expenses and other damages claimed by plaintiff should not be awarded, and that the appropriate period for determining the amount of compensation to be allowed is the one-year period of the actual reservation set forth in the final subdivision approval of October 5, 1966. We, however, do not agree with the court that the 6% rate of return on the fair market value of the property is a reasonable measure of just compensation under the facts and, accordingly, have made our own finding with respect thereto. State v. Johnson, 42 N.J. 146, 161-162 (1964).

We will set forth those facts found by the court below and otherwise disclosed by the record that are material to our disposition of the appeal.

Application for preliminary approval of the subdivision was made April 29, 1964. It was proposed that the premises in question be subdivided into 25 building plots.

After a regular meeting of August 11, 1964, in which Mr. Cali, plaintiff's principal participated, the planning board, on August 18, 1964,*fn2 by resolution gave preliminary subdivision approval. In accordance with a suggestion of Cali at the August 11 meeting, the August 18 resolution stated, among other things, that it was understood by the applicant that the borough was interested in purchasing a portion of the land and that the granting of the preliminary approval

would not affect its value; that the determination of such value would be made as if no application for subdivision approval had been filed; that no improvements would be installed in the proposed park area for a period of six months from the date of approval, and that the approval would not preclude the planning board from amending the master plan to reserve the land for park purposes. As indicated by the court below, the purpose of the six month period agreed upon was to enable the parties to agree upon a price for the borough's purchase of the property.

No definitive action was taken by the municipality until after the six months had expired. At a meeting of the planning board of February 9, 1965 Cali and his attorney questioned whether the land would be used for park purposes or would be acquired by condemnation within a year. Cali, however, agreed to give the planning board until the meeting of March 9, 1965 to determine what course of action it wished to pursue with respect to the proposed park land. Notwithstanding the objections of the plaintiff and its counsel, the master plan was revised on March 9, 1965 to indicate that the land in question was being reserved for park purposes. At that meeting plaintiff's attorney advised the board that, in his opinion, if the master plan amendment were effected and litigation ensued, either the amendment or the existing subdivision ordinance requiring improvements to be made before final subdivision approval would result in confiscating his client's land. There was also a discussion indicating that plaintiff, upon a showing of hardship, might obtain relief from the prior improvements portion of the ordinance when it applied for final subdivision approval.

On October 5, 1966 final subdivision approval was granted by resolution without requiring the installation of the improvements otherwise required by the ordinance, "it being understood that said final approval shall be solely for the purpose of allowing the statutory period of one year to commence running" as to park lands ...


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