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Nyt Cable TV v. Homestead at Mansfield Inc.

Decided: November 19, 1986.


On appeal from the Superior Court, Chancery Division, Burlington County, and the Board of Public Utility Commissioners.

Morton I. Greenberg, J. H. Coleman and Gruccio. The opinion of the court was delivered by Morton I. Greenberg, P.J.A.D.


[214 NJSuper Page 152] This matter comes on before this court on consolidated appeals from an order issued in the Superior Court, Chancery Division, a decision of the Board of Public Utilities (BPU) in a contested case and an order of the BPU adopting a rule. The controversy involves a dispute between respondent NYT Cable TV (NYT), a cable television company, and appellant Homestead at Mansfield, Inc. (Homestead), developer of a 1,187 unit planned adult community in the Township of Mansfield, concerning the right of NYT to install its cable facilities within the development and, if it has such a right, the compensation it must pay for its exercise. In addition, Homestead at Mansfield Homeowner's Association (Association) and Michael Laino and Daniel Quigley, officers and owners of Homestead, were parties or participants in the underlying proceedings with interests

similar to Homestead and are appellants here. Thus we refer to Homestead, the Association, Laino and Quigley collectively as appellants.

An understanding of the case requires a description of the development. Homestead has been constructing housing units for sale to individual purchasers who acquire their own units in fee. The project has been registered with the Department of Community Affairs pursuant to the Planned Real Estate Development Full Disclosure Act, N.J.S.A. 45:22A-21 et seq. The purchasers become members of the Association which owns or will own the common property in the development such as the club house, roads and recreational lands. Thus the development differs from a condominium project in which the unit purchasers have undivided interests in the common property. The activities of the Association are financed by monthly fees assessed to the members. Homestead's plans include installation of a bi-directional cable television system to supply ordinary television service received by a master antenna to the unit holders and to carry signals that can be directed from each unit to central locations within the development. This bi-directional system includes a central monitoring station in a guardhouse at an entrance to the development. The system allows residents to summon medical or other assistance by pushing a button near the front door of each unit. Homestead's plans also include construction of a television studio in the club house so that the residents will be able to develop their own programs and send them to each unit.

NYT is authorized to provide cable television service in the Township of Mansfield, including the area of Homestead's development, by a municipal consent ordinance and a certificate of approval issued by the BPU. Inasmuch as the Homestead system could supply some of the same programming as NYT carries, it is obvious that there is a potential for controversy between appellants and NYT. Not surprisingly a dispute did arise. On January 11, 1982, following an inquiry from NYT to Homestead concerning the installation of cable in the development,

Homestead's attorney, Frederick W. Hardt, Esq., advised NYT that Homestead wanted a bi-directional cable system installed. In response, on January 21, 1982 Don Dworkin, a group director of engineering of NYT, wrote Hardt that NYT was willing to provide the bi-directional system but without security or medical services. NYT suggested that a less costly and more reliable bi-directional system could be provided through utilization of a "twisted-pair wire" technique. On May 17, 1982, Hardt wrote NYT and described the system and services Homestead wanted installed. Hardt expressed strong reservations concerning NYT's ability to provide a system meeting those criteria and indicated that the "twisted-pair" wire technique would not provide the flexibility and versatility desired and required by Homestead. He stated that because of the inadequacies of the NYT system, Homestead would install the bi-directional system. Hardt also said that NYT could not have access to the development for its business activities.

Insofar as we can ascertain from the record, NYT did little during the next two years to facilitate installation of its system. Homestead, however, went ahead on its own and on March 11, 1983, formed a cable television company, Homestead Cable T.V. Inc., which, to implement Homestead's plan, developed an "uncertificated satellite master antenna television" (SMATV) system costing somewhere between $175,000 and $200,000. NYT, however, reactivated the matter by a letter from its attorney to Hardt on February 1, 1984 asserting it had the right of access to the development and would bring an action necessary to secure the right. Hardt by letter of February 13, 1984 responded that it was doubted that NYT was entitled to the access claimed.

On March 23, 1984, NYT filed a complaint in the Superior Court against appellants claiming that under N.J.S.A. 48:5A-49 it had a right of access to the development. Thus it sought a judgment enjoining appellants from interfering with the access and a temporary restraining order against appellants precluding

them from interfering with its access to the development.*fn1 A hearing was held on this application on March 26, 1984 at which time the motion judge orally ruled that NYT was entitled to access, the determination of the details of which was within the jurisdiction of the BPU. On July 3, 1984 he signed an order transferring the matter to the BPU to determine the "circumstances and conditions" of the access but retaining jurisdiction over the balance of the complaint. One year later on July 3, 1985 the judge signed an order on the supposed authority of R. 4:42-2 providing that the order of July 3, 1984 was "hereby certified as a Final Judgment capable of Appellate review" as there was no just reason for delay "in the review of the Order" and reserving the remaining issues which included a damages claim until "all Appellate proceedings have concluded." The order of July 3, 1985 correctly characterized the earlier order as interlocutory. On July 16, 1985 appellants appealed from the order of July 3, 1984.

Inasmuch as the judge had ruled that the BPU should determine the method of access, on April 2, 1984 NYT filed a petition with the Office of Cable Television of the BPU against appellants seeking access to the development. After appellants answered, the case was transmitted to the Office of Administrative Law as a contested case. A prehearing order was entered on August 9, 1985 specifying that the issues in the case were (1) whether NYT was entitled to access to the development; (2) whether the BPU could grant immediate access or could only authorize NYT to proceed under the Eminent Domain Act of 1971, N.J.S.A. 20:3-1 et seq.; (3) whether, assuming NYT otherwise had a right of access, it should be curtailed because of the public interest in the bi-directional system; (4) the terms and conditions of access; and (5) whether the BPU could make the determination of the amount of just compensation.

At the subsequent hearing NYT demonstrated that it would install its lines, which were 26 miles in length, by making use of existing telephone and electricity easements. While there was evidence that the NYT and Homestead systems are not technically incompatible, absent cooperation between the parties the systems would operate separately making it improbable that a resident would pay for both services. Thus if a resident subscribed to the NYT system it would limit the effectiveness of the security aspects of the bi-directional system. Further, selection of the NYT system by a large number of residents could compromise the economic feasibility of the bi-directional system.

The parties presented expert testimony on the calculation of just compensation. William Ard, a licensed real estate broker in New Jersey specializing in appraisals, testified for NYT that there would be no damage or reduction in value to the property from NYT having access and thus just compensation for the access was $1.00. Ard, however, did not do any market studies to support his result. Rather, in his words, he "applied reason to the problem."

Harry A. Carroll, an appraiser and president of a real estate appraisal firm which concentrates almost exclusively on appraisals, market studies and economic feasibility studies, and who was familiar with the Homestead development having done appraisals there, testified for appellants. He developed figures based on linear feet calculations and arrived at the conclusion that NYT should pay $3.20 per linear foot in improved areas and $2.50 per linear foot in unimproved areas.

On March 11, 1985 the administrative law judge issued his initial decision. He ruled that NYT should have access to the development and he approved its proposed method of installation. He also determined that NYT should pay $1.00 as just compensation for the taking. On May 3, 1985 the BPU adopted the initial decision as a final order except ...

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