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County of Monmouth v. Whispering Woods at Bamm Hollow Inc.

Decided: October 16, 1987.

COUNTY OF MONMOUTH, PLAINTIFF-APPELLANT,
v.
WHISPERING WOODS AT BAMM HOLLOW, INC., A CORPORATION, WILLIAM J. MONTANARO; FRANK DIMISA; HARRY KANTOR; VICTOR LOSQUADRO AND TOWNSHIP OF MIDDLETOWN, DEFENDANTS-RESPONDENTS. JOSEPH AZZOLINA, INDIVIDUALLY AND AS A REPRESENTATIVE OF A CLASS OF ALL THOSE PERSONS SIMILARLY SITUATED, PLAINTIFF, V. THE BOARD OF CHOSEN FREEHOLDERS OF THE COUNTY OF MONMOUTH, DEFENDANT



On appeal from Superior Court of New Jersey, Law Division, Monmouth County.

Dreier and Baime. The opinion of the court was delivered by Baime, J.A.D.

Baime

This is an appeal from a judgment of the Superior Court, Law Division, dismissing appellant County of Monmouth's action seeking to condemn property owned by respondents Whispering Woods at Bamm Hollow, Inc., Frank DiMisa, Harry Kantor and Victor Losquadro. Following a hearing, the trial judge determined that appellant had not engaged in bona fide negotiations with respondents prior to the commencement of the action, contrary to the mandate of N.J.S.A. 20:3-6. The judge also concluded that the complaint was defective because it did not provide reasonable disclosure of the information required by R. 4:73-1. In the latter respect, the judge refused to relax the rules under R. 1:1-2 despite appellant's compliance with the requirements of R. 4:73-1 some eight days after the filing of the complaint. While we find that the trial judge applied our court rules with undue rigidity and we disagree with portions of his reasoning, we nevertheless conclude that appellant's failure to comply with the statutory requisites set forth in N.J.S.A. 20:3-6 compelled dismissal of the complaint. We thus affirm.

The essential facts are not in dispute. The property in question is a 276-acre tract which presently consists of a 27-hole golf course. In 1984, William Montanaro acquired an option to purchase the property at a price of $8.2 million. We have not been apprised of the consideration paid for the option. In any event, apparently Montanaro intended to develop the property by constructing 780 townhouses and by reducing the golf course to 18 holes. Montanaro filed an application with the Middletown Township Planning Board seeking conditional use, site plan and subdivision approvals. That application generated considerable opposition, resulting in a request by the Township that the Monmouth County Board of Freeholders or the Monmouth County Parks Commission conduct a study regarding the possible acquisition of the entire tract.

Montanaro became aware of the County's interest in acquiring the property upon meeting with the latter's appraiser.

In late 1985, Montanaro attended a meeting of the Monmouth County Parks Commission, at which he urged prompt action regarding the question of acquisition. The record reflects that the matter became a subject of substantial public attention and it is uncontradicted that respondents were fully cognizant of the County's interest in the property.

Despite the possibility of condemnation, respondents entered into a contract of sale with Montanaro on January 31, 1986. The contract provided for the purchase of the property at a price totaling $16.3 million. The contract required (1) two separate cash payments of $250,000, (2) assumption of Montanaro's $4,125,000 obligation to Bamm Hollow Realty Corp., (3) a cash payment of $4.3 million at the closing and (4) a non-recourse purchase money mortgage for $7,735,000 in favor of Montanaro.

On March 6, 1986, respondents attended a meeting of the Board of Freeholders concerning a proposed bond issue to finance the acquisition of Bamm Hollow. At the meeting, respondents apprised the freeholders of their new application to the Township, which anticipated a greatly reduced use of only 215 units with 80% of the tract to remain undeveloped. See Whispering Woods at Bamm Hollow, Inc., Harry Kantor, Frank DiMisa and Victor Losquadro v. Township of Middletown Planning Board and Judith Stanley, 220 N.J. Super. 161 (Law Div.1987). The freeholders nevertheless adopted the bond ordinance.

Unbeknownst to respondents at the time of the meeting, the County had sent to them a written offer to purchase the property for $8.2 million. Apparently, the letter had been placed in the mail on March 3, 1986. The letter, which was dated February 28, 1986, noted that the "market data [and] comparable sales" approaches were considered by the appraiser and that the sum of $8.2 million represented "just compensation" for acquisition of "all the right, title and interest to the lands taken in fee."

On March 20, 1986, respondents Kantor and DiMisa, along with their attorney, met with Freeholder Thomas Powers, County Administrator Robert Collins and County Counsel Richard O'Connor. During this meeting, respondents focused the discussion on possible alternative sites for condemnation, rather than on a demand for a different purchase price. In his testimony, respondent Kantor described his motivation for not discussing the value of the property. According to Kantor, he deemed the County's offer to be "laughable." In light of what he perceived to be the incredibly low offer made by the County, it was his purpose to persuade its representatives that approaches other than condemnation of the entire tract would be both feasible and more beneficial. Among the options discussed was the purchase of another golf course in the area or the acquisition of only part of the Bamm Hollow site. Despite representations in the February 28 offer letter that the property had been appraised, Kantor "believe[d] that the offer was not based upon an appraisal but rather [was premised] upon a misunderstanding regarding the pre-existing $8.2 million [option price that had been made] approximately two years [before]." On the other hand, the County was of the view that the transaction with Montanaro was a sham, designed to create an inflated market price for the Bamm Hollow property. In that context, the County was aware of the allegation that DiMisa had previously conducted himself in a manner which, it believed, was designed to inflate the purchase price of another property.*fn1

Although the question of the value of the Bamm Hollow property had only briefly, if ever, been discussed, O'Connor filed the complaint in condemnation on April 8, 1986. The complaint did not set ...


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