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State v. Hess Realty Corp.

Decided: July 7, 1988.

STATE OF NEW JERSEY, BY THE COMMISSIONER OF TRANSPORTATION, PLAINTIFF-RESPONDENT,
v.
HESS REALTY CORPORATION, A CORPORATION OF DELAWARE, STATE OF NEW JERSEY, THE BOROUGH OF RIVERDALE, IN THE COUNTY OF MORRIS, A MUNICIPAL CORPORATION OF NEW JERSEY, DEFENDANTS-RESPONDENTS. GREG'S HESS STATION, INC., A NEW JERSEY CORPORATION, DEFENDANT-THIRD-PARTY PLAINTIFF-APPELLANT, V. AMERADA HESS CORPORATION, A DELAWARE CORPORATION, THIRD-PARTY DEFENDANT-RESPONDENT



On appeal from Superior Court, Law Division, Morris County.

Petrella, Dreier and Ashbey. The opinion of the court was delivered by Petrella, P.J.A.D. Dreier, J.A.D. (Dissenting).

Petrella

The State of New Jersey, by the Commissioner of Transportation, filed a condemnation action for certain premises owned by Hess Realty Corporation (Hess). Greg's Hess Station, Inc. (Station) was joined as a defendant because of its potential interest as a tenant, occupant or lessee on the land and premises. This appeal by Station is from orders entered on October 14, 1986 in the condemnation action dismissing its counterclaim for compensation for loss of franchise rights and from the dismissal of its cross-claim against Hess and its third-party complaint against Amerada Hess Corporation (Amerada) in which it sought a share of compensation received by them.

Hess owned the land and facilities thereon and leased same to Amerada which granted the franchise. Station operated its business on the subject property under a franchise agreement with Amerada which was for the sole purpose of operating a gasoline station limited to the sale of Amerada's products.

Station argues on its appeal that its loss of franchise rights is a separate taking of property entitling it to a separate award of compensation from the State. It also argues that even if it is not entitled to direct compensation, it is entitled to a portion of the compensation awarded to Amerada or Hess.

Gregory Forte acquired the subject franchise on January 12, 1978, with the consent of Hess, from the prior franchise holder to operate an existing Hess gasoline station on Route 23 in Riverdale. Forte as sole stockholder formed the corporation which became known as Greg's Hess on March 13, 1978, and thereafter operated the gas station in the corporate form.*fn1 On August 25, 1981 Forte signed a revised "Dealer Agreement" with Amerada which provided for yearly renewals, unless written notice not to renew was given by either party as provided by paragraph 17. That paragraph also set forth various other

bases for termination of the franchise under specified circumstances, including:

(iii) If the Station or any part thereof is taken or condemned for a public or quasi-public use, this Agreement shall, at the option of Hess, terminate as of the date title shall vest in the condemnor and Dealer shall have no claim or interest in or to any award of damages for such taking, including but not limited to any claim for the value of any unexpired portion of the term of this Agreement, and assigns to Hess all claims and rights in connection with any such taking or condemnation, and agrees to execute any documents in connection therewith or in confirmation thereof.

Hess notified Forte by letter of March 25, 1985 that his Dealer Agreement would be terminated effective June 30, 1985 as a result of the State's intended condemnation of the property. The State paid Station relocation expenses of $6,044.50 in accordance with N.J.S.A. 27:7-75 as "fixed expense in lieu of moving costs."

Initially, the State challenges the timeliness of Station's appeal filed on October 27, 1987 from the October 14, 1986 orders. Prior to Station filing its notice of appeal another panel of this court on January 5, 1987 denied Station's motion (filed October 29, 1986) for leave to appeal the 1986 orders. The Commissioners' report fixing compensation to be paid by the DOT at $372,500 was issued on September 10, 1987. This appeal was filed thereafter.*fn2 Although the jury trial has not yet been held, Station appealed from the October 14, 1986 orders of dismissal asserting that "all issues, as to all parties under docket No. L-29215-86, were disposed of by the filing therein of the Report of Commissioners on September 10, 1987." The jury trial as to damages was to be instituted under a different docket number.

The State correctly points out that Station should have filed a notice of appeal from the judgment appointing Commissioners, rather than having moved for leave to appeal (which was denied by ...


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