[235 NJSuper Page 349] N.J.S.A. 20:3-6 provides, with certain exceptions, that no action to condemn shall be instituted unless the condemnor has engaged in bona fide negotiations with the condemnee. Those negotiations must include a reasonable disclosure of the manner in which the amount of offered compensation was calculated. At issue here is the scope of the required disclosure. Does the term "reasonable disclosure" compel the condemnor to give the condemnee a copy of all appraisals which it has obtained for the purposes of making its condemnation offer?
After negotiations to acquire defendant's*fn1 property proved fruitless, the plaintiff filed a complaint in condemnation and thereafter brought an order to show cause for the appointment of commissioners and judgment confirming plaintiff's right to condemn. The defendant's answer raised numerous objections to the entry of the order. All of those objections have since been resolved except for the issue of plaintiff's obligation to divulge all appraisals in its possession. The plaintiff concedes that it has more than one appraisal but is only willing to provide its approved appraisal.*fn2 The defendant asserts a right to have the complaint dismissed because the plaintiff failed to give him a copy of all the appraisals.
The scope of required disclosure as part of pre-litigation bona fide negotiations has expanded dramatically in recent years. There was a time when the condemnor could merely make an offer without disclosing how the figure was developed. The 1965 report of the Eminent Domain Revision Commission recognized this evil. The Commission concluded that if fair offers were made based upon appropriate data disclosed to the owner, many attempted acquisitions would be completed amicably without subjecting the condemnor or the owner to expense and delay. It recommended that no taking should be instituted until bona fide negotiations, which include reasonable disclosure of the basis of the offer, had failed. Eminent Domain Revision Commission, Report, at 16-17 (1965).
Those recommendations were embodied in N.J.S.A. 20:3-6, which provides in part:
[N]o action to condemn shall be instituted unless the condemnor is unable to acquire . . . title or possession through bona fide negotiations with the prospective condemnee, which negotiations shall include an offer in writing by the condemnor to the prospective condemnee . . . setting forth . . . the compensation
offered to be paid and a reasonable disclosure of the manner in which such offered compensation has been calculated, and such other matters as may be required by the rules. Prior to such offer the taking agency shall appraise said property and the owner shall be given an opportunity to accompany the appraiser during inspection of the property.
The mandate of the statute is also reflected in R. 4:73-1, which provides in part:
Unless the court for good cause orders otherwise, reasonable disclosure by the condemnor shall include furnishing the condemnee with the map and a description of land to be acquired and identity of improvements to be acquired, if any; a statement of the full fair market value including a description of the appraisal valuation method or methods relied upon as well as a breakdown of the appraised value allocated to the land to be acquired, and improvements to be acquired, if any; and data concerning comparable sales or leases relied upon in determining the amount of compensation . . . and any unusual factors known to the condemnor which may affect value.
Neither the statute nor the rule explicitly require the condemnor to reveal any appraisal. The question of whether it is obligated to reveal its approved appraisal was addressed in dicta in State v. Siris, 191 N.J. Super. 261 (Law Div.1983). Judge Haines said: "My reading of the statute requires the State to disclose its complete appraisal information during pre-litigation negotiations." Id. at 268; emphasis in original. That statement was dicta because the application to the court in Siris was made after the condemnation commissioners started their hearing to determine value. The pre-complaint negotiations had already been completed so that the question did not arise within the context of reasonable disclosure as part of bona fide negotiations. However, in State v. Hancock, 208 N.J. Super. 737 (Law Div.1985), aff'd., 210 N.J. Super. 568 (App.Div.1985), Judge Haines made the Siris dicta the holding by deciding that the statute requires disclosure of the condemnor's complete appraisal information during pre-litigation negotiations. Id. at 742. The Appellate Division, affirming Hancock and expressly approving the Siris opinion, held that "In the field of condemnation, 'government has an overriding obligation to deal forthrightly and fairly with property owners.'" 210 N.J. Super., at 570; citation omitted.
The Hancock requirement that the state disclose its "complete appraisal information" is not dispositive of the issue before this court. Since Hancock involved only one appraisal, the state has read that decision to require it to disclose its approved appraisal but not any other appraisals it may possess. Thus, the essential issue in this case is whether a disclosure is adequate if it includes only the approved appraisal or, put another way, ...