On appeal from the Superior Court of New Jersey, Law Division, Burlington County.
Petrella, Shebell and Landau. The opinion of the court was delivered by Shebell, J.A.D.
Plaintiff, State of New Jersey, by the Commissioner of Transportation, appeals from the August 17, 1988 order of the Law Division which dismissed its complaint for condemnation of a portion of lands owned by defendants Mr. and Mrs. Philip R. T. Carroll (hereinafter referred to in the singular, Carroll) along Route 38 in Mount Holly. The trial court held that the filing of the condemnation action was premature under N.J.S.A. 20:3-6, which provides that no action to condemn shall be instituted unless bona fide negotiations have been completed. We affirm.
The New Jersey Department of Transportation (DOT) notified defendant Carroll by letter dated August 11, 1986 that the State required a portion of his property for the Route 38 project. The letter noted that Carroll would soon be contacted by the State's appraiser, and further stated:
Negotiations are scheduled to begin following the completion and review of the appraisals. Prior to visiting your property to meet with you, our representative will individually contact you to arrange mutually convenient appointments. The negotiators will be prepared to explain the basis of the State's monetary offer and to answer any questions that you may have regarding the transactions.
Defendant was contacted and an appointment was arranged for the appraisal for March 13, 1987. The appraisal set the fair market value of the taking at $14,500. A negotiator for the Bureau of Acquisition in the Division of Right of Way, DOT, met with Carroll in his home on July 8, 1987 and presented him with a copy of the appraisal. She stated in her certification in opposition to defendant's motion to dismiss, "I attempted to explain the appraisal process, but Mr. Carroll stated that the offer was much too low and there was no need to discuss the matter any further. He requested that I leave and I did so."
On July 17, and again on August 5, 1987, the negotiator attempted to arrange a meeting with Carroll to discuss the State's offer. Defendant maintained his position that there was no need to meet, as he would not accept the State's offer unless the State agreed to compensate him for the trees which were located on the parcel the State would be taking and agreed to
change its method of appraisal. The negotiator told Carroll that the appraiser had determined that in this case the trees did not enhance the value of the property, and that the front-foot appraisal method desired by Carroll was inappropriate as he was not losing the entire buildable depth behind the frontage. Carroll responded that if the appraisal could not be changed, then the matter should be submitted to the courts for resolution.
A DOT representative stated in a letter dated August 11, 1987:
Although we do understand and sympathize with your concern for the trees, in the absence of a professional appraisal which would support the notion that land is more valuable with trees than if there were no trees, we cannot change our appraisal or offer. Further, as explained by [our negotiator], the front foot unit value is defined as one foot along the frontage plus the rectangle behind it to the maximum buildable depth. Since our taking only involves a small portion of the entire buildable depth behind the frontage, front feet is not an appropriate unit to estimate value. The square foot unit of value is the more applicable unit of measurement in this instance.
We will submit this case for management review and continue negotiations at the next level to protect your rights. This step results in an overwhelming percentage of agreements, and we are confident this will be the outcome for you.
We would like to continue negotiations with you if you feel it's possible to resolve this matter. Unless we hear from you within 5 days after receipt of this letter, we will assume that you are unwilling to accept our proposed settlement at this time, and we will submit this case to our management for reassignment and preliminary condemnation proceedings so that we can move promptly to an independent finding of value should further negotiations not reach an amicable solution.
Carroll responded by letter dated August 25, 1987, in which he stated:
For the record, I do not feel that thus far any negotiations have been conducted. I was given a single appraisal report which on its face was defective and unworthy of discussion. Nonetheless, I am perfectly willing to enter into good faith negotiations and for that purpose will write to you as soon as I can setting forth my viewpoint of the compensation and damage to which I am entitled pursuant to the Eminent Domain Act of 1971, as amended, NJSA 20:3-1 et. seq.
The DOT representative responded by September 3, 1987 letter:
I have discussed this matter with . . . the Negotiator in this matter and we both are ready and willing to meet with you at your convenience, to negotiate this taking.
You have indicated that as soon as you are prepared, you will contact this office and arrange an appointment; accordingly, we will await your call.
Unfortunately, a letter dated September 2, 1987 was sent from the DOT, Bureau of Acquisition informing Carroll that:
Our negotiator reports that you have rejected the above offer [of $14,500]. This is to advise that unless a favorable acceptance of our offer is received by the Department of Transportation within 14 days from the date of this letter, we will have no other alternative except to assume that settlement by agreement cannot be reached and condemnation proceedings will, as a matter of necessity, be instituted.
Carroll did not respond to this communication, and the State, on October 30, 1987, filed its complaint.
The Law Division judge entered an order on November 10, 1987 providing that $14,500 be paid into court and that the State be entitled to exclusive possession of the subject portion of Carroll's property. An order to show cause was signed by the court on November 16, 1987, with a return date of February 5, 1988, providing that defendants appear and show cause why commissioners should not be appointed "to fix the compensation to be paid for the taking . . ., including the damage, if any, resulting from the taking, to any remaining property. . . ." On the return date, the court rescheduled argument after requesting briefs from the parties, and directing that the State negotiate with Carroll regarding the trees.
After oral argument on April 15, 1988, the Law Division judge took the matter under advisement, and on July 20, 1988, he handed down his written opinion. He found that federal regulations required a hearing to be held prior to the widening of the road to six lanes, but that "[t]he consequences of the breach . . . do not affect the State's condemnation proceedings. The hearing requirement is a federal requirement, and as such only affects the State's right to receive federal funds." The court in holding that bona fide negotiations had not been completed as required by N.J.S.A. 20:3-6, reasoned that "[n]egotiations cannot be bona fide when (1) a 'one price'
method is used; (2) an unintelligible and inadequate appraisal is presented to the condemnee; (3) information concerning the impact of noise is not affirmatively provided to him; and (4) neighboring appraisals constituting public records are made inaccessible."
The State argues that it submitted its registered appraisal to defendant and made every effort to explain its position in response to his demands. The State urges that since defendant did not supply any contrary appraisal, it did not need to continue negotiations or change its appraisal or offer.
Defendant Carroll counters that a condemnee is not required to offer any proof to the State regarding the value of the property to be taken, relying on State, By Com'r of Transp. v. Siris, 191 N.J. Super. 261, 269 (Law Div.1983). Siris dealt with the State's burden under N.J.S.A. 20:3-12(e) to offer proof at the hearing of condemnation commissioners regarding its opinion of proper compensation for condemned property. 191 N.J. Super. at 265. The Siris court found the condemnee had no statutory burden at that hearing to offer proof. Id. at 269.
The requirement that the State negotiate with a condemnee prior to filing a complaint for condemnation is found in N.J.S.A. 20:3-6, which states:
Whenever any condemnor shall have determined to acquire property pursuant to law, including public property already devoted to public purpose, but cannot acquire title thereto or possession thereof by agreement with a prospective condemnee, whether by reason of disagreement concerning the compensation to be paid or for any other cause, the condemnation of such property and the compensation to be paid therefor, and to whom payable, and all matters incidental thereto and arising therefrom shall be governed, ascertained and paid by and in the manner provided by this act; provided, however, that no action to condemn shall be instituted unless the condemnor is unable to acquire such 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 holding the title of record to the property being ...