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National Amusements Inc. v. New Jersey Turnpike Authority

Decided: June 26, 1992.

NATIONAL AMUSEMENTS, INC., PLAINTIFF,
v.
NEW JERSEY TURNPIKE AUTHORITY AND HERBERT I. OLARSCH, DEFENDANT



Weiss, J.s.c.

Weiss

Plaintiff filed its second amended complaint on December 17, 1990. The complaint contains four counts; Count One seeks damages from defendant New Jersey Turnpike Authority ("Turnpike Authority") for inverse condemnation; Counts Two, Three and Four seek damages from both the Turnpike Authority and Defendant Herbert Olarsch ("Olarsch"). Count Two alleges tortious interference with an economic advantage; Count Three alleges unjust enrichment and Count Four alleges economic duress. Defendants have moved to dismiss Counts Two, Three and Four pursuant to R. 4:6-2(e) for failure to state a claim upon which relief can be granted.

Both parties have submitted to the court documents not contained in the pleadings. Since the court's decision relies on

facts beyond those contained in the pleadings, defendants' motion to dismiss is converted into a motion for summary judgment. R. 4:6-2.

The following facts are undisputed. Plaintiff owns an 18.74 acre tract of land in Newark, New Jersey ("Theater Property"). The land is bounded by Foundry Street, the New Jersey Turnpike and State Highway Routes 1 and 9. Plaintiff operated a drive-in movie theater on the property from approximately 1954 to 1985. Sometime in 1984, Plaintiff began plans to develop this property as a state-of-the-art, 12 screen movie theater complex. On February 4, 1985 it obtained site plan approval and on March 6, 1985 a building permit was issued by the City of Newark. Plaintiff proceeded to demolish the existing structures and to grade the property in preparation for construction.

In or about June 1985, the Turnpike Authority announced a proposal to widen various sections of the New Jersey Turnpike. By letter dated July 5, 1985, the Turnpike Authority notified plaintiff that its proposed project would require the purchase of a portion of plaintiff's property. By letter dated August 22, 1985, the Turnpike Authority informed plaintiff that its preliminary engineering designs for the proposed project were not yet complete and advised plaintiff not to proceed with the development of its property until a final right of way line was established.

As you and your organization are aware, due to the fact that National Amusements, Inc. was about to construct its project on the subject parcel, the Turnpike Authority felt it necessary to forward your organization a notice of taking as soon as possible. As the preliminary engineering design for the entire area is not as yet completed, there is a possibility that the right-of-way line, as forwarded to you, may be modified. Therefore, National Amusements, Inc. is advised, not to proceed with any further development of the remaining portion of the property until a final, fixed property right-of-way line is established for the subject acquisition by the New Jersey Turnpike Authority.

On September 16, 1985 plaintiff responded to the Turnpike's letter, setting forth its version of prior meetings held with Turnpike personnel and the supposed cooperative progress that the two groups were making. The letter then stated:

Until the Turnpike Authority commits itself, officially and legally, to a definite and binding course of action with respect to our property, there is no assurance that the Authority will take any part of our Theatre property. Under these circumstances, we are entitled, as property owners, to proceed with the full construction of a Multiplex Theater, as nearly on schedule as possible, and we intend to do so.

In a letter dated September 23, 1985, the Turnpike Authority further advised plaintiff that the commencement of any construction by plaintiff would be done at plaintiff's risk.

To commence your construction operations after we specifically advised you of our intention can only be interpreted as a bad faith attempt to inflate the valuation of the property. This courtesy was extended to you as it was our intention for you to avoid the expenditure of funds for the short period between the date of my letter and finalization of the Turnpike Authority's plans. Should you still continue to commence construction of your project, you do so at your own peril. (Emphasis added)

In a letter dated October 4, 1985, plaintiff advised the defendants that plaintiff intended to commence construction of a theater complex on the portion of plaintiff's property excluded from the proposed taking. By letter dated October 18, 1985 the defendants again advised plaintiff that commencement of the construction would be at plaintiff's "own risk." Plaintiff built a 10 screen movie theater complex on the property, rather than the proposed 12 screen theater complex.

Upon completion of its engineering designs, the Turnpike Authority concluded that the proposed project would not require the condemnation of any portion of plaintiff's property. The Turnpike Authority communicated this decision to plaintiff on or about March 14, 1990.

The communications between plaintiff and the Turnpike Authority regarding the proposed project and the subsequent decision not to condemn a portion of plaintiff's property were executed by defendant Olarsch in his capacity as Counsel for the Turnpike Authority.

The following are the sole issues to be decided by this motion for summary judgment:

1. As a matter of law, do Counts Two, Three and Four of plaintiff's second amended complaint state a claim upon which relief may be granted?

2. Does the N.J. Tort Claims Act, N.J.S.A. 59:1-1 immunize each of the defendants from liability for the tort claims alleged in Counts Two, Three and Four ...


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