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State v. Town of Morristown

Decided: July 27, 1992.

STATE OF NEW JERSEY, BY THE COMMISSIONER OF TRANSPORTATION, PLAINTIFF-APPELLANT,
v.
TOWN OF MORRISTOWN, IN THE COUNTY OF MORRIS, A MUNICIPAL CORPORATION OF NEW JERSEY, DEFENDANT-RESPONDENT, AND D.M. AIRPORT DEVELOPERS, INC., A CORPORATION OF NEW JERSEY; THE LINPRO COMPANY, A CORPORATION OF TEXAS; AMERICAN TELEPHONE AND TELEGRAPH COMPANY, A CORPORATION OF NEW YORK; TOWNSHIP OF HANOVER, IN THE COUNTY OF MORRIS, A MUNICIPAL CORPORATION OF NEW JERSEY, DEFENDANTS.



On certification to the Superior Court, Appellate Division, whose opinion is reported at 246 N.J. Super. 156 (1991).

Clifford, Wilentz, Handler, Pollock, O'Hern, Garibaldi, Stein

Clifford

The opinion of the court was delivered by

CLIFFORD, J.

In this eminent-domain proceeding arising out of the Department of Transportation's construction of a State highway, the condemnee requested, before a condemnation complaint had been filed, that the condemnor provide copies of its appraisal reports on neighboring properties. In modifying the Law Division's judgment granting the requested relief, the Appellate Division held that a court can order the production of such information, if relevant, at either the pre-litigation phase, the Commissioner of Transportation's hearing phase, or the trial phase of the proceedings. State, Comm'r of Transp. v. Morristown, 246 N.J. Super. 156, 166 (1991). We granted certification, N.J. (1992), to review that determination only as it relates to pre-litigation disclosure, and now reverse.

To construct an interchange on State Highway 24, DOT decided to condemn about seven acres of the Morristown Airport, owned by the Town of Morristown. In March 1989, DOT received two reports appraising the value of that property. one, the so-called Schwartz appraisal, valued the property at $1,445,400; the other, the Griffin appraisal, valued the property at $1,668,000. On May 12, 1989, DOT, relying on the Schwartz appraisal, offered to purchase the property from the Town for $1,445,400, attaching to its written offer a copy of that appraisal. The record discloses little about subsequent negotiations, but on December 14, 1989, the State, by the Commissioner of Transportation, filed a condemnation complaint alleging that DOT had been unable to acquire the property through bona fide negotiations with Morristown. However, DOT did not serve the Town with a copy of the condemnation complaint and order to show cause until January 11, 1990.

Apparently unaware that DOT had filed its complaint, Morristown requested more information from DOT in a letter dated December 18, 1989. Morristown asked DOT for a copy of all other appraisal reports concerning the property, and "copies of any and all appraisals prepared or commissioned with respect to neighboring properties, whether contiguous to the subject property or not, and located in the same zone as the subject property." That DOT possessed appraisals of neighboring properties is undisputed, but the record is silent concerning the circumstances under which and the purposes for which DOT acquired those appraisals.

On January 18, 1990, Morristown received a copy of the Griffin appraisal, but DOT refused to provide the appraisals of neighboring properties. On March 7, 1990, the Town filed an answer to the State's complaint and order to show cause, alleging, in part, that DOT had violated the Eminent Domain Act of 1971 (Act), N.J.S.A. 20:3-1 to -50. Morristown argued that by failing to provide appraisals of neighboring property, DOT had failed to engage in bona fide negotiations as required by the Act.

On April 8, 1990, the trial court ruled in favor of the State, and appointed three commissioners to determine the amount of compensation. However, paragraph eight of the order required DOT to provide "copies of appraisals on properties in the immediate neighborhood of the subject property."

After the court denied DOT's motion for reconsideration of paragraph eight, DOT appealed, arguing that the Act does not require a condemnor to make available to a condemnee any appraisals of neighboring properties during any phase of condemnation proceedings. As indicated, the Appellate Division held that neighboring appraisals "can be ordered by the court whenever it is persuaded by the condemnee that the information is relevant, whether the request be made at the pre-litigation offer stage (N.J.S.A. 20:3-6), the commissioner's hearing phase (N.J.S.A. 20:3-12), or the trial phase (N.J.S.A. 20:3-13)." 246 N.J. Super. at 166. However, the Appellate Division cautioned, "The burden rests on the party seeking such information to show that the requested discovery is relevant in arriving at a determination of fair market value. * * * The court's order, in that regard, accordingly should be very specific." Ibid.

On the question of who should pay for producing copies of appraisal reports, the Appellate Division declared that the trial court can, in its discretion, impose those costs on the condemnee. Ibid. And finally, to guard against disclosure of confidential information the Appellate Division noted that "in a particular case, a court may enter an appropriate protective order." Id. at 167. Accordingly, the Appellate Division affirmed in part the trial court's "general approach," but remanded for entry of a more specific order. Ibid.

On remand, the trial court again ordered DOT to produce the appraisals of neighboring properties. Although DOT has since complied with that order and although it agrees with the Appellate Division's decision to the extent that it allows the discovery of neighboring appraisals after the condemnor has filed a complaint, DOT petitioned this Court for certification to challenge so much of the decision as establishes the condemnee's right to neighboring appraisals before a complaint has been filed. DOT argues that the inevitable result will be increased costs and delays in the construction of public projects.

Because the appeal presents a question of general public importance, we address the issue even though this case is moot. See Transamerica Ins. Co. v. National Roofing, Inc., 108 N.J. 59, 64 (1987) ("Even if a matter is technically moot, our courts may ...


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