The opinion of the Court was delivered by Handler, J. Chief Justice Poritz and Justices Pollack, O'hern, Garibaldi, Stein and Coleman join in Justice Handler's opinion.
The opinion of the court was delivered by: Handler
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
State of New Jersey v. Fred and Geraldine Weiswasser and Township of Hainesport 149 N.J. 320, 693 A.2d 864 (A-54-96)
Argued November 19, 1997 -- Decided May 20, 1997
HANDLER, J., writing for a unanimous Court.
The issues in this appeal are whether, in determining just compensation in a partial-taking condemnation case, evidence of damages, or the mitigation thereof, may include the availability and value of replacement property and whether the severance damages may include the loss of visibility of the remainder property as a result of reduced highway frontage.
Fred and Geraldine Weiswasser owned property in Burlington County, consisting of over 112 acres of undeveloped land, which had sections of road frontage on Route 38 and Bullshead Road. Some of the property located along Route 38 was zoned for commercial use. The bulk of the property, however, was zoned for residential use. When the Weiswassers purchased the property, they had intended to develop it.
The State took a portion of the property located along Route 38 to construct a jughandle. It also acquired an easement over a band of the property surrounding that section. As a result of the taking, the Weiswassers were left with only three sections of frontage on Route 38 of varying widths and one section of frontage along Bullshead Road.
The State filed a Complaint in Condemnation on October 15, 1986 and offered the Weiswassers $165,000 as compensation for the property taken, which they rejected. Thereafter, commissioners were appointed to determine just compensation. Subsequent to the commissioners' hearing, the State proposed to resolve the suit through the purchase by the State of property contiguous to the Weiswasser property, known as the Firth property. Acceptance of that property by the Weiswassers as part of the compensation for the taking would have left them with greater frontage remaining on Route 38. The parties never reached any settlement over the Firth property.
After continued extensive negotiations, which included the exchange of appraisers reports and pretrial motions for evidentiary rulings, the matter was scheduled for trial. During an earlier pretrial motion, the trial court had ruled that the State would be precluded from introducing its purchase of the replacement (Firth) property as evidence of just compensation. At trial, the primary evidence offered by the Weiswassers was the testimony of their appraiser. The State also offered testimony of their appraiser, who assessed damages in the amount of $204,000. He had earlier submitted a higher valuation, which included the increase in development costs due to the Weiswassers' inability to exhibit model homes within view of Route 38 because the taking had deprived them of their only frontage sufficiently large for that purpose.
The jury award of just compensation in the amount of $204,000 was appealed by the State and cross-appealed by the Weiswassers. The Appellate Division affirmed the jury verdict.
The Supreme Court granted the State's petition for certification.
HELD: Evidence of availability and use of replacement property may be used in mitigation of damages in determining just compensation in a partial-taking condemnation case; just compensation requires compensation for the diminution of value of the remainder property that is specifically attributable to visibility lost as a direct result of the removal of other portions of the property through a partial-taking condemnation.
1. Where only a portion of a property is condemned, the measure of damages includes both the value of the portion of land actually taken and the value by which the remaining land had been diminished as a consequence of the partial taking. (p. 10)
2. Most cases that have considered mitigation of damages in a partial-taking condemnation action have done so where the cost of cure is based on actions that can be taken by the owner-condemnee relating directly to the remaining property. (pp. 10-12)
3. The duty of a landowner to mitigate damages, which implicates actions involving both the property taken and property not owned by the condemnee presents an issue of first impression in New Jersey. (pp. 13-14)
4. The application of the doctrine of mitigation of damages in the form of evidence of replacement property has been opposed as amounting to specific performance. (pp. 14-16)
5. The availability and use of replacement property can be a material consideration that is relevant to market value as the basis for just compensation, just as it can be a factor in the negotiations between a willing buyer and seller. (pp. 16-17)
6. Evidence of available replacement property in mitigation of damages does not equate with compelling the condemnee to purchase the property. Rather, the key to the relevance of action taken in mitigation of damages is whether such action is fair and reasonable, a determination which may be made by comparing the replacement property to the property taken. (pp. 17-21)
7. Because the duty to mitigate damages involving the availability and use of replacement property represents a departure from existing law, the rule should be applied only prospectively, except in respect of cases pending in the trial courts, where the rule may be applied on the application of either party for good cause. (pp.21-22)
8. Loss of visibility as an element of severance damages may be related to a loss of access and the basis for the compensability for such damages would be whether the loss is attributable to the taking of the property itself or off-site conditions. (pp.23-31)
Judgment of the Appellate Division is AFFIRMED.
CHIEF JUSTICE PORITZ and JUSTICES POLLACK, O'HERN, GARIBALDI, STEIN and COLEMAN join in JUSTICE HANDLER'S opinion.
The opinion of the Court was delivered by
In this case, the State of New Jersey condemned a small section of a large tract of undeveloped property fronting on a major highway. As a result of the partial taking, the property owners lost their widest stretch of contiguous highway frontage.
In the course of extended settlement negotiations, prolonged pretrial proceedings, a commissioners' hearing with an award of compensation, and pretrial motions for evidentiary rulings, the parties raised arguments over the admissibility of evidence that present issues to be determined on this appeal. Those issues are whether, in determining just compensation in a partial-taking condemnation case, (1) evidence of damages, or the mitigation thereof, may include the availability and value of replacement property; and (2) severance damages may include the loss of visibility of the remainder property as a result of reduced highway frontage.
The property that is the subject of this condemnation action is located in Burlington County and is owned by defendants, Fred and Geraldine Weiswasser. They bought the property as an investment and planned to develop it. The property consisted of 112.38 acres of undeveloped land, which had road frontage on Route 38 and on Bullshead Road. The sections of the property fronting on Route 38 were approximately 110 feet, 54 feet, 278.5 feet, and 62 feet in width. The property between the 278.5 foot frontage and the 62 foot frontage sections was a 0.37 acre parcel owned by third parties, the Firths. The frontage on Bullshead Road is approximately 135 feet wide and three to four feet below the road grade. Approximately 19 acres of the Weiswasser property located within five hundred feet of Route 38 were zoned for commercial use. The bulk of the Weiswasser property, approximately 93.38 acres, was zoned for residential use. Although defendants had never applied for access permits, access would have been permitted at all points of frontage.
The State took a 0.39 acre crescent-shaped section of the Weiswasser property in fee simple to construct a jughandle on Route 38. It also acquired a slope easement over a 0.105 acre band of property surrounding the section taken in fee simple. The section taken included 255 feet of frontage from the property's largest section on Route 38, thereby reducing the width of that section along the highway from 278.5 feet to approximately 24 feet. As a result of the taking the owners were effectively left with only three sections of frontage on Route 38, of widths of 62, 54, and 110 feet, respectively, and the 135 foot stretch of frontage on Bullshead Road.
The State filed a Complaint in Condemnation on October 15, 1986, and offered the Weiswassers $165,000 as compensation. The Weiswassers rejected that offer. The State then deposited $165,000, its estimate of just compensation, with the court and filed a Declaration of Taking on November 13, 1986. On January 8, 1987, the court entered a final judgment on the State's exercise of its eminent domain power and appointed commissioners to determine just compensation. The State later revised its estimate upward and deposited an additional $4,000 with the court on February 10, 1988. The Weiswassers withdrew those sums from the court, having ...