Before Judges Baime, Conley and A.a. Rodr¡guez.
The opinion of the court was delivered by: The opinion of the court was delivered by Baime, P.j.a.d.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
On appeal from Superior Court of New Jersey, Law Division, Atlantic County.
The Eminent Domain Act of 1971, N.J.S.A. 20:3-1 to -50, provides three alternative valuation dates: the date the condemnor takes possession of the property, N.J.S.A. 20:3-30(a); the date on which the condemnation action is commenced, N.J.S.A. 20:3-30(b); and the date on which action is taken by the condemnor which substantially affects the condemnee's use and enjoyment of the property, N.J.S.A. 20:3-30(c). Just compensation is determined by the value of the property as of the earliest of these dates. N.J.S.A. 20:3-30. At issue is whether interest on a condemnation award runs from a date of valuation which is triggered by something other than an actual taking or the filing of a condemnation complaint. Ancillary issues concern the appropriate rate of interest on a condemnation award. We hold that interest on a condemnation award runs from either the date of commencement of the action or the date of actual taking, whichever is earlier. We also conclude that the interest rates set by R. 4:42-11 may be applied to a condemnation award depending upon the period of time in which the condemnation action was pending, the extent to which commercial interest rates fluctuated, and other relevant factors.
The salient facts are not in dispute. In May of 1991, the Casino Reinvestment Development Authority announced its plans to proceed with its northeast inlet redevelopment project. Walter and Virginia Hauck owned six contiguous lots within the project area. Situated on the lots were two single-family residences, vacant land, and a commercial building in which the Haucks operated a marine supply store. Although the property was in a residential zone, the Haucks had obtained a variance permitting them to operate the supply company. It is unclear whether variances were obtained for the other lots, a point to which we will return later in our opinion. In any event, the Haucks closed the marine supply store in 1988, but continued to use the building for storage.
Subsequent to its announcement of the project, the Authority scheduled a series of meetings with property owners affected by the development plan. The Haucks attended a meeting conducted in June 1991, during which an acquisition and relocation schedule was distributed. The schedule indicated that appraisal inspections would begin in mid- June 1991 and that relocations would commence the following month. Each property owner received a pamphlet noting that the Authority had issued its final approval of the project and that the development plan involved acquisition of all properties in the project area.
On February 17, 1993, the Authority filed a complaint for the condemnation of the Haucks' six lots. Based upon pre-condemnation appraisal reports, the Authority offered the Haucks $216,000 for the six properties. The parties thereafter sought a hearing to determine the date for valuing the lots. Following an evidentiary hearing, the Law Division issued a letter opinion in which it found that "as early as June 1991, [the Haucks'] use and enjoyment of [their] property had been affected by the actions of the [Authority]." The court concluded that the Authority's conduct "constituted a direct, unequivocal, immediate and easily observable interference with [the Haucks'] use and enjoyment of [the] property that was traceable to the condemnation." Rejecting the Authority's argument that the date of filing its complaint should control, the court held that the value of the property in June 1991 should be the barometer for determining just compensation.
The case was first tried in August 1996. The Authority offered expert testimony that the value of the six lots totaled $220,000. The Haucks asserted that the properties were worth $536,000. The jury found that the fair market value of the lots in June 1991 was $230,000. The Haucks moved for a new trial, contending that the Law Division erred in its instructions by telling the jury that the variance permitting the commercial use of the property pertained solely to one of the six lots. The Law Division granted the Haucks' motion. In its memorandum decision, the court determined that a jury question was presented respecting whether variances had been obtained for all of the lots, and that it had committed error by deciding the factual issue as a matter of law.
The case was retried in June 1997. The jury returned a verdict of $281,100. The Haucks moved for the award of interest on the amount of the jury's verdict in excess of the sum the Authority had deposited. In their application, the Haucks asked the court to apply an interest rate of 12.1% per annum, and asserted that interest should run from June 1991, the date fixed for valuation of the property. The Law Division applied the rates of interest set by R. 4:42-11. In reaching this Conclusion, the court reasoned that the interest rates had not fluctuated during the pendency of the condemnation proceedings and that the Haucks' unreasonable demands had "contribut[ed] to the delay" in disposing of the case. The court also concluded that interest should run from the date that the condemnation complaint was filed.
The Haucks appealed, contending that interest should be computed based upon the valuation date set by the court, and that the interest rate applied by the Law Division was insufficient to compensate them for their loss. The Authority cross-appealed, asserting that the Law Division erred by granting a new trial. We granted motions to intervene filed by the Attorney General, the Township of West Windsor and Yvette Nierenberg. We now affirm the judgment with minor modifications.
We first address the Haucks' argument that interest should run from the date of valuation, June 1991. Two statutory provisions are implicated by the Haucks' contention. ...