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State v. Simon Family Enterprises

March 05, 2004


On appeal from the Superior Court of New Jersey, Law Division, Atlantic County, Docket No. ATL-L-1519-00.

Before Judges Havey, Fall and Hoens.

The opinion of the court was delivered by: Hoens, J.A.D.


Argued September 22, 2003

Plaintiff, State of New Jersey, by the Commissioner of the Department of Transportation, appeals from a judgment entered following a jury verdict awarding defendant Simon Family Enterprises, L.L.C. compensation for a partial taking of a tract owned by Simon and from an order denying a new trial on that complaint in condemnation. We affirm.

The facts relevant to the dispute are as follows. Late in 1994, officials from Atlantic County approached Sydney Simon of Simon Family Enterprises, L.L.C. in furtherance of an effort to purchase a portion of a tract of land Simon owned in Egg Harbor Township. The property in question is bordered by State Highway Routes 40 and 322 (Black Horse Pike) on the southeast and County Route 563 (Tilton Road) on the northwest. Tilton Road is comprised of one traffic lane in each direction and carries approximately 18,000 vehicles per day, while the Black Horse Pike is comprised of two traffic lanes in each direction and carries approximately 40,000 vehicles per day.

The Simon parcel included a small"out parcel" near the center, owned by a Mr. Roselle, which maintained an ingress/egress easement across the Simon tract to Tilton Road. There is a McDonald's restaurant directly to the south of the tract, a mobile home park directly to the north, and a mixture of homes, businesses and vacant lots along the two bordering highways opposite the Simon property. At the time, Atlantic County was beginning a road construction project that included the elimination of the nearby Cardiff traffic circle, a part of which plan included the creation of a connecting road between the Black Horse Pike and Tilton Road. Completion of that aspect of the project required the acquisition of a part of the Simon tract where the contemplated connecting roadway would be built. For reasons not revealed in the record, negotiations stalled until the State became involved with the project approximately two years later.

The State and Simon then attempted to negotiate a mutually agreeable price for the sale of the subject portion of the property, estimated to be approximately one-third of the Simon tract. Those negotiations ended with the State's offer of $308,000 for the parcel, which Simon rejected. As the negotiations had failed, the State, through the Department of Transportation, filed a complaint in condemnation on May 5, 2000, followed by a declaration of taking, pursuant to which the State acquired 2.562 acres of the 9.713 acre tract owned by Simon on June 20, 2000. As required, at the same time the State deposited $308,000 with the court representing its evaluation of just compensation.

As part of the construction project, a new road, Uibel Avenue, was constructed on the eastern portion of Simon's tract, connecting Tilton Road with the Black Horse Pike. After the taking, the Simon parcel's available frontage on the Black Horse Pike was reduced from 953 feet to 553 feet and the available frontage on Tilton Road was diminished from about 477 feet to about 100 feet. In addition, the elimination of Cardiff Circle and the creation of the Uibel Avenue intersection reduced the possible use of the remaining Tilton Road frontage as a means of ingress to and egress from the tract by effectively eliminating sufficient distance from the tract to the intersection for safe ingress or egress of vehicles onto the roadway.

In September 2000, after the taking, Simon entered into a land purchase option agreement to sell the remainder of his tract to WAWA Incorporated ("WAWA"), for $325,000 per acre. The option agreement included a provision giving WAWA the right to terminate the agreement if the required permits and approvals it would need to develop the parcel for its purposes could not be obtained within 450 days. The permits and approvals WAWA needed related to creating a means of ingress to and egress from Tilton Road either by way of permit or additional property acquisition. WAWA and Simon entered into a new option agreement, however, when WAWA could not arrange for the required approvals within the allotted time. That option extension fixed the price of the parcel at $322,000 per acre and included three additional option periods extending through December 15, 2002. The extension agreement, however, also obligated WAWA to take the parcel at the full price even if it could not obtain approval for a means of ingress to and egress from Tilton Road or purchase an adjacent property to provide that access. Prior to the trial on the condemnation complaint, WAWA obtained the development approvals from Egg Harbor Township and it purchased an adjacent tract of land from its owner, Mr. Barr, which provided it with full ingress to and egress from the site and Tilton Road. In the interim, on March 21, 2001, the court-appointed commissioners issued their report declaring just compensation for the taking. The commissioners considered the evidence presented by both parties and fixed compensation at $360,000 representing both the fair-market value of the taken portion of the tract and damages to the remaining property.

At the beginning of the trial, the judge ruled that evidence relating to the WAWA option contract was admissible in spite of the contingencies that contract contained but he excluded evidence relating to the Barr transaction and its effect on the value of the remaining tract. At trial, the jury heard both parties present expert testimony with respect to the highest and best use of the property and concerning the potential development proposals for the tract before and after the taking and they heard expert testimony about the fair market value of the property. The State's expert calculated just compensation to be $400,000, while Simon's expert arrived at a figure of $2,122,000. After a six-day trial, the jury returned a verdict of $1,710,000 consisting of $850,000 in compensation for the land that was taken and $860,000 representing damages to the remainder of the tract. The State's motion for a new trial was denied for reasons the judge expressed on the record on July 3, 2002.

On appeal, the State contends that the trial court erred in its analysis of the admissibility of evidence relating to the WAWA contract and the acquisition of the Barr property. The State argues that the trial court abdicated its role as the gatekeeper of evidence by improperly permitting Simon's expert to testify about a highest and best use of the property that was not financially feasible and in keeping from the jury evidence that would have demonstrated that the taking did not diminish the value of the remainder. Moreover, the State urges us to conclude that the jury's award was against the weight of the evidence. We address these issues in turn.

Each of the issues raised in this appeal relates to the admissibility of evidence and to the uses to which evidence may properly be put in the context of expert opinions offered in condemnation matters. Each, therefore, requires us to address not only the evidence in issue, but its role in the opinions offered by each of the experts and the uses of that evidence by those experts in the condemnation context.

The first issue on appeal, relating to the WAWA contract, raises an issue first addressed by our Supreme Court in State by Comm'r of Transp. v. Caoili, 135 N.J. 252 (1994), namely, the role of the trial judge as the gatekeeper of evidence to be considered by the jury in condemnation trials. The essential issue raised by the State in this regard is whether the WAWA contract could be essentially repudiated by Simon's experts as being irrelevant to any of the elements of the proofs in the condemnation proceeding.*fn1 In the State's analysis, this attempted repudiation of the post-taking ...

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