On certification to the Superior Court, Appellate Division.
(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).
In this appeal from a judgment in condemnation, the Court is required to consider when action of a condemning authority "substantially affects the use and enjoyment of the property" that triggers the date of valuation under N.J.S.A. 20:3-30(c).
In December 1997, a judgment of repose was entered in litigation challenging the exclusionary zoning of the plaintiff, Mount Laurel Township. The judgment designated lands owned by defendants, Richard and Lucia Stanley, as a future site of low and moderate income housing. Plaintiff did not file a complaint to condemn the property until five years later. During that period, the fair market value of defendants' property rose significantly due solely to inflationary pressures.
One of the key components in determining what constitutes just compensation for a taking under the Eminent Domain Act of 1971 is the date of valuation of the property. N.J.S.A. 20:3-30 sets forth the temporal hierarchy for determining the date of valuation as the earliest of: (a) the date possession is taken by the condemnor; (b) the date of the filing of the condemnation complaint; (c) the date on which action is taken by the condemnor which substantially affects the use and enjoyment of the property; or (d) the date of the filing of the declaration of blight or, in the case of property maintained as abandoned, the date of expiration of the condemnee's right to appeal from inclusion of the property on the abandoned property list.
Plaintiff asserts that the case is governed by N.J.S.A. 20:3-30(c), "the date on which action is taken by the condemnor which substantially affects the use and enjoyment of the property by the condemnee. . . ." It argues that under Twp. of West Windsor v. Nierenberg, 150 N.J. 111(1997), the proper date of valuation was December 3, 1997, when the judgment of repose was entered approving plaintiff's fair share housing plan that included defendants' property.
Defendants argue that the judgment of repose did not substantially affect their use and enjoyment of the property, because the later increase in value of the property was due solely to inflationary pressures and was not a result of any of plaintiff's actions, and because they continued to live on, use, and enjoy their property unabated until November 2002. Thus, defendants urge that N.J.S.A. 20:3-30(b) provides the proper standard for determining the date of valuation, specifically, "the date of the commencement of the action."
On motion, the trial court agreed with plaintiff. It cited to Nierenberg and held that the entry of the judgment of repose constituted a discrete and distinct act of the court confirming plaintiff's obligation to condemn the property in question.
The Appellate Division reversed and remanded for a new valuation proceeding using instead the May 8, 2002 filing of the complaint in condemnation as the valuation date. The panel explained that a substantial effect upon the use and enjoyment of the property is occasioned when the condemnor takes action that directly and immediately stimulates an upward or downward fluctuation in value which is attributable to future condemnation. It noted that the emphasis in Nierenberg is not that the taking is certain, but rather whether the effect of that certainty causes an increase or decrease in the property's value such that just compensation requires valuation as of the date of the effect.
The Supreme Court granted certification.
HELD: A property owner's use and enjoyment of the property is substantially affected within the meaning of N.J.S.A. 20:3-30(c) when the condemnor's action directly, unequivocally and immediately stimulates an upward or downward fluctuation in value that is directly attributable to future condemnation.
1. It is undisputed that the increase in the value of the defendants' property from the judgment of repose on December 3, 1997 until the filing of the complaint in condemnation on May 8, 2002 was "caused by inflationary circumstances," and was not the result of any act by plaintiff. Applying the hierarchy of the "earliest" events set forth in N.J.S.A. 20:3-30, the earliest event that defines the proper date of valuation for condemnation was May 8, 2002, the date of the filing of the complaint in condemnation. N.J.S.A. 20:3-30(b). (pp. 9-10)
The judgment of the Appellate Division is AFFIRMED.
CHIEF JUSTICE PORITZ and JUSTICES LONG, LaVECCHIA, ALBIN, ZAZZALI, WALLACE, and ...