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Township of Piscataway v. South Washington Avenue LLC

May 14, 2008

TOWNSHIP OF PISCATAWAY, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
SOUTH WASHINGTON AVENUE, LLC; RUTH HALPER, EXECUTRIX OF THE ESTATE OF HERBERT HALPER; LAURENCE HALPER; MARK HALPER; RUBY HALPER-ERKKILA, M.D.; AND FAITH ROST, DEFENDANTS-APPELLANTS, AND UNITED STATES OF AMERICA; STATE OF NEW JERSEY; JERSEY CENTRAL POWER & LIGHT CO.; TEXAS EASTERN TRANSMISSION CORP.; PUBLIC SERVICE ELECTRIC & GAS CO.; HELEN HARPER; SIMON HALPER; BELLA HARPER; RONALD HALPER, BONNIE HALPER; AND CINDY HALPER-RAIMAN, DEFENDANTS.
TOWNSHIP OF PISCATAWAY, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-APPELLANT,
v.
SOUTH WASHINGTON AVENUE, LLC; RUTH HALPER, EXECUTRIX OF THE ESTATE OF HERBERT HALPER; LAURENCE HALPER; MARK HALPER; RUBY HALPER-ERKKILA, M.D.; FAITH ROST; RONALD HALPER; BONNIE HALPER; AND CINDY HALPER-RAIMAN, DEFENDANTS-RESPONDENTS, AND UNITED STATES OF AMERICA; STATE OF NEW JERSEY; JERSEY CENTRAL POWER & LIGHT CO.; TEXAS EASTERN TRANSMISSION CORP.; PUBLIC SERVICE ELECTRIC & GAS CO.; HELEN HARPER; SIMON HALPER; AND BELLA HARPER, DEFENDANTS.



On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, L-11715-99.

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

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued April 8, 2008

Before Judges Coburn, Fuentes and Grall.

The Township of Piscataway filed this condemnation action to preserve a 75 acre farm as open space. The farm's owners, defendants South Washington Avenue LLC and members of the Halper family (the "Halpers"), answered the complaint, denying Piscataway's authority to condemn their property. After the action had been pending for approximately five years, Piscataway filed a declaration of taking and deposited in court its estimate of the fair market value of the farm as of the date the condemnation action was filed, which was approximately $4.3 million. The Halpers withdrew the deposit but continued to challenge Piscataway's right to condemn the property.

During the five years between the filing of the complaint and the filing of the declaration of taking, the value of the farm increased substantially. The increase was not related to Piscataway's conduct; rather, it resulted from market forces and inflation. Without abandoning their challenge to the condemnation, the Halpers asked the trial judge to set the filing date of the declaration of taking as the valuation date. Piscataway objected, arguing that the valuation date should be the date its complaint was filed. The judge agreed with the Halpers, and a jury determined that the fair market value of the farm was $17,955,000.

Barbara S. Schwartz filed an appeal on behalf of the Halpers under Docket No. A-3648-05T3, arguing that the condemnation should be set aside and the property returned to the Halpers because of alleged conflicts of interest and related matters. Piscataway filed an appeal under Docket No. A-4094-05T3, arguing that the judgment should be reversed for a new trial on damages based on the property's fair market value as of the date the complaint was filed or as of the earlier date on which Piscataway advised the Halpers of its intent to acquire the property. On this second appeal, the Halpers, represented by McKirdy and Riskin, argue that if the condemnation is not vacated, the judgment should be affirmed. We consolidated the appeals.

This action is governed by the Eminent Domain Act of 1971 (the "Act"), N.J.S.A. 20:3-1 to -50, and Article I, paragraph 20, of our State Constitution and the Fifth Amendment of the Federal Constitution, both guaranteeing that government may not take private property for public use without just compensation. The first issue to be resolved is whether a condemnee's withdrawal of a deposit made by a governmental entity pursuant to a declaration of taking is a waiver of the right to litigate all issues except the fair amount of compensation. And the second issue is whether the date the complaint is filed or the date the declaration of taking is filed is the proper valuation date when a condemned property increases in value between those dates due solely to market forces and inflation.

We hold that under the Act a condemnee's withdrawal of the deposit made with the declaration of taking is a waiver of all rights except for the right to litigate the amount of compensation. We further hold that when property increases in value between the date the complaint was filed and the date the declaration of taking was filed and the deposit made, and the increase is not due to governmental action but to market forces and inflation, the date of valuation must be the date of the deposit. Therefore, we affirm the judgment.

I.

Before stating the case in detail, we note that the record does not include a transcript of the jury trial because the only issue respecting that trial is whether the previously selected date of valuation was correct. Also, in light of our determination that the Halpers' withdrawal of the deposit waived all issues except for the fair market value of the property, much of the case history can be omitted as irrelevant.

On February 5, 1999, Piscataway advised the Halpers that it intended to acquire their 75 acre farm for public use. The Halpers had owned and operated the farm, which is located in Piscataway, for over 80 years. On May 3, 1999, Piscataway wrote to the Halpers offering to purchase the farm for $4,326,000, based on a duly obtained appraisal. Unsuccessful negotiations ensued, and Piscataway filed its complaint to condemn the Halpers' farm on December 10, 1999.

The Halpers answered the complaint, denying Piscataway's right to condemn their property on various grounds that need not be detailed. On June 1, 2000, the Assignment Judge sustained the ordinance authorizing the condemnation, ordered Piscataway to provide the Halpers with a copy of an appraisal previously prepared for the County of Middlesex when it was considering taking the property by eminent domain, and gave the parties thirty days for further negotiations.

With the support of Piscataway, and the acquiescence of the Assignment Judge, the Halpers spent the next two years attempting to place their property in the farmland preservation program administered by the Middlesex County Agriculture Development Board ("CADB"). On July 11, 2002, the CDAB certified the fair market value of the farm's development easement. The Halpers rejected the CADB's offer, and the parties returned to court, where the Halpers again challenged the condemnation on a number of grounds but not on the basis of any conflict of interest.

The Assignment Judge ruled in favor of Piscataway and ordered the appointment of condemnation commissioners, directing them to determine the fair market value of the property as of the date the complaint was filed. The Halpers appealed, and we affirmed, sustaining Piscataway's right to condemn the property. Twp. of Piscataway v. South Washington, LLC, No. A-2741-02 (App. Div. March 19, 2004), certif. denied, 180 N.J. 457 (2004). In that appeal, we were not asked to address, and we did not discuss, the valuation date.

On September 3, 2004, Piscataway filed its declaration of taking and deposited $4,326,000 with the court. On January 5, 2005, the condemnation commissioners filed their report valuing the farm at $5.4 million as of December 10, 1999. On February 4, 2005, the Halpers obtained an order from the Assignment Judge permitting them to withdraw the deposit minus $100,000 they owed on a federal tax lien and $4,402.50 they owed for real estate taxes. During the argument of these appeals, the Halpers stipulated that they withdrew the funds, about $4.2 million, within a few weeks after the order was entered.

Pursuant to the Act, the Halpers appealed to the Assignment Judge from the decision of the condemnation commissioners, demanding a jury trial and a change of the valuation date to the date of the filing of the declaration of taking. They supported their motion for change of the valuation date with undisputed expert evidence indicating that during the time between the filing of the complaint and the filing of the declaration of taking, the property had increased in value by no less than 83% as a result of market forces unrelated to any action taken by Piscataway.

On March 31, 2005, the Assignment Judge determined that the valuation date would remain as December 10, 1999, the date the complaint was filed. The Halpers asked for interlocutory ...


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