Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.

City of Asbury Park v. U.S. Appliance Recyclers Inc. of New Jersey


December 16, 2008


On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-611-05.

Per curiam.


Argued September 29, 2008

Before Judges Lisa and Alvarez.

This is an appeal by defendant property owner, U.S. Appliance Recyclers, Inc. of New Jersey, from a jury verdict in a condemnation case. Defendant claims that the trial court's admission into evidence of a supplemental structural engineering report was an abuse of discretion, and that the jury award of $400,000 should be set aside as a miscarriage of justice. We affirm.

The property at issue is Block 132, Lots 2 and 3 (the Property) in the City of Asbury Park (the City). The City is the plaintiff-condemnor. Plaintiff/intervenor Asbury Partners, LLC (Asbury Partners), is the redeveloper for the City's waterfront redevelopment plan, the project for which the Property was acquired by the City. The Property consists of 19,600 square feet, approximately half an acre. Situated upon the Property is a significantly deteriorated steel skeleton of a building, previously a parking garage and a warehouse. At the time of condemnation, the structure was not in use. The central dispute between the parties is whether the structure increases or decreases the value of the Property.

The City adopted its waterfront redevelopment plan by resolution on November 7, 1984. In August 2001, the City and Asbury Partners entered into a memorandum of understanding (MOU), setting forth the parameters for redevelopment of the blighted waterfront area.

On September 23, 2004, defendant filed a complaint in lieu of prerogative writs against the City, asserting that as a result of amendments made in 2002 to the original redevelopment plan, it could neither sell the Property nor engage in renovations that would put the structure located on the Property to a beneficial use. Defendant alleged that the amended redevelopment plan created such significant restraints on the Property that it constituted a taking. As a result of the action in lieu of prerogative writ, the parties agreed that the City would authorize the institution of condemnation proceedings no later than February 15, 2005.

Accordingly, on February 15, 2005, the City filed a verified condemnation complaint seeking to acquire the Property. On February 17, 2005, the City was ordered to deposit with the Clerk of the Court $360,000, the amount estimated by the City to constitute just compensation based on its appraisal. Commissioners were appointed, and commissioners' hearings were conducted on September 1, 2005 and March 8, 2006. The commissioners determined that compensation should be paid to defendant in the amount of $686,000. Both parties subsequently appealed. The trial date was postponed on several occasions, and trial eventually commenced on July 24, 2007, and ended on August 7, 2007. The jury's verdict totaled $400,000.

At the September 1 commissioners' hearing, the City presented an appraisal report prepared by Donald Moliver and Associates on March 6, 2003, which states:

The subject property was originally constructed as a parking garage and used by the City of Asbury Park.... The current owner purchased the building and used it for a time as a warehouse. Sometime in 2000, the owner began converting the structure into a showroom/office but ceased construction later that year. Existing on site is a decaying steel skeleton frame with no exterior walls, roof, or mechanical systems. The existing structure is three stories high, with a lower level and contains approximately 52,500 square feet. In its present condition, the property is not utilized.

The report opined:

Considering the current local and national economic conditions, the abundance of vacant and boarded up properties in the market place and the slowing economy, it is unlikely that development of the site at this time would be feasible. Therefore, the highest and best use of the site as if vacant is to hold until market conditions support development.

Moliver's report concluded:

The existing property is in poor condition and not occupied. The structural integrity of the existing structure is questionable, due to the fact that it is open and exposed to the elements. Falling and deteriorating concrete ceilings and floors were evident during our inspection and presented in our photographs.... Based on our analysis of the above criteria, the highest and best use of the subject property is an interim one to hold for future redevelopment until market demand supports the redevelopment of the property.

Kevin Sommons, P.E., a licensed structural engineer, was also retained by the City as an expert and prepared a report for the redeveloper. In that report, dated May 2, 2005, Sommons said:

The structural steel frame of the building appeared to be in decent condition. Due to long durations of time being exposed to the elements most of the structure shows signs of rust.... Overall the bar joist[s] were in poor condition. In many places considerable amounts of rust had collect[ed] throughout the bar joists.... In multiple locations the bar joist[s] were exposed directly to elements and showed significant corrosion, sagging and even failure....

Upon visual inspection of the building it is our professional opinion that the overall structural integrity of the building is in poor condition. We have concluded that exposure to the elements has deteriorated many of the structural elements beyond repair.... Based on the extensive repairs necessary to salvage just the main steel frame and bring it up to code, we recommend the building be razed and reconstructed.

At the commissioners' hearing, Sommons testified consistently with his report and affirmed his recommendation that the building be razed due to its poor structural integrity. When asked if it would be possible to renovate the existing structure, Sommons acknowledged that anything was possible, but said that to renovate it would be "physically impractical," as well as "economically impractical." On cross-examination, Summons was asked if he had considered renovation of the building for residential use, to which he responded that he had not. He added, however, that even for use as a residential building, the structure would still require extensive repairs.

In response to further questioning about the viability of the structural steel framing for residential development, Sommons said that he saw nothing that would lead him to believe that the steel framing could not be reused if the structure was renovated for residential development. He went on to say, however, that "there are hidden conditions and in a building of such decay, they could exist in localized areas." On re-direct, he reiterated that although the structure could be repaired, to do so would require "Herculean" efforts. He concluded by saying, "So whatever use you're going to use it for, dance studio, hospital, you know, disco, whatever, that structure needs to be razed and reconstructed."

Moliver also testified at the commissioner's hearing. He indicated that he had erred in his 2003 appraisal because he assumed that the structure could be salvaged. After subsequently reviewing Sommons' report, Moliver said that he determined that the building had no value and needed to be razed. Moliver further indicated that, as a result, the value of the Property was diminished by the costs of demolition.

Prior to the condemnation trial, a supplemental report dated June 19, 2007, was prepared by Sommons. The discovery end date had been May 11, 2006, and trial was scheduled for July 24, 2007. The report was due no later than forty days prior to trial. R. 4:73-11. Because plaintiff produced the supplemental report thirty-five days prior to trial, instead of forty, defendant objected to its admission. In the report, Sommons reiterated the testimony that he gave at the commissioners' hearing, "[I]t is our professional opinion to demolish the building even if the planned reuse is residential."

At the trial's start, defendant's counsel made a motion in limine based on its late receipt, to bar the report and any testimony related to its contents. In response, the City's counsel pointed out that Sommons' testimony at the commissioners' hearing was no different than the information contained in the report, that the structure needed to be razed and reconstructed for any use, including residential. The City's counsel asserted that the submission of the supplemental report was intended only to conform Sommons' testimony at the commissioners' hearing as to renovation of the structure for residential use, to his prior reports.

During the course of the motion, counsel for the City explained that he had contacted defendant's attorney to apologize for the late update to the report and to offer defendant time in which to obtain another report of its own, or, in the alternative, to make Sommons available for deposition. Defendant chose to depose Sommons prior to the commencement of trial. The City opposed the motion on the basis that no prejudice resulted to defendant because it had known since the commissioners' hearing on September 1, 2005, that Sommons believed that the structure should be razed regardless of the use of the Property, residential or otherwise. Additionally, the City contended, if defendant had requested an adjournment, the City would have joined in the request.

The trial judge, concluding that to exclude the supplemental report would put form over substance, denied defendant's motion, allowed use of the report and permitted Sommons to testify in accord with it. At trial, Sommons testified, as he had in the commissioners' proceeding, that the building lacked the structural integrity necessary for any use, including residential, and that demolition would be necessary.

Appellate courts are deferential in their review of a trial court's evidentiary rulings. State v. Morton, 155 N.J. 383, 453 (1998). The "admission or exclusion of proffered evidence is within the discretion of the trial judge whose ruling is not disturbed unless there is a clear abuse of discretion." Dinter v. Sears, Roebuck & Co., 252 N.J. Super. 84, 92 (App. Div. 1991). We apply the same approach when a trial court's admission of expert opinion evidence is alleged to be erroneous. State v. Burr, 392 N.J. Super. 538, 555 (App. Div. 2007), aff'd, 195 N.J. 119 (2008).

Rule 4:73-11(b) indisputably requires written expert reports in condemnation proceedings to be produced "at least 40 days prior to trial." Strict adherence to the rules is necessary, but not at the expense of common sense. In this case, the report reduced to writing an opinion known to the adverse party for almost two years before it was authored. The trial judge therefore, did not abuse his discretion in admitting the report, as the spirit of the rule was honored. In any event, defendant can point to no prejudice that resulted from the admission of the report because Sommons' opinion had long been known to defendant. The admission of the report was not error.

Defendant also argues that it is entitled to a new trial because the jury's award of $400,000 "shocks the conscience." Essentially, defendant proffers that because the jury's verdict was not the amount suggested in either party's appraisal, it was "devoid of any connection to the evidence in this matter whatsoever."

Proceeding on this theory, defendant moved for a new trial pursuant to Rule 4:49-1(a). That rule requires the motion be granted where, "having given due regard to the opportunity of the jury to pass upon the credibility of the witnesses, it clearly and convincingly appears that there was a miscarriage of justice under the law." Similarly, on appeal, "[t]he trial court's ruling on such a motion shall not be reversed unless it clearly appears that there was a miscarriage of justice under the law." R. 2:10-1.

A property owner is entitled to just compensation in cases involving governmental acquisition of property under the Eminent Domain Act, N.J.S.A. 20:3-1 to-50,. State v. Van Nortwick, 287 N.J. Super. 59, 70 (App. Div.) (Van Nortwick II), certif. denied, 143 N.J. 320 (1995). The fact-finder calculates the amount of compensation to be paid as "the fair market value of the property as of the date of the taking, determined by what a willing buyer and willing seller would agree to, neither being under any compulsion to act." Ibid. In making this determination, a jury is not obliged to accept or reject an expert's opinion as a whole; rather, "it may accept such testimony as appears reasonable, reject all of it or accept all of it." State. v. Interpace Corp., 130 N.J. Super. 322, 332 (App. Div. 1974). Differences of opinion are to be expected in cases involving the appraisal of real property. Ibid.

Both parties' experts agreed on the principle that the highest and best use of any land is the foundation of a real estate appraisal. In making that determination as to the Property, both examined four factors, zoning, physical feasibility, financial feasibility, and the greatest return.

On behalf of the City, Moliver concluded that the highest and best use for the Property would be to demolish the skeleton structure and hold the land for future development. The opinion of defendant's appraiser, Maurice Stack, was that the highest and best use of the land would be a condominium development. He specifically envisioned a five-story, 27,200 square foot structure containing twenty-two residential units. He further opined that each unit could be sold for approximately $350,000.

Defendant asserts that on the date of valuation, which both parties agreed was February 15, 2005, there was a high demand for residential housing in the City. The City contends, however, that the high demand for housing was in a different area, removed from the blighted area in which the Property is located.

Stack testified that he considered the existing structure to be a "positive" because it contained an underground parking garage, a steel skeleton, and a 15,000 square foot footprint. On cross-examination, he said that he relied on an engineer's report provided to him by the owner of the Property with regard to the integrity of the structure, but that he had not included that report in his own report.

Moliver valued the property at approximately $17 per square foot for a total of $330,000. From that, he deducted the estimated cost of demolition, $49,000, resulting in a value of $285,000. Moliver based his valuation on three sales of vacant land occurring between 2000 and 2002. He weighed two of the three comparable sales more heavily as they were located within the redevelopment zone.

Stack also used the sales comparison approach and compared the sale prices of five improved properties. Under this approach, he valued the land and improvements at $60 per square foot for a total of $1,175,000. Stack also utilized the cost approach method and added the estimated cost of replacing the existing structure to the land value. Under this approach, he valued the land at $50 per square foot for a total of $980,000 and added the value of the structure for a total of $1,275,000. By reconciling the different values produced by the two approaches, he arrived at his final figure of $1,225,000.

Moliver testified that there was a tremendous rise in property values in the City following the issuance of the 2001 MOU. He further testified that he excluded this positive influence from his valuation of the Property, as is required in condemnation cases.

In contrast, Stack testified that only negative project influence existed in this case. He explained that defendant had undertaken some demolition, invested in $300,000 worth of new steel, and hired an engineer in anticipation of converting the structure, only to be impeded by the designation of the property for potential condemnation in 2001. Stack alluded to properties that sat dormant for years because the City's original redeveloper had gone into bankruptcy in 1991, and detailed what he described as "condemnation blight." He stated that because the redevelopment project caused these negative effects, he excluded them from his valuation of the Property. But for this redevelopment project, he said, the City would have been redeveloped privately. In his opinion, the eventual stabilization in property values after the signing of the MOU was not positive project influence, but rather, a gradual elimination of condemnation blight.

The two experts obviously differed as to most of the factors that they considered significant in appraising the Property and their final numbers. The jury was free to accept or reject all or part of their competing analyses. It therefore cannot be fairly said that the jury's valuation of the Property was so contrary to the weight of the evidence that it constitutes a miscarriage of justice. R. 2:10-1.

Defendant also argues that the jury verdict must have been based on mistake or confusion. In defendant's opinion, the jury must have ignored the charge instructing them that under the project influence doctrine, they should not exclude any rise in market value due to the signing of the MOU, meaning that defendant could benefit from such an increase. According to defendant, because Moliver testified that there was a nine-percent appreciation in the market attributable to the MOU, under the project influence doctrine, the jury should have included this increase in its verdict. This argument is problematic. It ignores defendant's own appraiser's testimony that no positive influence resulted from the MOU, but rather, that it served merely to counteract the negative influence that the project initially wrought upon the area.

Under these circumstances, where the experts differed in their application of the same basic principles, defendant has failed to show that there was a miscarriage of justice under the law. See R. 2:10-1. We therefore do not consider the trial judge's refusal to grant a new trial to have been an error, nor does the jury's verdict shock our conscience.

Because the jury's verdict is affirmed, there is no need to reach plaintiff's conditional cross-appeal asserting that the trial court's charge on project influence was erroneous.



© 1992-2008 VersusLaw Inc.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.