September 2, 2010
TOWNSHIP OF EAST BRUNSWICK, PLAINTIFF,
JEFF MILLER, MILLER BUILDING COMPANY, AFFILIATED BUILDING CORP., ZURICH SURETY NORTH AMERICA, MOUNT BATTEN SURETY COMPANY, AND FIDELITY & DEPOSIT COMPANY OF MARYLAND, DEFENDANTS, AND JEFF MILLER, MILLER BUILDING COMPANY, AND AFFILIATED BUILDING CORP., THIRD-PARTY PLAINTIFFS-APPELLANTS/CROSS-RESPONDENTS,
COUNTY OF MIDDLESEX, THIRD-PARTY DEFENDANTRESPONDENT/CROSS-APPELLANT.
On appeal from Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-4396-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 27, 2010
Before Judges Axelrad and Espinosa.
Third-Party Plaintiffs Jeff Miller, Miller Building Company and Affiliated Building Corp.*fn1 appeal from a judgment of $12,000 entered following a jury trial of their inverse condemnation claim. Third-party Defendant County of Middlesex (County) cross-appeals from the denial of its motion for summary judgment. We affirm.
In April 1985, the Township of East Brunswick issued a Resolution of Subdivision permitting Miller to subdivide the property in question for the construction and sale of single-family houses. In accordance with that resolution, Miller was required to build and service a retention basin for the benefit of the sixty-seven lots, solely for allowing storm water to flow from the property into the retention basin.
A duly recorded Declaration of Covenants and Restrictions for the property provided that Miller was required to maintain the retention basin.*fn2 The County had the right to "enter upon and maintain" the drainage system and any and all detention/retention/recharge facilities in order to preserve and maintain the facilities in the event that Miller failed to maintain them and failed to cure deficiencies upon written notice from the County. The Declarations further authorized the County to seek reimbursement for the costs it incurred in maintaining the retention basin.
The retention basin is dedicated as Open Space and is restricted from any other use, development and construction. No homes or any other structure can be built on this property. As a result, Miller is not assessed taxes for this property.
In 1999, the County employed an engineering consulting firm to design traffic improvements the intersection of Ryders Lane and Peach Orchard (the road project) and address drainage problems on Ryders Lane near the East Brunswick Jewish Center (EBJC). The firm's report, a copy of which was received in evidence, included the engineering consultants' conclusion that the retention basin built to service the development was not constructed in accordance with the approved plans and that, as a result, 80% of the flow from the property was discharged onto Ryder's Lane and the EBJC.
In May 2002, Miller entered into an agreement to sell a portion of his 2.02-acre lot on Ryders Lane in lieu of a condemnation to the County to allow County to make necessary road improvements to the intersection. The total purchase price for the taking of 0.016 acre and an 0.013 slope easement was $2925.
The County did not provide written notice to Miller of any deficiencies in the retention basin. However, as part of the road project, the County also made improvements to the retention basin. It took approximately six months to complete the improvements, which introduced a large number of concrete pipes onto the property in several different locations of the property that were not part of the 2002 sale. The County did not seek reimbursement for the $112,222 cost of the improvements.
In December 2006, Miller filed a third-party complaint against County, that was later amended to assert a claim for inverse condemnation.*fn3
The County filed a motion for summary judgment, and Miller filed a cross-motion for summary judgment. The motion judge granted summary judgment to Miller "on the liability issue on the grounds of inverse condemnation." In a subsequent case management order, the court limited the trial "to value of property after taken by County" with a valuation date of October 30, 2002.*fn4
At trial, the County argued that the taking was temporary in nature and Miller argued that the taking was permanent. Both sides presented the testimony of expert appraisers and stipulated to the qualifications of the experts. John Zennario testified on behalf of the County that the property's value was $6,000 if the taking was temporary and $288,000 if it was a permanent taking. Zennario acknowledged that he was not qualified to determine whether the taking was permanent or temporary. However, Zennario testified that he believed the taking was temporary because Miller retained title to the property; the basin still serviced the development; and the County was no longer on the site when he inspected. Robert Belon testified on behalf of Miller that the value of the permanent taking was $375,000.
Kenneth Preteroti, the Supervising Engineer of County Engineer's Office also testified, purportedly as a fact witness to help the jury understand what the property looked like. Preteroti testified about the scope of the entire road project, and the improvements and modifications County made to Miller's retention basin to relieve drainage problems. When he was asked about the engineering consultants' report of its analysis, Miller's counsel objected on hearsay grounds. The trial court overruled the objection, stating that the testimony was "foundational" and "instructive to the jury as to what . . . the project was in terms of drainage." The field report referred to by Preteroti was later admitted into evidence without objection. According to the report, the retention basin had not been constructed in accord with the approved plans. Only 20% of the drainage was discharged through the outflow pipe. The remaining 80% was discharged overland across Ryders Lane and onto the properties owned by the EBJC.
The jury awarded $12,000 to Miller as full, fair and just compensation for the property.
In this appeal, Miller presents the following issues:
POINT I THE CHARGE TO THE JURY SHOULD NOT HAVE PERMITTED A CONDEMNATION VERDICT BASED ON A TEMPORARY TAKING.
NEITHER LOGIC, FACT OR LAW DIRECT AN INVERSE CONDEMNATION AWARD RESTRICTED TO A TEMPORARY TAKING.
THE COUNTY'S EXPERTS TEMPORARY TAKING TESTIMONY WAS WITHOUT FOUNDATION AND SHOULD HAVE BEEN BARRED AND OMITTED FROM THE JURY CHARGE.
SUMMARY JUDGMENT ESTABLISHED A PERMANENT TAKING AS A MATTER OF LAW.
EVIDENCE RULINGS WERE PREJUDICIAL IN CONTEXT WITH A CHARGE OF TEMPORARY TAKING.
In its cross-appeal, the County argues that the motion judge erred in denying its motion for summary judgment.
Miller's arguments spring from the premise advanced in Point IV that the issue of a temporary taking was not properly before the jury because the order granting summary judgment established a permanent taking as a matter of law. The order Miller relies upon states the following about the summary judgment granted:
4. ORDERED that Summary Judgment is hereby entered in favor of the Third Party Plaintiffs on the liability issue on the grounds of inverse condemnation.
The Order does not include any determination by the court that the taking was either permanent or temporary. Similarly, the transcript of the oral argument does not reflect any determination that Miller was granted summary judgment on liability on the grounds of inverse condemnation through a permanent taking. This argument is, therefore, entirely lacking in merit.
In Points I and II, Miller argues that the jury should not have been permitted to consider that the taking was temporary in determining the full, fair and just compensation due to Miller. However, the verdict sheet did not ask the jury to make a determination as to whether the taking was permanent or temporary, but rather, what amount would fairly compensate Miller for the taking. The amount awarded, $12,000, was actually double the only estimate of a "temporary" taking in the evidence.
In Point II, Miller argues that the "install[ation] of permanent structures as part of an integrated regional storm system for the Township would seem an obvious permanent taking." Miller argues that the condemnation continues until the property is restored to its original condition. Miller's reliance upon the sole authority cited, State v. Sun Oil Co., 160 N.J. Super. 513, 520, 524 (Law Div. 1978), is misplaced. Under this theory, the compensable taking would continue unless and until the County removed the improvements and restored the retention basin that Miller was required to install and maintain to a condition in which it failed to properly dispose of 80% of the discharge.
A review of the applicable legal principles shows that the mere presence of permanent structures, standing alone, does not justify that result.
Both the United States and New Jersey Constitutions require that property owners must be paid just compensation for governmental takings. U.S. Const. amend. V and XIV; N.J. Const. art. 1, ¶ 20; Mansoldo v. State, 187 N.J. 50, 58-59 (2006). The two ways in which a governmental taking requires compensation are "1) via physical taking, in which the government takes title to private property or 'authorizes a physical occupation [or appropriation] of property'; or 2) via regulatory taking or the excessive use of police powers, through which a government regulation deprives the property owner of all economically viable use of their land." Klumpp v. Borough of Avalon, 202 N.J. 390, ____ (2010) (quoting Yee v. Escondido, 503 U.S. 519, 522, 112 S.Ct. 1522, 1526, 118 L.Ed. 2d 153, 162 (1992)) (alteration in original). See also Dolan v. City of Tigard, 512 U.S. 374, 385-87, 114 S.Ct. 2309, 2316-17, 129 L.Ed. 2d 304, 316-17 (1994); Pinkowski v. Twp. of Montclair, 299 N.J. Super. 557, 575 (App. Div. 1997). "Physical occupation or appropriation of property is usually an obvious demonstration of a taking and 'qualitatively more severe than a' less apparent regulatory taking." Klumpp, supra, 202 N.J. at ____. As to the more complicated inquiry regarding the second category of takings, our Supreme Court has observed that government regulation goes "too far" where the "regulation denies all economically beneficial or productive use of [the] land." Mansoldo, supra, 187 N.J. at 58 (alteration in original).
While it is true that governmental actions that do not involve governmental occupancy or encroachment upon private land may "still affect and limit its use to such an extent that a taking occurs," OFP, L.L.C. v. State, 395 N.J. Super. 571, 580-581 (App. Div. 2007), aff'd o.b., 197 N.J. 418 (2008) "not every impairment of value establishes a taking." Pinkowski, supra, 299 N.J. Super. at 575. See also Greenway Dev. Co. v. Borough of Paramus, 163 N.J. 546, 553 (2000); Gardner v. N.J. Pinelands Comm'n, 125 N.J. 193, 210-11, (1991) (holding that impairment of marketability and restrictions on uses do not necessarily result in takings although they may reduce income or profits). If the regulation does not deny all economically beneficial use, the determination whether the regulation constitutes a compensable taking is governed by the standards set forth in Penn Central Transportation Co. v. New York City, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed. 2d 631 (1978). Mansoldo, supra, 187 N.J. at 58. The facts here do not fit neatly into either category.
The County did not take title to the property. The "permanent" invasion consisted of leaving behind concrete pipes necessary to satisfy the drainage needs that the retention basin was intended to fulfill. Significantly, it was required as part of the subdivision approval that the retention basin be built to specifications and maintained by Miller, and, upon transfer of title, by the Homeowners' Association. This lawsuit was, in fact, commenced by the Township of East Brunswick because it alleged that Miller failed to satisfy that obligation. Although the Supreme Court held in Loretto v. Teleprompter Manhattan Catv Corp., 458 U.S. 419, 438, 102 S.Ct. 3164, 3177, 73 L.Ed. 2d 868, 884 (1982) that the required installation of cable facilities was a taking, the Court noted "the constitutional distinction between a permanent occupation and a temporary physical invasion," as analyzed in PruneYard Shopping Center v. Robins, 447 U.S. 74, 100 S.Ct. 2035, 64 L.Ed. 2d 741 (1980). In PruneYard, the Court upheld a state constitutional requirement that shopping center owners permit individuals to exercise free speech and petition rights on their property. The Court noted that the invasion was temporary and limited in nature, that the owner retained the right to impose reasonable restrictions, and that the requirement would not "unreasonably impair the value or use of their property as a shopping center." Id., 447 U.S. at 83-84, 100 S.Ct. at 2042, 64 L.Ed. 2d at 753-54. Significantly, the owner had not exhibited an interest in excluding the particular activity of having persons on its property. The Court therefore concluded that the fact of "physical invasion" was not determinative of the issue whether there was a constitutional taking. Ibid.
Here, unlike the landlady who had the right to exclude the installation of cable facilities on her property in Loretto, Miller did not have a right to exclude the permanent improvements to the retention basin. It was a condition of the subdivision that a retention basin adequate to meet the needs of the development be built. The evidence indicates that Miller failed to do so. The Declarations provided that the County had the right to enter the land in the event that Miller failed to comply with its obligations, after giving written notice and an opportunity to cure the deficiency. Therefore, it is clear that while Miller had the right to exclude the County from the property in the absence of compliance with the procedure in the Declarations, Miller lacked the ultimate right to resist improvements that were necessary for the drainage needs identified in conjunction with the original subdivision approval.
Although no regulatory action was involved, the governmental action here more closely resembles the second category of takings because uses permitted on the property were not diminished in any way. Given the character of the property as Open Space and restricted from any use, development or construction other than as a retention basin, the governmental action here did not deny all economically beneficial or productive use of the land. Therefore, the application of the Penn Central factors was appropriate to evaluate Miller's claim. See Mansoldo, supra, 187 N.J. at 59-60. Those factors are: (1) the economic impact of the regulation, (2) interference with investment-backed expectations, and, (3) the character of the government action. Penn Cent., supra, 438 U.S. at 124, 98 S.Ct. at 2659, 57 L.Ed. 2d at 2648.
It is a basic requirement of inverse condemnation that the plaintiff-land owner show that any deprivation of the beneficial use of his property is the result of the exercise of government authority and that the property has in fact been impaired. Pinkowski supra, 299 N.J. Super. at 575. In this case, there was no evidence that the improvements that remained on the property deprived Miller of any beneficial use of the property that had been enjoyed prior to the improvements, that the improvements caused any additional restrictions on use, or caused any adverse economic impact on the property.
Miller has not identified any portion of the jury charge that contained an incorrect statement of law. We are satisfied that the instructions provided the jury with the correct legal principles necessary for it to determine the amount of fair compensation based upon the evidence in the case and therefore conclude that the arguments raised in Points I and II lack merit.*fn5
In Points III and V, Miller challenges evidentiary rulings made by the court that permitted certain testimony from Preteroti and Zennario. After reviewing the arguments and record, we are satisfied that these argument lack sufficient merit to warrant discussion in a written opinion, R. 2:11-3(e)(1)(E), beyond the following brief comments.
We grant substantial deference to the trial judge's discretion on evidentiary rulings. Bd. of Educ. of Clifton v. Zoning Bd. of Adjustment of Clifton, 409 N.J. Super. 389, 430 (App. Div. 2009); Benevenga v. Digregorio, 325 N.J. Super. 27, 32 (App. Div. 1999), certif. denied, 163 N.J. 79 (2000). As a general rule, the trial court's ruling will not be disturbed unless there is a clear abuse of discretion. Dinter v. Sears, Roebuck & Co., 252 N.J. Super. 84, 92 (App. Div. 1991). Reversal is only appropriate when the trial judge's ruling was "so wide of the mark that a manifest denial of justice resulted." State v. Carter, 91 N.J. 86, 106 (1982); Bd. of Educ., supra, 409 N.J. Super. at 430. We are satisfied that no manifest denial of justice resulted here.
In its cross-appeal, the County argues that the motion judge erred in denying its motion for summary judgment.
On appeal, a motion for summary judgment is reviewed de novo under the same legal standard applied by the trial court, that is, "whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue[s] in favor of the non-moving party." Spinks v. Twp. of Clinton, 402 N.J. Super. 465, 473 (App. Div. 2008) (quoting Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995)), certif. denied, 197 N.J. 476 (2009).
It was undisputed that, at a minimum, the County entered upon the property for a period of six months in conjunction with a project for the improvement of the nearby intersection as well as the drainage issues related to the retention basin. Further, even though the Declarations authorized the County to take action to maintain the retention basin, such authority was predicated upon giving Miller prior notice of deficiencies and an opportunity to cure. The County presented no evidence that it followed that procedure here. There was, then, sufficient evidence to create a genuine issue of fact as to whether a compensable taking occurred.