October 1, 2010
CITY OF ASBURY PARK, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY AND CITY COUNCIL OF THE CITY OF ASBURY PARK, IN THE COUNTY OF MONMOUTH, PLAINTIFF-APPELLANT,
JERSEY URBAN RENEWAL, LLC, DEFENDANT-RESPONDENT, AND BRITWOOD COURT, LLC, AMBOY NATIONAL BANK AND ASBURY PARK SEWER AUTHORITY, DEFENDANTS.
On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-2973-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued June 1, 2010
Before Judges R. B. Coleman, Alvarez and Coburn.
In this condemnation action, the plaintiff, City of Asbury Park, appeals from an order of judgment fixing just compensation and an order denying plaintiff's motion for new trial. Plaintiff asserts essentially three arguments on appeal: (1) the judge improperly precluded plaintiff's expert witness from testifying to information outside the scope of the expert's report; (2) the defense expert's testimony regarding project influence in Asbury Park from 1984 through 2000 was a net opinion; and, (3) the motion for new trial should have been granted. For the following reasons, we affirm.
The subject property in this case, identified as Block 159, Lot 26, is located at 212 Second Avenue, Asbury Park; it is one block west of the Atlantic Ocean's beaches, on the southerly side of Second Avenue between Kingsley and Bergh Streets (the Property). The Property is comprised of a 6,074 square foot lot, and is improved with an 11,994 square foot building with twenty developable units.
On February 26, 2003, defendant Jersey Urban Renewal, LLC, an entity consisting of Richard DePetro, Marshall Sigman, and Vincent Gifford, purchased the Property for $962,500. Defendant estimated that rehabilitation of the Property would cost $757,000. Previously, DePetro, an experienced real estate developer, had successfully completed a similar renovation project located near the Property, known as the Britwood.
Plaintiff filed a Verified Complaint and the Declaration of Taking with regard to the Property. On October 7, 2007, plaintiff acquired the Property by eminent domain in connection with the City's Waterfront Redevelopment Project (the Project). Just compensation for the Property was valued at $500,000 by plaintiff's appraiser, Dr. Donald Moliver. Thereafter, a hearing was held before court appointed condemnation commissioners and, on January 22, 2008, the commissioners valued the property at $868,000. Both parties appealed to the Law Division. In the Law Division, trial was conducted before Judge John R. Tassini and a jury over the course of seven days. At the conclusion of those proceedings, the jury returned a verdict in favor of defendant in the amount of $2,024,000. Judgment consistent with the jury verdict was entered on August 10, 2009, and thereafter amended on September 21, 2009.
Moliver served as plaintiff's expert with respect to Asbury Park property values and the value of the Property itself. He testified over the course of four days on topics that included, but were not limited to waterfront redevelopment; evaluation of the Property; photos of the Property and surrounding areas; developmental issues in the 1980s that affected property values in the City of Asbury Park; zoning of the Property; comparable sale analysis used in the evaluation of the Property; project influence on the Property; calculations and estimated value of the Property; and he compared the Property to the neighboring Britwood. Moliver concluded that the value of the Property was $500,000.
Plaintiff sought to elicit testimony from Moliver regarding project influence of the City's declaration of blight and subsequent efforts in Asbury Park between 1984 and 1994; however, defendant objected to such testimony:
Q: . . . Your graph only begins in 1995.
Q: What about all that data from the prior ten or eleven years?
A: Well, that data were [sic] not available by computer. I was able to get some data points, in excess of 100 -
[Defense Counsel]: Well, I am going to object to this. It's not included in any report provided to us. It is outside the scope of his expert report, which is limited to '95.
[Plaintiff's Counsel]: Your Honor, [defense counsel] was provided the data -
[Defense Counsel]: No, I wasn't.
[Plaintiff's Counsel]: Yes, you were after a commissioners' hearing that Dr. Moliver is referring to. He has that information.*fn1
[Defense Counsel]: No I don't. And for counsel to say that in front of the jury is inappropriate.
THE COURT: If it was not in his report and if there's not agreement as to what was exchanged, I sustain the objection.
The following day, the issue was addressed again by the parties outside the presence of the jury. Extensive segments of the transcripts from the commissioners' hearing for this matter, as well as that of another case previously litigated by both attorneys, City of Asbury Park v. Frank and Rita Marano, were read onto the record in support of counsels' respective arguments. Ultimately, the judge sustained defense counsel's objection because the judge did not "know of any report that was provided at least as relates to this property based on the 1984 to 1995 data." Plaintiff contends it was error for the court to have precluded Moliver's testimony concerning the 1984-1995 data.
DePetro testified concerning his experience renovating historic properties and defense witness John Brody, who appraised the Property on behalf of defendants, testified concerning four tests used to determine the Property's "highest and best use . . . defined as that use which will produce the greatest return to the underlying land." The four tests are (1) legal and physical possibility; (2) legal permissibility within the zone; (3) financial feasibility (using a comparison to the neighboring Britwood building); and, (4) "maximally productive", defined as a determination of whether "there [was] any other kind of use that we could hypothesize would go on this . . . 6,700 square foot piece of land that might be a better use that also met" the other three tests.
Brody discussed the effect of a redevelopment project designation and location on property values, and on the Property itself, based on his forty years of experience as a real estate appraiser. He then discussed his project influence analysis and beachfront property values in the vicinity of Asbury Park. Brody relied on the Memorandum of Understanding between the City and its redeveloper (MOU), an August 6, 2000 New York Times article, a November 5, 2000 Asbury Park Press article, and his experience in discussing the effect of the MOU on property values and his project influence analysis. Though Brody testified generally regarding project influence in the City of Asbury Park from 1984 to 2000, he stated during cross-examination that there was no data or analysis in his report from 1984-2001. The judge required Brody to confine his testimony to the content of his report.
Brody utilized three scenarios to estimate the fair market value of the Property, and his estimate ranged from $1,959,000 to $2,476,000. The first scenario hypothesized that if the owner had been allowed to complete the renovation and fully develop and sell the units on the Property, it would have been valued at $2,476,000. Brody used the Britwood as a point of comparison. This calculation was based on the estimated income from the sales of the twenty units within the fully developed Property.
In the second scenario, Brody utilized the sales of "shell" buildings, that is buildings "that were sold basically as gutted shells." In this approach, he used comparable sales of other property located in the City of Asbury Park. The comparison included five sales, one of which was the Britwood. Brody used a five percent adjustment to account for the "cloud that was hanging over" properties in the redevelopment area, "to bring up the value to wipe out the hypothetical positive and/or negative impact that may have been applicable to the subject property." Under this approach, just compensation for the Property was valued at $2,024,000.
The third scenario employed "the cost approach and the market of underlying land." Brody used seven sales to calculate the land value of the Property under this approach. These sales were strictly "for dirt" or, stated differently, "the underlying land[.]" After determining the value of the underlying land, Brody used Marshall Valuation to estimate the cost of the existing building and the cost of renovating that building on the Property. Under this approach, Brody valued the Property at $1,959,000. Brody's final opinion of value of the Property as of June 20, 2007 was $2,476,000.
On July 23, 2009, the jury returned its verdict in favor of defendant in the amount of $2,024,000. On August 10, 2009, the judge memorialized the verdict in an order, and added $253,242.68 in interest to the $2,024,000 award for a total amount of $2,277,242.68. The judgment directed that plaintiff was to receive a credit for the $500,000 already deposited by plaintiff for the taking, and it provided that "[u]pon payment of the sum of $1,777,242.68, plus interest" plaintiff would be released from its obligation to pay just compensation to defendant.
Plaintiff filed a motion for new trial and, alternatively, remittitur. On August 28, 2009, Judge Tassini heard argument on the plaintiff's motion, and entered an order denying the same. This appeal followed.
"When private property is condemned for public use, the condemnor is required to pay 'just compensation' to the property owner." Twp. of W. Windsor v. Nierenberg, 150 N.J. 111, 125-26 (1997) (citing U.S. Const. amend. V; N.J. Const. art. I, ¶ 20). Just compensation ought to be in an amount reflecting the fair market value of the property with the purpose of making the previous landowner whole. Id. at 126.
Although a sum of money equal to "fair market value" cannot always be a perfect measuring stick for determining the worth of property to a landowner, the State must try as nearly as possible, employing objective standards, to replace the land which has been earmarked for public use with equivalent public funds. [Ibid. (quoting State by Roe v. Nordstrom, 54 N.J. 50, 53 (1969)).]
The amount of just compensation should be free of the "diminution in value resulting from 'the cloud of condemnation' being placed on the property by a potential condemnor" and be insulated from "'the ravages of an inflationary spiral.'" Twp. of W. Windsor, supra, 150 N.J. at 129 (quoting N.J. Sports & Exposition Auth. v. Giant Realty Assocs., 143 N.J. Super. 338, 348 (Law Div. 1976)).
"Condemnations under the Act are commenced with the filing of a verified complaint." Twp. of Piscataway v. S. Washington Ave., LLC, 400 N.J. Super. 358, 367 (App. Div. 2008) (citing N.J.S.A. 20:3-8).
(b) . . . Upon determination that the condemnor is authorized to and has duly exercised its power of eminent domain, the court shall appoint [three] commissioners to determine the compensation to be paid by reason of the exercise of such power.
(c) . . . Upon notice of at least [ten] days, the commissioners shall hold hearings at which the parties and their witnesses may be heard, under oath, administered by any commissioner. [N.J.S.A. 20:3-12.]
On appeal from the award of the commissioners, "[t]he hearing on appeal shall be a trial de novo, as in other actions at law, without a jury, unless a jury be demanded. The award of the commissioners shall not be admitted in evidence." N.J.S.A. 20:3-13(b). "Moreover, because N.J.S.A. 20:3-13(b) requires that the award of the commissioners not be admitted into evidence, it is clear that the legislative intent is to have the trial de novo conducted as if there had never been an administrative proceeding." Housing Auth. of Newark v. Norfolk Realty Co., 71 N.J. 314, 326 (1976).
Plaintiff argues that the judge improperly precluded Moliver from testifying to pre-1995 Asbury Park land sales and project influence on the Property.*fn2 Specifically, plaintiff asserts that because, in a separate condemnation matter - City of Asbury Park v. Frank and Rita Marano (Marano) - defense counsel was given materials and heard Moliver's testimony regarding pre-1995 sales and project influence in the City of Asbury Park, Moliver should have been allowed to testify to that data in the present matter, even though those materials were never produced with respect to this case.
"In New Jersey, '[i]t is well settled that a trial judge has the discretion to preclude expert testimony on a subject not covered in the written reports furnished in discovery.'" Conrad v. Robbi, 341 N.J. Super. 424, 441 (App. Div.) (quoting Ratner v. Gen. Motors Corp., 241 N.J. Super. 197, 202 (App. Div. 1990)), certif. denied, 170 N.J. 210 (2001). "As a result, an abuse of discretion standard of review is utilized in appellate oversight of a trial judge's decision to allow or to exclude such testimony." Ibid. (citing Velazquez v. Portadin, 321 N.J. Super. 558, 576 (App. Div. 1999), rev'd on other grounds, 163 N.J. 677 (2000)).
While a trial judge may in his or her discretion preclude expert testimony on a subject not covered in the written reports furnished by an adversary, [the Appellate Division has] strongly urged the trial judge in the exercise of his discretion to "suspend the imposition of [the] sanction [of exclusion]" when certain factors were present. These were "(1) the absence of a design to mislead (2) absence of the element of surprise if the evidence is admitted, and (3) absence of prejudice which would result from the admission of the evidence." [Congiusti v. Ingersoll-Rand Co., Inc., 306 N.J. Super. 126, 132-33 (App. Div. 1997) (quoting Ratner, supra, 241 N.J. Super. at 202). See also Westphal v. Guarino, 163 N.J. Super. 139, 145-46 (App. Div.), aff'd o.b., 78 N.J. 308 (1978).]
First, Moliver was correctly precluded from reiterating testimony given in a previous commissioner's hearing. See N.J.S.A. 20:3-13(b). Even Moliver's testimony at the commissioner's hearing in the present matter was not admissible at trial in the Law Division, because the legislative intent of the Eminent Domain Act of 1971 (the Act) "is to have the trial de novo conducted as if there had never been an administrative proceeding." Norfolk Realty Co., supra, 71 N.J. at 326. It would also be contrary to legislative intent to allow plaintiff to use Moliver's similar testimony from a commissioner's hearing in a separate matter at trial regarding the present matter.
Second, the judge's decision to exclude Moliver's testimony regarding pre-1995 project influence in the City of Asbury Park was not an abuse of discretion. Mauro v. Owens-Corning Fiberglas Corp., 225 N.J. Super. 196, 205-07 (App. Div. 1988), aff'd sub nom., Mauro v. Raymark Indus., Inc., 116 N.J. 126 (1989) (affirming the trial court's preclusion of an expert from making reference to certain "statistics because they were not contained in [his] written report or any other discovery material" and allowing such testimony would have surprised and prejudiced the defendants under Westphal). Ibid. Specifically, the Mauro court found:
Without defendants having available the exact data and statistics on which [the expert] relied, they were deprived of the opportunity to examine the accuracy of this particularized data or to test [the expert's] opinions which were bottomed on such data by way of deposition or otherwise. [Ibid.]
Regardless of what may have been supplied to defense counsel in the Marano matter, plaintiff never supplied defendant with the referenced statistical data produced by Moliver in this matter, and such data was neither represented nor referenced in Moliver's report in this case. The discovery materials exchanged between two attorneys in a previous matter are not de facto discovery materials in a separate, subsequent matter.
Thus, the exclusion of Moliver's testimony on project influence in the City of Asbury Park pre-1995 was not an abuse of discretion.*fn3
Plaintiff next asserts that the trial court abused its discretion by allowing Brody to give his expert opinion on negative project influence in the City of Asbury Park from 1984 through 2000 without Brody having performed a "detailed market based study of the City of Asbury Park marketplace," or used "statistical evidence or any detailed data analysis[.]" Plaintiff further argues that this error was compounded by the trial judge allowing Brody to "opine that a [five percent] upward adjustment was appropriate to account for . . . negative influence[,]" and by not allowing Moliver to testify to such project influence.
At trial, Brody gave his expert opinion, as a real estate appraiser of forty years, on project influence in the Project redevelopment zone. He gave a general description of "negative influence from a redevelopment project" and differentiated property appreciation in the Cookman business district versus the beachfront property in the City of Asbury Park.
Brody then testified regarding his "analysis of project influence . . . contained in [his] appraisal report . . . .
[s]pecifically the lack of redevelopment taking place from '91 to 2001" in the City of Asbury Park "because of Carabetta's bankruptcy." He testified that the bankruptcy was a negative influence because banks were less likely to put "their good dollars into a project that they're not sure how they're ever going to get paid back. That's just the banking industry." Plaintiff did not object at any point during this testimony. The remainder of Brody's testimony regarding project influence on the Property concerned project influence post-2000.*fn4 Though Brody testified generally regarding project influence in Asbury Park from 1984 to 2000, he stated during cross-examination that there was no data or analysis in his report from 1984-2001. Plaintiff made no objection.
The decisions of the trial court regarding the admission or exclusion of expert testimony or the scope of direct and cross- examination of an expert are reviewed in accordance with an abuse of discretion standard. See Kuen v. Pub Zone, 364 N.J. Super. 301, 321 (App. Div. 2003), certif. denied, 178 N.J. 454 (2004). Pursuant to N.J.R.E. 703, an expert's opinion must be based on "facts, data, or another expert's opinion, either perceived or made known to the expert, at or before trial." Rosenberg v. Tavorath, 352 N.J. Super. 385, 401 (App. Div. 2002). Though experts may rely on otherwise inadmissible "facts or data" so long as they are of a type "reasonably relied upon by experts in forming opinions on the same subject[,]" bare conclusions, not supported by "factual evidence or other data[,]" constitute "net opinion" and are inadmissible. State v. Townsend, 186 N.J. 473, 494 (2006). See also Buckelew v. Grossbard, 87 N.J. 512, 524 (1981). "The rule requires an expert to give the why and wherefore of his or her opinion, rather than a mere conclusion." Tavorath, supra, 352 N.J. Super. at 401 (quoting Jimenez v. GNOC, Corp., 286 N.J. Super. 533, 540 (App. Div.), certif. denied, 145 N.J. 374 (1996)).
Brody's general testimony was not net opinion because it was based on factual knowledge that he gained in his extensive experience as a real estate appraiser. Townsend, supra, 186 N.J. at 495 (finding that expert opinion is not net opinion where the foundation for that opinion is the expert's education, training, "and most importantly," experience). See also Rosenberg, supra, 352 N.J. Super. at 403 (explaining that "evidential support for an expert opinion is not limited to treatises or any type of documentary support, but may include what the witness has learned from personal experience.").
Brody gave only general testimony regarding negative project influence on the Property from 1984 to 2000, and he did not contend at trial that he had any data on project influence during that time period. Brody offered, however, that for the 1984 through 2000 time period, Carabetta's bankruptcy had a negative influence on property values in the City of Asbury Park in general, and that the Cookman business district was increasing in value faster than the beachfront property in the City of Asbury Park. This testimony does not speak specifically to project influence on the Property, as plaintiff alleges, but it is consistent with the testimony offered by plaintiff's expert, Moliver, regarding Carabetta's bankruptcy and failed attempts to redevelop Asbury Park.
Plaintiff claims, however, that Brody should not have been allowed to testify regarding the five percent upward adjustment he applied to account for negative project influence. This adjustment in Brody's comparable sales analysis was contained in his expert report, and he justified its use on direct examination by referencing the cloud of the blighting. Plaintiff had ample opportunity to question the use of that adjustment on cross-examination. We do not perceive that the trial judge mistakenly exercised his broad discretion by allowing Brody's testimony, and we decline to disturb the trial court's rulings.
Finally, plaintiff argues that the jury's award of $2,024,000 was against the weight of the evidence and constituted a miscarriage of justice requiring a new trial. A trial court may grant a motion for a new trial when, "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."
R. 4:49-1. In making this determination, "a trial court must consider the evidence in the light most favorable to the prevailing party in the verdict." Caldwell v. Haynes, 136 N.J. 422, 432 (1994). Consequently, a trial court should not interfere with a jury's verdict "unless the verdict is clearly against the weight of the evidence." Ibid. (citing Horn v. Village Supermarkets, Inc., 260 N.J. Super. 165, 178 (App. Div. 1992), certif. denied, 133 N.J. 435 (1993)).
[An award] should not be overthrown except upon the basis of a carefully reasoned and factually supported (and articulated) determination, after canvassing the record and weighing the evidence, that the continued viability of the judgment would constitute a manifest denial of justice.
The process of "weighing" the evidence is not to encourage the judge to "evaluate the evidence as would a jury to ascertain in whose favor the evidence preponderates" and on that basis to decide upon disruption of the jury's finding. "[T]he judge may not substitute his judgment for that of the jury merely because he would have reached the opposite conclusion; he is not a thirteenth and decisive juror." Nevertheless, the process of evidence evaluation called "weighing" is not "a pro forma exercise, but calls for a high degree of conscientious effort and diligent scrutiny. The object is to correct clear error or mistake by the jury." [Jastram v. Kruse, 197 N.J. 216, 230 (2008) (quoting Baxter v. Fairmont Food Co., 74 N.J. 588, 597-98 (1977)) (citations omitted).]
Stated differently, "a jury verdict, from the weight of evidence standpoint, is impregnable unless so distorted and wrong, in the objective and articulated view of a judge, as to manifest with utmost certainty a plain miscarriage of justice." Carrino v. Novotny, 78 N.J. 355, 360 (1979).
In determining whether there was a miscarriage, we defer to the trial court's findings of credibility, demeanor, and "feel of the case," but otherwise make an independent decision of whether a miscarriage of justice occurred using the same "weight of the evidence" standard employed by the trial court. Jastram, supra, 197 N.J. at 231; Carrino, supra, 78 N.J. at 360; Baxter, supra, 74 N.J. at 597-98.
In essence, the jury's sole determination of just compensation for defendants in this case is akin to a case tried solely on the issue of damages. The Supreme Court of New Jersey has held that the authority to set aside damages awards on the grounds of excessiveness is limited. Carey v. Lovett, 132 N.J. 44, 66 (1993). "Verdicts should be upset for excessiveness only in clear cases." Jastram, supra, 197 N.J. at 228.
The jury in this case was given the opportunity to hear both experts testify at length as to how they arrived at their respective opinions of the Property's value. Having heard both experts' testimony, the jury found the value of the property was $2,024,000, obviously accepting the comparable sales analysis offered by defendant's expert, Brody. In cases tried solely on the issue of damages, "the evaluation of damages is a matter uniquely reposed in the jury's good judgment and to justify judicial interference, the verdict must be wide of the mark and pervaded by a sense of wrongness." Ogborne v. Mercer Cemetery Corp., 197 N.J. 448, 463 (2009) (quoting Jastram, supra, 197 N.J. at 228). That circumstance is not present here. In this case, the jury's verdict easily finds support in the evidence presented, and should not be disturbed.