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New Jersey Transit Corporation, An Instrumentality of the State of New v. Hartz Mountain Development Corporation

December 6, 2010

NEW JERSEY TRANSIT CORPORATION, AN INSTRUMENTALITY OF THE STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
HARTZ MOUNTAIN DEVELOPMENT CORPORATION, A NEW JERSEY CORPORATION, DEFENDANT-APPELLANT, AND NATIONWIDE LIFE INSURANCE COMPANY, ASSOCIATED DRY GOODS CORPORATION, CALDOR, INC., STATE OF NEW JERSEY, AND TOWNSHIP OF NORTH BERGEN, IN THE COUNTY OF HUDSON, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANTS.



On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-4401-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted November 3, 2010 --

Before Judges Skillman, Parrillo and Espinosa.

Defendant, Hartz Mountain Development Corporation (Hartz), appeals from the order of the Law Division both granting plaintiff New Jersey Transit Corporation (NJT) the power to condemn easement parcels located on property owned by Hartz and appointing condemnation commissioners. At issue is a condemnor's obligations, imposed by N.J.S.A. 20:3-6, to engage in "good faith negotiations" for the purchase of property that it plans to acquire, if necessary, by eminent domain, as applied to a temporary taking for a construction easement. The condemnee Hartz alleged that the condemnor NJT had failed to disclose in pre-acquisition negotiations its plan to dump contaminants on Hartz's property. The Law Division found otherwise, that NJT made full disclosure to the property owner of its project-wide soil reuse plan and therefore granted NJT the power to condemn the easement parcels on Hartz's property. The trial court's findings are adequately supported in the record and we now affirm.

By way of background, NJT has undertaken to construct the 69th Street Grade Separation Project (GSP) in North Bergen (the Project) to correct what it terms a "dangerous at-grade rail crossing." The Project involves the construction of a bridge that will elevate 69th Street above railroad tracks so that the roadway no longer crosses those tracks at grade level. In order to complete the Project, NJT must make road and drainage improvements that require dredging and widening of a drainage ditch. The bridge construction will generate excavated soil, and the ditch dredging will produce sediment or "dredge spoils" that NJT intended to reuse as fill in accordance with a soil reuse plan (SRP) prepared in January 2009 by its environmental consultant, BEM Systems, Inc. (BEM).

The Project requires NJT to obtain three permanent and two temporary construction easements on a portion of Hartz's property covering five parcels. NJT plans to hold the temporary construction easements for a period of approximately two months, while the permanent easement parcels will contain permanent drainage, slope and wall support over which NJT will maintain a permanent interest.

In order to acquire the necessary easements for the Project under the Eminent Domain Act of 1971, N.J.S.A. 20:3-1 to -50, NJT had the easements appraised and conducted an environmental investigation of the property. According to NJT, as a result of Hartz's refusal to permit agency employees entry onto its property without a written agreement, NJT took representative samples from a nearby location, and found these samples to be contaminated. As a result, NJT concluded that the Hartz property was likewise contaminated.

Following its assessment and appraisal of the proposed easements, NJT sent Hartz a formal offer letter dated January 8, 2009 (offer letter) to purchase the property at the appraised value of $68,150.00, which did not include an additional $17,000.00 in environmental costs that NJT estimated it would incur in the remediation of soil contamination located within the subject easements. NJT included in the Offer Letter an appraisal report dated September 16, 2008 (Appraisal Report), a draft property purchase agreement, and an environmental report prepared by BEM. The latter, titled the BEM Property Acquisition Environmental Cost Estimating Report of November 2008 (PAECE Report), included an environmental evaluation of the property and proposed cost estimates. Although the PAECE Report, along with the offer letter and purchase agreement, did not explicitly refer to the January 2009 Soil Reuse Plan prepared by BEM, it nevertheless described its intended plans, indicating that soil regulated by the New Jersey Department of Environmental Protection (DEP) would be used as fill and that those "excess" soils that could not be reused on site would be disposed of or recycled. Specifically, in bold typeface on its cost summary page, the PAECE Report provided:

-During NJ TRANSIT's construction activities, soil will be reused within the 69th St GSP limits in accordance with an NJDEP-approved SRP. In addition, excess regulated soil generated during construction activities and not reused on site will be managed properly and subsequently disposed off site at a regulated disposal/recycling facility. This cost has not been included in this cost estimate. [(emphasis added).]

Negotiations occurring in 2009 eventually broke down due to the parties' disagreement over environmental provisions in the draft property purchase agreement. Consequently, on August 28, 2009, NJT filed a verified complaint and order to show cause to acquire the easements through condemnation. An order for payment and possession was filed on September 1, 2009. The estimated amount of the valuation of the property interests for the easements was deposited into court, and on September 21, 2009, a declaration of taking was filed.

On October 20, 2009, Hartz filed a contesting answer and after briefs were exchanged, oral argument was conducted on October 23, 2009 and again on November 18, 2009. During the latter, Hartz's counsel raised the issue whether NJT engaged in good faith bona fide negotiations by not disclosing whether it intended to use contaminated project fill on Hartz's property.

Following argument, on December 2, 2009, the court entered final judgment for NJT, finding that NJT had the power to condemn the easement parcels and appointing condemnation commissioners.

Hartz moved for reconsideration based on what it termed "newly revealed" information contained within the BEM soil reuse plan and other documents obtained from NJT and DEP pursuant to the Open Public Records Act (OPRA), N.J.S.A. 47:1A-1 to -13, that supposedly evidenced NJT's bad faith during the purchase negotiations process. According to Hartz, plan maps revealed that excavated soil and dredge spoils were to be imported from the "cut" areas of the project and used as "fill" within the easement areas on Hartz's property, including the temporary construction easement area adjacent to Westside Avenue. In connection with its reconsideration motion, Hartz retained an environmental expert who opined that the PAECE Report reference to the soil reuse plan in the form of a note to a table at the ...


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