On appeal from Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-11715-99.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Grall and LeWinn.
This appeal and cross-appeal are from orders addressing statutory interest in an action commenced by the Township of Piscataway under the Eminent Domain Act, N.J.S.A. 20:3-1 to -50, in December 1999. The jury determined the property, owned by defendants South Washington Avenue, L.L.C., and members of the Harper family, had a fair market value of $17,955,000 on September 3, 2004, the date of the taking. Although, at defendants' urging, the property was valued as of the date Piscataway filed the declaration of taking, and not the date about five years earlier when the complaint was filed, defendants sought interest as of the date of the complaint. The trial court awarded compound interest at the prime rate from September 3, 2004.
The court calculated the interest and certified the order as final pursuant to Rule 4:42-2 before it had resolved Piscataway's claim that a share of the proceeds should be reserved due to contamination of the property in accordance with Housing Authority of the City of New Brunswick v. Suydam Investors, L.L.C., 177 N.J. 2, 7 (2003). Because the pending environmental claim may have an impact on the amount of compensation payable to defendants and, therefore, the interest, the order was improperly certified as final. See Housing Auth. of the City of New Brunswick v. Suydam Investors, L.L.C., 355 N.J. Super. 530, 555 (App. Div. 2002), rev'd on other grounds, 177 N.J. 2 (2003). Nevertheless, the interest of justice warrants a grant of leave to appeal from that order as if it were properly certified. R. 2:2-4.
The most significant issue raised on appeal is defendants' claim that the court erred in denying statutory interest from the date of the complaint. Although we agree that N.J.S.A. 30:3-31 requires interest as of the date of the complaint, we cannot conclude that defendants demonstrated a loss attributable to delayed payment prior to that date. Accordingly, we affirm the denial of interest for that period.
Piscataway claims the court's award of compound interest at the prime rate is excessive. Because the court did not provide findings of facts and reasons adequately explaining the award of compound interest at the prime rate, and because interest was reduced to a dollar amount before resolution of Piscataway's demand for a Suydam escrow trust, we reverse and remand for further proceedings.
The extended procedural history of the case is set forth in two prior opinions on interlocutory appeals, as are the facts pertinent to the issues in those cases. Twp. of Piscataway v. South Washington Ave., L.L.C., 400 N.J. Super. 358, 365-66, 370-76 (App. Div. 2008) (Piscataway II) (appeals by both parties following jury trial that was filed prior to the court's consideration of interest); Twp. of Piscataway v. South Washington Ave., L.L.C., No. A-2741-02 (App. Div. Mar. 19, 2004), certif. denied, 180 N.J. 457 (2004) (Piscataway I) (defendants' appeal objecting to the condemnation proceeding). The statement of the case that follows includes only what is pertinent to the issues raised here.
Piscataway filed the condemnation complaint on December 10, 1999. The property is a seventy-five-acre farm, and defendants have conducted several businesses on that farm for decades. Defendants retained legal title and were obligated to pay property taxes on the farm until September 3, 2004, when Piscataway filed its declaration of taking and deposited $4,326,000, the appraised value of the farm, with the court. N.J.S.A. 20:3-21(a), -26a(2).
Defendants retained actual possession and continued use of the farm long after the declaration of taking was filed, however. In fact, they were still occupying and using the farm when the jury trial on valuation concluded in January 2006, and they remained on the property thereafter for nearly seven months, until late July 2006. They left only after being sanctioned on July 20 for non-compliance with prior court orders directing them to vacate.
Piscataway's $4,326,000 deposit with the court was based on an appraisal of the farm's fair market value as of December 10, 1999. The condemnation commissioners later determined that the fair market value as of December 10, 1999 should have been $5,400,000.
Thereafter, defendants moved for reconsideration of the valuation date. They asserted that September 3, 2004, not December 10, 1999, is the proper date because the constitution requires a payment based on the value at the time the property is taken. See U.S. Const. amend. V; N.J. Const. art. I, ¶ 20. Defendants supported their argument with undisputed evidence that the farm's value had increased "by no less than 83% as a result of market forces" between December 10, 1999 and September 3, 2004. Piscataway II, supra, 400 N.J. Super. at 364. The trial court accepted their position. Consequently, the question of fair market value as of September 3, 2004 was tried to a jury, and the jury determined the farm was worth $17,955,000 as of that date.
The parties agree that Piscataway deposited an additional $8,574,000 with the court on February 6, 2006, bringing the total deposited to $12,900,000.*fn1 Since that date, Piscataway has succeeded in its efforts to stay additional withdrawals. Both experts ...