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City of Asbury Park, A Municipal v. Springwood Lake

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


March 26, 2012

CITY OF ASBURY PARK, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
SPRINGWOOD LAKE, LLC, DEFENDANT-APPELLANT, AND JCP&L AND/OR NEW JERSEY BELL TELEPHONE CO., CITY OF ASBURY PARK, DEFENDANTS.
CITY OF ASBURY PARK, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
VINCENT H. GIFFORD, DEFENDANT-APPELLANT, AND CITY OF ASBURY PARK, CITY OF ASBURY PARK SEWERAGE AUTHORITY, DEFENDANTS. CITY OF ASBURY PARK, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
TL PROPERTIES, INC., VINCENT H. GIFFORD, COASTAL JERSEY PROPERTIES, INC., DEFENDANTS-APPELLANTS, AND CITY OF ASBURY PARK, CITY OF ASBURY PARK SEWERAGE AUTHORITY, DEFENDANTS.
CITY OF ASBURY PARK, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
VINCENT H. GIFFORD, DEFENDANT-APPELLANT, AND CITY OF ASBURY PARK, CITY OF ASBURY PARK SEWERAGE AUTHORITY, DEFENDANTS.
CITY OF ASBURY PARK, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
COASTAL JERSEY PROPERTIES, INC., DEFENDANT-APPELLANT, AND TRANSAMERICA BUSINESS CREDIT, CRUSADER SERVICING CORP., CITY OF ASBURY PARK SEWERAGE AUTHORITY, DEFENDANTS.

On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket Nos. L-3212-08, L-3215-08, L-3213-08, L-3214-08, and L-3216-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued February 29, 2012

Before Judges Graves, J. N. Harris and Koblitz.

These five consolidated condemnation appeals present identical issues relating to the Eminent Domain Act of 1971 (the Eminent Domain Act), N.J.S.A. 20:3-1 to -50. Appellants are aggrieved by the City of Asbury Park's abandonment of eminent domain proceedings and the Law Division's refusal to order the municipality to re-commence them. In addition, appellants claim that they were entitled to more than the $88,261.59 in attorneys' fees and costs awarded in their favor by the Law Division pursuant to N.J.S.A. 20:3-26(b). We affirm.

I.

For nearly three decades, Asbury Park has endeavored to redevelop its waterfront along the Atlantic Ocean. In 1984, a Waterfront Redevelopment Plan (the Plan) was adopted by the City, which provided a comprehensive framework for the overall redevelopment of properties located within the confines of a defined area in need of redevelopment. The Plan was amended from time to time, but it remains to be fully implemented.

In June 2002, Ordinance 2607 was enacted by the City, which made further amendments to the Plan. Appellants own five properties located in the Prime Renewal Area as designated by the 2002 amendments.

On October 28, 2002, the City and Asbury Partners, LLC (Asbury Partners) entered into an Amended and Restated Redeveloper and Land Disposition Agreement (the Redeveloper Agreement), which designated Asbury Partners as the exclusive master developer of the Plan. Section 3.12 of the Redeveloper Agreement stated that the parties agreed that "City blocks, within the Redevelopment Area" would be acquired either by the master developer directly or through eminent domain. Section 17.2 of the Redeveloper Agreement, entitled "No Condemnation/Without Consent," stated:

The City agrees not to condemn or take title by exercise of its eminent domain powers any portion of the . . . Prime Renewal Area without [Asbury Partners's] consent. [Asbury Partners] agrees to take title to all property it requests be condemned upon the execution of a Declaration of Taking and placing of a deposit with the Court.

Starting in June 2006, Asbury Partners engaged in negotiations with appellants in an effort to negotiate an amicable acquisition of each of their properties. Asbury Partners indicated in writing that if the parties could not "come to terms as to the acquisition of [the] property," it would request the City "to commence eminent domain condemnation proceedings of [the] property so as to acquire title."

Appellants and Asbury Partners were unable to satisfactorily negotiate the sale of the properties. On May 9, 2007, they entered into an agreement obliging all parties to facilitate the City's expected condemnation actions. Among the provisions of the agreement were (1) the promise by Asbury Partners to update all appraisals for each of the affected properties and to request the City to institute condemnation proceedings; (2) the waiver by appellants of "any and all objections to the City's authority to acquire title" to their properties and their waiver of "any objection . . . that the City failed to engage in bona fide negotiations" for the properties; and (3) the agreement by Asbury Partners that within sixty days "from the date upon which [the court] confers jurisdiction upon the City to acquire any of the [p]roperties," it would provide the City with the necessary funds to make a deposit into court in connection with the filing of a declaration of taking and it would request that the City promptly file such a declaration of taking.

On April 11, 2008, Asbury Partners sent the City a letter requesting that it "kindly utilize [the agreement] as a basis for an Ordinance permitting these properties' acquisition to be introduced to the City Council." On June 4, 2008, the City adopted Ordinance 2873, which authorized the initiation of condemnation proceedings against appellants' properties. The preamble (in the fourth whereas clause) of the Ordinance acknowledged that Asbury Partners and appellants had entered into an agreement regarding the acquisitions of the properties and stated that the "agreement is annexed hereto and made a part hereof (copy available in the City Clerk's Office)." The Ordinance specifically authorized the City "to enter into negotiations and to acquire, by eminent domain if necessary, [the properties]."

The condemnation proceedings were commenced in early July 2008. In October 2008, appellants moved for a determination, pursuant to N.J.S.A. 20:3-30, of an earlier date of valuation for each property. The City's appraisals had valued the properties as of July or December 2007. Appellants sought a judicial declaration that the date as of which just compensation shall be determined was either in March 2005 (when the Redeveloper Agreement was filed in the Monmouth County Clerk's Office) or in March 2006 (when the City's appraiser wrote to the property owners demanding the right of inspection for appraisal purposes).

After briefing, oral argument, and a summary proceeding, on October 7, 2009, the Law Division denied appellants' application in a twenty-two page written opinion. An earlier, separate motion, filed by Asbury Partners, which sought permission to intervene in the eminent domain proceedings was also denied.*fn1

On December 7, 2009, Asbury Partners's counsel sent a letter to appellants' attorney advising that Asbury Partners was terminating the agreement because appellants had "violated

[p]aragraph 6 of the [a]greement by contesting the date of valuation for these properties" and that appellants had violated paragraph 7 because they "permitted liens and/or unsafe conditions to exist on one or more of the properties."

On December 8, 2009, appellants filed a motion to compel the City to file a declaration of taking for each of the properties, insisting that the City was obliged to do so as part of its supposed undertaking pursuant to the agreement between Asbury Partners and appellants. On February 4, 2010, the Law Division denied the application. The court doubted the agreement's enforceability against the City, even though such agreement was expressly mentioned in Ordinance 2873. However, the court found that even assuming that the agreement was enforceable against the City, it was "not persuaded by [appellants'] argument that the City [was] in breach of the [agreement]."

To reach this conclusion, the Law Division analyzed the language of the agreement and found that although it was "negotiated for the purpose of accelerating the acquisition of the subject properties," the agreement did not require the City to "file a Declaration of Takings for the subject properties within any time period; it only require[d] that Asbury Partners request that the City file a Declaration of Taking[] within the [sixty] day period."

The Law Division also found that because the Redeveloper Agreement made "no provision for or reference to the acceleration of N.J.S.A. 20:3-25," the City was "bound only by those time constraints delineated in . . . N.J.S.A. 20:3-25." The court concluded that because the orders appointing commissioners were entered on October 7, 2009, appellants could not move to compel the filing of declarations of taking until six months later in April 2010.

On February 19, 2010, Asbury Partners requested that the City discontinue the condemnation proceedings. On March 18, 2010, the City complied by filing a Notice of Abandonment for each property.

On May 26, 2010, appellants filed a motion for reimbursement of attorneys' fees and costs pursuant to N.J.S.A. 20:3-26(b). Appellants' attorney provided a certification in support of the reallocation application pursuant to Rule 4:42-9(b). The total amount of attorneys' fees and disbursements was $89,501.59. Also submitted for reallocation was a billing invoice from Appraisal Consultants Corp. for $10,100.

The City did not object to the majority of the attorneys' fees. It argued, however, that the start date for attorneys' fees should be in June 2008 because that was when the City adopted Ordinance 2873 specifically authorizing the use of eminent domain to take title to appellants' properties. The City further contended that appellants were not entitled to attorneys' fees for their motion to compel the filing of declarations of taking since N.J.S.A. 20:3-35 clearly stated that the condemning authority had six months to file the declarations of taking from the time the court appoints commissioners. Additionally, it noted that appellants could not have reasonably compelled the City to condemn the properties within the timeframes set by the agreement between appellants and Asbury Partners because the City was not a party to that agreement. Lastly, the City argued that appellants were not entitled to attorneys' fees for any work completed after the City filed the Notices of Abandonment on March 18, 2010, pursuant to the plain language of N.J.S.A. 20:3-26.

On September 3, 2010, the Law Division granted appellants' motion in part, ordering the City to pay $78,261.59 for attorneys' fees and disbursements, and $10,100 for appraisal services. The Law Division ruled that appellants were not entitled to attorneys' fees for work done before the adoption of ordinance 2873 and for work done after the filing of the Notices of Abandonment. This appeal followed.

II.

A.

On appeal, appellants' primary contention is that the City was obliged to file a declaration of taking for each property and the Law Division erred in refusing to order such relief.

They argue that because the City "assign[ed] [its] negotiation obligations to the redeveloper, the City cannot distance itself from any agreements reached between the redeveloper and property owner." By the redeveloper standing in the shoes of the City, so to speak, its promises became the obligations of the City. Accordingly, because the agreement provided that within 60 days from the date upon which the Superior Court, Monmouth County confers jurisdiction upon the City to acquire any of the Properties, Asbury Partners will (a) provide the City with funds necessary for the City to deposit with the Court in connection with the filing of a declaration of taking for each property so considered, and (b) request that the City promptly file a declaration of taking for each of the Properties at that time[,] the City effectively gave up its right to abandon the condemnation proceedings and was required to file the declarations of taking. Appellants' arguments find no support in the law and fly in the face of the plain meaning of the agreement. We are unpersuaded by appellants' invocation of the square corners doctrine and reject their request to apply judicial estoppel against the City.

We start with the undisputed fact that the City was not a party to the agreement between Asbury Partners and appellants. We are unaware of how a governmental entity becomes obliged to perform another party's promises in the absence of taking official action. Here there was none. The Redeveloper Agreement neither contains language imposing such derivative obligations on the City nor was there any affirmative act by the City that evidenced its intention to fulfill an unexpressed duty to file declarations of taking within an abbreviated sixty-day period.

Appellants' reliance upon the "annexed hereto and made a part hereof" language in Ordinance 2873's preamble is misplaced. This clause has no legal consequence since a preamble to local legislation is not to be given substantive effect "'particularly where the enacting portion of the [ordinance] is expressed in clear and unambiguous terms.'" Gonzalez v. Bd. of Educ. of Elizabeth Sch. Dist., Union Cnty., 325 N.J. Super. 244, 255 (App. Div. 1999) (quoting PRB Enters., Inc. v. S. Brunswick Planning Bd., 105 N.J. 1, 5-6 (1987)), certif. denied, 163 N.J. 77 (2000). Furthermore, declaring the agreement "a part hereof" did not connote anything more than making the agreement readily available for public inspection. The City did not undertake to be responsible for the private arrangements between appellants and Asbury Partners.

"In dealing with the public, the government must turn square corners." FMC Stores Co. v. Borough of Morris Plains, 100 N.J. 418, 425 (1985) (internal citation omitted). This maxim is especially true in the context of a public agency's taking of private land for redevelopment, one in which the "government has an overriding obligation to deal forthrightly and fairly with property owners." Jersey City Redev. Agency v. Costello, 252 N.J. Super. 247, 257 (App. Div.), certif. denied, 126 N.J. 332 (1991). However, the City's contentions that it (1) is entitled to the six-month deadline to file declarations of taking under N.J.S.A. 20:3-25 and (2) it has the right to abandon the condemnation proceedings under N.J.S.A. 20:3-35 have not eroded the ninety-degree angles of the City's conduct in this case.

Appellants also suggest that the City's successful resistance to their attempt to obtain an earlier valuation date somehow judicially estops the City from refusing to file the declarations of taking. This argument is without sufficient merit to warrant discussion beyond a few brief comments. R. 2:11-3(e)(1)(E). In the same way that government must comport itself fairly and honestly in its dealings with property owners, it has a concomitant duty to protect the public interest on behalf of all of its citizens. Accordingly, equitable principles of estoppel are governed by the long-standing principle that estoppel should rarely be invoked against a public official or public entity. Middletown Twp. Policemen's Benev. Ass'n v. Twp. of Middletown, 162 N.J. 361, 367 (2000). We discern nothing in the conduct of the City to warrant invocation of such equitable remedy.

B.

We next turn to appellants' grievance that the Law Division did not fully compensate them for $89,501.59 in attorneys' fees and disbursements in accordance with the Eminent Domain Act. The Law Division only deducted the following from that amount: $9397.50 for legal services performed before the City authorized the exercise of eminent domain, and $1942.50 for legal work conducted after the City formally abandoned the condemnation proceedings. The total award for attorneys' fees and disbursements was $78,161.59, which was eminently reasonable.

The decision to award attorneys' fees is committed to the discretion of the trial court. Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 444 (2001). Fee determinations will be disturbed only "'on the rarest of occasions, and then only because of a clear abuse of discretion.'" Ibid. (citing Rendine v. Pantzer, 141 N.J. 292, 317 (1995)); see also City of Englewood v. Exxon Mobile Corp., 406 N.J. Super. 110, 123 (App. Div.), certif. denied, 199 N.J. 515 (2009) ("An award of counsel fees is only disturbed upon a clear abuse of discretion.").

Pursuant to N.J.S.A. 20:3-26(b), if a condemnation action is abandoned by the condemning authority, "then the court shall award the owner . . . such sum as will reimburse such owner for his reasonable costs, disbursements and expenses actually incurred, including reasonable attorney, appraisal, and engineering fees." The Law Division was acutely aware of this provision and carefully analyzed appellants' request for reallocation.

Appellants make the general argument that the Law Division "ignored the very purpose behind the fee provision statute, 'to make the condemnee whole.'" Their appellate brief also cites the "second purpose cited by the Supreme Court -- to encourage care on the part of the condemnor in exercising its awesome power." Although these are correct statements of the law, appellants do not specifically identify how they were misapplied by the Law Division in this case.

In Township of West Orange v. 769 Associates, LLC, 198 N.J. 529 (2009), the Court concluded "that where a condemnation action is abandoned, a condemnee is entitled to reasonable fees and expenses from the point at which the property is formally targeted for condemnation." Id. at 532. After analyzing the language of the statute, the Court determined that the ordinance authorizing the condemnation of the property was the "formal action targeting" a condemnee's property, and thus, the starting date for the award of attorney's fees and costs. Id. at 541.

Similarly, the City's 2008 adoption of Ordinance 2873 was the start date for the calculation of attorneys' fees. We are unable to subscribe to the interpretations advanced by appellants that Ordinance 2607, adopted in 2002, authorized the exercise of eminent domain vis-a-vis their properties and "the 2008 ordinance was completely duplicative and redundant to the 2002 ordinance." Ordinance 2607 merely amended the City's vision for redevelopment of its waterfront; it did not authorize the City to do anything else, much less take appellants' properties by eminent domain. The Law Division properly reviewed appellants' application through this lens and excised those attorneys' fees that were anticipatorily incurred.

Although not explicitly stated, the language of N.J.S.A. 20:3-26(b) indicates that the filing of the notice of abandonment is the end date for the calculation of attorneys' fees and costs. The purpose of the statute is to compensate the condemnee for the expenses it incurred to defend the condemnation action. Once the action was abandoned, a defense was no longer necessary and thus, any fees generated on behalf of appellants cannot be reallocated to the City.

Affirmed.


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