Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.

Gloucester County Improvement Authority v. Gallenthin Realty Development


August 8, 2012


On appeal from the Superior Court of New Jersey, Law Division, Burlington County, Docket No. L-2718-10.*fn1

Per curiam.


Argued September 26, 2011

Before Judges A. A. Rodriguez, Sabatino and Ashrafi.

Gallenthin Realty Development, Inc. (Gallenthin) appeals from the November 16, 2010 final judgment and order appointing condemnation commissioners signed by Judge Michael J. Hogan, in favor of the Gloucester County Improvement Authority (Authority). We affirm.

These are the relevant facts. Gallenthin is the current owner of a 63.92 acre parcel of undeveloped land in the Borough of Paulsboro. This appeal concerns the efforts by the Authority to acquire this parcel. In 2001, the Authority began to plan for the construction of a marine terminal on the Delaware River (Port Terminal Project). In connection with this project, Paulsboro entered into a ninety-nine-year lease for an industrial site in Paulsboro. The Authority also acquired adjacent properties from private owners.

The project required the construction of a roadway connecting I-295 to the Port Terminal Project site. This new access was intended to reroute truck traffic away from residential neighborhoods. Gloucester County agreed with the New Jersey Department of Transportation to design, construct, maintain, and operate the new access route.*fn2

Because several of the potential access routes to the Port Terminal Project site would cross over land owned by Gallenthin Realty, the Authority sought to acquire this property, which has been vacant since 1998. It is zoned as a marine industrial business park.

In early 2006, the Authority sought access to the Gallenthin property, pursuant to N.J.S.A. 20:3-16, in anticipation of a condemnation action to build the access road. Gallenthin refused access. The Authority sued to gain access. On May 25, 2006, the Law Division entered an order granting the Authority access to the property.

Gallenthin then sought to remove the dispute to the federal court. United States District Court Judge Jerome Simandle remanded the matter to the Law Division. On April 4, 2008, the Law Division granted the Authority access to the Gallenthin property. Once the Authority had actual access, its engineers determined that the preferred location of the access route would require condemnation of a 3.663 acre parcel of the Gallenthin property in fee simple and .310 acres in a permanent construction easement and a storm-water retention basin. The engineers also determined that the access project would require the acquisition of other adjacent property.*fn3

The Authority retained Jerome McHale of J. McHale & Associates, Inc. (McHale) to determine the just compensation for the taking of the Gallenthin property. McHale concluded that the fair market value of the Gallenthin property, plus damage to the remainder, was $404,000 as of January 5, 2009. The Authority adopted a resolution accepting the appraisal report and authorizing an offer of $404,000. George Gallenthin, III, on behalf of Gallenthin, met with representatives of the Authority and rejected the $404,000 valuation. A long period of negotiations followed. There were additional meetings, exchange of information, and other attempts to reach an acceptable figure. In addition, George Gallenthin, III, the company's principal shareholder, who also served as its counsel and its counsel pro hac vice at oral argument, was sent overseas on military duty for a period of a year.

After several months, the Authority requested that Gallenthin provide a counter offer or respond to the offer.

Finally, in late December 2009, Gallenthin provided the Authority with an appraisal report prepared by Richard M. Chaiken, setting the fair market value of the property, plus damage to the remainder, at $4,938,000. Chaiken's appraisal was premised upon the highest and best use of the property being a dredge spoils transfer station. Chaiken did not address any of the impediments to this proposal, but simply noted that such transfer stations would be required by the dredging of the Delaware and that the property was conveniently sited -- with river and rail access -- for this use. Chaiken further assumed that the Authority's taking would prevent the entire property from being used for this purpose because: (1) the proposed bridge was not high enough to allow barges to pass under it; and

(2) the Authority's taking would cut off railway access to the property.

The Authority rejected Gallenthin's valuation. During the winter of 2010, the Authority changed its proposed taking in order to leave an existing railway spur in place. These changes required a reconfiguration of the proposed road and resulted in a decrease in size of proposed taking area. The new Authority plan involved a smaller taking -- 3.395 acres in fee simple, 0.256 acres in permanent easements, and 1.73 acres in temporary construction easements. The plan would require the Authority to take a roadway easement held by Gallenthin. On March 17, 2010, the Authority provided the revised takings maps to Gallenthin.

This change to the plan forced the Authority to obtain an updated appraisal. Although the taking area decreased, McHale concluded that value of the property taken and the related damages actually increased in valuation. In a March 2010 report, McHale estimated that just compensation for the taking would be $443,000.

On April 23, 2010, the Authority filed a verified complaint and proposed order to show cause against Gallenthin. Judge Georgia M. Curio signed the order to show cause. The Authority paid $443,000 to the Superior Court Trust Fund Unit as estimated compensation.

Gallenthin moved to dismiss and for change of venue, or for recusal of Judge Curio. The judge granted the motion for a change of venue and transferred the lawsuit to Burlington County.

On August 16, 2010, Judge Michael Hogan held a hearing on Gallenthin's motion to dismiss and the order to show cause. Judge Hogan issued a written opinion on August 30, 2010, confirming the Authority's power to condemn the subject property and denying Gallenthin's motion to dismiss. Specifically, the judge found that:

(1) Authority engaged in bona fide good faith negotiations pursuant to N.J.S.A. 20:3-6;

(2) Authority has established a proper public purpose for the taking and there is no indication of an ulterior improper purpose;

(3) The taking is neither arbitrary nor capricious; and

(4) The Complaint provides an adequate description of the taking.

The judge also found "that the evidence provided by Gallenthin has failed to raise any genuine issues of material fact." On November 16, 2010, Judge Hogan issued an order granting the Authority final judgment, as well as appointing commissioners to appraise the land and fix a price to compensate Gallenthin for the taking.

Gallenthin filed a notice of appeal on January 3, 2011. On appeal, Gallenthin contends that: (1) "it is harmful error to deny a plenary hearing after joinder of issues in summary actions pursuant to R. 4:67 as required by R. 4:73-1;" (2) the Authority "failed to conduct the pre-complaint bona fide negotiations required by N.J.S.A. 20:3-6;" (3) the Authority "has hidden the true, impermissible purpose for the condemnation;" (4) the taking is arbitrary and capricious; (5) "the complaint fails to provide an adequate description of the taking;" (6) "possession and all further proceedings in this matter should be stayed pending the entry of final judgment on the [Authority's] right to condemn;" (7) Gallenthin is entitled to discovery and a hearing on whether or not the taking was for a private rather than a public purpose; and (8) Gallenthin should be awarded fees pursuant to N.J.S.A. 20:3-26(b), the lis pendens and any declaration of taking should be discharged, and the wetlands delineation should be voided. We reject these arguments and affirm.

We note that Gallenthin's brief was not very helpful to us. In fact, it improperly contains multiple pages of factual assertions that are not referenced to the record. See R. 2:6-2(a)(4). Many of the arguments are not supported by case law. It is essential for a party on appeal to present an adequate legal argument. State v. Hild, 148 N.J. Super. 294, 296 (App. Div. 1977).

We have carefully reviewed these arguments challenging the final judgment in light of the record and determine that they are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(A) & (E).

We now turn to the last contention raised by Gallenthin,

i.e., that "it is plain error to usurp subject matter jurisdiction for class II railroad/yards which rest exclusively with the Federal Government and administered through the Surface Transportation Board as a matter of federal statute: Title 49 U.S.C.[A.] §[]10501."

We reject this argument, which is a proverbial red herring. Gallenthin is not a rail carrier. Therefore, this dispute is not subject to the jurisdiction of the Surface Transportation Board (STB) to which Congress has vested exclusive jurisdiction over "transportation by rail carriers," and thus state law is not preempted. N.Y. & Atl. Ry. Co. v. Surface Transp. Bd., 635 F.3d 66, 70 (2d Cir. 2011) (quoting Green Mountain R.R. Corp. v. Vermont, 404 F.3d 638, 639-43 (2d Cir. 2005)).

The Interstate Commerce Commission Termination Act of 1995 (ICCTA) grants jurisdiction to the STB over:

(1) transportation by rail carriers, and the remedies provided in this part [49 USCS §§ 10101 et seq.] with respect to rates, classifications, rules (including car service, interchange, and other operating rules), practices, routes, services, and facilities of such carriers; and

(2) the construction, acquisition, operation, abandonment, or discontinuance of spur, industrial, team, switching, or side tracks, or facilities, even if the tracks are located, or intended to be located, entirely in one State, is exclusive. Except as otherwise provided in this part [49 USCS §§ 10101 et seq.], the remedies provided under this part [49 USCS §§ 10101 et seq.] with respect to regulation of rail transportation are exclusive and preempt the remedies provided under Federal or State law.

[49 U.S.C.A. § 10501(b).]

A "'rail carrier' means a person providing common carrier railroad transportation for compensation, but does not include street, suburban, or interurban electric railways not operated as part of the general system of rail transportation." 49 U.S.C.A. § 10102(5). "'Transportation' includes a 'yard, property [or] facility . . . of any kind related to the movement of [property] by rail, regardless of ownership or an agreement concerning use.'" N.Y. & Atl. Ry. Co., supra, 404 F.3d at 71 (alteration in original) (quoting 49 U.S.C.A. § 10102(9)(A)). In N.Y. & Atl. Ry. Co., supra, 404 F.3d at 71, the Second Circuit noted that "the STB reasoned that before it can exercise exclusive jurisdiction under Section 10501(b)(2), an activity must constitute transportation and must be performed by, or under the auspices of, a rail carrier as set forth in Section 10501(b)(1)." Id. at 71-71.

Once again, Gallenthin is not a rail carrier. This condemnation dispute does not in any way fit the requirements for exclusive federal jurisdiction.

Affirmed substantially for the reasons expressed by Judge Hogan in his August 31, 2010, comprehensive written opinion.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.