NEW JERSEY TRANSIT CORPORATION v. MECCA & SON TRUCKING CO., INC.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5643-03T35643-03T3

NEW JERSEY TRANSIT

CORPORATION,

Plaintiff-Appellant,

v.

MECCA & SON TRUCKING

CO., INC.,

Defendant-Respondent

and

CITY OF JERSEY CITY, and

STATE OF NEW JERSEY,

Defendants.

 

Argued September 21, 2005 - Decided

Before Judges Conley, Winkelstein and Sapp-Peterson.

On appeal from the Superior Court of New Jersey, Law Division, Hudson County, HUD-L-5621-00.

Dale Laster Lessne, Deputy Attorney General, argued the cause for appellant (Peter C. Harvey, Attorney General, attorney; Patrick DeAlmeida, Assistant Attorney General, of counsel; Ms. Lessne, on the brief).

John H. Buonocore argued the cause for respondent (McKirdy & Riskin, attorneys; Mr. Buonocore, of counsel and on the brief).

PER CURIAM

In this eminent domain case, plaintiff, New Jersey Transit Corporation (New Jersey Transit), appeals from a $1,700,000 verdict in favor of defendant, Mecca & Son Trucking Company, Inc. (Mecca). Plaintiff challenges evidentiary rulings made by the trial judge, the limitations the judge imposed on the cross-examination of defendant's expert, and the court's decision not to permit the jury to view the property. We find plaintiff's arguments to be without merit and affirm.

New Jersey Transit is authorized by statute to acquire property by condemnation. See N.J.S.A. 27:25-13d. Mecca's lot is located on Paterson Plank Road in Jersey City. Active railroad tracks run south of the property, while Paterson Plank Road runs to its north. New Jersey Transit wanted to acquire the property to construct a storm water detention basin to prevent flooding on the railroad tracks.

At the time New Jersey Transit filed its condemnation complaint in August 2000, the property contained two storage warehouses. While originally zoned I-2, intensive industrial, the Jersey City Master Plan, dated May 2000, recommended rezoning the property to R-3, multi-family mid-rise residential. The zoning change was effectuated by ordinance in April 2001. At the time of the taking, most of the development in the area was industrial.

At trial, both New Jersey Transit's and Mecca's appraisers valued the property for residential use. Those values, however, differed substantially. New Jersey Transit's expert valued the property at $700,000; Mecca's expert valued the property at $1,970,000. The jury, as noted, arrived at a value of $1,700,000.

Due to the property's industrial nature, it had become contaminated. According to New Jersey Transit's environmental consultant, BEM Systems, ninety-nine cubic yards of "hot spot" soil volume required excavation and off-site disposal. Additional expenditures were also necessary for soil and ground water investigation costs, capping, deed notice preparation and recording, and groundwater monitoring well installation. Consequently, New Jersey Transit sought remediation costs against Mecca in a separate lawsuit, where, following a bench trial, Judge D'Italia entered a final judgment on January 23, 2003, in favor of New Jersey Transit in the amount of $182,400. Neither party appealed from that judgment.

Immediately prior to the trial in this case, which was held before Judge Kenny and a jury from March 22, 2004 through March 29, 2004, New Jersey Transit moved in limine to permit the jury to view the property. Judge Kenny denied the request. Because the property had undergone significant change over the three and one-half years that had passed from the date of the taking to the date of the trial, the court concluded that a view of the property would be confusing for the jury.

New Jersey Transit also moved in limine to permit the jury to hear evidence that the property was contaminated. Plaintiff argued that as a result of the environmental contamination, the property acquired an environmental stigma. The trial judge denied that application. Relying, in part, on Hous. Auth. of New Brunswick v. Suydam Investors, L.L.C., 177 N.J. 2 (2003), Judge Kenny made the following findings:

If there were a way for an expert to testify or an appraiser to testify and say, yes, I appraised it, . . . I took 10 percent off because of . . . deed notice [was] there without getting into your side issue. I think that the [S]upreme [C]ourt recognizes that that has an affect on the valuation of property, and I think that the [S]upreme [C]ourt in [Suydam] recognizes the distinction between the remediation and environmental stigma and perhaps it's fair and distinct to say, well, look, this has something on it. That's why, you know, it's not as valuable as the exact same sized piece of property over a mile away, or even across the street.

However, what's concerning me now about the posture of this case are all the representations that have been made that this is not in the case, that it's out of the case, that the State is going to proceed with this trial solely on valuation. And you don't have comparables that are comparable in terms of environmental stigma. Nobody does. So, at this point in time, it seems inherently unfair to get into what is going to be a big collateral issue.

. . . .

I don't know whether you can, but if you can think of a way that you can fairly have your environmental stigma evaluation in there without getting us into the side trial, I'm willing to listen to it.

. . . .

[A]t this point in time, I'm going to go with the main holding of [Suydam] which is we value the property as if remediated and we don't get into issues of contamination because it's far too prejudicial, confusing and time consuming.

During trial, an issue arose concerning the scope of New Jersey Transit's cross-examination of Mecca's appraiser. Plaintiff attempted to cross-examine with an appraisal report prepared by another appraiser hired by Mecca, but not called as a witness at trial. Although the trial judge precluded New Jersey Transit from using that report for cross-examination, the court did permit plaintiff to cross-examine the expert with the comparable sales included in the report.

Given this background, we turn first to the environmental stigma issue. Neither party disputes that property that has been remediated as a result of environmental pollution may carry a "remediation stigma discount." See Hous. Auth. of New Brunswick v. Suydam Investors, L.L.C., 177 N.J. 2, 21 n.4 (2003) ("as if remediated" is slightly different than "as if clean" insofar as it incorporates a "so-called remediation stigma discount"). Nevertheless, the trial court had more than sufficient support for her decision to preclude evidence of contamination from reaching the jury.

The judge precluded the evidence for several reasons. First, because New Jersey Transit had previously agreed that contamination and remediation were not to be raised at the valuation trial.

The judge was correct. Not only was the contamination issue addressed in the separate legal proceeding, where New Jersey Transit obtained a $182,400 judgment against Mecca, but New Jersey Transit had agreed in writing prior to trial that the jury would not be told of the contamination or the cost of remediation. First, in a letter to the court dated November 21, 2002, the State, on behalf of New Jersey Transit, said: "The estimated fair market value of the property as if remediated was not an issue, nor was it ever raised during the cost recovery trial before Assignment Judge D'Italia, nor will the remediation costs be raised by New Jersey Transit during the condemnation trial." Second, in a January 23, 2003 letter brief in opposition to Mecca's request to adjourn the trial, almost two years after the property was rezoned residential, the State specifically noted that "the contaminated condition of the property will not be before the jury since the property was appraised by NJ Transit as if it were already remediated." The brief continued: "[c]ontrary to defendant Mecca's assertion, the condemnation trial will not involve any environmental issues . . . . Mecca's apprehension that the issue of the contamination and its effect on the fair market value of the Mecca property will be raised during the condemnation trial is unfounded." The State went so far as to object to Mecca's request for additional discovery on comparable sales involving the effect of contamination on purchase price "since neither party's appraisal contains comparable sales involving contaminated or previously contaminated properties." Defendant had a right to rely on these representations.

Another reason the judge prohibited the contamination evidence from reaching the jury was that New Jersey Transit's expert provided no facts to support his opinion that the stigma warranted a ten percent decrease in the property's value. In his 2003 appraisal report, to account for environmental stigma, New Jersey Transit's appraiser made an across-the-board ten percent deduction to all comparable sales he had selected. He did not, however, provide any market data upon which to base that opinion. During trial, he again failed to provide data to support his opinion. Judge Kenny concluded that his opinion was therefore a net opinion, and inadmissible. See Matter of Yaccarino, 117 N.J. 175, 196 (1989); State v. One Marlin Rifle, 319 N.J. Super. 359, 370 (App. Div. 1999). We agree. The record contains no objective evidence to support the appraiser's subjective opinion that the comparable sales, as well as the value of the subject property, should be reduced by a flat ten percent for environmental stigma. New Jersey Transit failed to present even a shred of market data to support such a conclusion. The expert's opinion was a net opinion, and as the judge properly concluded, inadmissible.

The judge made one further point to support her conclusion that contamination evidence should not reach the jury. She noted that even if the environmental stigma evidence had some probative value, that probative value was outweighed by the substantial prejudicial effect of presenting the jurors with evidence of environmental contamination when, in fact, the appraisers valued the property as if clean. In essence, while not specifically referring to N.J.R.E. 403, the judge analyzed the issue under that rule. It says: otherwise admissible evidence may be precluded by the trial judge if "its probative value is substantially outweighed by the risk of (a) undue prejudice, confusion of issues, or misleading the jury . . . ." N.J.R.E. 403. Here, the judge noted that to allow the environmental stigma evidence would "get us into a collateral issue that whose potential for prejudice I think vastly outweighs the probative value." We agree with her reasoning. See State v. Nelson, 173 N.J. 417, 470 (2002) (precluding evidence pursuant to N.J.R.E. 403, trial judge has wide discretion and will be reversed only if "the trial court's ruling was so wide of the mark that a manifest denial of justice resulted." (internal quotations omitted)).

New Jersey Transit claims that the judge's ruling is tantamount to a decision that only sales of contaminated properties could be used to measure the effect of environmental stigma on the value of the property. Respectfully, that is not what the judge said. She required the environmental stigma valuation to be factually based, but did not rule that only comparable sales of contaminated properties could be used. She left the method of proof of stigma to New Jersey Transit. And, the only proof provided was New Jersey Transit's expert's subjective opinion, not supported by the evidence. The court therefore properly precluded the testimony. See Metuchen I, LLC v. Borough of Metuchen, 21 N.J. Tax 283, 291 (Tax 2004) (tax court struck stigma damage portion of valuating expert's testimony because expert unable to prove factual support for opinion); see also Finkelstein v. Dep't of Transp., 656 So. 2d 921, 924-25 (Fla. 1995) (factual basis required to support testimony reducing value of condemned property based upon stigma damages; "an opinion as to a decrease in value cannot be a mere surmise that because property is contaminated, it logically follows that the value of the property is decreased.").

We next turn to the court's decision to prohibit New Jersey Transit from cross-examining Mecca's expert with the report of a nontestifying expert. "[T]he scope of cross-examination of a witness rests in the discretion of the trial judge. An appellate court will not interfere with the exercise of such discretion unless clear error and prejudice are shown." Glenpointe Assocs. v. Twp. of Teaneck, 241 N.J. Super. 37, 54 (App. Div.), certif. denied, 122 N.J. 391 (1990). It is not appropriate for a party to cross-examine an expert witness with hearsay materials not prepared or relied on by the expert. State v. Pennington, 119 N.J. 547, 583 (1990).

Here, we find no abuse of discretion by Judge Kenny when she precluded New Jersey Transit's counsel from cross-examining Mecca's testifying appraiser with the report of Mecca's nontestifying appraiser. Without its preparer to testify, that document was rank hearsay. Nevertheless, Judge Kenny did permit the State to cross-examine Mecca's expert with the comparable sales included in the nontestifying appraiser's report. That decision was well within her discretion. Plaintiff's arguments on this issue are not sufficient to warrant any additional discussion. R. 2:11-3(e)(1)(E).

Finally, we address plaintiff's argument that the trial court abused its discretion by declining to allow the jury to view the property. That argument is similarly without merit.

In general, jury views are governed by N.J.S.A. 2B:23-16a, which provides, in part: "At any time during trial the court may order that the jury view the lands, places or personal property in question to understand the evidence better." Specifically, as to condemnation cases, Rule 4:73-7 states: "The jury shall view the land and property to be taken, unless the court otherwise orders." A view is not evidence, but may help the jury to understand "the evidence properly introduced before it by the parties." State v. Coleman, 46 N.J. 16, 25 (1965), cert. denied, 383 U.S. 950, 86 S. Ct. 1210, 16 L. Ed. 2d 212 (1966). The decision to allow a jury view, therefore, lies with the sound discretion of the trial court. Id. at 25-26.

Here, prior to trial, Judge Kenny, accompanied by counsel, viewed the subject property. Following argument from counsel, the judge denied New Jersey Transit's motion. She based her decision on the fact that the property had undergone significant change over the previous three and one-half years. The property no longer housed two garages, but instead "a large detention basin surrounded by high walls had been erected around the entire property." As such, Judge Kenny found that a view would potentially confuse the jury. That was not an abuse of the court's discretion.

 
Affirmed.

(continued)

(continued)

12

A-5643-03T3

September 29, 2005