TOWNSHIP OF MOUNT OLIVE, et al. v. INTERVERSE ENTERPRISES, INC.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-6727-04T36727-04T3

TOWNSHIP OF MOUNT OLIVE,

a Municipal Corporation of the

State of New Jersey and County

of Morris,

Plaintiff-Respondent,

v.

INTERVERSE ENTERPRISES, INC.,

a New Jersey Corporation,

Defendant-Appellant.

 

Submitted May 31, 2006 - Decided July 31, 2006

Before Judges Hoens and Seltzer.

On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-174-03.

Singer & Goger, attorneys for appellant (Susan S. Singer, on the brief).

Dorsey & Semrau, attorneys for respondent (Fred Semrau and Karen A. Lodeserto, on the brief).

PER CURIAM

Defendant, Interverse Enterprises, Inc., appeals from the July 13, 2005, order of the Law Division to the extent that a portion of its application for reimbursement of fees incurred in an abandoned condemnation action, see N.J.S.A. 20:3-26b, was denied. We affirm.

Only the following facts are relevant to the narrow issue that we address on appeal. Interverse purchased a parcel of property in Mount Olive in 1988. At the time, the parcel, which was approximately 103 acres in size, was included in the R-1 zone, which allowed development of single family residences on one-acre lots. Rather than develop the parcel, the family members who comprised Interverse used about one-third of it for farming, and left the remainder in its undeveloped, densely wooded, state.

In April 1998, Mount Olive adopted Ordinance 5-98, which was the result, in part, of the 1995 reexamination of its Master Plan. That ordinance, in relevant part, altered the zoning applicable to the Interverse property, limiting development on that parcel to one home on five acres and effectively reducing the total number of homes that could be built there. Interverse did not immediately challenge the change in the zoning because David Kan, who was its president, believed that he would be able to negotiate with the township for permission to create more building lots than the new ordinance permitted. Late in 1998, representatives of Mount Olive contacted Kan and told him that the township was interested in acquiring the property for a public purpose. Negotiations between Mount Olive and Kan proceeded for nearly two years but were unsuccessful.

In June 2000, Mount Olive formally advised Kan in writing of its intention to acquire the property, offering to do so by an amicable settlement about the price or to proceed through condemnation. After further negotiations, the particulars of which are not relevant to the issues on appeal, on October 4, 2000, Mount Olive advised Kan that if its offer were not accepted within fourteen days, a complaint in condemnation would be filed. In response, Interverse filed a prerogative writs complaint on October 20, 2000. The purpose of that complaint was to challenge Ordinance 5-98, arguing in part that it was adopted in an effort to reduce the value of the parcel so as to permit the township to acquire it at a lower price. At the time, however, the validity of Ordinance 5-98 was also being challenged in a prerogative writs action filed by unrelated property owners. The judge therefore stayed proceedings on the Interverse prerogative writs complaint pending the outcome of that separate challenge to the ordinance.

During the time when the prerogative writs action was stayed, further negotiations about the price of the Interverse property were conducted. Because those discussions were not successful, Mount Olive filed its complaint in condemnation in January 2003. Shortly thereafter, the challenge to Ordinance 5-98 which had been raised in the unrelated complaint was concluded, resulting in a holding that the ordinance was facially valid. The stay of the Interverse prerogative writs complaint was then lifted. Following a hearing on that complaint in March 2004, the judge upheld the validity of Ordinance 5-98 as applied to the Interverse property. In part, the judge concluded that Interverse had failed to demonstrate that the change in the zoning was motivated by the township's plan to acquire the property or that the township adopted the ordinance in an effort to depress the price of the Interverse parcel in anticipation of condemnation. Instead, the judge concluded that the change in zoning was the culmination of twenty years of planning in connection with preserving the character of the township.

Six weeks after the judge rejected the Interverse challenge to the ordinance, he issued an order scheduling proceedings in the condemnation action. In compliance with that order, Interverse served its expert reports and appraisals in November 2004. Shortly thereafter, Mount Olive filed a notice of abandonment of the condemnation proceedings.

In March 2005, Interverse filed an application for reimbursement of fees and costs related to the abandoned condemnation proceedings. See N.J.S.A. 20:3-26b. In particular, Interverse sought reimbursement of two categories of costs that are germane to the issues on appeal. First, Interverse requested reimbursement of fees and costs related to the condemnation action, including costs associated with the negotiations with the township that had taken place before the complaint in condemnation was filed. Second, Interverse requested reimbursement of costs and fees it had incurred in connection with its prerogative writs action.

Judge Bozonelis concluded that Interverse was entitled to the former but not the latter. Because Mt. Olive has not filed an appeal, the only issue before us is Interverse's argument that the judge erred in concluding that the statute authorizing reimbursement of costs and fees following an abandonment of a condemnation action did not permit Interverse to recoup the costs and fees associated with its prerogative writs complaint.

The statute provides in relevant part as follows:

If . . . the condemnation action is abandoned by the condemnor, then the court shall award the owner of any right, or title to, or interest in such real property, such sum as will reimburse such owner for his reasonable costs disbursements and expenses actually incurred, including reasonable attorney, appraisal, and engineering fees.

[N.J.S.A. 20:3-26b.]

In a related context, we have commented that "[p]erhaps, it would be fair or efficient to compensate a land owner for all costs he or she incurs as a result of a condemnation action, but the United States Supreme Court has said that 'such compensation is a matter of legislative grace rather than constitutional command.'" Jersey City Redev. Agency v. Clean-O-Mat Corp., 289 N.J. Super. 381, 401 (App. Div.)(quoting United States v. Bodcaw Co., 440 U.S. 202, 204, 99 S. Ct. 1066, 1067, 59 L. Ed. 2d 257, 260 (1979)), certif. denied, 147 N.J. 262 (1996); see Casino Reinv. Dev. Auth. v. Marks, 332 N.J. Super. 509, 512-13 (App. Div.), certif. denied, 165 N.J. 607 (2000). This background implies that we should interpret the "legislative grace" narrowly. Moreover, this understanding of our role informs us in addressing the limits, if any, that the statutory language imposes on the costs incurred "as a result of" the condemnation action.

Although the statute does not explicitly foreclose the Interverse application for costs and fees it incurred in the prerogative writs action, our analysis of the language of the statute compels us to conclude that the costs incurred in pursuing litigation ancillary to the condemnation action itself are not recoverable. First, the plain meaning of the subsection is to reimburse a property owner for "costs, disbursements and expenses actually incurred" in connection with the condemnation action. The use of the word "actually" implies that the Legislature intended to create a narrow scope of recovery. The Legislature's choice of this language makes it plain that the costs and expenses must be incurred in defense of the abandoned condemnation action itself. Nothing in the statutory language implies that a property owner who incurred costs or expenses in a corollary proceeding designed to maximize the price he might receive for the property would be entitled to be reimbursed for those costs as well. Rather, as the Law Division judge concluded, the prerogative writs action that Interverse pursued was a separate litigation, filed by it solely as a matter of choice. The costs Interverse incurred in that pursuit do not constitute costs it incurred "as a result of" the failed condemnation proceeding. These costs do not therefore qualify as ones for which reimbursement is mandated by the statute.

Second, even were we to conclude to the contrary and agree with Interverse that the meaning of the statute is sufficiently broad to permit reimbursement of costs incurred in pursuing litigation that is merely related to the condemnation action in some fashion, we would not reach a different result. Rather, we would conclude nonetheless that the costs Interverse incurred in the prerogative writs litigation would fall outside of the bounds of the statute. In light of the fact that the prerogative writs action failed on its merits both in the Law Division and on appeal, it could not have had any impact on the eventual decision by the township to abandon the condemnation complaint. We think it plain that unsuccessful, ancillary litigation that does not advance the cause of the property owner so as to effect a favorable result either by increasing the quantum of the final award or by causing the condemnor's decision to abandon, falls outside the scope of the reimbursement statute.

 
Affirmed.

Interverse appealed that decision, which was affirmed in an unpublished decision on May 4, 2005. Interverse Enterprises, Inc. v. Township of Mount Olive, et al., No. A-4512-03T3 (App. Div. May 4, 2005).

The record reflects that there was insufficient evidence in Interverse's motion papers to permit the judge to accurately divide the amounts sought between these two categories. The parties, however, reached an agreement about the appropriate sums attributable to the condemnation action and have resolved that issue amicably.

(continued)

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A-6727-04T3

July 31, 2006