TOWNSHIP OF EDISON v. FILCREST REALTY, INC

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5891-07T25891-07T2

TOWNSHIP OF EDISON,

a Municipal Corporation of

the State of New Jersey,

Plaintiff-Respondent,

v.

FILCREST REALTY, INC.,

Defendant-Appellant.

________________________________________________________________

 

Submitted April 22, 2009 - Decided

Before Judges Stern and Espinosa.

On appeal from Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-2173-08.

Blank Rome, LLP, attorneys for appellant (Steven D. Weinstein, James M. Andrews, and Mark L. Rhoades, on the briefs).

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, P.C., attorneys for respondent (Timothy P. Beck, on the brief).

PER CURIAM

The trial court entered judgment in this summary proceeding, declaring that plaintiff Township of Edison (the "Township") duly exercised its power of eminent domain to condemn a .48 acre strip of property across the property of defendant Filcrest Realty for a riverfront walkway project. Defendant appeals from this judgment, contending that a plenary hearing was required. We affirm.

The Township entered into an agreement with Middlesex County (the "County"), dated September 15, 2005, in which the County agreed to provide $550,000 in funding "for the construction of riverfront walkway, boardwalks, pedestrian bridge, wetlands enhancement and signage and related improvements" along the Raritan River ("the walkway project"). The agreement noted the County's finding that the project met the purposes for which its "Open Space, Recreation and Farmland and Historic Preservation Trust Fund" was established pursuant to N.J.S.A. 40:12-15.1. The proposed walkway was to run from the Edison boat basin to the end of a portion of property owned by defendant. The Department of Environmental Protection granted the Township a permit for the construction in January 2006. There was, however, a special condition to the permit that prohibited the Township from commencing construction "until an agreement is reached with [defendant] concerning the construction . . . ." In April 2006, the Township's environmental special counsel wrote to defendant's counsel to obtain such agreement.

The Township's efforts to secure defendant's agreement coincided with defendant's efforts to secure cooperation from the Township in order to satisfy its obligations under a consent decree it entered into with the United States Environmental Protection Agency, dated October 18, 2005. The consent decree resolved claims against defendant and others associated with the clean-up of the Kin-Buc Landfill. The Kin-Buc Landfill is an environmental superfund site partially located on property owned by Kin-Buc, Inc., which is adjacent to the property owned by defendant where the easement was sought. In addition to paying a civil penalty to the EPA Hazardous Substance Superfund, defendant was required to convey thirty-three lots comprising one hundred acres owned by Transtech to a conservation organization called the Clean Land Fund ("CLF"). Because the property to be conveyed was interspersed with lots owned by the Township, it was anticipated that the CLF would approach the Township in an effort to convince the Township to have its lots become part of defendant's project to preserve the area as a salt water estuary (the "Regional Wetlands Project").

The parties met during April 2006 and thereafter to discuss these issues but negotiations proved to be unsuccessful.

The Township obtained an appraisal of the proposed riverfront walkway easement that determined that $15,000 was just compensation for the easement. The manner in which this amount was calculated was fully disclosed in a report prepared by the appraiser.

The Township's Council passed Ordinance No. 1610-2008 on February 27, 2008, authorizing the payment of $15,000 to purchase the property. The ordinance also authorized the Township to institute condemnation proceedings in the event that an agreement with the property owner could not be reached.

On March 20, 2008, the Township filed a Verified Complaint pursuant to the Local Lands and Buildings Law, N.J.S.A. 40A:12-1 to -30, instituting a condemnation proceeding to acquire an easement over a .48 section of the property owned by defendant. An order to show cause was filed thereafter. Defendant filed an answer and certifications of the president of Transtech, along with exhibits, in opposition. The Township filed the certification of its attorney as well as exhibits in support of its position. At oral argument, defense counsel urged the court to conduct a plenary hearing. However, when the court asked what further evidence would be presented if a hearing were held, defense counsel responded that "the gist" of all the evidence was contained in the certifications that had been supplied to the court. The trial court declined to hold a plenary hearing and entered final judgment in favor of the Township, finding that the Township "is authorized to and has duly exercised its power of eminent domain as to the property and rights described and depicted in the Verified Complaint," and appointing commissioners in accordance with N.J.S.A. 20:3-12(b).

On appeal, defendant raises the following arguments:

POINT I

A PLENARY HEARING WAS REQUIRED PRIOR TO CONDEMNING FILCREST'S PROPERTY BECAUSE THE CERTIFICATIONS SUBMITTED BY THE PARTIES CREATED MATERIAL ISSUES OF FACT THAT COULD NOT BE APPROPRIATELY DECIDED IN THE ABSENCE OF A FULL HEARING WITH THE OPPORTUNITY TO CALL WITNESSES AND CROSS-EXAMINE THE TOWNSHIP'S WITNESSES

A. A PLENARY HEARING WAS REQUIRED TO EVALUATE WHETHER THE TOWNSHIP'S CONDEMNATION ACTION WAS UNDERTAKEN IN BAD FAITH.

B. A PLENARY HEARING WAS REQUIRED TO EVALUATE WHETHER THE TOWNSHIP'S CONDEMNATION ACTION WOULD EXPOSE THE PUBLIC TO DANGER.

C. A PLENARY HEARING WAS REQUIRED TO DETERMINE WHETHER FILCREST WILL BE EXPOSED TO POTENTIAL TORT LIABILITY AS A DIRECT RESULT OF THE CONDEMNATION.

"It is well-established that a reviewing court will not upset a municipality's decision to use its eminent domain power 'in the absence of an affirmative showing of fraud, bad faith or manifest abuse.'" Twp. of W. Orange v. 769 Assocs., 172 N.J. 564, 571 (2002) (quoting City of Trenton v. Lenzner, 16 N.J. 465, 473 (1954), cert. denied, 348 U.S. 972, 75 S. Ct. 534, 99 L. Ed. 757 (1955)). Defendant does not argue that it has presented evidence sufficient to set aside the condemnation. Rather, it argues that it should have been afforded a plenary hearing to explore possible grounds for setting aside the condemnation.

However, a plenary hearing is not required for such an inquiry. Rule 4:73-1 provides that condemnation actions are to be brought in a summary manner pursuant to Rule 4:67. When there is an objection, "the court may try the action on the pleadings and affidavits, and render final judgment thereon" if "the affidavits show palpably that there is no genuine issue as to any material fact." R. 4:67-5.

Defendant contends that a material issue of fact existed here as to whether the Township acted in bad faith in undertaking this condemnation action. The thrust of this argument is that the Township allegedly tried to make defendant agree to the easement as a quid pro quo for its cooperation in implementing the Regional Wetlands Project. Defendant contends that a certification from the Township attorney shows "there is a material factual dispute as to whether it was the Township or Filcrest that was using the proposed walkway easement as a quid pro quo . . . ."

"Bad faith" challenges to a public body's authority to condemn are generally addressed to the actual purpose of the public body in initiating the condemnation proceeding. Borough of Essex Fells v. Kessler Inst. for Rehab., Inc., 289 N.J. Super. 329, 338-39 (Law Div. 1995). The Kessler Institute decision provides a classic example of such bad faith:

[W]here a condemnation is commenced for an apparently valid, stated purpose but the real purpose is to prevent a proposed development which is considered undesirable, the condemnation may be set aside. The extensive record in this case compels the inference that Essex Fells undertook this condemnation action for the sole purpose of preventing Kessler's development of a rehabilitation facility in the community. The credible evidence demonstrates that the public purpose articulated for taking Kessler's property, a public park, was selected not based on a true public need but in response to community opposition to Kessler's proposed use of the property.

[Id. at 339.]

Defendant does not contend that the condemnation was initiated for any reason other than its stated purpose or that the stated purpose is not a legitimate public purpose. As a result, "this case is governed by the general rule that '[c]ourts will generally not inquire into a public body's motive concerning the necessity of the taking or the amount of property to be appropriated for public use.'" Mount Laurel Twp. v. Mipro Homes, L.L.C., 379 N.J. Super. 358, 377 (App. Div. 2005) (quoting Kessler Inst., supra, 289 N.J. Super. at 337) aff'd, 188 N.J. 531 (2006), cert. denied, ___ U.S. ___, 128 S. Ct. 46, 169 L. Ed. 2d 242 (2007). Therefore, defendant's argument that a plenary hearing is necessary to explore "the motivations for the Township's actions" is without merit.

In fact, defendant's challenge implicates bad faith in negotiation, not bad faith in initiating condemnation proceedings. A complaint for condemnation will be dismissed if the public body fails to comply with the pre-litigation requirements of N.J.S.A. 20:3-6, which states in pertinent part:

no action to condemn shall be instituted unless the condemnor is unable to acquire such title or possession through bona fide negotiations with the prospective condemnee, which negotiations shall include an offer in writing by the condemnor to the prospective condemnee . . . setting forth the property and interest therein to be acquired, the compensation offered to be paid and a reasonable disclosure of the manner in which the amount of such offered compensation has been calculated . . . .

See State Comm'r of Transp. v. Town of Morristown, 129 N.J. 279, 285 (1992); Casino Reinvestment Dev. Auth. v. Katz, 334 N.J. Super. 473, 481 (Law Div. 2000). It is, however, undisputed that the Township offered defendant the full amount of the appraisal and provided the basis for the appraisal. Defendant has acknowledged that "[t]he facts concerning the appraisal and financial offer are not in issue." Therefore, there is no material issue of fact regarding the Township's compliance with the pre-litigation requirement to conduct bona fide negotiations.

Defendant's remaining arguments that a plenary hearing was required to determine whether the Township's proposed use created a public hazard or increased defendant's potential tort liability lack sufficient merit to warrant discussion in a written opinion, R. 2:11-3(e)(1)(E), as neither argument is supported by evidence that creates a genuine issue of fact but rather by merely speculative concerns.

 
Affirmed.

This statute is part of what is often called the Municipal Trust Fund Act, N.J.S.A. 40:12-15.1 to -15.9.

Kin-Buc, Inc. and defendant Filcrest Realty are both wholly-owned subsidiaries of Transtech Industries, Inc., all of which were signatories to the consent decree. The Township was not a party to the consent decree.

The cases cited by defendant do not support the proposition that a plenary hearing is required in the absence of evidence showing a material issue of fact. Plenary hearings were required in both County of Ocean v. Stockhold, 129 N.J. Super. 286 (App. Div.), rev'd, 67 N.J. 104 (1974), and Township of Bridgewater v. Yarnell, 64 N.J. 211 (1974), because the defendants made out a sufficient case of arbitrary action to create a genuine issue of fact. Defendant has failed to present such evidence here. Options v. Lawson, 287 N.J. Super. 209 (App. Div. 1996) did not concern a condemnation but, rather, the entry of a permanent injunction against abortion protesters in which we held that a plenary hearing was required "in light of the extreme gravity of imposing injunctions against expressive conduct." Id. At 217.

(continued)

(continued)

10

A-5891-07T2

July 28, 2009