ROCCO BERARDI v. TOWNSHIP OF PEMBERTON

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1973-11T2

ROCCO and ANTONIA BERARDI,

Plaintiffs-Appellants/

Cross-Respondents,

v.

TOWNSHIP OF PEMBERTON,

Defendant-Respondent/

Cross-Appellant.

_______________________________________________

July 25, 2013

Argued February 26, 2013 - Decided

Before Judges Alvarez, Waugh and St. John.

On appeal from Superior Court of New Jersey, Law Division, Burlington County, Docket No. L-2535-08.

Peter H.Wegener arguedthe causeforappellants/cross-respondents(Bathgate, Wegener & Wolf, attorneys; Mr. Wegener, on the brief).

John C. Gillespie argued the cause for respondent/cross-appellant (Parker McCay, P.A., attorneys; Mr. Gillespie, on the brief).

PER CURIAM

Plaintiffs Rocco and Antonia Berardi appeal an August 5, 2011 order of partial summary judgment dismissing their claim against the Township of Pemberton for damages arising from the temporary taking of their property. Following our review of the arguments advanced on appeal, in light of the record and applicable law, we affirm.

I.

The record discloses the following facts and procedural history.

In Township of Pemberton v. Berardi, 378 N.J. Super. 430, 448 (App. Div. 2005) (Berardi I), we held that a condemnor, on a condemnee's application to the court, pursuant to the New Jersey Eminent Domain Act (Act), N.J.S.A. 20:3-1 to -50, must either (1) file a declaration of taking and make the required deposit of compensation offered the condemnee pursuant to N.J.S.A. 20:3-18 or (2) abandon the proceedings pursuant to N.J.S.A. 20:3-35. We incorporate the facts and procedural outlined in Bernardi I by reference.

After we issued our opinion in Berardi I, Pemberton filed a Notice of Abandonment of Proceedings. In November 2005, the trial judge ordered that Pemberton be returned the $2,270,000 it had deposited with the court. On August 18, 2008, the Berardis filed a complaint against Pemberton, "seeking the recovery of fees, costs and damages resulting from the abandonment of the antecedent condemnation case." Count Four of the complaint sought damages for the "temporary taking" of the Berardis' lots. Pemberton filed a motion for partial summary judgment, seeking dismissal of Count Four of the complaint, and the Berardis filed a cross-motion for partial summary judgment on that count. A hearing on the cross-motions for summary judgment took place before the motion judge and she granted partial summary judgment in favor of Pemberton, dismissing Count Four of the Berardi's complaint. Thereafter, a consent order and final judgment granting attorneys' fees and disbursements to the Berardis was entered on November 14, 2011.

The Berardis asserted that Pemberton's exercise of eminent domain temporarily deprived them of their property rights. Especially affected was the ability to rent space in the Browns Mills Shopping Center, owned by Rocco Berardi, including a retail store representing thirty-six percent of the shopping center that stood empty at the time the proceedings began. In addition, the adjacent vacant lot owned by Antonia Berardi "remained undevelopable and unsaleable." The Berardis contended that as a result of the actions taken by Pemberton they lost rental income, business opportunity, and opportunity to expand. According to their appraisal report, "just compensation" for the thirty-four month taking would be $1,161,000. The report further indicates that they realized $368,751 in rental income from the properties in 2002, $316,978 in 2003, $293,019 in 2004, and $319,654 in 2005.

The motion judge, in an August 5, 2011 order of partial summary judgment accompanied by a comprehensive written opinion, decided that Pemberton did not take the Berardi's property requiring just compensation under the Act, the Federal Constitution, or the State Constitution.1 It is from that order that the Berardis appeal.

II.

It is well-established that our review of a trial judge's conclusions of law is de novo. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995) ("A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference."). Consequently, we review a grant of summary judgment de novo, applying the same standard governing the trial court under Rule 4:46-2(c). Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 539-40 (1995); Chance v. McCann, 405 N.J. Super. 547, 563 (App. Div. 2009) (citing Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007)). In addressing a motion for summary judgment, a judge must "consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill, supra, 142 N.J. at 540; see also R. 4:46-2(c).

Subsequent to the motion judge's decision in this case, we decided Hoagland v. City of Long Branch, 428 N.J. Super. 321 (App. Div. 2012), cert. denied, 213 N.J. 388 (2013). In Hoagland, the plaintiffs argued that the mere filing of condemnation complaints and the accompanying lis pendens by the municipality constituted a temporary taking of an "interest in their properties" for which they should be compensated. We disagreed and stated:

The terms of the Act are clear. Pursuant to N.J.S.A. 20:3-17, a taking of the property does not occur until the municipality files and records a "declaration of taking." Twp. of Wayne v. Ricmin, Inc., 124 N.J. Super. 509, 517 (App. Div.), certif. denied, 63 N.J. 538 (1973). The municipality may simultaneously file a declaration of taking with its condemnation complaint and, if it follows that course, it has "the right to the immediate and exclusive possession and title to the property." N.J.S.A. 20:3-19; County of Monmouth v. Wissell, 68 N.J. 35, 38 (1975). Alternatively, the municipality may withhold the filing of the declaration of taking, thereby preserving its right to dismiss the action at a future time. N.J.S.A. 20:3-35; Twp. of Piscataway v. So. Washington Ave., LLC, 400 N.J. Super. 358, 367 (App. Div. 2008). If the municipality decides to abandon its condemnation action, rather than to file a declaration of taking to obtain possession of the property, it is required to pay the property owner its litigation expenses. N.J.S.A. 20:3-35.

[Hoagland, supra, 428 N.J. Super. at 327.]

The Berardis seek to distinguish Hoagland on factual grounds and also argue that the relevant portion of the holding relies on case law that has been overruled. Pemberton urges us to uphold the grant of summary judgment in light of Hoagland.

The condemnation in Hoagland began when Long Branch filed condemnation actions against owners of multiple parcels of land in an area that it alleged to be blighted. Id. at 324. The property owners "filed motions to dismiss." Ibid. The trial judge denied the motions and entered an order recognizing that Long Branch had properly exercised eminent domain authority and appointed commissioners. City of Long Branch v. Anzalone, No. A-0067-06 (App. Div. Aug. 7, 2008) (slip op. at 5), certif. denied, 199 N.J. 134 (2009).

The property owners appealed, asserting, among other issues, that Long Branch had failed to find actual blight as required under the Supreme Court's subsequent decision in Gallenthin Realty Development, Inc. v. Borough of Paulsboro, 191 N.J. 344 (2007), and had improperly delegated eminent domain authority to a redeveloper. Anzalone, supra, slip op. at 6; Hoagland, supra, 428 N.J. Super. at 324. We upheld the trial court's recognition of eminent domain authority, but reversed the appointment of commissioners based on an "absence of substantial evidence of blight" and remanded for Long Branch to "amplify the record" in light of the Gallenthin requirements. Anzalone, supra, slip op. at 7-8, 41; Hoagland, supra, 428 N.J. Super. at 324. After remand, Long Branch abandoned the condemnation proceedings. Hoagland, supra, 428 N.J. Super. at 323. There, as here, the condemning authority never filed a declaration of taking for any of the subject properties. Id. at 327. After the condemnation actions were abandoned, property owners sued for compensation on the basis that these actions "had constituted a 'temporary taking' of their properties." Id. at 323. Long Branch prevailed on a motion for summary judgment, the property owners appealed, and we affirmed the trial court's dismissal of their claims. Ibid.

Facially, the orders entered here and in Hoagland, and the prayers for relief that prompted the orders' issuance, are very similar and track the language of N.J.S.A. 20:3-8. The order to show cause here makes it clear that Pemberton did not seek an order giving it immediate possession of the property. Instead, it sought a determination that it would be entitled to possession in the future, after it had complied with the Act's provision requiring that "[a] copy of the declaration of taking and notice of the filing thereof and of the making of the aforesaid deposit, shall be served upon the condemnee and all occupants of the property in accordance with the rules, and proof of such service shall be filed in the action." N.J.S.A. 20:3-19.

Nevertheless, the Berardis argue that we should not follow Hoagland in rejecting their claim, that the order brought about a taking, asserting that: (1) their case is procedurally distinguishable from Hoagland; and (2) Hoagland improperly relied on a portion of a case that has been overruled. We disagree. Whether a condemnor has the authority to condemn is recognized by the court following a waiver of a challenge to authority, as in the Berardis' case, or by an unsuccessful challenge to authority, as in Hoagland, the "final determination" of the issue of the authority of the condemnor to condemn would be the same.

The Berardis also contest Hoagland's application on grounds that we erroneously relied on Township of Wayne v. Ricmin, Inc., 124 N.J. Super. 509 (App. Div.), certif. denied, 63 N.J. 538 (1973). They assert that "the specific statutory interpretation" set forth in Ricmin was rejected in Jersey City v. Realty Transfer Co., 129 N.J. Super. 570 (App. Div.), aff'd o.b., 67 N.J. 104 (1974), and later overruled by Township of Wayne v. Kosoff, 73 N.J. 8, 17 (1977).

Hoagland cited Ricmin several times in support of its holding that "[b]ecause no declarations of taking were filed by the City and because, under the Act, a taking does not occur unless and until such a declaration is filed, there was no taking of plaintiffs' properties by the City under the Act." Hoagland, supra, 428 N.J. Super. at 327-28. Citing Ricmin, supra, 124 N.J. Super. at 517, we observed that "[p]ursuant to N.J.S.A. 20:3-17, a taking of the property does not occur until the municipality files and records a 'declaration of taking.'" Hoagland, supra, 428 N.J. Super. at 327. We also quoted Ricmin directly, stating that under the Act, "taking does not occur until the filing and service of the declaration of taking pursuant to N.J.S.A. 20:3-17 and 19." Id. at 328 (quoting Ricmin, supra, 124 N.J. Super. at 517) (internal quotation marks omitted).

The Berardis argue that Jersey City, supra, 129 N.J. Super. at 570, "specifically rejected" the statutory interpretation from Ricmin that was relied upon by the Hoagland panel. This is not accurate. Jersey City only rejected Ricmin's interpretation of the statutory provisions governing interest. Jersey City, supra, 129 N.J. Super. at 576. Because in Jersey City we affirmed the trial court's finding that the city and property owner involved in the litigation had "agreed [to a] taking date in advance of litigation," the only issue dealt with at length was the computation of interest on the amount owed. Id. at 572, 575. The taking itself had been brought about by a "taking in fact," accomplished by means of the parties' stipulation to a taking date in pre-litigation negotiations. Id. at 572-73. The decision expressly disagreed with Ricmin only on the issue of interest, as provided for by N.J.S.A. 20:3-31. Id. at 574. We wrote:

Contrary to the discussion in Wayne v. Ricmin, Inc., supra, 124 N.J. Super. at 514, we do not believe that the exclusion of the amount deposited from the computation of interest for the period prior to the deposit is supported by N.J.S.A. 20:3-23, which provides that where there is a deposit followed by an award in excess of the deposit interest is to be allowed on the excess "from the date of the deposit."

[Jersey City, supra, 129 N.J. Super. at 576.]

With regard to declarations of taking, in Jersey City we observed that the Act "clear[ly] . . . envisions either an acquisition by negotiation or, with respect to the application of its interest provisions, a taking only after commencement of the action in accord with a filed declaration of taking accompanied by a deposit." Id. at 575. This is in accord with Ricmin's holding that a taking occurs with the filing of a declaration of taking.

The Berardis' argument that Kosoff, supra, 73 N.J. at 17, rejected the portion of Ricmin relied on by Hoagland is equally unpersuasive. In Kosoff, the condemnor filed a declaration of taking, id. at 12-13, and the Supreme Court therefore had no occasion to comment on Ricmin's holding as to when a taking occurs. The portion of Ricmin that the Court overruled pertained to the determination of interest under N.J.S.A. 20:3-23 and -31. Id. at 16-17.

In Hoagland we also quoted Ricmin's statement that under the Act, "the complaint in an eminent domain proceeding simply prays for judgment that the condemnor is duly vested with and has duly exercised its authority to acquire the property being condemned, and for an order appointing commissioners to fix compensation. N.J.S.A. 20:3-8." Hoagland, supra, 428 N.J. Super. at 328 (quoting Ricmin, supra, 124 N.J. Super. at 517) (internal quotation mark omitted). This statement is a summary of the statutory language, and is not affected by Jersey City or Kosoff.

We do not agree with the Berardi's arguments that Hoagland is procedurally distinguishable or legally unsound, and therefore would justify a finding that the order under review constituted a taking, in light of Hoagland's determination that the parallel order there did not constitute a taking.

The Berardis also contend that several other decisions should inform our review. They assert that County of Sussex v. Merrill Lynch Pierce Fenner & Smith, Inc., 351 N.J. Super. 66, 71 (Law Div. 2001), aff'd, 351 N.J. Super. 1 (App. Div. 2002), supports their position. However, in Sussex, the trial court's final determination provided a "rul[ing] on the basic validity of the proposed taking." Id. at 71 (emphasis added). It did not establish that a taking had occurred. The Berardis also rely on State v. Hess Realty Corp., 226 N.J. Super. 256, 261 (App. Div. 1988), aff'd, 115 N.J. 229, cert. denied, 493 U.S. 964, 110 S. Ct. 406, 107 L. Ed. 2d 371 (1989), where we found that "[t]he judgment appointing Commissioners, because it disposes of all issues other than value, is considered a final judgment, which may be appealed of right." The Berardis emphasize similar language in State v. Orenstein, 124 N.J. Super. 295, 298 (App. Div.), certif. denied, 62 N.J. 588 (1973), that

[i]f there are any issues to be decided other than that of value and damages be they a challenge to the plaintiff's right to exercise the power of eminent domain or a claim that the condemnor is in fact taking more property and rights than those described in the complaint those issues must be presented to and decided by the court before it enters judgment appointing condemnation commissioners.

The issue in Hess, supra, 226 N.J. Super. at 260-61, was whether the order appointing commissioners was a final judgment for purposes of appeal, not whether it established that a taking had occurred. Accordingly, Hess is inapplicable here.

Orenstein is more persuasive, yet not compelling. The passage the Berardis cite appears in commentary on why property owners who seek to challenge a condemnor's authority or description of the property must do so before entry of the order appointing commissioners, as follows:

[T]he only issue to be determined by the commissioners and by the fact finder in event of appeal is the lump sum compensation to be paid by the condemnor, . . . plus any damages to the remaining property of the owner if the taking is only a part thereof . . . .

Fundamental fairness and the governing statute mandate that the factfinder be limited to that one issue since the condemnor will obtain, by virtue of the condemnation proceedings, title only to the land and property rights described in the complaint.

If there are any issues to be decided other than that of value and damages be they a challenge to the plaintiff's right to exercise the power of eminent domain or a claim that the condemnor is in fact taking more property and rights than those described in the complaint those issues must be presented to and decided by the court before it enters judgment appointing condemnation commissioners.

[Orenstein, supra, 124 N.J. Super. at 298 (citing N.J.S.A. 20:1-12 (now repealed), N.J.S.A. 20:3-6 and N.J.S.A. 20:3-19) (other cita tions omitted).]

Our use of the future tense, referring to what the condemnor "will obtain, by virtue of the condemnation proceedings," ibid., suggests that the order appointing commissioners does not finalize the "obtaining"; rather, it finalizes the description of what will be obtained by the condemnor following subsequent steps. See State by Admas v. N.J. Zinc Co., 40 N.J. 560, 572 (1963) ("all issues raised as to the right to exercise the power of eminent domain and other like preliminary matters are to be determined in the cause before the court enters judgment of appointment"). This understanding comports with our summary of Orenstein in State v. Stulman, 136 N.J. Super. 148, 157 (App. Div. 1975).

The Berardis further assert that the lack of a declaration of taking does not preclude them from establishing that their constitutional rights were violated by a de jure taking under the Act, and because they are asserting a de jure regulatory taking, to prevail on their motion for summary judgment they need not establish they suffered "substantial destruction of beneficial use" of their property. Washington Mkt. Enters. v. City of Trenton, 68 N.J. 107, 122 (1975); see also Pa. Coal Co. v. Mahon, 260 U.S. 393, 43 S. Ct. 158, 67 L. Ed. 322 (1922). Additionally, they argue that they in fact suffered such a loss with regard to the vacant lot, as the condemnation proceedings barred them from developing or selling that lot.

However, our Court has limited temporary takings to instances where the government deprived the owner of "all beneficial use of the land for a significant period of time." Littman v. Gimello, 115 N.J. 154, 164-65, cert. denied, 493 U.S. 934, 110 S. Ct. 324, 107 L. Ed. 2d 314 (1989).

We discern no reason to disagree with the decision of Judge M. Patricia Richmond, as expressed in her comprehensive written opinion, "that 'all property is owned subject to the power of eminent domain and that damages which a landowner suffers as an incident to such proceedings and the subsequent abandonment thereof are damnum absque injuria,2 the condemnor being in the exercise of a legal right.'" (quoting 92 A.L.R.2d 355 2). The motion judge concluded "that Pemberton did not commit a constitutional taking of the Berardis' property." We agree.

Finally the Berardis have seized upon dicta in the motion judge's opinion to argue before us an issue that is being raised for the first time on appeal. The motion judge stated that the general rule is that, absent a statute imposing liability, a condemnor is not liable upon abandonment for incidental loss or damage sustained by the condemnee, "if the condemnor has acted in good faith and without unreasonable delay." (quoting 92 A.L.R.2d 355 3a). As Pemberton correctly points out, the Berardis did not raise the issue of any bad faith by Pemberton or unreasonable delay before the motion judge. Accordingly, it is not subject to appellate review. U.S. Bank Nat'l Ass'n v. Williams, 415 N.J. Super. 358 (App. Div. 2010); see also Nieder v. Royal Indem. Ins. Co., 62 N.J.229, 234 (1973) ("appellate courts [generally] will decline to consider questions or issues not properly presented to the trial court").

We agree with the opinion of the motion judge that neither a taking under the Act nor a constitutional taking was effected upon the subject property of the Berardis and therefore no just compensation is owed by Pemberton. Because we affirm the motion judge's decision, Pemberton's cross-appeal is moot and will not be discussed.

A

1 Both our federal and state constitutions prohibit the taking of private property for public use without "just compensation." U.S. Const. amend. V; N.J. Const. art. I, 20. In New Jersey, the Act sets forth the mechanism by which municipalities, like Pemberton, may condemn and take private property.

2 Damnum absque injuria is defined as "A loss or injury which does not give rise to an action for damages against the person causing it." Black's Law Dictionary 393 (6th ed. 1990).