NEW JERSEY SCHOOLS CONSTRUCTION CORPORATION, a subsidiary of the New Jersey Economic Development

 

(NOTE: The status of this decision is Published.)

                   FOR PUBLICATION WITHOUT THE
                APPROVAL OF THE APPELLATE DIVISION

                                   SUPERIOR COURT OF NEW JERSEY
                                   APPELLATE DIVISION
                                   DOCKET NO. A-4732-07T2


NEW JERSEY SCHOOLS
CONSTRUCTION CORPORATION, a
subsidiary of the New Jersey
                                         APPROVED FOR PUBLICATION
Economic Development
Authority, a public body                      February 19, 2010
corporate and politic,
                                            APPELLATE DIVISION
      Plaintiff-Appellant,

v.

DAVID LOPEZ and the CITY OF
UNION CITY, a municipal
corporation of the State of
New Jersey,

      Defendants-Respondents,

and


UNIVERSAL AMERICAN MORTGAGE
COMPANY, VALLEY NATIONAL
BANK, and CRUSADER SERVICING
CORPORATION,

      Defendants.


          Argued January 5, 2010 ­ Decided February 19, 2010

          Before Judges Parrillo, Lihotz and Ashrafi.

          On appeal from the Superior Court of New Jersey, Law
          Division, Hudson County, Docket No. L-6174-04.

          George P. Ljutich, Deputy Attorney General, argued the
          cause for appellant (Anne Milgram, Attorney General,

          attorney; Melissa H. Raksa, Assistant Attorney
          General, of counsel and on the brief; Dale Laster
          Lessne, Deputy Attorney General, on the brief).

          Scott A. Heiart argued the cause for respondent David
          Lopez (Carlin & Ward, P.C., attorneys; William J.
          Ward, of counsel and on the brief; Mr. Heiart and Adam
          Karczewski, on the brief).

          Jacquelin P. Gioioso argued the cause for respondent
          City of Union City (Scarinci Hollenbeck, attorneys;
          Ms. Gioioso, on the brief).

          The opinion of the court was delivered by

PARRILLO, J.A.D.

     In this condemnation action involving property located at

1501 Palisade Avenue, Union City, plaintiff, New Jersey Schools

Construction Corporation (plaintiff or SCC),1 challenges certain

rulings of the Law Division on in limine motions: (1)

determining that the value of the improvements to the property

made after the owner, defendant David Lopez, received a notice

of interest (NOI) letter from plaintiff are included in setting

just compensation; (2) excluding evidence attacking the validity

of variance and site plan approvals issued by the Union City

Zoning Board of Adjustment (Zoning Board); and (3) holding that

defendant had no obligation to inform the Zoning Board of his

receipt of the NOI letter.   The case below focused on the

question of whether defendant and his agents had knowledge of

1
  The SCC is now known as New Jersey Schools Development
Authority.



                                                             A-4732-07T2
                                2

the imminent condemnation of the property, and with that

knowledge constructed a building on the property for the sole

purpose of enhancing the condemnation award.    Following the

ruling on plaintiff's last in limine motion, memorialized in an

order of March 12, 2008, the parties negotiated a settlement,

which provided that plaintiff pay $1,825,000 as just

compensation for the property.   As part of the settlement,

plaintiff reserved the right to appeal the Law Division's

interlocutory rulings, including the latest embodied in the

March 12, 2008 order.   On April 25, 2008, the Law Division judge

entered a consent order for final judgment memorializing the

settlement, from which plaintiff now appeals.

    Some background is in order.     When defendant and his two

brothers bought the property in 1996, the structure that once

stood there had already been torn down.    The plan was to erect a

new building, but in the meantime to use the lot for parking

spaces.   So until construction of the new building commenced in

2003, the property was used as a parking lot.    The Lopez

brothers' first attempt to develop the property was in November

1999, when the Union City Planning Board denied their

application to construct a three-story mixed

residential/commercial structure because a use variance from the




                                                             A-4732-07T2
                                 3

Zoning Board was required.   The matter was abandoned for lack of

financing.

    The next attempt in 2003 was more successful, eventually

resulting in a three-story structure consisting of a dental

office and four-car garage on the first floor, and four

apartments on the second and third floors.    Each floor consisted

of 2500 square feet and the building covered one hundred percent

of the lot.    Title was placed in defendant's name on April 24,

2003, in order to secure financing because he enjoyed the best

credit rating of the three brothers.    Another brother, Daniel,

managed construction of the improvements to the property.     The

third brother, Samuel, a licensed dentist, planned to reside at

the property and use the ground floor for his dental practice.

Their parents lived in a home next door.

    An architect was hired in March 2003 and prepared site

plans dated May 22, 2003.    On April 25, 2003, the Union City

Planning Board again rejected defendant's development

application because a use variance was required, and advised

that defendant must go before the Zoning Board.    On April 30,

2003, defendant retained an attorney to prepare a zoning

application.   On June 3, 2003, defendant applied for site plan

approval and variances for the property.




                                                            A-4732-07T2
                                 4

     Defendant's property sits adjacent to the Christopher

Columbus Middle School, in the Union City School District

(School District), a designated "Abbott District."
2 On March 15,

1999, the facilities management plan for the School District,

which called for construction of a new school and acquisition of

other adjacent lots, did not contemplate use of the Lopez

property.   However, a later plan, adopted at the December 6,

2002 meeting of the New Jersey Economic Development Authority,

did call for the use of defendant's lot.   On December 18, 2003,

the Union City Board of Education approved the site acquisition

of adjacent lots, including defendant's, for construction of a

new school.   On February 5, 2004, the Board of Education sought

the approval of the SCC, the State agency charged with the

responsibility of implementing the State's school construction

program under Abbott v. Burke, supra.

     Meanwhile, on August 27, 2003, plaintiff wrote a NOI letter

to defendant at 1501 Palisade Avenue, stating that plaintiff was

considering the property for development of a school facility.3

It also stated: "This letter does not represent an offer on the

2
  Abbott v. Burke, 
153 N.J. 480 (1998).
3
  Plaintiff's senior project officer testified that an NOI letter
is used to introduce homeowners to the taking process. It
officially and formally informs the owner that plaintiff is
considering purchasing the property through eminent domain,
although it does not always result in acquisition of the
property.



                                                            A-4732-07T2
                                5

part of NJSCC to purchase your property, as no final decision to

acquire your property has been made at this time."   The letter

indicated that plaintiff was seeking to exercise its right of

preliminary entry onto the property to conduct an engineering

and site feasibility investigation, which would include surveys,

soil sampling, underground storage tank investigations, and soil

borings.

    After discussing the NOI letter with his attorney,

defendant was advised to proceed with the zoning application

because there were a number of such notices being sent around

and there was no way of knowing whether any legitimate

condemnation proceedings would evolve.   The attorney did not

inform defendant that he had an obligation to disclose the NOI

letter to the Zoning Board.   Architect Feld also saw the NOI

letter and did not advise defendant to stop construction.

    On September 11, 2003, less than two weeks after receipt of

the NOI letter, defendant's application before the Zoning Board

proceeded to a public hearing, at which no objection was voiced.

The Board voted to approve the application with the proposed




                                                            A-4732-07T2
                                6

variances.
4 On October 9, 2003, the Board passed a resolution of

findings and conclusions memorializing the approval.

     On November 26, 2003, the Zoning Board granted a

construction permit for "footings only at owner[']s risk," with

$400,000 listed as the cost of construction.    Building

Department plan review logs show that plumbing subcode review

was approved on November 21, 2003; building subcode review was

approved on April 15, 2004; and fire and electric subcode review

was approved on May 18, 2004.

     In June 2004, the building was about eighty percent

completed.    On October 26, 2004, defendant received condominium

certification from the Department of Community Affairs allowing

for the sale of five units at 1501 Palisade Avenue.     The dental

office was completed with dental chairs, a phone line, special

hookups, an intercom system, piping, bathrooms, and a

handicapped ramp.

     The Department of Environmental Protection gave plaintiff

approval for the school construction project some time in the

summer of 2004.   On September 10, 2004, plaintiff made a formal,

written offer of $326,000 to defendant for 1
501 Palisade Avenue

 4
  According to Joseph Layton, a licensed professional planner,
defendant required ten variances for the building and opined
that this was not a normal course for pursuing an application.




                                                            A-4732-07T2
                                 7

(called the "notice of intent to acquire"), claiming it

represented the total fair market value of the property, as

appraised by plaintiff's expert on May 26, 2004, with the

partially completed building.    Defendant rejected the offer as

inadequate, but agreed to halt the final stages of construction

in exchange for the SCC filing a condemnation action and

updating its appraisal report.

    On December 1, 2004, plaintiff filed a verified complaint

against defendant and four other entities appearing to have an

interest in the property: two apparent holders of mortgages, an

assignee/holder of a tax sale certificate, and Union City.

Plaintiff sought judgment that it was authorized to acquire the

property being condemned, and also sought an order appointing

commissioners to fix the compensation to be paid.

    On December 2, 2004, an order to show cause was issued as

to why judgment should not be rendered appointing three

disinterested commissioners to fix the just compensation to be

paid for taking of the property.     On December 17, 2004,

plaintiff filed a declaration of taking and deposited $326,000,

the amount it estimated was the value of the property, with the

court.   On January 7, 2005, defendant was authorized to withdraw

the estimated value of the property that had been deposited.




                                                             A-4732-07T2
                                 8

    Defendant's appraiser issued a report on February 1, 2005,

setting value of the property as of November 10, 2004, at

$2,250,000.   Plaintiff reappraised the property to determine

value on the date the complaint was filed, determining that it

                  See N.J.S.A. 20:3-30.    Plaintiff deposited that
was $1,480,000.

amount, less $326,000 already paid to defendant, with the court

on February 4, 2005.     On February 14, 2005, a final judgment

adjudicating SCC's authority to condemn the Lopez property and

appointing commissioners was entered.     On February 15, 2005,

defendant moved to withdraw the deposited funds ($1,154,000,

plus interest), and on March 4, 2005, an order for the

withdrawal was issued.     On March 10, 2005, the condemnation

complaint was dismissed without prejudice, so the case would

proceed to a hearing before the commissioners.

    On February 26, 2006, plaintiff moved to exclude value

evidence of zoning approvals and related improvements to the

property for purposes of determining just compensation, arguing

bad faith on defendant's part.     That motion was denied for want

of jurisdiction by order of May 8, 2006, determining that a

plenary hearing was necessary.    After the parties agreed to

waive a commissioner hearing and proceed directly to a jury

trial, on February 28, 2007, an order was entered vacating the

appointment of commissioners.




                                                            A-4732-07T2
                                  9

     Thereafter, defendant filed an in limine motion, seeking to

exclude evidence relating to the Zoning Board process and the

validity of the variance approvals issued for the property.     The

Law Division judge, in an order of August 23, 2007, granted the

motion in part and denied it in part.   The order precluded

plaintiff from attacking the validity of Zoning Board approvals

and the Zoning Board resolution pertaining to this property,5 but

allowed plaintiff to present evidence as to whether defendant

sought the approvals and made the subsequent improvements to the

property for the sole purpose of enhancing the condemnation

award, and whether defendant's actions constituted bad faith.

See State by Comm'r of Transp. v. F & J P'ship, 
250 N.J. Super.
 19, 26-27 (App. Div. 1991).

     Plaintiff then re-filed its original in limine motion,

seeking to exclude evidence of the value of the improvements to

the property and zoning approvals for purposes of determining

just compensation.   After four days of hearings, the judge

rendered an oral decision and order of March 12, 2008, denying

plaintiff's motion, finding that plaintiff failed to demonstrate

bad faith on defendant's part, and noting, in part, that "[a]t

no time did the State prior to the notice of intent indicate in

5
  This ruling also precluded plaintiff from presenting any
conspiracy theories involving Union City officials or Zoning
Board members.



                                                          A-4732-07T2
                                10

any way that it was going to use this site, that it was going to

select this site when in fact other sites had been considered

and rejected."   The judge further concluded that whether the

Zoning Board should have granted approval, and whether there was

any collusion or inappropriate behavior by the Zoning Board or

other officials, were not issues properly before the court.      The

matter was then set for trial to determine the issue of

valuation.

     As noted, following entry of this order, the parties

negotiated a settlement, later embodied in a Consent Order for

Final Judgment, resolving the issue of just compensation at

$1,825,000, but preserving plaintiff's right to appeal the Law

Division's evidentiary rulings.6

     Although this appeal is taken from the April 25, 2008

consent order "for final judgment[,]" it is directed at the

evidentiary rulings allowing proof of the value of improvements

to the property and zoning approvals to determine just

compensation and excluding evidence collaterally attacking the

validity of those municipal approvals.   Those rulings, however,


6
  The consent order also called for SCC's Board of Directors to
approve the settlement amount and to deposit $345,000 -- which
represented the balance of funds owed to defendant -- into the
Superior Court Trust Fund Unit. In June 2008, SCC's Board
approved the settlement amount and the funds were deposited into
court where they await resolution of this appeal.



                                                            A-4732-07T2
                                11

did not effectively resolve plaintiff's action altogether.    On

the contrary, the critical factual issue of valuation of the

condemned property remained for the jury to determine.    As such,

the threshold issue presented by this appeal is whether the

April 25, 2008 consent judgment is appealable.

    It is well-settled that interlocutory orders may be

challenged when final judgment is entered, and to be appealable,

as of right, a matter must be resolved in the trial court as to

all issues and all parties.   Pressler, Current N.J. Court Rules,

comment 2.2.2 on R. 2:2-3 (2010) (citing e.g. Parker v. City of

Trenton, 
382 N.J. Super. 454, 457 (App. Div. 2006)).    See also

Grow Co. v. Chokshi, 
403 N.J. Super. 443 (App. Div. 2008); Mango

v. Pierce-Coombs, 
370 N.J. Super. 239, 245 n.1 (App. Div. 2004);

Caggiano v. Fontoura, 
354 N.J. Super. 111, 123 (App. Div. 2002).

As we stated in Janicky v. Point Bay Fuel, Inc., 
396 N.J. Super.
 545 (App. Div. 2007) (Janicky I):

              Under R. 2:2-3(a)(1), an appeal as of
         right may be taken to the Appellate Division
         only from a "final judgment." To be a final
         judgment, an order generally must "dispose
         of all claims against all parties." "This
         rule, commonly referred to as the final
         judgment rule, reflects the view that
         'piecemeal [appellate] reviews, ordinarily,
         are [an] anathema to our practice.'"

         [Id. at 549-50 (internal citations
         omitted).]




                                                           A-4732-07T2
                                12

    It is equally clear than an "order . . . consented to by

the attorneys for each party . . . is . . . not appealable."

Winberry v. Salisbury, 
5 N.J. 240, 255, cert. denied, 
340 U.S. 877, 
71 S. Ct. 123, 
95 L. Ed. 638 (1950); see also Pemberton v.

Pemberton, 
41 N.J. Eq. 349 (E. & A. 1886); Janicky v. Point Bay

Fuel, Inc., 
410 N.J. Super. 203, 207 (App. Div. 2009) (Janicky

II); O'Loughlin v. Nat'l Cmty. Bank, 
338 N.J. Super. 592, 602

(App. Div.), certif. denied, 
169 N.J. 606 (2001); DeAngelis v.

Rose, 
320 N.J. Super. 263, 281 (App. Div. 1999).    This is

because the rule allowing an appeal as of right from a final

judgment contemplates a judgment entered involuntarily against

the losing party.   See Cooper Med. Ctr. v. Boyd, 
179 N.J. Super.
 53, 56 (App. Div. 1981).   Thus,

         [a] party may not seek appellate review of
         an adverse interlocutory order without
         seeking relief from the outcome of the
         litigation as embodied in the judgment. A
         litigant satisfied with the judgment cannot
         have an advisory appellate evaluation of an
         alleged interlocutory error.

         [Magill v. Casel, 
238 N.J. Super. 57, 62
         (App. Div. 1990).]

    Even where the so-called consent final judgment expresses a

party's desire to preserve appellate review, the practice is

disapproved of because it preempts the appellate court's

authority to decide whether to hear an interlocutory appeal and

it "'foist[s] jurisdiction'" upon the appellate court.


                                                              A-4732-07T2
                                   13

Caggiano, supra, 
354 N.J. Super. at 124 (quoting CPC Int'l, Inc.

v. Hartford Accident & Indem. Co., 
316 N.J. Super. 351, 366

(App. Div. 1998), certif. denied, 
158 N.J. 73 (1999)).     Indeed,

simply "'[b]y saying that he reserved the right to appeal, the

plaintiff cannot thereby make appealable an order otherwise

unappealable.'"    Palmieri v. DeFaria, 
88 F.3d 136, 141 (2d Cir.

1996) (quoting Evans v. Calmar S.S. Co., 
534 F.2d 519, 522 (2d

Cir. 1976)).

    There is, however, an exception to this general rule

against appealability where parties to a consent judgment

reserve the right to appeal an interlocutory order "by providing

that the judgment would be vacated if the interlocutory order

were reversed on appeal[.]"    Janicky II, supra, 
410 N.J. Super.

at 207.     See also Mt. Hope Dev. Assocs. v. Mt. Hope Waterpower

Project, L.P., 
154 N.J. 141, 149 (1998); Capital Fin. Co. of

Del. Valley v. Asterbadi, 
398 N.J. Super. 299, 307 (App. Div.),

certif. denied, 
195 N.J. 521 (2008); Arias v. Figueroa, 
395 N.J.

Super. 623, 627 (App. Div.), certif. denied, 
193 N.J. 223

(2007); Pressler, Current N.J. Court Rules, comment 2.2.3 on R.

2:2-3 (2010) ("If, however, the consent judgment reserves a

single issue for appeal, the settlement of all other issues will

not preclude appeal of the trial court's order on the reserved

issue.").




                                                            A-4732-07T2
                                  14

    Here, although the consent judgment does not expressly

provide that the judgment would be vacated if the interlocutory

orders at issue were reversed on appeal, such a proviso is

implicit in the consent final judgment and no party argues

otherwise.   Indeed, defendant acknowledges that should we

reverse the evidentiary rulings and remand, then SCC would have

the opportunity to potentially recover the funds it already paid

out and which defendant has withdrawn.    See N.J.S.A. 20:3-23.

In other words, defendant would not be entitled to retain the

approximately $1.4 million he already withdrew if unsuccessful

on this appeal.   Moreover, the balance of the funds -- $325,000 --

remains on deposit with the court and awaits resolution of this

dispute on appeal.   Consequently, unlike the plaintiffs in

Janicky II, supra, who were entitled to retain the amount

awarded regardless of the outcome of the appeal because the

consent judgment did not provide otherwise, 
410 N.J. Super. at
 207, here, the parties have an economic stake in a ruling by

this court as to the propriety of the trial court's evidentiary

rulings.   In light of the pecuniary interest affected by the

judgment in question, there exists a justiciable controversy

between the parties and our resolution, therefore, will not

simply amount to an advisory opinion.    See Howard Sav. Inst. v.

Peep, 
34 N.J. 494, 499 (1961); Janicky II, supra, 410 N.J.




                                                             A-4732-07T2
                                 
15 Super. at 208; see also N.J. Ass'n for Retarded Citizens v. N.J.

Dep't of Human Servs., 
89 N.J. 234, 241 (1982).

    Having found the consent judgment appealable, we proceed to

address the issues raised.    Plaintiff's essential challenge is

to evidentiary rulings of the trial court on the issue of

valuation, which is pivotal in a takings case.       Indeed, the

United States and New Jersey Constitutions provide that when

private property is taken by the government for public use, the

                                             U.S. Const. amend. V;
government must pay just compensation.

N.J. Const. art. I, ¶ 20.     The object of an eminent domain award

is to compensate the owner for loss of that property.         State, by

State Highway Comm'r v. Gallant, 
42 N.J. 583, 587 (1964).          Just

compensation "'implies full indemnity to the owner.'"         State, by

Comm'r of Transp. v. William G. Rohrer, Inc., 
80 N.J. 462, 467

(1979) (quoting 4 Nichols on Eminent Domain § 12.21 at 12-86.1

(3d ed. 1978)).    It is the property's fair market value on the

date of the taking that establishes the general measure of just

                  N.J.S.A. 20:3-30.    Fair market value is
compensation.

"determined by what a willing buyer and a willing seller would

agree to, neither being under any compulsion to act."         State, by

Comm'r of Transp. v. Silver, 
92 N.J. 507, 513 (1983).

    Equally clear is that a trial judge's decisions about the

admission or exclusion of evidence are discretionary.         Benevenga




                                                                A-4732-07T2
                                  16

v. Digregorio, 
325 N.J. Super. 27, 32 (App. Div. 1999), certif.

denied, 
163 N.J. 79 (2000).   In fact, "whether to admit evidence

of value in a condemnation case is 'liberally entrusted to the

sound discretion of the trial judge.'"     State, by Comm'r of

Transp. v. Caoili, 
262 N.J. Super. 591, 595 (App. Div. 1993)

(quoting N.J. Highway Auth. v. Rudd, 
36 N.J. Super. 1, 3 (App.

Div. 1995)), aff'd, 
135 N.J. 252 (1994).    Thus, such exercises

of discretion "are entitled to respectful review under an abuse

of discretion standard."   Serenity Contracting Group, Inc. v.

Borough of Fort Lee, 
306 N.J. Super. 151, 157 (App. Div. 1997),

certif. denied, 
153 N.J. 214 (1998).   Measured by this standard,

we find no abuse of discretion in the trial court's evidentiary

rulings.

    Plaintiff argues, to the contrary, that the value of

defendant's improvements should have been excluded from the

"just compensation" determination because defendant received

plaintiff's NOI and failed to disclose the receipt to the Zoning

Board.   We reject this argument as unfounded.    The NOI letter in

itself was not sufficient to convey an imminent intent to take

so as to trigger a duty either to disclose or abandon

development.

    In Far-Gold Constr. Co. v. Borough of Chatham, 
141 N.J.

Super. 164, 169 (App. Div. 1976), we noted that a borough's




                                                            A-4732-07T2
                                17

adoption of resolutions expressing the desire to acquire a

property "for park purposes and authorizing applications for

state and federal funds with which to accomplish that . . .

result had no legal impact on the ownership, possession or use

of the . . . tract."   We explained: "No option was created

thereby nor did it result in an actual, substantial destruction

of beneficial use.   Those holding an interest in the property

were as free to deal with or dispose of it as they were before

the resolutions were adopted."   Ibid.

    In Rieder v. State, Dep't of Transp., 
221 N.J. Super. 547,

555-56 (App. Div. 1987), we held similarly:

         The object of the filing is to accord fair
         "notice to all persons of the system of
         highways proposed to be established by
         subsequent proceedings of condemnation."
         Bauman v. Ross, 
167 U.S. 548, 597, 
17 S. Ct. 966, 985, 
42 L. Ed. 270, 291 (1897). The
         filing itself "does not restrict in any way
         the use or improvement of lands by their
         owners before the commencement of
         proceedings for condemnation . . ., nor does
         it limit the damages to be awarded [in the
         event of] such proceedings." Ibid.

So too, in Kingston E. Realty Co. v. State, 
133 N.J. Super. 234,

240 (App. Div. 1975), we held that a property owner may continue

to utilize and develop its property even though it is aware of

plans for public acquisition, and noted that "[t]he mere

plotting and planning in anticipation of condemnation without




                                                           A-4732-07T2
                                 18

any actual physical appropriation or interference does not

constitute a taking . . . ."   Id. at 239.

    Indeed, this principle was recognized as early as 1873 in

State v. Carragan, 
36 N.J.L. 52, 54 (Sup. Ct. 1872), where the

court held that a property owner was entitled to compensation

for improvements erected in the right of way of a proposed

future street because the planned public acquisition was

uncertain when the improvements were erected.   Significant,

however, for present purposes, the court also stated that "[i]f

the improvements should be made in bad faith, with intent to

throw an undue burthen on the public, another element would

enter into the consideration of the question, which might

perhaps produce a different result."   Ibid.

    Thus, in F & J P'ship, supra, 
250 N.J. Super. at 26, we

upheld the exclusion of evidence of zoning approvals for a

condemned property based on findings that the property owner had

knowledge of an impending condemnation, and with that knowledge,

obtained the approvals for the sole purpose of enhancing the

condemnation award.   We concluded that the trial court was

correct to exclude evidence of value based on those approvals

because the improvements were made in bad faith.   Id. at 27.

    The California Court of Appeals also drew the same

distinction in Escondido Union Sch. Dist. v. Casa Sueños De Oro,




                                                            A-4732-07T2
                                19

Inc., 
29 Cal. Rptr. 3d 89, 106 (Cal. Ct. App. 2005).     In holding

the cut-off date for work on a compensable improvement when the

property owner gains knowledge of impending condemnation

proceedings to be the day the owner is served with the

condemnation complaint, the court explained:

         [T]he plans of a governmental agency to
         condemn land for a public use often are
         delayed or do not come to fruition.
         Therefore, requiring property owners to stop
         all work on a project as soon as they learn
         that a governmental agency may possibly
         condemn their land does not strike us as
         just or fair. Absent bad faith, such a
         restriction on a property owner's use of his
         or her land based on a mere possibility of
         government action would be an undue
         deprivation of property rights.

         [Id. at 106-07 (emphasis added).]

    The court stated that the applicable standard is whether

the property owner acted in bad faith, that is, "conduct that is

not consistent with 'the natural, ordinary, and legitimate use

of real property,' but rather is conduct undertaken 'for the

sole purpose of enhancing the damages to be recovered in an

                           Id. at 107 (quoting State ex rel.
eminent domain action.'"

Herman v. Schaffer, 
515 P.2d 593, 600 (Ariz. 1973)).    Indeed,

"[g]ood faith has been equated with what an ordinarily prudent

businessman would do under similar circumstances, and with the

natural, ordinary, and legitimate use of the property."

Annotation, Eminent Domain: Recovery of Value of Improvements


                                                            A-4732-07T2
                                20

Made with Knowledge of Impending Condemnation, 
98 A.L.R.3d 504,

517-18 (1980) (footnotes omitted).    One commentator has stated:

         [T]here comes a time when a condemnee should
         not be able to improve his or her property
         and receive compensation from the condemnor
         for such improvements. If this were not the
         case, an unscrupulous owner could improve
         the property for the sole purpose of
         increasing the compensation due from the
         condemnor. Such improvements would be made
         in bad faith and not in the course of an
         ordinary and legitimate use of the property.
         Improvements are made in bad faith if they
         are not made in the natural, ordinary and
         legitimate use of real property, but are
         made for the sole purpose of enhancing the
         damages to be recovered in an eminent domain
         proceeding.

         [4 Nichols on Eminent Domain § 13.12[3] at
         13-108 to -109 (3d ed. 2002) (footnotes
         omitted).]

    Here, the trial judge's evidentiary ruling not to exclude

proof of the value of the property's improvement was in

accordance with relevant law and her predicate findings of lack

of bad faith were supported by sufficient credible evidence in

the record.   We therefore perceive no error in the court's

determination.

    Nor was it error to disallow the entire transcript of the

Zoning Board hearing into evidence.    Significantly, the judge

did not exclude all evidence of conduct before the Zoning Board,

especially as it related to the applicable standard of whether

defendant sought approvals and developed his property for the


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sole purpose of enhancing the compensation award.      In any event,

the validity of that proceeding had never been directly and

                         See R. 4:69-1.   We, therefore, find no
properly challenged.

"palpable abuse of discretion" in the court's ruling.      Brenman

v. Demello, 
191 N.J. 18, 31 (2007) (citing Green v. N.J. Mfrs.

Ins. Co., 
160 N.J. 480, 492 (1999)).

     We also find, under present circumstances, no error in the

evidentiary rulings based on defendant's breach of a claimed

duty of disclosure.    While perhaps a factor in the "bad faith"

determination, it is not, in our view, dispositive of the

evidentiary issue.    Indeed, plaintiff cites no authority

compelling disclosure of receipt of a NOI letter to a local

zoning board.   Here, the NOI letter did not necessarily indicate

a taking and plaintiff's formal offer did not occur until well

after the Zoning Board proceeding.7

     The present matter is unlike F & J P'ship, supra, where the

Department of Transportation (DOT) sent plans in November 1987

to the engineering firm hired by the principals of F & J showing

it intended to acquire five acres of F & J's property for a

road-widening project.    
250 N.J. Super. at 25.    The trial judge


7
  In fact, the Union City Board of Education first authorized
defendant's property for part of the school project three months
after the Zoning Board hearing, and after construction commenced
in November 2003.



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in F & J P'ship found that the principals of F & J "understood

after their March 23, 1988 meeting with DOT officials that the

                                        Nevertheless, they failed
property would be condemned."   Ibid.

to reveal the anticipated condemnation to the Board of

Adjustment at the May 19, 1988 hearing on their site plan

application for a hotel and restaurant.   Ibid.

    While we concluded that the property owners in that case

might not have obtained site plan approval if they had made a

full and accurate disclosure to the Board of Adjustment, our

conclusion rested on the fact that the property owners acted in

bad faith.   We stated:

         [E]ven if F & J had made full disclosure to
         the Board and obtained site plan approval,
         evidence of the approval would nevertheless
         have been inadmissible because the record
         supports the trial court's finding that F &
         J's sole purpose in pursuing its application
         was to enhance the award in the anticipated
         condemnation action.

         [Id. at 29-30.]

    Here, unlike the property owners in F & J P'ship, supra,

the proof establishes that defendant had no knowledge, much less

confirmation, of any impending taking of his property.   The NOI

letter, although part of the process in determining whether a

taking may be appropriate, hardly connotes imminent or final

action since the SCC may very well have decided not to go




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forward with the condemnation.8    Indeed, the condemnation

complaint in this matter was not filed until fifteen months

after receipt of the NOI letter and the Zoning Board approvals.

Under present circumstances, given the passage of so much time,

the absence of bad faith as found by the motion judge, and its

lack of relevance to any of the N.J.S.A. 40:55D-70 criteria for

assessing whether variances should issue, we agree with the Law

Division that no adverse consequence befalls defendant for not

disclosing the NOI letter to the Zoning Board.

     Affirmed.




8
  As a postscript, we note that on April 26, 2007, the SCC
abandoned its efforts to construct the Columbus School project
on the subject property due to a lack of funding, and proceeded
to demolish defendant's newly erected building thereon.



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