NEW JERSEY TRANSIT CORPORATION et al. v. BOBBY WHOLESALE DISTRIBUTION, INC.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2280-05T52280-05T5

NEW JERSEY TRANSIT CORPORATION,

A Body Corporate and Politic,

Plaintiff-Appellant,

v.

BOBBY WHOLESALE DISTRIBUTION, INC.,

A New Jersey Corporation,

Defendant-Respondent,

and

TRAP ROCK INDUSTRIES, INC., a

New Jersey Corporation; STATE OF

NEW JERSEY DEPARTMENT OF LABOR,

DIVISION OF EMPLOYMENT SECURITY;

FIRST UNION NATIONAL BANK, N.A.,

a National Banking Association;

ELLER MEDIA COMPANY, a Foreign

Profit Corporation, a/k/a ELLER

SIGN CO.; G.O.D., INC., a New

Jersey Corporation, a/k/a GUARANTEED

ON-TIME DELIVERY and GUARANTEED

OVERNIGHT DELIVERY; STATE OF NEW

JERSEY; and TOWNSHIP OF PENNSAUKEN,

in the County of Camden, a Municipal

Corporation of New Jersey,

Defendants.

________________________________________________________________

 

Argued January 31, 2007 - Decided May 24, 2007

Before Judges Wefing, Parker and Yannotti.

On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-7201-00.

Kevin E. Rittenberry, Deputy Attorney General, argued the cause for appellant (Stuart Rabner, Attorney General of New Jersey, attorney for appellant; Michael J. Haas, Assistant Attorney General, of counsel; Emily H. Armstrong, Deputy Attorney General, on the brief).

Peter H. Wegener argued the cause for respondent (Bathgate, Wegener & Wolf, attorneys for respondent; Mr. Wegener, of counsel; Danielle A. Maschuci, on the brief).

PER CURIAM

In this condemnation case, New Jersey Transit Corporation (NJT) appeals from a judgment entered on November 1, 2005, after a jury awarded defendant Bobby Wholesale Distribution, Inc. (Bobby) $1,097,130, plus interest and costs, for taking the property owned by Bobby in Pennsauken.

NJT sought to acquire Bobby's property for construction of the Light Rail line. The property consists of 11.98 acres, 3.3 of which are wetlands, located across from the Pennsauken landfill, adjacent to an automobile salvage yard and a Conrail right-of-way. At trial, NJT's real estate appraisal expert testified that just compensation for the property was $575,000. Bobby's expert testified that it was $1,079,000.

Joseph H. Martin testified as NJT's expert appraiser. Martin performed a retrospective appraisal on the property in February or March 2003 and valued it as of the condemnation date: November 17, 2000. He "walked" the property and inspected the building on it, a "three-bay garage type structure, reinforced concrete floor, [with] a loft area in it for offices, a loft area being like a mezzanine in the building. It has a shed . . . [which is] in very poor condition." Martin rated the building "maybe in fair condition." He characterized the land as "pretty well graded with a stone covering." He noted that the property was completely fenced and that it "was not the best of neighborhoods" since it was across from an active landfill and down the street from an auto salvage yard. He explained that he used the cost approach to value the property:

[Y]ou find out what the land is worth and then you add to it whatever the improvements are worth based upon [the] cost to replace them or to reproduce them. And you take off depreciation, whatever that is. . . .

[The cost approach] sets the upper limit of value. It sets the upper limit because nobody should pay more for property than what [it] can cost to reproduce it.

Martin compared the property to four parcels of vacant land in the area that had been sold recently. He described the comparison process as follows:

You look at the properties that have sold and then you look at your property that you're trying to sell and you make comparisons, why is my property better or worse and so forth. An appraiser goes through the same process. So when you're dealing with land you have to deal with location, physical characteristics, land size, utilities and zoning. They're the five most important things you have to look at and then compare one piece of land with another piece of land. And that's what I did with each sale.

Martin found a range of values for four previously sold lots, ranging from $37,000 to $47,000 per acre. He valued Bobby's property at $42,000 per acre and testified that the land value was $503,000. He did not "make an adjustment" for the wetlands on the property. He evaluated the building using Marshall & Swift, a standard evaluation tool in the industry, explaining that

we looked in this book, we found the cost that we felt was applicable for the type of building this was, a garage type building, masonry, we called it a Class C, single-story[,] . . . masonry building. We found that the cost was indicated to be unadjusted for time now and for local modifiers $35.20 a square foot and then the mezzanine, the loft area was also $13.48 a square foot. So you add all those up and the total cost new [is] $140,000.

He then depreciated the structure by fifty-five percent based on his "experience, observation, looking at the building, [and] looking at Marshall & Swift." He calculated the combined value of the structure and the acreage at $580,000. Combining that assessment with the comparative sales assessment, Martin arrived at a final appraised value of $575,000. On cross-examination, Martin acknowledged that one of the properties in his comparative sales analysis was next door to Bobby's and was purchased by NJT for the Light Rail project. Since the property was subject to condemnation, Martin agreed that it was "[n]ot typical" of an arm's-length sale.

John Brody testified as Bobby's expert appraiser. Brody physically inspected the property on December 12, 2004, four years after the taking on November 17, 2000. He agreed with Martin that the property is in a heavy industrial zone and focused on the "highest and best use" of the land. Brody applied a four-part test, which inquires: (1) Is it physically feasible to build what is proposed on the property? (2) Is it legally permitted? (3) Is it financially feasible? (4) Is it a maximally productive use of the land?

Brody noted that the property fronted on River Road and a railroad, which are positive assets for the property. "[F]or most heavy industrial type users[,] rail is a very, very significant part . . . of their utilization and . . . the flexibility of a property." He opined that a property with rail access will sell for more "because it . . . creates a more flexible type of a utilization of the site."

Brody testified that the property was used for the storage and repair of tractor trailers. The three-bay garage was a necessary facility for the repair work. "[T]hat's what this site was so ideal for primarily because of its proximity to Philadelphia, primarily because of its proximity to . . . Routes 73 and Route 90 and to Route 130." Brody noted that the proximity of the property to major roadways is important to truckers because of the price of fuel, which "is an integral part of [the] formula as to how far truckers will go in order to get work done on their trucks . . . . So it made this site idea[l]."

Brody testified that the value of the site was also influenced by its size, "you could put 366,000 square feet of building on this site. The zoning for this site for 12 acres is 70 percent coverage." In evaluating this property, "the dominant factor . . . is the land . . . . [W]e've got 12 acres of land and we've got a 4,200 square foot building. So the building becomes less important - it's an important thing from a just compensation market value standpoint but the land obviously takes up the bulk of the value."

Brody indicated that for comparison purposes he used three prior sales which had similar locations and characteristics, adjusting them for various factors. Based on the range of those sales, he estimated Bobby's property would have sold for $78,000 per acre. Multiplied by 11.9839 acres, Brody estimated the total land value at $935,000. Using Marshall & Swift, Brody calculated the value of the building at $287,768, depreciating it roughly fifty percent, to $144,000. He concluded, therefore, that the total value of Bobby's property was $1,079,000.

Robert J. Banks, Sr., Bobby's principal and owner of the property, testified that he stored about forty tractors and eighty trailers on the property and leased a portion of the property for truckers to park their rigs overnight. When Banks learned that he would have to vacate the premises, he began a search for property of a comparable size and location. He "looked from Exit 15 on 295 back up to Route 38 and back to Maple Shade because [his] activity was . . . from Marbridge to Benjamin Franklin straight back to Reading, PA." He used major realtors to look for properties at lease five to seven acres in size.

Banks testified that he is a member of the "Big Council," which is similar to a Chamber of Commerce. The "Big Council" consisted of thirty-five to forty members representing businesses in Pennsauken. "[W]hen vendors come into the town, people come into the town to start businesses[,] [w]e tell them what they need and advise them where to go and the zoning and . . . whatever." Banks testified that he used the resources of the Big Council and searched in Camden, Burlington, and Pennsauken for "anything that would be comparable to the subject property," but was unable to find it.

NJT declined to cross-examine Banks and, after his testimony was completed, the trial court gave the jury a limiting instruction:

Ladies and gentlemen, in regard to Mr. Banks'[s] testimony, while Bobby Wholesale Distribution, Inc. is entitled to compensation for the property, this compensation does not include losses or costs incidental to the taking such as a loss of good will, loss of profits, inability or difficulty in relocating or frustration of Bobby Wholesaler's business plans, if any. I'm going to repeat that charge when I charge you as to the law sometime hopefully early tomorrow morning but perhaps late tomorrow morning.

In closing argument, Bobby's counsel told the jury that it would be charged that Bobby is

entitled to compensation for the property but this does not include [incidental costs] such as the loss of good will, loss of profits or the inability to locate [a comparable property] or frustration of Bobby Wholesale's business plans. You have heard no testimony and we have made no offer of any testimony with regard to anything such as that [be]cause those things are not compensable under the law. And what we have given to you in terms of evidence does not include anything like that. There was testimony from - from Bobby about the efforts that he made to search for and find property within the - the market area and really greater than [that] - the submarket area that we're talking about.

The purpose of that testimony was to point out to you that the size of the property, which was 12 acres, the value or [the] market price is based on supply and demand.

After the verdict, NJT moved for a new trial. The motion was denied on December 2, 2005. NJT appealed and now argues that (1) the jury verdict should be set aside because it was against the weight of the evidence; and (2) the trial court abused its discretion in not allowing the jury to view the property.

A motion for a new trial is a prerequisite for appellate review of a verdict challenged as against the weight of the evidence. R. 2:10-1. Our scope of review under the rule is limited and we must not reverse "unless it clearly appears that there was a miscarriage of justice under the law." Ibid. We defer to the trial court's "feel of the case," but make an independent assessment of whether a miscarriage of justice occurred. Kassick v. Milwaukee Elec. Tool Corp., 120 N.J. 130, 134-35 (1990); Carrino v. Novotny, 78 N.J. 355, 360 (1979).

NJT maintains that defense counsel's summation and Banks's testimony regarding the difficulty of finding a replacement property for the business prejudiced the jury. Relying on State v. Wemrock Orchards, Inc., 95 N.J. Super. 25, 28-29 (App. Div.), certif. denied, 50 N.J. 92 (1967), NJT contends that Banks's testimony caused the jury to base its award on non-compensable factors. In Wemrock, we found that the jury impermissibly took into consideration the historic value of the condemned property even though the experts did not provide any basis for the jury's setting a value on its historical significance. Id. at 29. NJT argues that the verdict, higher than either expert's appraisal, indicates that the jury took impermissible factors into consideration. We disagree.

In our view, neither Banks's testimony nor defense counsel's comments during summation adversely affected the jury verdict. Immediately after Banks's testimony, the trial court gave a limiting instruction regarding the jury's consideration of Banks's testimony. In defense counsel's summation, he specifically advised the jury not to include incidental costs, "such as the loss of good will, the loss of profits or the inability to locate [a comparable property] or frustration of Bobby Wholesale's business plans." Defense counsel added that "[y]ou have heard no testimony and we have made no offer of any testimony with regard to anything such as that [be]cause those things are not compensable under the law."

A jury is free to accept some or all of the testimony of expert witnesses or to reject some or all of the expert testimony. See State v. Chatman, 156 N.J. Super. 35, 41 (App. Div.), certif. denied, 79 N.J. 467 (1978); see also State v. Frost, 242 N.J. Super. 601, 616 (App. Div.), certif. denied, 127 N.J. 321 (1990). Juries, as finders of fact, are not bound by the experts' assessments in reaching their conclusions. See Frost, supra, 242 N.J. Super. at 616. Here, the evidence presented to the jury regarding comparable sales and prior sales allowed them to consider multiple factors, including the size of the property and its convenient location for transportation, including railroad accessibility.

We have carefully considered the record in light of NJT's arguments and we are satisfied that the verdict is supported by substantial credible evidence in the record and that there was no miscarriage of justice. R. 2:10-1.

NJT next argues that the trial court erred in not allowing the jury to view the property. N.J.S.A. 2B:23-16a allows the trial court to order the jury to "view the lands, places or personal property in question to understand the evidence better." Rule 4:73-7 provides that "[t]he jury shall view the land and property to be taken, unless the court orders otherwise." Nothing in the statute or the court rule requires the court to grant a request for the jury to view the property. It remains within the discretion of the trial court.

At the close of testimony, the court discussed NJT's motion for the jury to view the property. Defense counsel represented that the property was now dilapidated since it had been vacated five years earlier and was not in the condition it was on November 17, 2000, the date of the taking. NJT did not dispute that representation and the court accepted it and determined that the "lack of upkeep over the past five years" would make a jury viewing unduly prejudicial to defendant. The court articulated a second, practical reason for denying the application because NJT did not make the request in advance of trial so that arrangements could be made for transportation and security. The court noted

I don't know what this area [of] River Road is like. I'm not going to bring six - seven people out there if there are drug dealers or muggers or whatever it is that might be out there. There are places in this city - . . . I'll point out for the record this city was rated as the most violent city of its size in the United States. And I'm not going to be without security [and] responsible for the health, safety and welfare of one, two, three, four - 11 and the litigants in . . . a desolate or . . . industrial area on River Road in Pennsauken, the danger or the presence of dangerousness of which I have no idea.

NJT cites no New Jersey cases to support its position that the trial court is mandated to have a jury view the property upon the request of a party. Rather, NJT relies on several out-of-state cases in which juries were permitted to view properties that have undergone changes since the taking. See, e.g., United States v. 2.4 Acres of Land, 138 F.2d 295, 298 (7th Cir. 1943); City of Riverside v. Kraft, 21 Cal. Rptr. 425 (Ct. App. 1962); State v. Simerlein, 325 N.E.2d 503 (Ind. Ct. App. 1975); R.E. Rasberry v. Calhoun County, 94 So. 2d 612, 614 (Miss. 1957). NJT maintains that there was no good reason for the trial court to deny the jury viewing. Again, we disagree. The trial court gave two valid and cogent reasons for denying the application for a jury viewing: (1) undue prejudice to defendant; and (2) the practical inability to assure the safety and security of the jurors and litigants. In short, the trial court did not abuse its discretion in denying NJT's application.

 
Affirmed.

(continued)

(continued)

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A-2280-05T5

May 24, 2007