CITYOF HOBOKEN v. PONTE EQUITIES, INC., UNITY ENVIRONMENTAL CORP., d/b/a UNITY EDUCATIONAL SYSTEMS, INC and PUBLIC SERVICE ELECTRIC AND GAS COMPANY, LAZ PARKING NEW YORK NEW JERSEY, LLC and STATE OF NEW JERSEY
Annotate this CaseNOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3822-15T1
CITY OF HOBOKEN,
Plaintiff-Respondent/
Cross-Appellant,
v.
PONTE EQUITIES, INC., UNITY
ENVIRONMENTAL CORP., d/b/a
UNITY EDUCATIONAL SYSTEMS, INC.,
Defendants-Appellants/
Cross-Respondents,
and
PUBLIC SERVICE ELECTRIC AND GAS
COMPANY, LAZ PARKING NEW YORK/
NEW JERSEY, LLC and STATE OF
NEW JERSEY,
Defendants.
___________________________________
Argued December 19, 2017 – Decided February 26, 2018
Before Judges Yannotti, Carroll and Leone.
On appeal from Superior Court of New Jersey,
Law Division, Hudson County, Docket No.
L-4095-12.
Daniel E. Horgan argued the cause for
appellants/cross-respondents (Waters,
McPherson, McNeill, PC, attorneys; Daniel E.
Horgan, of counsel; Eric D. McCullough, of
counsel and on the briefs; Robert S.
Lipschitz, on the briefs.)
Edward J. Buzak argued the cause for
respondent/cross-appellant (The Buzak Law
Group, LLC, attorneys; Edward J. Buzak and
Susan L. Crawford, on the briefs).
PER CURIAM
Plaintiff City of Hoboken filed an action in the Law Division
to acquire by the exercise of eminent domain property owned by
defendants Ponte Equities, Inc., and Unity Environmental Corp.,
d/b/a Unity Educational Systems, Inc. (collectively, Ponte). The
matter was eventually tried before a jury and a final judgment
entered awarding Ponte $4,483,000, plus interest. Ponte appeals
and the City cross-appeals from the final judgment. For the reasons
that follow, we affirm on the appeal and the cross-appeal.
I.
We briefly summarize the relevant facts and procedural
history. Ponte's property consists of several contiguous lots
totaling .79 acres in the southwest corner of the City. The
property is located in the City's I-2 zoning district, where
permitted uses include food processing, storage, manufacturing,
fabricating, and retail business. Conditional uses include
automotive sales and services, bars, commercial garages, railroad
shipping terminals, and public parking facilities. Ponte acquired
2 A-3822-15T1
the property in 1990. It has since used the property as a
commercial parking lot.
On August 23, 2012, the City filed a verified complaint and
order to show cause against Ponte and other defendants to acquire
the property by exercising its condemnation power. Ponte filed a
motion to dismiss the complaint on the ground that the City had
not engaged in bona fide negotiations. On January 3, 2013, the
court granted Ponte's motion and dismissed the complaint without
prejudice.
After negotiating for a time with Ponte, the City filed a
motion to reinstate the action. It also sought leave to file an
amended complaint. Ponte opposed reinstatement of the action and
the filing of the amended complaint. Among other contentions,
Ponte argued that June 11, 2008, should be the controlling date
for valuation under
N.J.S.A. 20:3-30 because on that day, the City
allegedly took actions that substantially affected the value of
the property.
On September 26, 2013, the court found that the City had
cured its previous failure to engage in bona fide negotiations and
entered an order granting the City's motions to reinstate the
action and file an amended complaint. The court also scheduled a
plenary hearing to determine the valuation date. On September 26,
2013, the City filed its amended complaint and deposited $2,937,000
3 A-3822-15T1
in court, representing what it then believed was just compensation
for the taking. The City filed a declaration of taking on September
30, 2013, and became record owner of the property on that date.
Prior to the scheduled hearing on the valuation date, the
City filed a motion in limine to strike the testimony of Ponte's
experts, professional planner Peter G. Steck and appraiser Maurice
J. Stack, II. The City argued that the testimony of these experts
lacked sufficient factual support. The motion judge conducted the
hearing on January 28, 2014. The judge reserved decision on the
City's motion.
Thereafter, the judge filed a written opinion addressing the
City's motion and the valuation date. The judge granted the City's
motion to strike the testimony of Ponte's experts, finding that
both experts had presented inadmissible net opinions. The judge
determined that the operative valuation date under
N.J.S.A. 20:3-
30 was August 23, 2012, the date upon which the City first filed
its condemnation complaint. The judge memorialized his decision
in an order dated February 19, 2014. Ponte filed a notice of
appeal, which this court dismissed because the trial court's order
was not final and could not be appealed as of right pursuant to
Rule 2:2-2(a).
The case was presented to the condemnation commissioners for
a decision on the compensation to be paid to Ponte for the taking
4 A-3822-15T1
of its property. On December 19, 2014, the commissioners filed a
report with their award. The City and Ponte then sought a trial
de novo in the Law Division pursuant to
N.J.S.A. 20:3-13(a) and
(b). Prior to trial, the City and Ponte filed motions to limit or
exclude testimony. The trial judge entered orders dated October 5
and 8, 2014, granting in part and denying in part the relief sought
in those motions.
The case then was tried before a jury, which returned a
verdict finding that Ponte was entitled to compensation in the
amount of $4,483,000. The jury also responded to a special
interrogatory asking whether on August 23, 2012, it was reasonably
likely the City would issue a residential use variance to Ponte
for the property. The jury answered, "No." On November 19, 2015,
the clerk of the court entered a judgment in accordance with the
jury's verdict.
Ponte filed a motion for the award of interest and entry of
a final judgment. Ponte argued that the court should award it
interest from August 23, 2012, when the City filed its initial
complaint, at the prime interest rates in effect for various
periods, ranging from 3.25 percent to 3.5 percent, compounded
annually. The City opposed the motion and filed a cross-motion
seeking to limit the award of interest to 1.05 percent, and to
5 A-3822-15T1
have interest awarded from September 26, 2013, the date when it
filed its amended complaint.
On March 16, 2016, the trial judge entered orders, which
denied Ponte's motion and granted the City's cross-motion in part.
The judge decided that the interest rate should be 1.05 percent
and interest would accrue from August 23, 2012. The judge also
decided that the final judgment had been entered in the case on
November 19, 2015.
Ponte later filed a motion for reconsideration of the court's
determination regarding the date of the final judgment. The trial
judge granted the motion and determined that final judgment would
be deemed to have been entered on April 29, 2016. Ponte's appeal
and the City's cross-appeal followed.
In its appeal, Ponte argues: (1) the motion judge erred by
deciding that the valuation date was the date the City filed its
initial complaint; (2) the trial judge erred by allowing the City
to rely at trial upon a resolution adopted by the City Council but
later invalidated by the courts; (3) the judge should have estopped
the City from changing its position on the highest and best use
of the property; (4) the judge should have allowed Ponte to use
the City's appraisal reports from 2009 to show that the City
previously had taken the position that a residential use variance
would have been granted for the property; (5) the judge erred by
6 A-3822-15T1
permitting the City to argue before the jury that the fair market
value of the property was less than its offer and good faith
deposit; and (6) the judge erred by failing to award it a
reasonable rate of interest on the award.
In its cross-appeal, the City argues: (1) the court erred by
establishing April 29, 2016, as the date of the final judgment;
(2) the appeal should be dismissed as time-barred because it was
not filed within the time required by the court rules; and (3) the
court erred by awarding interest from August 23, 2012, rather than
September 26, 2013, the date on which the City filed its amended
complaint.
II.
We turn first to Ponte's contention that the court erred by
determining that the valuation date under
N.J.S.A. 20:3-30 was the
date the City first filed its complaint, August 23, 2012. Ponte
argues that the court should have found that the valuation date
was June 11, 2008, because that was the date that the City
allegedly took actions that substantially affected its use and
enjoyment of the property.
When the government acquires private property for public use
by the exercise of its power of eminent domain, the government is
required to pay "just compensation" to the property owner. Twp.
of W. Windsor v. Nierenberg,
150 N.J. 111, 125-26 (1997) (citing
7 A-3822-15T1
U.S. Const. amend. V; N.J. Const. art. I ¶ 20). The property owner
is entitled to the amount of money that will make the owner
"whole." Id. at 126 (citations omitted). Therefore, in a
condemnation proceeding, the court must determine the "fair market
value" of the property taken. Ibid. (citations omitted).
The Eminent Domain Act of 1971 (the Act),
N.J.S.A. 20:3-1 to
-50, provides the statutory authority for the exercise of the
condemnation power by the State and its potential subdivisions.
The Act provides in pertinent part that
[j]ust compensation shall be determined as of
the date of the earliest of the following
events: . . . (b) the date of the commencement
of the action; [or] (c) the date on which the
action is taken by the condemnor which
substantially affects the use and enjoyment
of the property by the condemnee . . . .
[N.J.S.A. 20:3-30.]
In New Jersey Sports & Exposition Authority. v. Giant Realty
Associates,
143 N.J. Super. 338, 353 (Law Div. 1976), the court
observed that "[a] substantial effect upon the use and enjoyment
of property is occasioned when the condemnor takes action which
directly, unequivocally and immediately stimulates an upward or
downward fluctuation in value and which is directly attributable
to a future condemnation."
Our Supreme Court later stated that the rule set forth in
Giant Realty "falls short of prescribing a precise matrix against
8 A-3822-15T1
which subsequent cases may be judged." Nierenberg,
150 N.J. at
136. The Court stated that the Legislature's objective in
N.J.S.A.
20:3-30(c) "was to identify events that affected the value of
property so significantly that it would be unfair, either to the
condemnor or the condemnee, to allow the post-event fluctuation
in value to be reflected in the condemnation award." Id. at 136-
37.
The Court noted that "[t]he question of whether and when a
landowner's use and enjoyment of his or her property has been
'substantially affected' under
N.J.S.A. 20:3-30(c) is a mixed
question of law and fact." Id. at 135. Resolving such a question
requires application of a rule of law to the facts. Ibid. (citing
5 C.J.S. Appeal & Error § 703d (1993)).
The trial court's factual findings on this issue are binding
on appeal if "supported by adequate, substantial and credible
evidence." Ibid. (citing Rova Farms Resort, Inc. v. Investors Ins.
Co. of Am.,
65 N.J. 474, 484 (1974)). However, it is well
established that an appellate court owes no deference to the trial
court's ruling on an issue of law. Manalapan Realty, LP v. Twp.
Comm.,
140 N.J. 366, 378 (1995) (citations omitted).
Here, Ponte argues that the valuation date should be June 11,
2008, because on that date, the Council took several actions,
which Ponte claims substantially affected its use and enjoyment
9 A-3822-15T1
of the property. On June 11, 2008, the Council introduced Ordinance
DR-366, which would have rezoned various properties, including
Ponte's property, as open and recreational space.
The Council also adopted Resolution 08-206, which requested
the City's Zoning Board of Adjustment (zoning board) to defer
consideration of any applications for development concerning
certain properties, including Ponte's property. Resolution 08-206
also directed the zoning board to consider the Council's intent
and not grant any variances that would hinder or make more costly
to rezone the properties.
In addition, the Council adopted Resolution 08-207, which
retained McGuire Associates, LLC (McGuire) to prepare appraisals
of certain properties, including Ponte's property. The Council
indicated that it intended to include the appraisals in an
application to the Hudson County Board of Chosen Freeholders
(Freeholders) for a grant of funds from the County's Open Space
Trust Fund. The City would use any monies provided to acquire
certain properties, including Ponte's property.1
In March 2009, McGuire completed an appraisal, which valued
Ponte's property at $10,170,000. McGuire stated that the highest
1
The Freeholders later approved the application and awarded the
City $3 million, but this was insufficient to fund acquisition of
all of the properties identified in the application.
10 A-3822-15T1
and best use of the property was residential, and Ponte could
obtain a use variance permitting residential development of the
site.
In January 2012, McGuire completed a second appraisal, which
appraised the property at $2,350,000. McGuire used a November 21,
2011 valuation date, and concluded that as of that date, the
highest and best use of the property was for surface parking. In
the appraisal report, McGuire pointed out that the City's master
plan reexamination report of 2010 recommended against residential
development in industrial areas or areas not zoned for residential
development.
At the trial court's hearing, Steck testified that prior to
June 11, 2008, variances for residential development were
routinely granted for properties in the I-2 zone. Steck stated,
however, that this was not the case after June 11, 2008, and it
then became "riskier" to seek such a variance. Steck testified
that the Council's June 11, 2008 resolution sent a message to the
zoning board to deny all variances for residential development in
the I-2 zone.
Stack testified that June 11, 2008, was the correct date to
value the property because the Council's resolutions indicated to
the public that the City was interested in acquiring the Ponte
property, thereby making it unmarketable for any use other than
11 A-3822-15T1
those permitted in the I-2 zone. According to Stack, at that point,
the City became the only potential buyer of the property.
Stack concluded that the Council's actions on June 11, 2008,
substantially decreased the value of Ponte's property. He
testified that he agreed with McGuire's 2009 appraisal, which
valued the property at $10,170,000, based on the assumption that
its highest and best use was residential development.
In his decision, the judge found that the testimony of Ponte's
experts lacked adequate factual support. The judge noted that
Steck had not opined as to whether the City's actions on June 11,
2008, had substantially affected Ponte's use and enjoyment of the
property within the meaning of
N.J.S.A. 20:3-30(c). In addition,
Stack's opinion that the Council's actions substantially affected
Ponte's property was based on unfounded speculation. The judge
therefore determined that Ponte's experts had presented
inadmissible net opinions.
The judge concluded that his decision on the City's motion
to strike the testimony of Ponte's experts was dispositive and
required denial of Ponte's motion to have June 11, 2008, declared
the valuation date. The judge nevertheless considered the
testimony, as though it was admissible, and made additional and
detailed findings of fact. The judge concluded that the City's
actions of June 11, 2008, did not substantially affect Ponte's use
12 A-3822-15T1
and enjoyment of its property, and therefore June 11, 2008 was not
the date of valuation under
N.J.S.A. 20:3-30(c).
In his opinion, the judge noted that Ponte had not presented
any evidence showing that the value of its property fell as a
result of the Council's June 11, 2008 actions. The judge pointed
out that the testimony of Ponte's appraiser supported the opposite
conclusion because Stack testified he agreed with McGuire's 2009
appraisal of the Ponte property, which valued the property at
$10,170,000. This was one year after the Council's actions.
The judge also pointed out Ordinance DR-366 was only a
proposed zoning change that was never adopted. As such, the
proposed ordinance was unlikely to have a significant effect on
Ponte's use and enjoyment of its property. In addition, Resolution
08-206, which recommended that the zoning board postpone
consideration of applications for development, had no legal force
or effect, which Steck had conceded.
Moreover, although the Council had retained McGuire to
appraise certain properties for the City's Open Space Trust Fund
application, the application was not completed on June 11, 2008.
In addition, there was no assurance the County's Freeholders would
grant the application and provide funds sufficient to acquire the
Ponte property. The judge concluded that
13 A-3822-15T1
[e]ven taking all three of Hoboken's actions
on June [11], [2008] cumulatively . . . they
are still insufficient to invoke N.J.S.A.
20:3-30(c). The three actions taken by Hoboken
may have merely put potential buyers on guard,
but did not substantially affect the Property
indicating a reasonable certainty that it
would be soon condemned. Therefore, the court
finds that Hoboken's actions on June 11, 2008
did not have a substantial effect upon the use
and enjoyment of the Ponte Property, and these
actions did not directly, unequivocally and
immediately stimulate an upward or downward
fluctuation in value, which was directly
attributable to a future condemnation. As a
result, the court holds, even assuming,
arguendo, that Ponte's experts' testimony and
opinions were admissible, the proper valuation
date would remain the date on which Hoboken
filed its complaint in condemnation – August
23, 2012 – pursuant to
N.J.S.A. 20:3-30(b).
We are convinced that the judge did not err by striking the
testimony of Ponte's experts, Steck and Stack. The judge correctly
found that they had presented net opinions, which lacked the
necessary factual support and were based on speculation. See Davis
v. Brickman Landscaping,
219 N.J. 395, 410 (2014) (noting that net
opinion rule precludes an expert from offering an opinion that is
unsupported by factual evidence); Grzanka v. Pfeifer,
301 N.J.
Super. 563, 581 (App. Div. 1997) (net opinion rule bars speculative
testimony).
The judge correctly determined that his ruling striking the
testimony of Ponte's experts was dispositive on Ponte's motion to
establish June 11, 2008, as the valuation date. Nevertheless, the
14 A-3822-15T1
judge considered the experts' testimony, as though admissible, and
found that Ponte had not established that the City had taken
actions on June 11, 2008, which had a substantial effect on its
use and enjoyment of the property. The judge found that under
N.J.S.A. 20:3-30, the date of valuation was the date the City
filed its initial complaint, August 23, 2012.
On appeal, Ponte argues that the judge's rationales for his
decision are erroneous. Ponte contends the judge essentially
ignored the provision of Resolution 08-206, which directed the
zoning board to take the Council's intent to rezone certain
properties for open space and recreation into account when voting
on variance applications. Ponte asserts the zoning board would
likely have considered the City's intent, which was inconsistent
with the grant of a residential use variance for its property.
Ponte further argues that at trial, the City took the position
that the property's highest and best use was as surface parking
because residential use was inconsistent with the City's intent
to preserve the I-2 zone for open and recreational space. According
to Ponte, the City claimed that certain of its pre-complaint
actions showed that it intended to preserve the I-2 zone. Ponte
contends the City inconsistently took the position the Council's
resolutions of June 11, 2008, had no effect on the property's
value.
15 A-3822-15T1
Ponte also argues that the City's assertion that the highest
and best use of the property was surface parking is "patently
absurd." Ponte argues that the City's intent changed from
encouraging residential use to preservation of the I-2 zone. Ponte
thus argues that the valuation date should be fixed at the point
when the City's intent changed, which was June 11, 2008. Ponte
contends the City acted improperly to deprive it of the fair market
value for its property.
We are convinced, however, that there is sufficient credible
evidence to support the trial court's findings of fact and
conclusions of law. We affirm the trial court's order of February
19, 2014, setting the valuation date as August 23, 2012,
substantially for the reasons stated by the motion judge in his
opinion of February 19, 2014.
The record supports the court's determination that Ponte
failed to show that the City's actions on June 11, 2008, which
"directly, unequivocally and immediately stimulate[d] an upward
or downward fluctuation in value and which is directly attributable
to a future condemnation." Giant Realty,
143 N.J. Super. at 35.
Ponte also failed to show that the City's actions "affected the
value of [its] property so significantly that it would be unfair,
either to the [City] or [Ponte], to allow the post-event
16 A-3822-15T1
fluctuation in value to be reflected in the condemnation award."
Nierenberg,
150 N.J. at 136-37.
III.
Ponte argues that the trial judge erred by allowing the City
to rely at trial upon a Council resolution which the Court in Kane
Properties, LLC v. City of Hoboken,
214 N.J. 199 (2013), held was
invalid. The court permitted the City to rely on the resolution
for a limited purpose on the issue of whether it was reasonably
probable Ponte would obtain a use variance for its property.
"[I]n determining the fair market value of condemned property
as a basis for just compensation, the jury may consider a potential
zoning change affecting the use of the property provided the court
is satisfied that the evidence is sufficient to warrant a
determination that such a change is reasonably probable." Borough
of Saddle River v. 66 East Allendale, LLC,
216 N.J. 115, 138-39
(2013) (quoting State v. Caoili,
135 N.J. 252, 265 (1994)). The
evidence must "indicat[e] beyond a mere possibility that a change
of use is likely and, further, that such a change would be an
important factor in the valuation of the property." Id. at 138
(quoting Caoili,
135 N.J. at 264).
The trial court should perform a "gatekeeping function" and
screen out "potentially unreliable evidence and [admit] only
evidence that would warrant or support a finding that a zoning
17 A-3822-15T1
change is probable." Ibid. (quoting Caoili,
135 N.J. at 264). The
trial court must make a preliminary finding that there is a
reasonable probability of a zoning change. Ibid. (citing Caoili,
135 N.J. at 264).
Thereafter, the jury determines whether "a buyer and seller
engaged in voluntary negotiations over the fair market value of
the property [would reasonably believe] that a change may occur
and will have an impact on the value of the property." Id. at 139
(quoting Caoili,
135 N.J. at 264-65). The jury may consider "future
variance approval and potential subdivision of the property in the
valuation analysis." Ibid. (citing Caoili,
135 N.J. at 265).
In Kane, a developer moved for a zoning variance to construct
a residential building in Hoboken's I-2 zone. Kane,
214 N.J. at
205. The owner of a neighboring property, who was represented by
an attorney, challenged the variance application. Id. at 208.
After the zoning board granted the variance, the neighboring
property owner appealed to the Council. Id. at 209. By the time
the Council heard the appeal, the attorney who had previously
represented the neighbor was then serving as corporation counsel
for the Council. Ibid.
Previously, the Council had adopted an ordinance that allowed
it to review decisions of the zoning board approving applications
for development. Id. at 225-26 (citing
N.J.S.A. 40:55D-70(d)). The
18 A-3822-15T1
Council issued a resolution reversing the zoning board's decision
to grant the variance. Id. at 211. The developer then appealed to
the trial court, which upheld the Council's action. Id. at 214.
We reversed the trial court's judgment and remanded the matter to
the Council to consider the matter anew. Id. at 216.
The Supreme Court found the Council's action was
"irretrievably tainted" by the "incomplete recusal" of the
Council's attorney. Id. at 224. The Court determined that the
matter should not be remanded to the Council but remanded to the
trial court, which was directed to conduct a de novo review of the
zoning board's decision. Id. at 231.
In this case, the trial judge permitted the City to rely upon
the resolution invalidated in Kane for the limited purpose of
establishing "the Council's reasoning with regards to the I-2
district." On appeal, Ponte argues the judge erred by doing so.
Ponte contends the Court in Kane held that the Council's action
was "irretrievably tainted" by a conflict of interest, and the
judge should not have permitted the City to rely in any manner
upon that resolution.
Ponte further argues that the trial judge compounded the
error by preventing its attorney from cross-examining the City's
witnesses on the fact that the Supreme Court found that the Kane
resolution was "irretrievably tainted." Ponte contends the trial
19 A-3822-15T1
judge also erred by instructing the jury that in its decision, the
Supreme Court in Kane had been referring to "a conflict issue with
the attorneys." Ponte contends these errors require reversal and
remand for a new trial.
We review the trial court's evidentiary rulings under an
abuse of discretion standard, so long as the court's ruling is
consistent with the applicable law. Hisenaj v. Kuehner,
194 N.J.
6, 12 (2008); Verdicchio v. Ricca,
179 N.J. 1, 34 (2004). We are
convinced the trial judge did not abuse his discretion by
permitting the City to rely upon the resolution at issue in Kane
for the limited purpose of showing that the Council intended to
retain the existing I-2 zone and that retention of the I-2 zone
was not a matter of inaction.
The judge noted that although the Supreme Court in Kane found
that the Council's action was "irretrievably tainted," the Court's
decision was based on a conflict of interest on the part of the
Council's attorney. The judge stated that the conflict had
"poisoned the well" with regard to the Council's consideration of
the application at issue, but the resolution nevertheless was
probative of the Council's policy regarding development of the I-
2 zone.
The judge cited our later opinion from the trial court's
order following the remand in Kane, and noted that the City had
20 A-3822-15T1
consistently taken the position that its decision not to alter the
zoning in the I-2 zone to include residential uses was intentional
and not due to inaction. In our opinion, we observed that there
was nothing in the record on remand which supported the conclusion
that the City's position in this regard was a product of, or
influenced by, the receipt of generic legal advice at the Board's
March 2010 meeting, when it reversed the zoning board's grant of
the variance. See Kane Properties, LLC v. City of Hoboken, No. A-
2500-13 (App. Div. June 30, 2015) (slip op. at 8-9).
We therefore conclude that the trial judge did not err by
allowing the City to rely upon the resolution invalidated in Kane,
with regard to the issue of whether it was reasonably probable
Ponte would obtain a use variance to allow residential development
of the property. We are convinced that the judge's ruling was
consistent with the law and it was not an abuse of discretion.
We have considered Ponte's other arguments on this issue and
conclude that they lack sufficient merit to warrant discussion in
this opinion. R. 2:11-3(e)(1)(E).
IV.
Ponte raises three arguments with regard to certain other
evidentiary rulings that the trial judge made. As noted, we must
determine whether the rulings are consistent with the law and, if
21 A-3822-15T1
so, whether they are a proper exercise of discretion. Hisenaj,
194 N.J. at 12; Verdicchio,
179 N.J. at 34.
A. Estoppel
Ponte contends the judge should have precluded the City from
asserting different positions with regard to the highest and best
use of the property. Ponte cites McGuire's 2009 appraisal, which
was based on its determination that the highest and best use of
the property was residential. At trial, the City took the position
that a variance was not likely and the highest and best use was
as surface parking.
The trial judge correctly determined that the City was not
bound by McGuire's 2009 appraisal. At trial, the City relied upon
an appraisal by a different expert that was based on the highest
and best use of the property as of August 23, 2012, the date of
valuation. McGuire's earlier appraisal was based on the highest
and best use of the property as of April 3, 2009.
We are convinced that the judge did not abuse his discretion
by allowing the City to rely upon the 2012 appraisal. The 2009
appraisal did not estop the City from securing a new expert to
prepare a new appraisal based on the court-determined date of
valuation, rendering the earlier appraisal obsolete, irrelevant,
and non-binding. In addition, the judge properly found the jury
22 A-3822-15T1
would be confused if it were presented with a report of an expert
who was no longer in the case.
B. Use of McGuire's 2009 Appraisal
Ponte further argues that the judge erred by precluding it
from using McGuire's 2009 appraisal at trial. Ponte asserts that
in a pre-trial ruling, the judge had permitted it to use McGuire's
2009 appraisal for the limited purpose of establishing the highest
and best use of the property. According to Ponte, at trial, the
judge summarily rejected any use of the 2009 appraisal. Ponte
contends the 2009 appraisal was an adopted admission and,
therefore, admissible under the exception to the rule against
hearsay in N.J.R.E. 803(b)(2).
The party offering an alleged adoptive admission must show
that "the party to be charged" was "aware of" and understood the
content of the statement purportedly adopted and "unambiguously
assented" to the statement. McDevitt v. Bill Good Builders, Inc.,
175 N.J. 519, 529-30 (2003) (citing State v. Briggs,
279 N.J.
Super. 555, 562–63 (App. Div. 1995)). In Skibinski v. Smith,
206 N.J. Super. 349, 353-54 (App. Div. 1985), discussing an earlier
version of N.J.R.E. 803(b)(2) and (3), we noted that if a party
incorporates an expert report in an answer to interrogatories, the
report will be considered an adoptive admission.
23 A-3822-15T1
Here, Ponte argues that the City retained McGuire and relied
upon the McGuire appraisal in the open space application it
submitted to the County's Freeholders. According to Ponte, this
is tantamount to incorporating an expert report in the answer to
interrogatories. We disagree. Ponte failed to show that the City
purposely and unambiguously adopted the 2009 McGuire appraisal for
use at trial. The 2009 appraisal was not admissible under N.J.R.E.
803(b)(2) as an adoptive admission. Moreover, as noted previously,
it was obsolete, irrelevant, and non-binding.
C. The City's Argument Regarding Fair Market Value
The record shows that the City initially offered Ponte
$2,350,000 for the property but did not deposit that amount with
the court because its initial complaint was dismissed. When the
action was reinstated, and the City filed an amended complaint,
it made an offer of $2,937,000 and deposited that amount in court.
Later, at trial, the City relied upon a subsequent appraisal by
Paul Beisser, who valued the property at $2,415,000.
On appeal, Ponte argues that the judge should have precluded
the City from arguing to the jury that the fair market value of
the property was less that the $2,937,000 the City had deposited
in court. In support of this argument, Ponte relies upon State of
New Jersey, Department of Environment Protection v. Fairweather,
298 N.J. Super. 421 (App. Div. 1997).
24 A-3822-15T1
In Fairweather, the State sought to condemn a property, and
hired an appraiser, who valued the property at $23,000. Id. at
423. Before trial, the first appraiser died and a second appraiser
valued the property at $21,000. Ibid. The trial judge excluded
evidence of the first, higher valuation, and the jury awarded
defendant $21,000 for the property. Id. at 424. We reversed the
judgment, holding that the State was estopped from "taking a
different position at trial concerning the value of the property
from that which it had assumed when it made its offers and
deposited with the court clerk what it considered to be the
property's fair market value." Id. at 425.
We are convinced that Ponte's reliance upon Fairweather is
misplaced. Here, the $2,937,000 offer, which the City made in
2013, was based upon a valuation date of May 21, 2013. The Beisser
appraisal of $2,415,000 valued the property as of August 23, 2012,
which was the controlling valuation date, as determined by the
judge in his February 19, 2014 opinion and order.
The trial judge therefore found that the City could rely upon
the Beisser appraisal at trial, and the City was not bound by the
higher deposit or offer. We conclude the judge's ruling was
consistent with the law and not an abuse of discretion.
25 A-3822-15T1
V.
Ponte argues that the court erred by awarding it simple
interest at a rate of 1.05 percent. The Act does not specify the
amount of interest that should be awarded in a condemnation case.
See
N.J.S.A. 20:3-32. Rather, the Act confers broad discretion
upon the trial court to decide the appropriate rate and amount of
interest. Borough of Saddle River v. 66 East Allendale, LLC,
424 N.J. Super. 516, 540 (App. Div. 2012) (citing Casino Reinvestment
Dev. Auth. v. Hauck,
317 N.J. Super. 584, 594 (App. Div. 1999)),
rev'd on other grounds,
216 N.J. 115 (2013).
The trial judge "should consider the prevailing commercial
interest rates, the prime rate or rates, and the applicable legal
rates of interest." Ibid. (quoting Hauck,
317 N.J. Super. at 594).
The judge should then "select that rate or rates of interest which
will best indemnify the condemnee for the loss of use of the
compensation to which he has been entitled from the date on which
the action for condemnation was instituted, less interest on all
amounts previously deposited." Ibid. (quoting Hauck,
317 N.J.
Super. at 594).
In its motion, Ponte asked the court to award it interest at
the prime interest rates ranging from 3.25 to 3.50 percent,
compounded annually. The certification that Ponte submitted in
support of its motion also stated that it had earned net income
26 A-3822-15T1
from the property from August 23, 2012, until the City filed its
declaration of taking on October 3, 2013.
Based on that information and the jury's valuation finding,
the City determined that Ponte's annualized net income from the
property was 1.05 percent of the property's value. In addition,
for purposes of comparison, the City noted that the post-judgment
rate calculated pursuant to Rule 4:42-11 was 2.25 percent, and the
average rates for one-year certificates of deposit in the relevant
time ranged from .5 to .7 percent.
The trial judge determined that Ponte should be awarded
interest at a rate of 1.05 percent. The judge found that Ponte had
not established any basis for use of the prime interest rate,
compounded annually.
On appeal, Ponte argues the rate of interest selected by the
court was "unjustifiably low." It argues that the judge should
have awarded interest at the prime rate, compounded annually. We
disagree.
As noted, under the Act, the amount of interest to be awarded
in a condemnation action is committed to the sound discretion of
the court. Here, there is sufficient credible evidence in the
record to support the court's determination that interest at 1.05
percent was sufficient to provide just compensation to Ponte for
27 A-3822-15T1
the taking of its property. Ponte's arguments on this point lack
sufficient merit to warrant further comment. R. 2:11-3(e)(1)(E).
VI.
We turn to the issues raised by the City in its cross-appeal.
The City argues that the trial judge erred by establishing
the date of the final judgment as April 29, 2016, rather than
November 19, 2015. The City contends Ponte's appeal should be
dismissed because it was not filed within forty-five days after
November 19, 2015, as required by Rule 2:4-1(a).
As noted previously, the clerk of the court entered a judgment
on November 19, 2015, after the jury returned its verdict. See R.
4:47(a). However, under our court rules, appeals may only be taken
as of right from final judgments of the trial court. R. 2:2-3(a).
Further, a judgment is final and appealable as of right only when
it is final as to all parties and all issues. Janicky v. Point Bay
Fuel, Inc.,
396 N.J. Super. 545, 549-50 (App. Div. 2007) (citing
S.N. Golden Estates, Inc. v. Cont'l Cas. Co.,
317 N.J. Super. 82,
87 (App. Div. 1998)).
The November 19, 2015 judgment did not resolve all issues as
to the parties because the court had not yet addressed the amount
of interest to be awarded. Therefore, an appeal could not be taken
as of right from that judgment. See Twp. of Piscataway v. South
Washington Ave., LLC,
400 N.J. Super. 358, 366 (App. Div. 2008)
28 A-3822-15T1
(holding that judgment entered in condemnation action after jury's
verdict is not final and appealable because trial judge had not
yet resolved the issue of interest).
Thus, the trial judge correctly found that the final judgment
was not entered in this action until April 29, 2016. We conclude
Ponte's appeal was filed within the time required by Rule 2:4-
1(a).
Next, the City argues that the judge erred by awarding
interest from August 23, 2012, when it filed its initial complaint.
The City contends interest should run from September 26, 2013,
when the City filed its amended complaint.
As noted,
N.J.S.A. 20:3-31 governs the payment of interest
in a condemnation proceeding. The statute provides in pertinent
part that the interest shall be paid "from the date of the
commencement of the action until the date of payment of the
compensation." Ibid.
Here, the judge correctly found that the action was commenced
when the City first filed its complaint. The record shows that the
court dismissed City's initial complaint and the City did not
thereafter commence a new action. Rather, the trial court's order
of September 26, 2013, reinstated the action and the action
continued under the same docket number. The court permitted the
City to file an amended complaint, but the amended complaint was
29 A-3822-15T1
filed in the same action that the City had commenced on August 23,
2012.
The City argues, however, that the August 23, 2012 accrual
date contravenes the Legislature's intent and the purpose for
which interest is awarded in a condemnation action because after
the initial complaint was dismissed, Ponte remained in possession
and control of the subject property. The City therefore argues
that Ponte was not deprived of the profitable use and enjoyment
of its property until the City filed its declaration of taking and
became record owner of the property on October 3, 2013.
We are not persuaded by these arguments. As we stated
previously, the award of interest is committed to the sound
discretion of the trial court. Here, the court did not mistakenly
exercise that discretion by awarding interest from the date the
City initially commenced the action, which was August 23, 2012.
The City's arguments on this point lack sufficient merit to
warrant further comment. R. 2:11-3(e)(1)(E).
Affirmed on the appeal and cross-appeal.
30 A-3822-15T1
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