CASINO REINVESTMENT DEVELOPMENT AUTHORITY V. HAUCK

SYLLABUS
 

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

CASINO REINVESTMENT DEVELOPMENT AUTHORITY V. HAUCK (A-99/100-98)

 
Argued November 9, 1999 -- Decided February 3, 2000

PER CURIAM

These appeals by the owners of property condemned by governmental entities involve the manner in which interest on a condemnation award is calculated.

Walter and Virginia Hauck owned property in Atlantic City condemned by the Casino Reinvestment Development Authority. After a jury trial and verdict, the trial court granted interest on the award, computing interest at the rate set in Rule 4:42-11 and calculating it from the date the condemnation action was filed.

On appeal to the Appellate Division, the Haucks challenged the interest portion of the award, taking the position that the trial court should have granted interest from the date of the valuation of the property and that an interest rate different from that prescribed in Rule 4:42-11 should have been applied.

Yvette Nierenberg, whose property is the subject of a condemnation proceeding by the Township of West Windsor, intervened in the Appellate Division.

The Appellate Division concluded that the Eminent Domain Act of 1971, N.J.S.A. 20:3-1 to -50, establishes that interest on a condemnation award runs from the date on which the condemnation action began until the date compensation is paid to the property owners and affirmed the judgment of the trial court, including application of the interest rate in Rule 4:42-11.

The Supreme Court granted the petitions for certification filed by the Haucks and Yvette Nierenberg.

HELD: Interest at the rate established in Rule 4:42-11 was properly added to the condemnation award from the date the condemnation action began until the date compensation was paid.

1. The Eminent Domain Act of 1971, clearly establishes that interest on a condemnation award runs from the date the condemnation action is commenced until the date compensation is paid; interest does not run from the date of valuation of the property. (p. 3)

2. To establish a governmental taking of property that implicates the constitutional standard requiring payment of interest from the date of the taking, there must be proof that the value of the property has been substantially destroyed and that governmental activity has been a substantial factor in bringing that about. No such proof was presented by the Haucks. (pp. 3-4)

3. The trial court properly concluded that the interest rate established in Rule 4:42-11 best indemnified the Haucks for the loss of the use of the compensation to which they were entitled from the date the condemnation action was begun. Application of a different interest rate may be warranted in some cases, such as in times of great interest fluctuations, when the rate prescribed by the court rule is inadequate to indemnify the owner of the condemned property. (p. 4)

The judgment of the Appellate Division is AFFIRMED.

CHIEF JUSTICE PORITZ and JUSTICES O'HERN, GARIBALDI, STEIN, COLEMAN, LONG and VERNIERO join in the opinion of the Court.

 
SUPREME COURT OF NEW JERSEY
A-99/ 100 September Term 1998

CASINO REINVESTMENT DEVELOPMENT AUTHORITY, a public corporate body of the State of New Jersey,

Plaintiff-Respondent,

v.

WALTER J. HAUCK and VIRGINIA HAUCK, husband and wife,

Defendants-Appellants,

and

STATE OF NEW JERSEY, NATIONAL WESTMINSTER BANK, JOHN DOE(S), an unknown claimant(s), fictitious name(s), who is (are) or may be tenant(s) CITY OF ATLANTIC CITY and ATLANTIC CITY MUNICIPAL UTILITIES AUTHORITY,

Defendants,

and

YVETTE NIERENBERG,

Intervenor-Appellant,

and

STATE OF NEW JERSEY and TOWNSHIP OF WEST WINDSOR,

Intervenors-Respondents.

Argued November 9, 1999 -- Decided February 3, 2000

On certification to the Superior Court, Appellate Division, whose opinion is reported at 317 N.J. Super. 584 (1999).

Peter H. Wegener argued the cause for appellants (Bathgate, Wegener & Wolf, attorneys).

Edward D. McKirdy argued the cause for intervenor-appellant (McKirdy and Riskin, attorneys).

Paul V. Fernicola argued the cause for respondent (Giordano, Halleran & Ciesla, attorneys; Mr. Fernicola and Nicole Devaney, on the brief).

Richard L. Rudin argued the cause for intervenor-respondent Township of West Windsor (Weiner Lesniak, attorneys).

George P. Ljutich, Deputy Attorney General, argued the cause for intervenor-respondent State of New Jersey (John J. Farmer, Jr., Attorney General, attorney; Mary C. Jacobson, Assistant Attorney General, of counsel).
 

PER CURIAM
On certification granted, 160 N.J. 476 (1999),See footnote 11 Walter and Virginia Hauck, property owners in Atlantic City, challenge the interest portion of a judgment entered upon a jury verdict in a condemnation action instituted against them by the Casino Reinvestment Development Authority. More particularly, they claim that the trial judge erred in failing to grant interest as of the date of the valuation of the property and in applying the rate of interest prescribed in Rule 4:42-11. We affirm substantially for the reasons expressed by the Appellate Division in Judge Baime's opinion reported at 317 N.J. Super. 584 (App. Div. 1999). As the Appellate Division concluded, id. at 592-94, the Eminent Domain Act of 1971, N.J.S.A. 20:3-1 to
-50, clearly establishes that interest on a condemnation award runs from the date of the commencement of the action until the date of payment of compensation, N.J.S.A. 20:3-31, and not from the date of valuation which serves an entirely different statutory purpose. See Township of W. Windsor v. Nierenberg, 150 N.J. 111, 126-27 (1997) (quoting Report of Eminent Domain Revision Commissioner of New Jersey, 27-28 (1965)).
Moreover, even where the condemned property is valued pursuant to N.J.S.A. 20:3-30(c) on the basis of governmental action that substantially affects use and enjoyment of the property, satisfaction of that standard for valuation purposes falls short of meeting the constitutional standard requiring payment of interest from the date of taking. See N.J. Highway Auth. v. Ellis, 24 N.J. 1, 7 (1957). As the Appellate Division observed, 317 N.J. Super. at 592, to establish a taking that implicates the constitutional demand for compensation, there must be proof that there has been substantial destruction of the value of [the] property and that defendant's activities have been a substantial factor in bringing this about. Washington Mkt. Enters. v. Trenton, 68 N.J. 107, 123 (l975). No such proof was offered by the condemnee.
Concerning the application of the interest rate established in Rule 4:42-11, we are satisfied, as was the Appellate Division, that, in this case, the trial court considered the Haucks' expansive documentary submissions concerning interest and properly concluded that the rate set forth in the rule best indemnified the Haucks for the loss of the use of the compensation to which they were entitled from the date of the institution of the condemnation action. Township of Wayne v. Cassatly, 137 N.J. Super. 464, 474 (App. Div. 1975), certif. denied, 70 N.J. 137 (l976).
That is not to suggest that such a rate will always be appropriate. Indeed, in times of great interest fluctuations, where the interest rate prescribed by the court rule is inadequate to indemnify the condemnee, application of a different rate may well be warranted. See Cassatly, supra, 137 N.J. Super. at 474. We hold only that, on the facts presented, the application of the Rule 4:42-11 rate was proper.
The judgment of the Appellate Division is affirmed.
CHIEF JUSTICE PORITZ and JUSTICES O'HERN, GARIBALDI, STEIN, COLEMAN, LONG, and VERNIERO join in the Court's opinion.

SUPREME COURT OF NEW JERSEY
 

NO. A-99/100

SEPTEMBER TERM 1998
ON APPEAL FROM
ON CERTIFICATION TO Appellate Division, Superior Court

CASINO REINVESTMENT DEVELOPMENT AUTHORITY, a public corporate body of the State of New Jersey,
Plaintiff-Respondent,
v.
WALTER J. HAUCK and VIRGINIA HAUCK, husband and wife,
Defendants-Appellants,
and
STATE OF NEW JERSEY, NATIONAL WESTMINSTER BANK, JOHN DOE(S), an unknown claimant(s), fictitious name(s), who is (are) or may be tenant(s) CITY OF ATLANTIC CITY and ATLANTIC CITY MUNICIPAL UTILITIES AUTHORITY,
Defendants,
and
YVETTE NIERENBERG,
Intervenor-Appellant,
and
STATE OF NEW JERSEY and TOWNSHIP OF WEST WINDSOR,
Intervenors-Respondents.

DECIDED February 3, 2000 Chief Justice Poritz

PRESIDING
OPINION BY PER CURIAM
CONCURRING OPINION BY DISSENTING OPINION BY
CHECKLIST
AFFIRM CHIEF JUSTICE PORITZ X JUSTICE O'HERN X JUSTICE GARIBALDI X JUSTICE STEIN X JUSTICE COLEMAN X JUSTICE LONG X JUSTICE VERNIERO X TOTALS
7 Footnote: 1 1 We simultaneously granted certification to Intervenor Appellant Yvette Nierenberg who claimed that our decision could affect the outcome in a pending condemnation action involving her property in West Windsor. Township of West Windsor v. Nierenberg, 150 N.J. 111 (1997). Like the Haucks, she is bound by our disposition here.