State by Com'r of Transp. v. Weiswasser

• Decision Date: 20 May 1997
• Citation: State by Com'r of Transp. v. Weiswasser, 693 A.2d 864, 149 N.J. 320 (N.J. 1997)
• Parties: , 65 USLW 2790 STATE of New Jersey, by the COMMISSIONER OF TRANSPORTATION, Plaintiff-Appellant, v. Fred WEISWASSER and Geraldine Weiswasser, Defendants-Respondents, and Township of Hainesport, in the County of Burlington, a Municipal Corporation of the State of New Jersey, Defendant.
• Court: New Jersey Supreme Court

Page 320

149 N.J. 320

693 A.2d 864, 65 USLW 2790

STATE of New Jersey, by the COMMISSIONER OF TRANSPORTATIONPlaintiff-Appellant, v.Fred WEISWASSER and Geraldine Weiswasser, Defendants-Respondents and Township of Hainesport, in the County of Burlington, a Municipal Corporation of the State of New Jersey, Defendant.

Supreme Court of New Jersey.

Argued Nov. 19, 1996.

Decided May 20, 1997.

George P. Ljutich, Deputy Attorney General, for plaintiff-appellant(Peter G. Verniero, Attorney General, attorney; Mary C. Jacobson, Assistant Attorney General, of counsel).

S. David Brandt, Moorestown, for defendants-respondents(Brandt, Haughey, Penberthy, Lewis & Hyland, attorneys; Donald M. Doherty, Jr., Cherry Hill, on the brief).

The opinion of the court was delivered by

HANDLER, J.

In this case, the State of New Jersey condemned a small section of a large tract of undeveloped property fronting on a major highway.As a result of the partial taking, the property owners lost their widest stretch of contiguous highway frontage.

In the course of extended settlement negotiations, prolonged pretrial proceedings, a commissioners' hearing with an award of compensation, and pretrial motions for evidentiary rulings, the parties raised arguments over the admissibility of evidence that present issues to be determined on this appeal.Those issues are whether, in determining just compensation in a partial-taking condemnation case, (1) evidence of damages, or the mitigation thereof, may include the availability and value of replacement property; and (2) severance damages may include the loss of visibility of the remainder property as a result of reduced highway frontage.

I

The property that is the subject of this condemnation action is located in Burlington County and is owned by defendants, Fred and Geraldine Weiswasser.They bought the property as an investment and planned to develop it.The property consisted of 112.38 acres of undeveloped land, which had road frontage on Route 38 and on Bullshead Road.The sections of the property fronting on Route 38 were approximately 110 feet, 54 feet, 278.5 feet, and 62 feet in width.The property between the 278.5 foot frontage and the 62 foot frontage sections was a 0.37 acre parcel owned by third parties, the Firths.The frontage on Bullshead Road is approximately 135 feet wide and three to four feet below the road grade.Approximately 19 acres of the Weiswasser property located within five hundred feet of Route 38 were zoned for commercial use.The bulk of the Weiswasser property, approximately 93.38 acres, was zoned for residential use.Although defendants had never applied for access permits, access would have been permitted at all points of frontage.

The State took a 0.39 acre crescent-shaped section of the Weiswasser property in fee simple to construct a jughandle on Route 38.It also acquired a slope easement over a 0.105 acre band of property surrounding the section taken in fee simple.The section taken included 255 feet of frontage from the property's largest section on Route 38, thereby reducing the width of that section along the highway from 278.5 feet to approximately 24 feet.As a result of the taking the owners were effectively left with only three sections of frontage on Route 38, of widths of 62, 54, and 110 feet, respectively, and the 135 foot stretch of frontage on Bullshead Road.

The State filed a Complaint in Condemnation on October 15, 1986, and offered the Weiswassers $165,000 as compensation.The Weiswassers rejected that offer.The State then deposited $165,000, its estimate of just compensation, with the court and filed a Declaration of Taking on November 13, 1986.On January 8, 1987, the court entered a final judgment on the State's exercise of its eminent domain power and appointed commissioners to determine just compensation.The State later revised its estimate upward and deposited an additional $4,000 with the court on February 10, 1988.The Weiswassers withdrew those sums from the court, having filed a consent to entry of judgment in the event that the money withdrawn exceeded the amount to which they were ultimately held entitled.SeeN.J.S.A. 27:7-22.

The commissioners' hearing was held on April 5, 1988.The State's expert was John Borden, who testified that the value of the property taken and damages to the remainder combined were $169,000.Fred Weiswasser testified that just compensation would be $604,000.The commissioners awarded the Weiswassers $390,000 as just compensation.

Subsequent to the hearing, on October 18, 1988, the State proposed to the Weiswassers to resolve the suit through the purchase by the State of the Firth property.Its northern edge has 150 feet of frontage on Route 38; its eastern edge is contiguous with the 62-foot wide leg of the Weiswasser property, and its western edge is contiguous with the 24 feet of frontage of the Weiswasser property remaining after the taking; the Firth property thus is surrounded on three sides by the Weiswasser property, with the fourth side fronting on Route 38.The addition of the Firth property to the remainder therefore would provide the Weiswassers with a 236 foot stretch of frontage on Route 38.The parties apparently negotiated over the Firth property, but did not reach any settlement.

Thereafter, on March 9, 1989, the Weiswassers submitted an appraiser's report and a planner's report to the State.According to the appraisal of Stephen Segal, prior to the taking, the "highest and best use" of the property was for a mixed-use development with five acres for commercial uses and 107.38 acres for single-family residential development; it would have been possible to construct "a high-quality, median[-]divided, tree-lined development entrance road, thereby creating a proper 'gateway' for the residential community that is beyond the commercial frontage."Segal valued the five-acre commercial section at $65,000 per acre, and the residential section at $8,000 per acre before the taking.He found that as a result of the taking, "[n]o commercial development could be market[-]supported without sufficient frontage on Route 38."He therefore valued the remaining "commercial" land as residential.Segal also concluded that the residential section had dropped in value from $8,000 to $7,000 per acre as a result of the taking.He concluded The diminished frontage on Route 38 and potential loss of access has reduced the marketability for residential development and has decreased the value of the residential land.

Segal assigned damages in four parts: $25,350 to the property taken (0.39 acres @ $65,000 per acre), $267,380 to the commercial remainder reduced to use for residential purposes (4.61 acres @ $58,000 per acre), $107,380 to the reduced worth of the residential remainder (107.38 acres @ $1,000 per acre), and $200 for the value of the slope easement taken by the State.These damages resulted in his total of $400,300, of which $374,960 represented severance damages to the 111.99 acre remainder.

On September 21, 1989, the State brought a motion to exclude the damages contained in the Segal appraisal that compensated for the reduced potential access to the remainder caused by the taking; in the alternative, it sought leave to amend its complaint to permit the acquisition of the Firth property as compensation to the Weiswassers.On November 30, 1989, the court determined as a matter of law that there was reasonable access to the residentially zoned portion of the remainder property (93.3 acres) and that the issue of reasonable access to the approximately 19 acres zoned "AC Residential/Commercial" was a question of fact.Accordingly, the court allowed the State to amend its complaint to show, as evidence of just compensation, the acquisition of the Firth property to replace the frontage lost as a result of the taking.The State then made an offer of $83,000 for the Firth property, pursuant to N.J.S.A. 20:3-6, under which the offer can be no less than the "approved appraisal of the fair market value of [the] property."On January 10, 1990, the State purchased the Firth property for $84,000.According to the State, the purpose of the purchase of the Firth property was both to replace the frontage lost by the Weiswassers due to the taking, and to cure the severance damages testified to by Fred Weiswasser and Stephen Segal.

The Weiswassers brought a motion for reconsideration of the November 30, 1989, order permitting the State to introduce evidence of the purchase of the Firth property as a partial measure of just compensation.The court granted that motion on January 15, 1990.The court reasoned that under the Eminent Domain Act, the State had an obligation to propose to the Weiswassers the purchase of a third-party tract at the time of the initial offer and then to negotiate in good faith on that basis.Because the Firth property was not offered to the Weiswassers until late 1988, the court ruled that the State would be barred from introducing evidence of such a purchase.

On January 30, 1992, the State presented the Weiswassers with a new appraisal and formally revised its offer, revaluing just compensation at $117,700, or, in the alternative, the Firth property plus $3,700.The State's new valuation was based on an appraisal by Joseph Manzi, who concluded that the 0.37 acre Firth property plus an additional $3,700 would make the Weiswassers whole as of the date of the taking.The State valued the Firth property at $114,000 by adding to the purchase price of $84,000 its costs of $30,000 to clean-up the property and to restore it to an undeveloped state.The State's offer stated that the Firth property would be "conveyed as vacant land with all improvements and environmentally hazardous materials removed...."The additional $3,700 was to compensate for the 0.105 acre slope easement and for the 0.02 acre land differential between the 0.39 acre parcel taken and the 0.37 acre Firth...