State, by Com'r of Transp. v. Sun Oil Co.

• Decision Date: 08 June 1978
• Parties: STATE of New Jersey, By the COMMISSIONER OF TRANSPORTATION, Plaintiff, v. SUN OIL COMPANY, a corporation of New Jersey, et al., Defendants.
• Court: New Jersey Superior Court

Page 513

160 N.J.Super. 513

390 A.2d 661

STATE of New Jersey, By the COMMISSIONER OF TRANSPORTATION, Plaintiff, v. SUN OIL COMPANY, a corporation of New Jersey, et al., Defendants.

Superior Court of New Jersey, Law Division.

June 8, 1978.

Philip F. Mattia, Deputy Atty. Gen., for plaintiff (William F. Hyland, Atty. Gen.).

Robert S. Tobin, Paterson, for defendant Sun Oil Co.

DWYER, J. S. C.

The State of New Jersey by the Commissioner of Transportation (State), appealed from the award of the condemnation commissioners in the amount of $52,700 for the taking of a portion of a gasoline service station owned by Sun Oil Company (Sun) together with a construction easement, on the ground that the award was excessive. Sun cross-appealed on the ground that the State's acquisition required awarding direct damages for property taken, severance damages for destroying the use of the remainder as a gasoline station because the remainder no longer complied with the municipal zoning ordinance for gasoline stations, with the further result that consequential damages had to be allowed for machinery and equipment; hence the award was not sufficient. The matter was heard by the court without a jury.

Four basic questions are presented:

1. On an appeal from an award of the commissioners in condemnation, under R. 4:9-2 may the State amend the complaint in accordance with the evidence?

2. In connection with a highway construction program, may the State replace existing sewer and water pipe laterals beyond the public easement, relocate electric lines beyond the public easement, and replace an underground gasoline storage tank where the cost for such work is less than the diminution in market value of the remainder of the parcel rather than pay damages in cash?

3. Will the remainder not comply with the municipal zoning ordinance for continued use as a gasoline station so that the State is required to compensate Sun as if there were a total taking of the gasoline service station, with credit for the remainder value of the land and structure?

4. What is the amount of compensation?

The basic facts are not disputed. The date of valuation is December 3, 1971. On that date Sun owned in fee simple a gasoline service station at the corner of Lyons Avenue and Schley Street in the City of Newark. Pursuant to an arrangement with Sun, an independent operator ran the station and bought gasoline from Sun.

Lyons Avenue intersected Schley Street at the grade. The station was located at the northwest corner with a frontage of 88.05 feet on Lyons Avenue and 114.78 feet along Schley Street. It contained 9,456 square feet, with ingress and egress on both streets. The other property lines were interior lines.

The station consisted of a one-story cinder block building with a metalized front containing two bays facing Lyons Avenue, an office and display area facing Lyons Avenue, two lavatories at the rear end of the side of the building facing Schley Street, and a furnace room. The station building is about three feet from the eastern property line. Behind, and outside of, the middle of the rear, or northern, wall of the station's building is an underground 500-gallon waste oil, or slop oil, tank and a 1,000-gallon fuel oil tank for the furnace.

The only pump island is on the southern, or Lyons Avenue, side of the station. It is supplied by two 3,000-gallon gasoline storage tanks and one 4,000-gallon gasoline storage tank. Another underground tank near Lyons Avenue was not in service.

The sewer line from the lavatories for the station connected with a sanitary line under Schley Street. The electric lines were carried over the portion of the subject premises closest to Schley Street. The water line for the station connected to a line on Schley Street.

The highway project was the construction of Interstate 78 (I-78) which, under applicable federal law, requires that no access be given across the right of way.

The project called for the abandonment of Schley Street and the construction of a roadbed of I-78 at the bottom of a cut to be dug along the former roadway on Schley Street. The project also called for the construction of a bridge across I-78 to carry Lyons Avenue over I-78, with a ramp from Lyons Avenue down to I-78 running around the southwest corner of the subject premises.

The complaint, as filed on December 7, 1971, sought to take 3,450 square feet as shown on an attached map, together with the owner's right of direct access to and from I-78, subject to all existing recorded and unrecorded public utility easements.

The map attached to the complaint showed that a Sunoco sign, the unused underground tank near Lyons Avenue and a portion of the 4,000-gallon underground tank in use near Lyons Avenue would be taken.

The first amendment to the complaint was filed April 19, 1973 and sought to take in addition to the property described in the complaint:

ALSO the right to construct and maintain a diversionary road, utility facilities and appurtenances at the location shown on the aforesaid maps, for use during the construction of the bridges and highway. Said right to terminate when the new bridges and highway are completed and open to traffic, at which time the land will be graded and seeded; all other items, including trees, shrubs, etc. will be restored * * *.

The area of the easement was outlined on an attached map. It included all the frontage on Lyons Avenue to a depth depicted by an irregular line starting at the southeast corner of the property line, extending around the interior side of the pump island and terminating at the proposed right-of-way line along the Schley Street side of the station. It embraced 1,533 square feet. Significantly, Exhibit G, which set forth the test of the easement, at the end contained the following: "The above described premises are color coded on Exhibit 'H' in the following manner: Red-Parcel Area; Brown-Temporary Slope and Diversionary Road ". (Emphasis supplied).

The second amendment to the complaint involved matters not germane to the issues. The third amendment reduced the permanent taking to 2,870 square feet and depicted some outside lights to be taken, as well as the area for the temporary slope rights and diversionary road covered in the easement. This was filed on May 10, 1974. Sun did not object to the foregoing amendments. The commissioners filed their report on November 20, 1975, and had all the foregoing amendments before them.

After the taking, the site will have a frontage of 78 feet on Lyons Avenue, a frontage along the westerly side facing, but without access to, the right-of-way for I-78 of 119 feet, and 37 feet along the northerly boundary. The western line just misses the end of the station building and effectively precludes legal means of access to the rear of the station building on that side. Access to the rear will be available by means of the three-foot area between the station building and the eastern boundary line unless a door is cut into the rear of the station building. The remainder is irregular in shape, aggregating 6,580 square feet.

Sun contends that under the zoning ordinances of Newark the premises will no longer be usable for a service station because it will lack the requisite square footage for an interior lot and will violate certain set-back requirements. The State contends that the station will still be a corner lot and will meet the zoning requirements.

Sun's position is that the State's taking is so extensive that the subject premises' highest and best use will no longer be that of a gasoline service station. In addition, Sun contends that in respect to matters pertaining to activities of the State's contractor during construction, which the parties learned about during trial, the State should be treated as if it condemned the whole because of its taking of water and sewer line laterals.

The court will resolve issues 1 and 2 which arose out of surprise testimony at trial. The court then will resolve the other issues in the order stated.

I

At the hearing an enlargement of the map attached to the complaint depicting the right-of-way acquisition and the easement across the front was introduced without difficulty or objection. The State had to call its resident engineer for the project to get the construction plans and specifications into evidence.

During the initial phase of his testimony two problems developed. The first problem related to the duration of the diversionary road easement. Sun objected to any testimony as to a date of completion for the bridge to carry Lyons Avenue over I-78. Counsel for Sun contended then, and now, that the description of the easement is so vague that it amounts to a permanent taking of that area. In part, Sun predicates its contention on the fact that the ability to use the remainder as a service station is destroyed because this easement must be considered permanent for purposes of valuation. The second problem related to the activities of the State's contractor during construction. The engineer testified that the contractor had entered the station and severed the sanitary and water lines to Schley Street on permission from the operator. All parties claimed surprise. This generated another problem, because the resident engineer also testified that the new sanitary line was located in the right-of-way for I-78 where Sun could not be given access to service it.

With consent of all parties, an adjournment was granted to permit the parties to explore the problem of what existed in the field. At the end of the adjournment it was established that Sun never consented to the entry for the severance of the lines or relocation thereof. The State had obtained permission from the operator of the station. It was established that the water line was located within the boundary lines of the subject premises in a trouble-free area and was connected to the water line in Lyons Avenue.

It was further established that the sanitary...