State by State Highway Com'r v. Burnett

• Decision Date: 13 May 1957
• Docket Number: No. A--112,A--112
• Parties: STATE of New Jersey by the STATE HIGHWAY COMMISSIONER, Plaintiff-Appellant, v. John C. BURNETT, Defendant-Respondent.
• Court: New Jersey Supreme Court

Page 280

24 N.J. 280

131 A.2d 765

STATE of New Jersey by the STATE HIGHWAY COMMISSIONER Plaintiff-Appellant, v. John C. BURNETT, Defendant-Respondent.

No. A--112.

Supreme Court of New Jersey.

Argued April 1, 1957.

Decided May 13, 1957.

John F. Crane, Deputy Atty. Gen., argued the cause for plaintiff-appellant (Grover C. Richman, Jr., Atty. Gen., Attorney; William J. McCormack, Deputy Atty. Gen., on the brief).

Irving Riker, Newark, argued the cause for defendant-respondent (Riker, Emery & Danzig, Newark, attorneys; Walter H. Jones, Newark, of counsel; Dickinson R. Debevoise, Newark, on the brief).

The opinion of the court was delivered by

BURLING, J.

This is an appeal by the State of New Jersey from a jury verdict in the Superior Court, Law Division, which determined the amount of compensation to be paid for the taking of defendant's property. The property involved is to be used for a portion of the Palisades Interstate Parkway (L.1933, c. 384, as am., R.S. 32:16--1 et seq., N.J.S.A.).

The proceedings are governed by R.S. 20:1--1 et seq., N.J.S.A. A hearing was held before condemnation commissioners, who fixed the award at $1,245.321.50. Both parties appealed from the commissioners' award and the cause was tried before a struck jury which returned a verdict of $1,585,600. The State pursued an appeal to the Superior Court, Appellate Division, and we have certified the cause prior to a review below.

The land comprises some 55 acres in the Borough of Alpine, Bergen County, between Route 9W and the Palisades Cliffs. It is nine miles north of the George Washington Bridge. The eastern border fronts upon the Palisades overlooking the Hudson River. The terrain there is wooded and rocky, and the scenic beauty of the locale makes it a most desirable residential site. In the past persons of wealth have established estates along the 12 miles stretch of the Palisades.

The defendant owner, Dr. John C. Burnett, and his wife (now deceased) occupied and started developing the property in 1920. Various structures were added from time to time as well as a variety of expensive conveniences. The design of the estate and its functional characteristics were not born of a conventional bent. Mrs. Burnett was an artist who devoted her talents to painting and sculpturing. She designed the buildings and her husbond supervised the construction. After the main residence was completed in 1920 the Burnetts designed and constructed a separate dining hall and kitchen, five service buildings (grouped together in a semi-circular fashion and containing staff residences, as well as a garage, machine shop, a pump and filter room, an electric switchboard, a carpenter shop and a laboratory), a dome-shaped wooden building used as a studio, a log cabin and a swimming pool. A Japanese tea house was purchased and moved onto the property. The exterior design of many of the buildings is unusual because of its curvilinear features, sloping sides and massive rock texture. Two eminent architects produced by defendant were asked whether the structures were illustrative of any recognized architectural style or philosophy. One noted a similarity of expression with the architectural principles of several modern architects. The expert described the principle as 'the fluid movement of space within the building,' 'not rigid squares, right angles, parallel lines one to the other'. The other architect conceived that the architectural purpose of the Burnetts was to 'key' the structures in with the site, and to maintain and emphasize the natural characteristics of the land itself by dispersing the uses individually, making each appear as a natural rock outcropping of the terrain. Both experts felt the design was sound from an architectural viewpoint although it did not conform to any conventional style. Truly, many of the structures were more impressionistic than colonial.

Next in presentation of expert testimony for defendant were three real estate brokers wholly familiar with the Alpine area and the real estate market prevailing in that locale. The sum of their testimony was that the uniqueness of the structures precluded an opinion on the market value of the estate because other realty which had been sold in the past was not 'comparable' to defendant's property. One broker stated:

'To my knowledge I have never seen a comparable property, nor has any of my staff. I checked with my entire organization. This was because of the unusual architecture of the buildings, the most unusual construction. Many of the buildings were built like a fortress with steel, concrete and tile, and then too there were some unorthodox buildings such as the Japanese Tea House and the Igloo, and there was another studio. The building had a stone quarry in the service area. It had a stone crusher and with a forge machine shop, pump room, carpenter shop, a room set aside for a laboratory, a large water filter over six feet high, a generating plant for direct electric current, a big tank for softening water, and of course the other buildings such as the caretaker's cottage, office, bungalow and so forth, swimming pool, and it had its own telephone system between buildings. It had three water systems and in every respect it was most unusual, and unlike any property that I have had the privilege of knowing about.'

However, on cross-examination one expert acknowledged that every property 'has a buyer for it at a price' and that the Burnett property was no exception. All three witnesses gave their opinion on the market value of the 55 acres as vacant land. These estimates were close and approximated an average of $1,093,000.

Defendant thereafter produced a construction engineer who estimated the reproduction cost of the structure at $1,587,700, which reduced by a depreciation allowance of $413,916 would result in a net reproduction cost of $1,173,784. The sum of the separate valuations would approximate $2,266,000.

Although the State contended that evidence attributing separate values to the structures and the land was inadmissible, the trial court thought it proper for the jury's consideration in the absence of sales of comparable property in the vicinity.

Two real estate brokers, equally experienced with the local realty market, were produced by the State. They acknowledged the unique structural quality of the premises but were of the opinion that the property would have a demand on the market. Under questioning of the trial judge one broker stated:

'Q. Were there any buyers in the market around 1953 for such an estate as the Burnett estate? A. I think so.

'Q. Where would you find them other than possible the Palisades Interstate Park Commission itself for the use of the buildings, for example, for the police department, automobiles or repairs storage for their snow plows, and things like that, who else would buy this place? A. Your Honor, it is my opinion--Previews is a clearing house for estates and they publish a book twice a year describing estates all over the United States, and in my opinion if the Burnett estate with photographs and descriptions were published in Previews, many a buyer would probably be found who would be interested in that property, because of its location, and many of its characteristics that would have general appeal and I think that--

'Q. Would the average person buy the residence, for example, to live in? A. Yes, and remodel it, put a dining room in it and put a kitchen in it so that they wouldn't have to walk in bad weather to the dining hall.

'Q. Would a prospective purchaser have to tear down the building and develop it in a different way or what? A. He would probably demolish the service group because I think it is a monstrosity and serves no useful purpose to an estate of that size. Of course, you need some utility building and some maintenance building, but not on the grand and fabulous scale of this service group for an eight room house.'

The same broker testified that some years ago he had two potential purchasers for the Burnett estate, but the owners were not interested. Both of these witnesses suggested that $750,000 would represent a fair market price, and when questioned about the basis for this estimate expressed the thought that there was a sufficient correlation between large estates previously sold in the area and the Burnett property to support the opinion. On the matter of comparability it was said:

'There were numerous estates sold in this area which indicated that there are buyers for estates, and every estate I ever sold was different from any other. The architectural style was different, the size of the property was different, the kinds of out buildings are different, and I don't think there is a single estate that was ever sold that had the same things on it. It is not like a development, not like the houses we live in and own. They are all different, all built according to the whims of the owners, and when they are purchased the new owner will invariably spend more than he paid for the property to refurbish it and change it according to his desires.'

On submission of the case to the jury the trial court emphasized that the core of the inquiry was just compensation and that 'the landowner is entitled to receive a fair price for any use for which the land has a commercial value.' The methods of proof were explained and the court stated that in view of defendant's position that it was impossible to construct a hypothetical market for the subject property through comparable sales, he had permitted testimony of the separate valuation of the structure and the land as an aid to the jury in reaching a just compensation. (The jurors were accorded a view of the premises as the initial step in the trial proceeding.) It may be noted, without attempting analysis, that the jury verdict of $1,585,600 was slightly over the average of the two extremes taken by the contestants.

The State's position on appeal is quite simply...