$8.1m Award For Taking Reversed Due To Error On Presumption Of Use Variance And Road Dedication

In an unusual step, the Appellate Division recently reversed the Law Division due to "prejudicial error" in permitting defendant condemnees' experts to "offer trial testimony which was legally inadequate and legally incorrect," and in so doing, ordered a new trial on the issue of just compensation. The decision, New Jersey Transit Corp. v. Franco, Docket No. A-3802-12T4, decided on October 19, will be reported and is precedential.

The case involved the condemnation by New Jersey Transit Corp. of adjoining properties in Hoboken, Union City and Weehawken. New Jersey Transit offered $934,500 for the taking (subject to remediation of contamination), and the condemnation commissioners awarded compensation of $1.35M to the defendants/condemnees. On appeal to the Law Division, the defendants' appraisal report valued the property at approximately $9M. The defendants' appraisers ultimately valued the property at a highest and best use for a 12-story, 72-apartment high-rise building on the Union City parcel and a four-story, 54-apartment mid-rise building on the Hoboken parcel. The ultimate issue in arriving at the viability of the highest and best use was access to the consolidated parcels. Access was proposed through a private driveway and cul-de-sac which would provide access for the entire site from Weehawken's West 19th Street and would occupy the majority of the property in Weehawken.

The Appellate Division found that the "crucial issue on appeal is whether the creation of a cul-de-sac on the Weehawken parcel of the property would have required and received approval by Weehawken." The defendants' experts assumed Weehawken would not need to approve a use variance for the cul-de-sac which would constitute the sole use of the Weehawken parcel. Alternatively, the defendants' experts contended that the street could be dedicated to Weehawken without need for a use variance. Prior to trial, New Jersey Transit filed a motion in limine to bar the introduction of defendants' plans and the experts' reports prepared by their appraiser and planner. New Jersey Transit contended that "the experts' opinions failed to analyze whether there was a reasonable probability Weehawken would grant a use variance," or alternatively "it was speculative that Weehawken would accept dedication of the cul-de-sac." New Jersey Transit also requested a N.J. R. Evid. 104 hearing to determine the admissibility of the experts' reports. The Law Division denied New Jersey...

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