Title: Township of Manalapan v. Gentile
Citation: N/A
Docket Number: 
State: new-jersey
Issuer: new-jersey Supreme Court
Date: June 2, 2020

Township of Manalapan v. Gentile Annotate this Case Justia Opinion Summary The Township of Manalapan challenged the condemnation award in favor of defendants entered after a jury trial. The issue was whether the trial court erred in admitting testimony that the condemned property’s highest and best use would require a variance without first determining whether there was a reasonable probability the variance would be granted. The New Jersey Supreme Court concluded evidence that risks misleading the jury into assuming a zoning variance for purposes of calculating a property’s value must not be admitted absent a judicial finding it was reasonably probable that the variance will be obtained. Therefore, the trial court erred by allowing the jury to consider testimony that the highest and best use of the subject property would require a variance without first confirming the probability of securing that variance. Read more Want to stay in the know about new opinions from the Supreme Court of New Jersey? Sign up for free summaries delivered directly to your inbox. Learn More › You already receive new opinion summaries from Supreme Court of New Jersey. Did you know we offer summary newsletters for even more practice areas and jurisdictions? Explore them here . SYLLABUSThis syllabus is not part of the Court’s opinion. 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 Court. In the interest of brevity, portions of an opinion may not have been summarized. Township of Manalapan v. Anthony Gentile (A-14-19) (083137)Argued February 4, 2020 -- Decided June 2, 2020SOLOMON, J., writing for the Court. The Township of Manalapan challenges the condemnation award in favor of defendants entered after a jury trial. The issue is whether it was error to admit testimony that the condemned property’s highest and best use would require a variance without first determining whether there is a reasonable probability the variance would be granted. Defendants’ property was in an area zoned as R20 (residential) until 2002, when the Township rezoned it to RE (residential environmental). The R20 zone allows for single family dwellings on half-acre lots, whereas the RE zone provides for single family dwellings on lots of no fewer than three acres. Therefore, undivided land in an R20 zone would have a greater fair market value than the same land in an RE zone. At trial, the Township’s expert explained that, in arriving at his estimate of $2.83 million, he assumed the continued application of RE zoning and evaluated the property by reference to the sale price of similar properties. He acknowledged, however, that unlike the subject property, those he compared did not have sanitary sewer or municipal water systems. By contrast, defendants’ expert planner opined, over the Township’s objection, that the highest and best use of the subject property would be to divide it into smaller lots, as would be permitted in an R20 zone. He explained that such use of the property would yield “up to six times the density” under the current RE zoning but that “the Township committee would have to agree to change the zone.” Importantly, he did not offer any opinion about the value of the property as is or if a variance were granted, or even about the probability that such a variance would be granted. Indeed, in ruling on the Township’s objection to his testimony, the court cautioned defendants’ expert not to “opin[e] on possibilities or likelihoods or odds or procedures about getting variances.” The Township moved for judgment at the close of evidence. The court granted the motion in part, ordering defense counsel not to argue in closing that, when calculating the property’s value, the jury could assume a variance will be granted. But the court allowed the question of fair market value to go to the jury. During closing, defense counsel reminded the jurors that the subject property is surrounded by an R20 zone and repeatedly referenced the possibility of rezoning. 1 The court instructed the jurors to decide the market value of the property using the expert opinions if they “find those opinions helpful.” The judge instructed that if the jurors were to reject all expert testimony, then they could “come up with another figure for the fair market value of the property,” so long as that figure is based on the evidence presented. The jury returned a unanimous verdict awarding defendants $4.5 million. The Township filed post-trial motions claiming that the Court’s decision in Borough of Saddle River v. 66 East Allendale, LLC, 216 N.J. 115 (2013), required the trial court to conduct an N.J.R.E. 104 hearing as to the reasonable probability of a variance before admitting any testimony by defendants’ expert that the subject property’s highest and best use would require R20 zoning. The trial court denied those motions, and the Appellate Division affirmed. The Court granted certification, “limited to the issue of whether the Appellate Division erred in concluding that a plenary hearing regarding the 'reasonable probability’ of a zoning change was not required before the commencement of trial.” 239 N.J. 495 (2019).HELD: As the Court explained in Borough of Saddle River v. 66 East Allendale, LLC, evidence that risks misleading the jury into assuming a zoning variance for purposes of calculating a property’s value must not be admitted absent a judicial finding it is reasonably probable that the variance will be obtained. 216 N.J. 115, 142 (2013). Therefore, the trial court erred by allowing the jury to consider testimony that the highest and best use of the subject property would require a variance without first confirming the probability of securing that variance.1. A municipality has the authority to take private property for a public use provided that just compensation is paid to the property owner. Just compensation is the fair market value of the property as of the date of taking. The fair market value generally considers “the property’s highest and best use.” To constitute the 'highest and best use,’ a use must be '1) legally permissible, 2) physically possible, 3) financially feasible, and 4) maximally productive. (pp. 10-11)2. Whether potential zoning changes might be considered in determining a property’s best use or whether such consideration would run afoul of the “legally permissible” requirement was addressed in Commissioner of Transportation v. Caoili, where the Court held that “the jury may consider a potential zoning change affecting the use of the property provided the court is satisfied that the evidence is sufficient to warrant a determination that such a change is reasonably probable.” 135 N.J. 252, 265 (1994) (emphasis added). (pp. 11-12)3. In 66 East Allendale, the Court applied those principles in the context of a purported highest and best use that could be achieved only if a variance were granted and held that, “only when the trial court has first determined that the evidence is of a quality to allow the jury to consider the probability of a zoning change should the jury be permitted to 2 assess a premium based on that zoning change . . . . The gatekeeping function was assigned to the judge specifically to screen the jury from hearing mere speculation.” 216 N.J. at 142. From 66 East Allendale derives the following overarching approach to predicating highest and best use analyses on not-yet obtained zoning variances. A use that does not conform to current zoning is not legally permissible and so cannot be a property’s highest and best use. See id. at 137. However, while a property’s highest and best use “is ordinarily evaluated in accordance with current zoning ordinances[,] [c]ertain circumstances may permit valuation to include an assessment of a change in the permitted use of a property, but only if there is a reasonable probability that a zoning change would be granted.” Id. at 119. That substantive determination of probability must account for “the standard that would govern the particular zoning change under consideration.” Id. at 143. In making that determination, the trial court must examine the parties’ evidence as to the probability of the zoning change to “determine whether [the court] can render its required determination based on the papers.” Ibid. If that determination cannot be made on the written submissions alone, the court shall conduct a pretrial Rule 104 hearing to resolve the issue. Id. at 142-43. (pp. 12-16)4. The question presented in this case was answered in 66 East Allendale. The trial court here neglected its role as gatekeeper by letting the jury consider evidence about a variance without following the procedures and standards laid out in 66 East Allendale. Because there was no finding that a variance from RE to R20 would likely be granted, the jury should not have been permitted to evaluate the property on any basis other than its highest and best use “in accordance with current zoning ordinances.” See id. at 119 (emphasis added). Given the state of the evidence in this case, a Rule 104 hearing would have been necessary to make a finding as to the likelihood of obtaining the variance, but the trial court never held that hearing or made that finding. The result was that “the quality of the evidence that the jury was allowed to consider undermined the soundness of the jury’s property valuation.” Ibid. Given that the only opinion put before the jury as to the value of the property was that of plaintiff’s expert appraiser, who valued the property at $2.83 million based upon RE zoning, the jury’s $4.5 million verdict was a manifest miscarriage of justice that shocks the conscience and requires a new trial. (pp. 16-18)5. On remand, if defendants seek once again to admit testimony of a highest and best use that would require a variance, the trial court must conduct a Rule 104 hearing to determine whether there exists a reasonable probability that a variance would be granted. Only if the court makes that finding may the jury consider, for valuation purposes, uses of the subject property that would require a zoning variance. See id. at 142. REVERSED and REMANDED.CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, PATTERSON, FERNANDEZ-VINA, and TIMPONE join in JUSTICE SOLOMON’S opinion. 3 SUPREME COURT OF NEW JERSEY A- 14 September Term 2019 083137 Township of Manalapan, a Municipal Corporation of the State of New Jersey, Plaintiff-Appellant, v. Anthony Gentile, individually and as Executor of The Estate of Eugene Gentile, Eugene Gentile, and Frank Gentile, Administrator of the Estate of Eugene John Gentile, Defendants-Respondents. On certification to the Superior Court, Appellate Division. Argued Decided February 4, 2020 June 2, 2020 William J. Wolf argued the cause for the appellant (Bathgate Wegener & Wolf, attorneys; William J. Wolf, Peter H. Wegener, and Ryan S. Malc, on the briefs). Lawrence B. Sachs argued the cause for the respondents (Lawrence B. Sachs, on the brief).JUSTICE SOLOMON delivered the opinion of the Court. 1 When a municipality condemns private property for the purpose oftaking it, the municipality must compensate the owner based upon the fairmarket value of the property, which is generally calculated in terms of whatthe property would be worth if put to its highest and best use. In this case, theTownship of Manalapan challenges the condemnation award in favor ofdefendants Anthony, Eugene, and Frank Gentile entered after a jury trial. Theissue is whether it was error to admit testimony that the condemned property’shighest and best use would require a variance without first determiningwhether there is a reasonable probability the variance would be granted. Briefly stated, the Township presented expert testimony that the subjectproperty as currently zoned was valued at $2.83 million. Defendants’ expertdid not offer any opinion as to the value of the property but testified insteadthat the property’s highest and best use would require it to be subdivided intomultiple half-acre lots, although the property was in a zone that permitted lotsof no fewer than three acres. The jury returned a verdict of $4.5 million ascompensation for the defendants, and the Appellate Division affirmed. As we explained in Borough of Saddle River v. 66 East Allendale, LLC,evidence that risks misleading the jury into assuming a zoning variance forpurposes of calculating a property’s value must not be admitted absent ajudicial finding it is reasonably probable that the variance will be obtained. 2 216 N.J. 115, 142 (2013). We therefore hold that the trial court erred byallowing the jury to consider testimony that the highest and best use of thesubject property would require a variance without first confirming theprobability of securing that variance. Accordingly, we reverse the judgment ofthe Appellate Division and remand for a new trial. I. Defendants’ property, a 48.94-acre tract of land, was in an area zoned asR20 (residential) until 2002, when the Township rezoned it to RE (residentialenvironmental). As relevant here, the difference between those zones is thatthe R20 zone allows for single family dwellings on half-acre lots, whereas theRE zone provides for single family dwellings on lots of no fewer than threeacres. As noted by defense expert Paul Phillips, land in the R20 zone couldyield “up to six times the density of the [same amount of land in] RE [three-acre] zoning.” Therefore, undivided land in an R20 zone would have a greaterfair market value than the same land in an RE zone. After a nearly decade-long dispute between the parties, the details ofwhich are not relevant here, the Township commenced condemnation 3 proceedings.1 The court appointed condemnation commissioners to hear thematter; they issued a report awarding defendants $3.6 million in compensationfor the taking.2 The Township appealed, and the case went to trial before ajury to determine the subject property’s fair market value. The trial recordreveals admission of the following evidence for consideration by the jury. The Township’s expert appraiser, James Stuart, explained that, inarriving at his estimate of $2.83 million, he assumed the continued applicationof the current RE zoning (permitting no more than twelve single-family lots onthe subject property) and evaluated the property by reference to the sale priceof similar properties. He acknowledged, however, that unlike the subjectproperty, the properties he used for comparison did not have sanitary sewer ormunicipal water systems, and that, if the subject property were to yield more1 Defendants subsequently filed a counterclaim alleging inverse condemnation, but the court dismissed defendants’ claims before trial and we denied defendants’ cross-petition for certification, see 239 N.J. 520 (2019). 2 “Upon determination that the condemnor is authorized to and has duly exercised its power of eminent domain, the court shall appoint 3 commissioners to determine the compensation to be paid by reason of the exercise of such power.” N.J.S.A. 20:3-12(b). “Within 4 months next following their appointment, or within any extended period in accordance with the rules, the commissioners, or a majority of them, shall make and file in form and content fixed by the rules, an award fixing and determining the compensation to be paid by the condemnor.” N.J.S.A. 20:3-12(g); see also R. 4:73-4. “Any party who has appeared at the hearings of the commissioners, either personally or through an attorney, may appeal from the award of the commissioners.” N.J.S.A. 20:3-13(a); see also R. 4:73-6. 4 than twelve lots, “you’ve got a whole different ball game” in terms of propertyvaluation. The Township also offered the expert testimony of planner JenniferBeahm, who noted that the subject property is surrounded by an R20 zone andthat a zoning variance would be necessary to use the subject property in waysnot otherwise permitted in its current RE zone. By contrast, defendants’ expert planner Paul Phillips opined, over theTownship’s objection, that the highest and best use of the subject propertywould be to divide it into smaller lots, as would be permitted in an R20 zone.He explained that such use of the property would yield “up to six times thedensity” than under the current RE zoning, although he noted that, “for R20zoning to be on the [subject] property[,] the Township committee would haveto agree to change the zone.” Importantly, Phillips did not offer any opinion about the value of theproperty as is or if a variance were granted, or even about the probability thatsuch a variance would be granted. Indeed, in ruling on the Township’sobjection to his testimony, the court cautioned Phillips not to “opin[e] onpossibilities or likelihoods or odds or procedures about getting variances.” The Township moved for judgment at the close of evidence, noting thatthe only issue in the case was the property’s value and that the only expert 5 valuation of the property was Stuart’s estimate of $2.83 million. The courtgranted the motion in part, ordering defense counsel not to argue in closingthat, when calculating the property’s value, the jury could assume a variancewill be granted. However, the court also denied the motion in part, holdingthat reasonable minds could differ on the value of the property because Stuartconceded that the property could yield more than twelve lots. Accordingly, thecourt allowed the question of fair market value to go to the jury. During closing, without expressly inviting the jurors to take a variancefor granted when evaluating the property, defense counsel reminded them thatthe subject property is surrounded by an R20 zone. He also repeatedlyreferenced the possibility of rezoning the subject property, observing that, at least under the current zoning we can get fourteen 3 lots [on the Gentile property, and that] . . . if anybody wanted to do anything with respect to these lots, they would have to go [to] the Zoning Board. . . . So that’s I think an important consideration for you. The court instructed the jurors that they “must decide the market valueof the [subject] property after comparing and considering all the evidenceusing the expert opinions,” if they “find those opinions helpful.” The judgeinstructed that if, on the other hand, the jurors were to reject all expert3 Defense counsel misspoke: the record demonstrates that the property could be divided into only twelve lots under the current RE zoning. 6 testimony, then they could “come up with another figure for the fair marketvalue of the property,” so long as that figure is based on the evidencepresented. The jury returned a unanimous verdict awarding defendants $4.5million for their condemned property. The Township filed post-trial motions for judgment notwithstanding theverdict and for a new trial, claiming that our decision in 66 East Allendalerequired the trial court to conduct an N.J.R.E. 104 hearing as to the reasonableprobability of a variance before admitting any testimony by defendants’ expertthat the subject property’s highest and best use would require R20 zoning. Thecourt denied those motions, and the Township appealed. The Appellate Division affirmed, holding in relevant part that the trialcourt “properly exercised its discretion by allowing defendants’ planningexpert to testify in a limited manner.” The court found that a Rule 104 hearingwas not necessary under 66 East Allendale because Phillips “did not make anyspeculative comments regarding the likelihood of defendants’ obtaining avariance,” having instead opined only that defendants’ property is best suitedfor a use that would require a variance. Relatedly, the court also held therewas no error in denying the Township’s motions for judgment and for a newtrial, since some evidentiary basis existed for the jury to deviate from Stuart’sestimate of $2.83 million -- Stuart took for granted that the property could be 7 divided into no more than twelve lots, and the properties he looked to forcomparison, unlike the subject property, did not have sanitary sewer ormunicipal water systems. We granted the Township’s petition for certification, “limited to theissue of whether the Appellate Division erred in concluding that a plenaryhearing regarding the 'reasonable probability’ of a zoning change was notrequired before the commencement of trial.” 239 N.J. 495 (2019). II. The Township argues that by permitting the defense expert to testify thatthe highest and best use would require a variance -- without first holding aRule 104 hearing to determine if there is a reasonable probability the variancewould be granted -- the trial court admitted testimony likely to mislead the juryinto calculating the property’s value with an assumption that the variancewould be granted. The Township concludes that the trial court neglected itsrole as gatekeeper by admitting that evidence without regard for theprocedures and standards laid out in 66 East Allendale, resulting in agroundless $4.5 million verdict that the Township asserts shocks theconscience. Defendants distinguish this case from 66 East Allendale on the basisthat, there, testimony about the likelihood of a variance being granted was 8 offered but lacked a proper foundation whereas, here, the defense experttestified only that the property’s highest and best use would require a variancewithout ever testifying about the probability of securing such a variance.Defendants also point out that the jury had reason to doubt the credibility ofStuart’s valuation of the property at $2.83 million because Stuartacknowledged that, when calculating that number, he compared the property toothers that lacked sanitary sewer or municipal water systems and took forgranted that the subject property would be divided into no more than twelvelots. Thus, defendants assert there is no need to assume that in reaching itsverdict the jury improperly relied on testimony about the variance. III. “The standard of review on appeal from decisions on motions for a newtrial is the same as that governing the trial judge.” Risko v. Thompson MullerAuto. Grp., Inc., 206 N.J. 506, 522 (2011). Thus, to determine whether theTownship is entitled to a new trial based on the record before us, we considerwhether denying a new trial “would result in a miscarriage of justice shockingto the conscience of the court.” Id. at 521 (quoting Kulbacki v. Sobchinsky, 38 N.J. 435, 456 (1962)); see also R. 4:49-1(a) (“The trial judge shall grant themotion if, having given due regard to the opportunity of the jury to pass upon 9 the credibility of the witnesses, it clearly and convincingly appears that therewas a miscarriage of justice under the law.”). We therefore must determine whether allowing the jury to considerevidence that the property’s highest and best use under R20 zoning could yield“up to six times the density” under the current RE zoning, without firstdetermining whether there was a reasonable probability that the propertywould be rezoned, resulted in a miscarriage of justice. We do so byconsidering the applicable constitutional and statutory provisions, as well asour jurisprudence. A. A municipality, like the Township here, has the authority to take privateproperty for a public use provided that just compensation is paid to theproperty owner. See U.S. Const. amend. V (“[N]or shall private property betaken for public use, without just compensation.”); accord N.J. Const. art. I, ¶20; N.J.S.A. 20:3-29 (a section of New Jersey’s Eminent Domain Act, N.J.S.A.20:3-1 to -50, providing that a “condemnee shall be entitled to compensationfor the property, and damages, if any, to any remaining property, together withsuch additional compensation as provided for herein, or as may be fixedaccording to law”). 10 “Just compensation is 'the fair market value of the property as of thedate of taking . . . .’” Comm’r of Transp. v. Caoili, 135 N.J. 252, 260 (1994)(quoting Comm’r of Transp. v. Silver, 92 N.J. 507, 513 (1983)). The fairmarket value generally considers “the property’s highest and best use,” ibid.,which can be described as “the use that at the time of the appraisal is the mostprofitable, likely use” or, in the alternative, “the available use and program offuture utilization that produces the highest present land value,” so long as thatuse has “a probability of achievement,” Hous. Auth. of New Brunswick v.Suydam Inv’rs, L.L.C., 177 N.J. 2, 20 (2003) (quoting County of Monmouth v.Hilton, 334 N.J. Super. 582, 587 (App. Div. 2000)). “To constitute the'highest and best use,’ a use must be '1) legally permissible, 2) physicallypossible, 3) financially feasible, and 4) maximally productive.’” Ibid. (quotingHilton, 334 N.J. Super. at 588). Whether potential zoning changes might be considered in determining aproperty’s best use or whether such consideration would run afoul of the“legally permissible” requirement is a question this Court addressed in Caoili.There we held, consistent with our decision in Gorga, that in determining the fair market value of condemned property as a basis for just compensation, the jury may consider a potential zoning change affecting the use of the property provided the court is satisfied that the 11 evidence is sufficient to warrant a determination that such a change is reasonably probable. If evidence meets that level of proof, it may be considered in fixing just compensation in light of the weight and effect that reasonable buyers and sellers would give to such evidence in their determination of the fair market value of the property. [ 135 N.J. at 265 (emphasis added) (relying on State Highway Comm’r v. Gorga, 26 N.J. 113 (1958)).] In 66 East Allendale, this Court applied those principles in the context ofa purported highest and best use that could be achieved only if a variance weregranted. In that case, the defendant and the Borough of Saddle River disputedthe fair market value of the defendant’s property. 216 N.J. at 125. Thedefendant proposed “that the highest and best use of the property would be abank,” ibid., but that proposal would have required a variance, id. at 121-22.The defendant had previously applied for the requisite variance in seeking adevelopment permit but withdrew its permit application upon encounteringopposition to the proposed development. Id. at 121-22, 143. Nevertheless, attrial, the defendant submitted expert reports and testimony indicating theexperts’ belief that the bulk variance would be granted. Id. at 126-29. The Borough of Saddle River moved to strike the defendant’s experts’opinions “on the reasonable probability of a zoning change,” arguing that thoseopinions failed to address the standards under which a bulk variance 12 application would be reviewed and, therefore, “lacked a proper foundation.”Id. at 123. Alternatively, the Borough asked for a Rule 104 hearing to ass esswhether there was a reasonable probability that the property would be rezoned.Ibid. The motion court denied those requests, ibid., and, following a jury trial,entered judgment in the defendant’s favor, id. at 133. The Appellate Divisionaffirmed. Id. at 134-36. We reversed, holding that because neither the trial court nor the expertsanalyzed whether “there exists the reasonable probability of a zoning changebased on the standard that would govern the particular zoning change underconsideration,” the trial court neglected its gatekeeping function by leaving thedetermination of probability to be made at trial. Id. at 142-43. We specified that, notwithstanding any expert opinion as to thelikelihood a variance will be granted, only when the trial court has first determined that the evidence is of a quality to allow the jury to consider the probability of a zoning change should the jury be permitted to assess a premium based on that zoning change . . . . The gatekeeping function was assigned to the judge specifically to screen the jury from hearing mere speculation. [Id. at 142 (citing Caoili, 135 N.J. at 264-65).]And we explained that, in order to be relevant to the issue of a property’s fairmarket value, evidence presupposing a variance must be more than merely 13 speculative. Id. at 138. Our rule did not discriminate between speculative andirrelevant evidence -- neither is invited through the gate. Accord Caoili, 135 N.J. at 264 (“The risk of unsound and speculative determinations concerningfair market value is real when that determination is based on evidence of afuture change that is inherently vague or tenuous because it suggests no morethan the possibility of change. . . . The court can [reduce that] risk byperforming, in effect, a gatekeeping function by screening out potentiallyunreliable evidence and admitting only evidence that would warrant or supporta finding that a zoning change is probable.”). Though there was some expert testimony in 66 East Allendale as to theprobability that the municipal body would grant the variance necessary for theproposed use of the property, 216 N.J. at 130-32, our courts have properlyrecognized that case’s broader significance by applying its gatekeepingprocedures and standards even when no evidence is presented regarding theprobability of obtaining a variance, see, e.g., N.J. Transit Corp. v. Franco, 447 N.J. Super. 361, 373, 377-78 (App. Div. 2016) (relying on 66 East Allendale tofind “legally inadequate” the opinions offered by the defendants’ experts, whodid not “show a reasonable probability Weehawken would either grant a usevariance for the cul-de-sac or accept the dedication of the cul-de-sac as apublic street”). In short, with or without expert testimony as to the probability 14 of a variance, trial courts must guard against evidence likely to mislead juriesinto calculating a property’s fair market value at its highest and best use underan unsupported assumption that a variance will be granted. From 66 East Allendale, therefore, derives the following overarchingapproach to predicating highest and best use analyses on not-yet-obtainedzoning variances. A use that does not conform to current zoning is not legallypermissible and so cannot be a property’s highest and best use. See 216 N.J. at 137. However, while a property’s highest and best use “is ordinarily evaluatedin accordance with current zoning ordinances[,] [c]ertain circumstances maypermit valuation to include an assessment of a change in the permitted use of aproperty, but only if there is a reasonable probability that a zoning changewould be granted.” Id. at 119. That substantive determination of probabilitymust account for “the standard that would govern the particular zoning changeunder consideration.” 4 Id. at 143. In making that determination, the trial courtmust examine the parties’ evidence as to the probability of the zoning changeto “determine whether [the court] can render its required determination basedon the papers.” Ibid. If that determination cannot be made on the written4 The Township’s Board of Adjustment has discretion to grant variances to an applicant who satisfies certain conditions and who follows procedures laid out in Township ordinances. Township of Manalapan, Development Regulations of the Township of Manalapan § 95-4.4 (citing N.J.S.A. 40:55D-70). 15 submissions alone, the court shall conduct a pretrial Rule 104 hearing toresolve the issue. Id. at 142-43. B. The question before this Court -- whether it was error to admit testimonythat the condemned property’s highest and best use for purposes of valuationwould be one for which a variance would be necessary without firstdetermining that there is a reasonable probability that such a variance would begranted -- was answered in 66 East Allendale. In this case, the evidence about a variance is as follows: After plaintiff’sexpert appraiser Stuart opined that, under current zoning, the property valuewould be $2.83 million, plaintiff’s expert planner Beahm testified that theproperty was located in the RE zone and that it could not be used as though itwere in the R20 zone, like surrounding properties, without first obtaining avariance. Next, after the trial court forbade defendants’ expert planner Phillipsfrom “opining on possibilities or likelihoods or odds or procedures aboutgetting variances,” he testified that the highest and best use of the propertywould require R20 zoning, which could yield “up to six times the density ofthe underlying RE three[-]acre zoning.” However, Phillips conceded on cross-examination that “for R20 zoning to be on the [subject] property[,] theTownship committee would have to agree to change the zone.” Nevertheless, 16 during closing argument defense counsel referenced how the subject propertyis zoned differently than the surrounding properties, reviewed types ofvariances that could be secured with municipal approval, and emphasized theabsence of certain barriers to modifying applicable land use regulations . The trial court here neglected its role as gatekeeper by letting the juryconsider evidence about a variance without following the procedures andstandards laid out in 66 East Allendale. That case stands for more than theproposition that speculative testimony about the probability of obtaining avariance should not be allowed to reach a jury. That is but one way in whichthe harm 66 East Allendale identifies and seeks to prevent can occur. Anotheris what happened here: the jurors were invited to set a valuation based on ahighest and best use that would require a variance without any judicialconsideration of the probability of obtaining that variance. Whether the jurorsare allowed to consider speculative expert testimony or invited to supply theirown speculation, the result is the same: evidence not demonstrated to bereliable or relevant is put before the jury. The application of 66 East Allendaleby the trial court, which the Appellate Division affirmed, departed from theletter and undermined the spirit of that case. Here, because there was no finding that a variance from RE to R20would likely be granted, the jury should not have been permitted to evaluate 17 the property on any basis other than its highest and best use “in accordancewith current zoning ordinances.” See 66 East Allendale, 216 N.J. at 119(emphasis added). Testimony about a hypothetical highest and best use wasunreliable and misleading because its relevance presupposed an R20 usevariance without evidence that the variance was likely to be granted. Giventhe state of the evidence in this case, a Rule 104 hearing would have beennecessary to make a finding as to the likelihood of obtaining the variance, butthe trial court never held that hearing or made that finding. The result was that “the quality of the evidence that the jury was allowedto consider undermined the soundness of the jury’s property valuation.” Ibid.Given that the only opinion put before the jury as to the value of the propertywas that of plaintiff’s expert appraiser, who valued the property at $2.83million based upon RE zoning, the jury’s $4.5 million verdict was a manifestmiscarriage of justice that shocks the conscience and requires a new trial. IV. In light of the foregoing, the judgment of the Appellate Division isreversed, and the matter is remanded for a new trial. On remand, if defendantsseek once again to admit testimony that the condemned property’s highest andbest use for purposes of valuation would be one for which a variance would benecessary, the trial court must conduct a Rule 104 hearing to determine 18 whether there exists a reasonable probability that a variance would be granted.Only if the court makes that finding may the jury consider, for valuationpurposes, uses of the subject property that would require a zoning variance.See id. at 142. CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, PATTERSON, FERNANDEZ-VINA, and TIMPONE join in JUSTICE SOLOMON’S opinion. 19