Title: Greenway Development Co. v. Borough of Paramus
Citation: N/A
Docket Number: a-41-99
State: new-jersey
Issuer: new-jersey Supreme Court
Date: May 15, 2000

(This syllabus is not part of the opinion of the Court. 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 Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized). COLEMAN, J., writing for a unanimous Court. The issue before the Court is whether the notice of claim provision in the New Jersey Tort Claims Act (TCA), N.J.S.A. 59:1 to 12-3, applies to an inverse condemnation action. The facts are undisputed. In March 1997, Greenway Development Co., Inc. and Greenway Corporation (collectively Greenway) contracted with Paramus Investment Venture to purchase approximately 2.2 acres of land located in a residential two-family zone (the Greenway property). Greenway intended to build six two-family homes. Prior to closing title to the property, Greenway searched the public records and found a subdivision map, filed May 3, 1984, showing six two-family lots and a site plan approved by the Paramus Planning Board and the Borough Engineer on April 19, 1981 with revisions on March 6, 1984, showing subdivided lots for the construction of two family houses on each lot. The Greenway property previously had been part of a larger parcel that was located partially within a business zone and partially within a residential two-family zone. The Paramus Planning Board passed a resolution on January 29, 1982 granting a zoning variance to permit construction of a four-story office building on the portion of the property located in the business zone. As part of the same resolution, the land located in the residential zone, which included the Greenway property, was to be used only as a buffer area. This resolution was not made part of the subdivision approval file. After Greenway made a diligent search of the property, closed title to the property, and sought construction permits to build two-family homes on the property, its applications were denied by the Borough of Paramus (Paramus or Borough). Greenway instituted a Verified Complaint in Lieu of Prerogative Writs against the Borough of Paramus and others (collectively defendants). Count One of the complaint sought to compel Paramus to issue building permits for two-family homes on the property; Count Two asserted inverse condemnation; and Count Three alleged interference with prospective economic advantage by the Borough and various municipal officials. The trial court denied Greenway's request to immediately direct the issuance of the permits. Instead, the court remanded the matter to the Paramus Planning Board for clarification of the condition in the 1982 resolution relating to the buffer zone. On remand, The Planning Board determined, by resolution dated April 9, 1998, that it was intended that the residential portion remain undeveloped as a buffer between the office building and the surrounding residential area. Greenway later filed an amended complaint naming the Planning Board as an additional defendant. In May 1998, Greenway filed a motion seeking to compel Paramus to issue the requested building permits. Finding that, prior to 1982, it was the Planning Board's intention to permit the property to be developed with two family residential homes, the trial court directed the Borough to issue the requested permits. The court reasoned that if the Borough and the Planning Board did not intend that the site be developed as two-family residential dwellings, the information contained in the public record should have been corrected prior to Greenway's reliance on them. In November 1998, defendants filed a motion seeking to dismiss the inverse condemnation and interference with prospective economic advantage claims. The trial court dismissed the interference with prospective economic advantage claim, finding that defendants were entitled to immunity under the TCA because of Greenway's failure to file the required notice of claim. However, the court found in favor of Greenway on the inverse condemnation claim because Paramus prevented Greenway from developing the property. According to the trial court, the denial of Greenway's use of the land interfered with their reasonable investment-backed expectations in that use, resulting in a taking. Thus, Greenway was entitled to fair compensation for the temporary taking that occurred between the initial denial of the permits and the order compelling the issuance of those permits. The court determined that neither defendants' subsequent actions nor the 1982 resolution could override the Planning Board's original approval of the two-family home subdivision. In denying defendants' motion for reconsideration of whether the TCA barred the inverse condemnation claim, the trial court reasoned that it was bound by the decision in Russo Farms, Inc. v. Vineland Bd. of Educ., wherein the Appellate Division held that compliance with the TCA's notice requirement is not a prerequisite to pursuing an inverse condemnation claim. The court noted that the Supreme Court in Russo declined to resolve this specific issue but that the opinion nevertheless included a discussion of other jurisdictions who have held that tort claims rules do not apply to inverse condemnation claims . The trial court found those cases persuasive. Defendants' motion for leave to appeal to the Appellate Division, on the issue of whether the TCA applies to inverse condemnation claims, was denied. The Supreme Court granted defendants' motion for leave to appeal. HELD: Inverse condemnation is not a tort or an injury within the meaning of the Tort Claims Act, for which the notice of claim provision is applicable; therefore, inverse condemnation claims should proceed unencumbered by the TCA. 1. Consistent with its goals of restricting governmental liability in tort, the TCA requires that the public entity be notified of a claim against it within ninety days of its accrual. Suit may be filed six months after notice is given. In an inverse condemnation action, a landowner is seeking compensation for a de facto taking of his or her property. To be considered a compensable taking, the landowner must be deprived of all reasonably beneficial use of the property. (Pp. 8-10) 2. The Court previously has concluded that discrimination does not constitute an injury within the intendment of the TCA. The Appellate Division in Russo Farms held that the TCA does not apply to inverse condemnation claims. This Court did not overturn or disapprove of that part of the Appellate Division's opinion. To the extent that an inverse condemnation is a constitutional tort as argued by defendants, it is more akin to an action in lieu of prerogative writs than the tort of negligence. (Pp. 10-14) 3. Clearly the Legislature intended the TCA apply only to civil actions seeking damages for tortious conduct. Fault or lack of care, essential to the tort of negligence, are not involved in the concept of inverse condemnation. Factors surrounding the drafting of the TCA strongly suggest that the Legislature never intended inverse condemnation to be covered by the TCA's definition of injury. (Pp. 14-16) 4. The notice provision of the TCA does not apply to inverse condemnation claims because they allege, in a state court proceeding, a violation of the Just Compensation Clause of the Fifth Amendment. Claims made pursuant to the Just Compensation Clause arise independently of the TCA. In addition, a public entity cannot use a state statute like the TCA to abrogate a claimant's constitutional rights. (Pp. 16-18) Judgment of the Appellate Division is AFFIRMED and the matter is REMANDED to the Law Division for further proceedings to provide compensation for the period during which the taking was effective. CHIEF JUSTICE PORITZ and JUSTICES O'HERN, LONG, VERNIERO, and LAVECCHIA join in JUSTICE COLEMAN'S opinion. JUSTICE STEIN did not participate. GREENWAY DEVELOPMENT CO., INC. and GREENWAY CORPORATION INC., incorrectly impleaded as Greenway Corporation Co., Inc., Plaintiffs-Respondents, v. BOROUGH OF PARAMUS, MAYOR CLIFFORD GENNARELLI, Individually and as Mayor and PETER WELLS, Zoning Official, Defendants-Appellants, and WARREN LANE ASSOCIATES, a New Jersey Partnership, ROBERT C. SUMNER, STEPHEN B. PALMER, STANLEY BEKRITSKY and DOUGLAS HAYNES, Co-Trustees of the Edith Marion Summer Trust Agreement No. 2, ARTHUR B. FOWLER, ARTHUR B. FOWLER, II, and JOHN FOWLER, All as Successor Venture Agents of Paramus Investment Venture, a Joint Venture, SCHILP &amp; CO., L.L.C., ALEXANDER SUMMER, L.L.C. and BOROUGH OF PARAMUS PLANNING BOARD, Defendants. Argued February 14, 2000-- Decided May 15, 2000 On appeal from the Superior Court, Law Division, Bergen County. Frank J. Cuccio argued the cause for appellants (Cuccio and Cuccio, attorneys; Mr. Cuccio and Jonathan M. Remshak, on the brief). Sheri K. Siegelbaum argued the cause for respondents (Scarinci &amp; Hollenbeck, attorneys). The opinion of the Court was delivered by COLEMAN, J. The issue raised in this appeal is whether the notice of claim provision in the New Jersey Tort Claims Act (TCA), N.J.S.A. 59:1-1 to 12-3, applies to an action for inverse condemnation. The Law Division found that compliance with the TCA was not a prerequisite to pursuing inverse condemnation claims. We agree and affirm. NO. A-41 GREENWAY DEVELOPMENT CO., INC., et al., Plaintiffs-Respondents, v. BOROUGH OF PARAMUS, et al., Defendants-Appellants, and WARREN LANE ASSOCIATES, a New Jersey Partnership, et al., Defendants. DECIDED May 15, 2000 Chief Justice Poritz