Court Opinion

ID: 4430785
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:47:10.194461+00
Date Added: 2024-06-11T13:31:48.683009
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                      APPROVAL OF THE APPELLATE DIVISION
     This opinion shall not "constitute precedent or be binding upon any court."
      Although it is posted on the internet, this opinion is binding only on the
        parties in the case and its use in other cases is limited. R. 1:36-3.

                                        SUPERIOR COURT OF NEW JERSEY
                                        APPELLATE DIVISION
                                        DOCKET NO. A-5011-15T1
                                               NO. A-5201-15T1

NORTH HUDSON SEWERAGE AUTHORITY,
a Body Corporate and Politic of
the State of New Jersey,

        Plaintiff-Respondent,

v.

HARTZ MOUNTAIN INDUSTRIES, INC.,
a New York Corporation,

        Defendant-Appellant,

and

STATE OF NEW JERSEY and TOWNSHIP OF
WEEHAWKEN, a Municipal Corporation
of the State of New Jersey,

     Defendants.
______________________________________

NORTH HUDSON SEWERAGE AUTHORITY,
a Body Corporate and Politic of
the State of New Jersey,

        Plaintiff-Respondent,

v.

HARTZ MOUNTAIN INDUSTRIES, INC.,
a New York Corporation, STATE OF NEW JERSEY,
and TOWNSHIP OF WEEHAWKEN, a
Municipal Corporation of the
State of New Jersey,

     Defendants.

1500 HARBOR BOULEVARD PARTNERS,
LLC,

     Appellant.
___________________________________

          Argued March 14, 2018 – Decided July 26, 2018

          Before Judges Fuentes, Koblitz and Manahan.

          On appeal from Superior Court of New Jersey,
          Law Division, Hudson County, Docket No. L-
          1722-14.

          Anthony F. Della Pelle argued the cause for
          appellant Hartz Mountain Industries, Inc. (in
          A-5011-15) (McKirdy and Riskin, PA, attorneys;
          Anthony F. Della Pelle, of counsel and on the
          brief; Daniel Kim, on the brief).

          Dennis J. Drasco argued the cause for
          appellant 1500 Harbor Boulevard Partners, LLC
          (in A-5201-15) (Lum, Drasco and Postian, LLC,
          attorneys; Dennis J. Drasco and Kevin J.
          O'Connor, of counsel and on the brief).

          John J. Curley argued the cause for respondent
          (John J. Curley, LLC, attorneys; John J.
          Curley, of counsel; Jennifer J. Bogdanski, on
          the brief).

PER CURIAM

     1500 Harbor Boulevard Partners, LLC (1500 Harbor) appeals

from a December 8, 2014 order denying its motion to intervene in

a condemnation claim filed by North Hudson Sewerage Authority

(NHSA) against Hartz Mountain Industries, Inc. (Hartz), the State

                                  2                        A-5011-15T2
of New Jersey, and the Township of Weehawken.1          After a bench

trial, Hartz appeals from a May 20, 2016 award of $569,774.61 in

compensation damages. We consolidate these appeals for the purpose

of writing one opinion.     We affirm the denial of intervention and

remand for reconsideration of the condemnation award.

     On April 14, 2014, NHSA sought         four easements on Hartz

property, a ninety-acre tract known as Lincoln Harbor, which has

been under development for thirty years.       Hartz had built a 582-

unit luxury apartment complex called Estuary on a riverfront

portion of Lincoln Harbor with unimpeded views of the New York

City skyline.     Hartz owns approximately ninety-two percent of

Estuary.

     NHSA's four easements were needed to construct and maintain

a sewer pipeline to manage Weehawken storm water.            Permanent

Easement    B   provides   for   the   installation,   operation,   and

maintenance of a ninety-six inch sewer pipe that is located within

the right of way of Riverview Terrace, a private street owned by

Hartz.     The total area of Permanent Easement B is 14,424 square

feet.    Temporary Easement A, lasting ten months, is designed to

provide sufficient space for construction activities for Permanent

1
   Neither the State of New Jersey nor the Township of Weehawken
appeared in the litigation.
                                   3                          A-5011-15T2
Easement B.    The area of Temporary Easement A is 19,638 square

feet.

     Permanent Easement D provides for the construction of a

platform above the Hudson River as well as the construction of a

superstructure for two sewer outfalls that will discharge storm

water and treated sewage below the Hudson River's surface.                   The

total area of Permanent Easement D, the Outfall Facility, is 17,875

square feet, and it will be constructed level with the existing

Hudson River Walkway.

     Each new outfall constructed on this platform will have hidden

netting chambers that will be equipped with a system to catch

floatables – solid objects larger than one-half inch in diameter.

The netting system will be accessed from the top of the platform

and is maintained by a truck and boom system that removes and

replaces the nets periodically.            Temporary Easement C, lasting

twelve months, is designed to provide space for the construction

of Permanent Easement D.      The total area of Temporary Easement C

is 4600 square feet.

     On June 23, 2014, the trial court entered final judgment

allowing NHSA to exercise its eminent domain power and appointing

Condemnation   Commissioners      to       determine    just   compensation.

N.J.S.A. 20:3-12.       On November 19, 2014, 1500 Harbor filed an

unsuccessful   motion    to   intervene      in   the   condemnation     action

                                       4                               A-5011-15T2
pursuant to Rule 4:33-1 and requested an extension of the date for

the Commissioners' hearing.      The motion was denied on December 8,

2014. Five weeks later, a hearing was held before the Condemnation

Commissioners.    Two weeks later, the Commissioners issued their

report, awarding $129,816 compensation to Hartz for the permanent

easements and $11.25 per square feet for the temporary easements.

Both NHSA and Hartz appealed from the Commissioners' report.

                                   I.

     1500 Harbor owns the property known as "Pier D".               It had

received zoning approvals to build a 227 unit luxury residential

development on the site.      The Outfall Facility will be located

within two feet of 1500 Harbor's property.

     At the hearing for the motion to intervene, 1500 Harbor argued

it may be entitled to severance damages because of the Outfall

Facility and asserted unity of ownership and unity of use, giving

it   a   sufficient   interest   to       intervene   in   the   underlying

condemnation action.     1500 Harbor argued the severance damages

would stem from the anticipated diminution in value of the soon-

to-be-built north-facing apartments of 1500 Harbor's residential

development due to the interruption in the view.             1500 Harbor's

counsel stated that Hartz holds a significant ownership interest

in 1500 Harbor.

                                      5                            A-5011-15T2
      The motion judge expressed concern "that the intervention at

this point by 1500 Partners does not seem to me to fit into the

summary proceeding course that is to be taken by condemnation

actions."     The judge also stated that even if the court were to

accept both 1500 Harbor's unity of ownership and unity of use

arguments,    the     issue    regarding       severance      damages    appeared

premature and speculative.                The judge also expressed concern

regarding the fact that 1500 Harbor claims unity of ownership yet

did not seek to participate earlier in the condemnation action.

For these reasons, the motion court denied 1500 Harbor's motion

to   intervene,     noting    that    if    1500   Harbor's   property    suffers

damages, it could seek recovery in a separate action.                   We agree.

      Intervention in a condemnation case is governed by the general

intervention rule, Rule 4:33.              Pressler & Verniero, Current N.J.

Court Rules, cmt. 1.1 on R. 4:73-2 (2018).                Rule 4:33-1 requires

the moving party to show "an interest in the subject matter of the

litigation,    an    inability       to     protect    that   interest    without

intervention, lack of adequate representation of that interest,

and timeliness of the application."                Pressler & Verniero, cmt. 1

on R. 4:33-1.       "As the rule is not discretionary, a court must

approve an application for intervention as of right if the four

criteria are satisfied."             N.J. Dep't of Envtl. Prot. v. Exxon

Mobil Corp., 453 N.J. Super. 272, 286 (App. Div. 2018) (quoting

                                           6                              A-5011-15T2
Meehan v. K.D. Partners, LP, 317 N.J. Super. 563, 568 (App. Div.

1998)).

       "Rule 4:33-1 is construed 'liberally.'"             Allstate New Jersey

Ins. Co. v. Neurology Pain Assocs., 418 N.J. Super. 246, 254 (App.

Div. 2011) (quoting Meehan, 317 N.J. Super. at 568).               "Consistent

with   this    liberal   construction,      our   courts    take   a   practical

approach in determining whether a moving party has a cognizable

interest      in   litigation   that   it    is   entitled    to   protect     by

intervention."       Id. at 254-55 (citing Am. Civil Liberties Union

of N.J., Inc. (ACLU NJ) v. Cty. of Hudson, 352 N.J. Super. 44, 67-

69 (App. Div. 2002)).

       "[W]here intervention of right is not allowed, one may obtain

permissive intervention under [Rule] 4:33-2."               ACLU NJ, 352 N.J.

Super. at 70 (quoting Atl. Emp'rs Ins. Co. v. Tots & Toddlers Pre-

School Day Care Ctr., 239 N.J. Super. 276, 280 (App. Div. 1990)).

Pursuant to Rule 4:33-2, a court may permit anyone to intervene

in an action "upon timely application if the claim or defense and

the main action have a question of law or fact in common."                 Exxon

Mobil, 453 N.J. Super. at 286 (alterations omitted).               1500 Harbor

did not seek permissive intervention.

       When a public entity "takes private property for a public

use, the property owner is entitled to 'just compensation' under

our State and Federal Constitutions."             Borough of Harvey Cedars

                                       7                                A-5011-15T2
v. Karan, 214 N.J. 384, 388 (2013) (citing U.S. Const. amend. V

and N.J. Const. art. IV, § 6, ¶ 3).               In a condemnation action, the

parties are to include the "record owner, the occupant, if any,

such other persons appearing of record to have any interest in the

property and such persons claiming an interest therein as are

known to the plaintiff."            R. 4:73-2.

       "In condemnation cases, severance damages are awarded only

when   there    is   a    partial      taking     of   a    parcel    of   realty,    the

uncondemned     parcel        and   the   condemned        parcel    are   functionally

integrated, and there exists a unity of ownership."                         Union Cty.

Improvement Auth. v. Artaki, LLC, 392 N.J. Super. 141, 150 (App.

Div. 2007) (citing Hous. Auth. of Newark v. Norfolk Realty, 71

N.J. 314, 324 (1976)).

       Rule 4:33-1, governing intervention as of right, is subject

to de novo review.            Exxon Mobil, 453 N.J. Super. at 285.                   1500

Harbor argues that the motion court erred when it denied 1500

Harbor's motion to intervene because the Outfall Facility is within

two feet of 1500 Harbor's property and will clearly affect its

property interests.           Although 1500 Harbor claims it will suffer a

diminution in value of the apartments facing the Outfall Facility,

it has not argued that it could not otherwise seek remedies in a

separate action.         The motion judge stated that a claim for damages

"may    ripen   into      a    claim      based    upon      a   theory    of   inverse

                                            8                                   A-5011-15T2
condemnation."     Therefore, 1500 Harbor has not shown that the

disposition of the underlying action impairs or impedes its ability

to protect its interest.

     Lastly, 1500 Harbor did not file its motion to intervene

until one month after receiving an October 2014 public notice

issued by the Army Corps of Engineers regarding the scope of the

Outfall Facility and its proximity to 1500 Harbor's property. 1500

Harbor notes that NHSA's "Complaint and Declaration of Taking

. . . described only the lands to be taken and did not specifically

describe the sewer facilities to be constructed pursuant to the

easements (which directly causes the severance damages to [1500

Harbor's]   property)."     The   motion   court,   however,   expressed

concern regarding why 1500 Harbor did not move to intervene in the

matter sooner, if it had unity of ownership with Hartz.

     1500 Harbor's counsel was not prepared to present evidence

of damages to 1500 Harbor's property, but instead set forth 1500

Harbor's belief that its north-facing apartments would diminish

in value due to the construction of the Outfall Facility.              The

letter submitted by 1500 Harbor from McLaren Engineering Group

discussed   what   the   engineers   saw   as   possible   problems   that

construction of the Outfall Facility could cause to 1500 Harbor's

property.

                                     9                           A-5011-15T2
     Reviewing the evidence presented by 1500 Harbor de novo, we

agree with the motion judge that, even if it could prove unity of

use and ownership, the possible damages are speculative and could

be addressed in a later proceeding.      The delay in moving to

intervene given a unity in ownership also would have delayed the

entire proceedings.   We affirm the order denying intervention.

                                II.

                                A.

     We are compelled to reverse the award of condemnation damages

and remand for reconsideration due to certain erroneous rulings.

"The concept of 'unity of ownership' . . . is flexible and does

not require a rigid definition of ownership on the basis of bare

legal title."   Artaki, 392 N.J. Super. at 149.   "[A]ll parcels of

real property, whether contiguous or noncontiguous, that are in

substantially identical ownership . . . shall be treated as if the

entire property constitutes a single parcel."     Norfolk, 71 N.J.

at 325. (alteration in original) (emphasis in original) (quoting

Uniform Eminent Domain Code, § 1007 (1974)).

     Paul Beisser, NHSA's expert, valued the taking using the

comparable sales approach.   He concluded that the underlying land

value was $1.8 million – $41.32 per square foot of each easement

area.   Albert F. Chanese, Hartz's expert, valued the taking using

the same methodology, and concluded that the underlying land value

                                10                         A-5011-15T2
was $11.6 million – $265.70 per square foot of each easement area.

The court fully accepted Hartz's valuation of the property.                Hartz

does not appeal from this determination and NHSA does not cross-

appeal.

     Each expert also rendered opinions about the value of the

specific easements.        Beisser reduced his value of the property

subsumed by Permanent Easement B by ten percent to reflect the

value   of   the    limited    easement    interest.       Although   Permanent

Easement D was ultimately developed, Beisser attributed no value

to Easement D because, in his opinion, Easement D could not be

developed.    He determined that the value of Temporary Easements A

and C should be based upon an eight-percent rate of return that

was derived from the market value of the easement areas.                       He

ultimately concluded that just compensation for the takings was

$128,000,    adjusted     to    $150,000    to   reflect    favorable     market

conditions.

     Chanese       concluded   that   Permanent    Easement    B   represented

twenty percent of the bundle of rights to that property, and valued

this taking at $766,489.         He concluded that Permanent Easement D

represented twenty-five percent of the bundle of rights and valued

this taking at $1,187,344.         Chanese ultimately concluded that the

total value of Easements B and D was $1,953,833, and the total

                                      11                                A-5011-15T2
value    of   the   two   permanent   easements    and   the    two   temporary

easements was $2,463,300.

     Chanese also concluded that Hartz suffered severance damages

because of the taking.         He concluded that Permanent Easement D

would affect the view by a portion of Estuary residents because

Estuary would be in direct view of the netting chamber and capture

vault.    He concluded that this construction would translate to a

three-percent reduction in the value of the entire property, or

severance damages of $2,910,000.           Therefore, he concluded the

total value of the taking at $5,373,000.

     Our standard of review of trial court findings after an

evidentiary hearing is limited.        Gnall v. Gnall, 222 N.J. 414, 428

(2015).       The   court's   decision,    however,      must    be   based     on

substantial evidence in the record.           Ricci v. Ricci, 448 N.J.

Super. 546, 564 (App. Div. 2017).

     Hartz argues that the trial court's decision to allocate a

two-percent fee for the taking of Permanent Easement B, a one-

percent fee for Permanent Easement D, and no severance damages to

Estuary, was unsupported by the record.           With respect to Permanent

Easement B, Hartz states that the trial court's conclusion was

based on a faulty premise – that B was a "replacement of an

already-existing      easement."      Hartz   accurately        states   that     B

encompassed 14,424 square feet and was "not previously encumbered

                                      12                                 A-5011-15T2
by an easement."         Defendant's own expert assessed a ten-percent

fee for Easement B, yet the court assessed a fee of only two

percent.

      Hartz further argues that the trial court incorrectly noted

"that the only detriment to the encumbered parcel is the presence

of   the   pipe   with    no   further    access   nor   plan   for   continued

maintenance nor access to it."                In fact, the easement granted

access for maintenance.

      The trial court found that "Permanent easement B represented

a replacement of an already-existing easement and represents two

percent of the bundle of rights" because "Permanent easement B,

only very slightly, impacts on the surface area of the Estuary

. . . ."    It found that Permanent Easement B did not "affect the

use or the utility of the property, at all."               It calculated the

value of NHSA's taking at $76,649.14, two percent of the total

value of the land taken for Permanent Easement B.

      As to Permanent Easement D, Hartz contends that the trial

court "erroneously speculated that the 'decorating scheme' would

somehow cure the sign of trucks and other equipment." Hartz argues

that the design of the system could change at any moment, but this

is its only opportunity to "receive compensation."                Last, Hartz

contends that the trial court incorrectly determined that the

                                         13                            A-5011-15T2
impact of a truck utilized monthly to help maintain the sewer

outfall structure is negligible.

     With respect to Permanent Easement D, the court found that

"the land on which the platform is to be constructed has very

little, if any, development potential" because of the "presence

of the existing sewer outfall" and the "allowable density of the

development" would not be reduced.        It continued: "The Court

acknowledges that the permanent easement D may create a slight

visual impediment of the New York City skyline by a few of the

occupants of the Estuary."   It recognized the "decorating scheme"

would help "blend in" the "apparatus."    Furthermore, it found the

"periodic presence of the boom truck would be negligible because

of the expressed lack of frequency of the use of this equipment

. . . ."   For these reasons, it found a one-percent fee for the

imposition of Permanent Easement D, valued at $47,493.87.

     The Fifth Amendment to the United States Constitution and

Article I, Paragraph 20 of the New Jersey Constitution provide

that private property may not be taken for public use without just

compensation made to the owners.     N.J.S.A. 40A:12-4(a) provides:

           Any county or municipality may acquire:

           Any real property, capital improvement,
           personal property or any interest or estate
           whatsoever   therein,  including   easements,
           water, water power, or water rights, either
           within or without the county or municipality,
           except that no such property belonging to the

                                14                          A-5011-15T2
          State or any of its agencies, a county or any
          municipality shall be acquired without its
          express consent.

     Property is defined under the eminent domain statute as "land,

or any interest in land."        N.J.S.A. 20:3-2(d).   "An easement

constitutes an interest in land, and the owner must be compensated"

for its value.   Twp. of Manchester Dep't of Utils. v. Even Ray

Co., Inc., 315 N.J. Super. 122, 132 (App. Div. 1998).          "Just

compensation is a function of the value of the property in light

of its highest and best use, which is ordinarily evaluated in

accordance with current zoning ordinances."       Borough of Saddle

River v. 66 E. Allendale, LLC, 216 N.J. 115, 119 (2013).

     "[T]here is no precise and inflexible rule for the assessment

of just compensation.   The Constitution does not contain any fixed

standard of fairness by which it must be measured.      Courts have

been careful not to reduce the concept to a formula."      State v.

Caoili, 135 N.J. 252, 271 (1994) (quoting Jersey City Redevelopment

Agency v. Kugler, 58 N.J. 374, 387-89, (1971)).

     The court, as a factfinder, "may accept some of the expert's

testimony and reject the rest.    That is, a factfinder is not bound

to accept the testimony of an expert witness, even if it is

unrebutted by any other evidence."     Torres v. Schripps, Inc., 342

N.J. Super. 419, 430-31 (App. Div. 2001) (citations omitted).     But

                                  15                        A-5011-15T2
findings must be based on substantial evidence.            Ricci, 448 N.J.

Super. at 564.

    The trial court calculated the taking of Permanent Easement

B based on its "replacement of an already-existing easement" and

the nominal effect it would have on the surface area.             The court

failed   to    explain   in   what   way   even   the   defense   expert   so

dramatically overvalued the percent of damages, at ten percent

rather than the two percent the judge found.

                                      B.

    Our Supreme Court, in State by Comm'r of Transp. v. Silver,

92 N.J. 507, 514 (1983), wrote:

              [W]here only a portion of a property is
              condemned, the measure of damages includes
              both the value of the portion of land actually
              taken and the value by which the remaining
              land has been diminished as a consequence of
              the partial taking. The diminished value of
              the   remaining   property   constitutes   the
              severance damages visited upon that property
              as a result of the taking.

    Regarding the effect on the Estuary, the trial court wrote:

"Severance damages are not appropriate and will not be awarded.

Although the property is impacted by these easements, the Court

does not find that they [] so substantially impact the premises

to represent a diminution in the total value of the property to

justify an award."       The court also found no unity of ownership.

                                     16                             A-5011-15T2
       The court erred in finding no unity of ownership because

Hartz owned "only" 92.5% of Estuary.         In Artaki, 392 N.J. Super.

at 149-50, we wrote, "The concept of 'unity of ownership' suggests

that physically separate parcels are owned in their entirety by

one owner or set of owners.        The concept, however, is flexible and

does not require a rigid definition of ownership on the basis of

bare legal title."       The "fluid interpretation of the unity of

ownership" was addressed by the New Jersey Supreme Court in

Norfolk, 71 N.J. at 324.       Id. at 150.

       When determining unity of ownership, the Court addressed the

question of "whether strict unity of title in a given entity must

exist, or whether ownership is a matter of substance rather than

form   so   that   identity   of   beneficial   interest   will   suffice."

Norfolk, 71 N.J. at 324.       The Court concluded:

            However, the concept of eminent domain
            requires   that   the   realities    underlying
            corporate   ownership   of   land   be   fairly
            recognized. Normal business considerations,
            including   due   regard   for    federal   tax
            consequences, may indicate that a bifurcated
            ownership of the assets of a functionally
            integrated enterprise is more desirable than
            ownership by a single entity. The law should
            not require businessmen to ignore otherwise
            sensible economic planning decisions in order
            to retain their right to full actual damages
            consequent upon a public taking.

            [Ibid.]

                                     17                            A-5011-15T2
Thus the trial court's conclusion that there was no unity of

ownership because "Estuary is owned by three different entities,

with Hartz possessing only a 92.5% interest in that property" is

incorrect.

     In evaluating unity of use, the court overlooked that the

entire Lincoln Harbor has been developed by Hartz, that the site

has been treated as a "single planned development unit," and that

Hartz   essentially   controls   Estuary.     Additionally,       and   most

importantly,   because   Estuary    is   contiguous   to    the   easement

property, unity of use need not be demonstrated.           Manalapan Twp.

v. Genovese, 187 N.J. Super. 516, 521 (App. Div. 1983) ("[T]o

recover severance damages, an owner must prove either that the

parcels were contiguous or that they were constituent parts of one

economic unit.").

     The trial court focused on its perception that Hartz had to

prove a unity of use, writing:

           To establish a unity of use, the landowner
           must demonstrate that any non-contiguous lots
           were constituent parts of a single economic
           unit. Cty. of Middlesex v. Clearwater Vill.,
           Inc., 163 N.J. Super. 166, 174 (App. Div.
           1978); State v. Whitehead Bros. Co., 210 N.J.
           Super. 359, 366 (Law Div. 1986).

           [(Emphasis added).]

     NHSA does not dispute that the Estuary and the "part taken"

are, in fact, contiguous, but rather argues that the parcels are

                                   18                              A-5011-15T2
not part of a single economic unit.      To recover severance damages,

Hartz need only prove "either that the parcels were contiguous or

that they were constituent parts of one economic unit." Manalapan,

187   N.J.   Super.   at    521   (emphasis   added).     Because   Hartz

demonstrated both unity of ownership and that the parcels were

contiguous, Hartz is entitled to recover severance damages.

      We reverse and remand with regard to the award for Easement

B as well as severance damages for Estuary.             The court should

explain the foundation for its awards.

      A-5201-15 is affirmed.       A-5011-15 is reversed and remanded

for reconsideration.       We do not retain jurisdiction.

                                    19                          A-5011-15T2