HomeMy Public PortalAboutCarteret Terrace - Order for Discovery 5-10-23Hon. Michael A. Toto, A.J.S.C.
Middlesex County Superior Court
56 Paterson Street
PO Box 964
New Brunswick, NJ 08903-0964
(732) 645-4300
BOROUGH OF CARTERET,
Plaintiff(s),
vs.
CARTERET TERRACE, LLC, LASALLE
BANK NATIONAL ASSOCIATION, THE
BANK OF NEW YORK MELLON, PAR U
HARTFORD LIFE INSURANCE COMFORT
TRUST, COUNTY OF MIDDLESEX,
MIDDLESEX WATER COMPANY, NUI
CORPORATION D/B/A ELIZABETHTOWN
GAS COMPANY, BELL ATLANTIC – NEW
JERSEY, INC., PUBLIC SERVICE
ELECTRIC AND GAS COMPANY,
PIVOTAL UTILITY HOLDING, INC., and
ETG ACQUISITION CORPORATION
Defendant(s).
SUPERIOR COURT OF NEW JERSEY
MIDDLESEX COUNTY – LAW DIVISION
DOCKET NO. MID-L-1308-23
BOROUGH OF CARTERET,
Plaintiff(s),
vs.
MERIDIAN II, LLC, PRINCIPAL LIFE
INSURANCE COMPANY AND PIVOTAL
UTILITY HOLDINGS, INC D/B/A
ELIZABETHTOWN GAS COMPANY
Defendant(s).
SUPERIOR COURT OF NEW JERSEY
MIDDLESEX COUNTY – LAW DIVISION
DOCKET NO. MID-L-1313-23
CIVIL ACTION
ORDER
FILED
MAY 10, 2023
HON. MICHAEL A. TOTO, A.J.S.C.
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THIS MATTER having been opened to the Court by Kevin McManimon, of McManimon,
Scotland & Baumann, LLC, counsel for Plaintiff, Borough of Carteret, seeking relief by way of
an Order to Show Cause application, based upon the facts set forth in the Verified Complaint,
filed herewith; with Anthony DellaPelle and Michael Realbuto, of McKirdy, Riskin, Olson &
DellaPelle, P.C., counsel for Defendants, Carteret Terrace, LLC and Meridian II; and the Court
having considered the moving papers, and oral argument of the parties; and for good cause shown;
IT IS on this 10th day of May, 2023, ORDERED as follows:
ORDERED that the parties are to engage in limited discovery surrounding the site design
and engineering issues discussed in the moving papers and oral argument by July 3, 2023; and it
is further
ORDERED that the discovery shall be further limited to the testimony of relevant
engineers and experts surrounding the site design and engineering issues discussed in the moving
papers and oral argument; and it is further
ORDERED that a subsequent hearing shall be held examining the issues presented in
limited discovery on August 15, 2023; and it is further
ORDERED that a copy of this Order shall be deemed served upon all counsel of record by
the uploading of this Order on eCourts.
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MEMORANDUM
I. BACKGROUND
The Plaintiff is a municipal corporation who is authorized to acquire real property by
N.J.S.A. 40A:12-5(a)(1) and pursuant to the Eminent Domain Act. The subject property consists
of two private multi-family residential developments. Essentially, Plaintiff seeks to acquire
portions of the property to construct a public roadway that would serve as an extension of Carteret
Ave. through the private development. Specifically, the plaintiff seeks to acquire permanent
easements for a sidewalk, traffic signal and right-of-way extension, and two temporary
construction easements in a portion of the land and premises designated on the Tax Maps of the
Borough as Block 7401, Lot 1, and 4, formerly known as Block 241, Lot 1, pursuant to N.J.S.A.
20:3-1 et seq. and N.J.S.A. 40A:12-5(a)(1). The Plaintiff has offered $854,400 to the property
owner but has allegedly been unable to acquire the premises through bona fide negotiations with
the property owner, Defendant Carteret Terrace, LLC. Plaintiff additionally seeks one permanent
easement for right-of-way extension and two temporary construction easements in a portion of the
land and premises designated on the Tax Maps of the Borough as Block 302 Lots 3 and 4. Plaintiff
has allegedly engaged in bona fide negotiations with the property owners and has offered $36,000
(based on the assumption that the property is free of contamination or has been remediated).
II. DEFENDANTS’ REQUESTED RELIEF
Defendants request that the Court (1) deny the OTSC and (2) dismiss the complaint or, in
the alternative, order a plenary hearing with expedited discovery.
III. DEFENDANTS’ ARGUMENT
In its answer to the Plaintiff’s OTSC, the Defendant raises multiple separate defenses
including (1) denial of the Plaintiff’s authority to condemn, (2) that the taking is arbitrary,
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capricious, and unreasonable, (3) that the taking is unnecessary, and (4) that there was a failure to
conduct bona fide negotiations.
A. Denial of Authority to Condemn
A municipality may only condemn property subject to rights provided by the enabling
statute. See N.J. Highway Auth. V. Currie, 35 N.J. Super. 525, 540 (App. Div. 1955). Defendants
allege that Plaintiff’s proposed acquisition is not properly authorized by the Local Lands and
Buildings Law (“LLBL”), N.J.S.A. 40A:12-1 et seq., which must be strictly construed. The LLBL
expressly requires a municipality to pass an ordinance that provides for the acquisition of real
property. N.J.S.A. 40A:12-5. Defendants argue that the plaintiff has not produced any such
ordinance here. Furthermore, while condemnations usually proceed summarily, factual issues
created by proof in affidavits may establish a prima facie case requiring a plenary hearing. Tex.
Eastern Transmission Corp. v. Wildlife Preserves, Inc., 48 N.J. 261, 275 (1966). According to
Defendants, an evidentiary hearing is required under New Jersey eminent domain law when
summary disposition is inappropriate due to genuine disputed issues of reasonableness and
evidentiary sufficiency. Glassboro v. Grossman, 457 N.J. Super. 419, 436-37 (App. Div. 2019).
B. Arbitrary, Capricious, and Unreasonable Taking
Defendants claim that the threatened acquisition is an abuse of discretion because it is not
limited to the reasonable necessities of the case. Tex. Eastern, 48 N.J. at 269 (Experts for
Defendants proposed alternate pipeline that would cause less damage). Defendants also argue that
the taking will destroy the value of the property — primarily because it will get rid of a substantial
number of parking spaces, reducing the number provided for in its site plan approval and required
by the Carteret Land Use Ordinance. Ex. B, Letter from Sheppard A. Guryan dated April 6, 2022.
Defendants explain that, not only would this be a major inconvenience for residents, but it would
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render the property nonconforming such that any future alterations would require a variance. Id.
(citing City of Linden v. Benedict Motel Corp., 370 N.J. Super. 372, 380 (App. Div. 2004)).
Defendants also raise security and safety concerns, given the sought-after conversion of Meridian
Square’s private driveway, which is currently used for residents and guests to access to a public
street. Id. Further, Defendants worry about compliance with Ordinance requirements: only partial
sidewalks are proposed, which would cause issues of pedestrian safety and use. Id. Finally,
Defendants also name drainage as a problem. Id.
Plaintiff then furnished Defendants with an alternate plan on June 29, 2022. Ex. B, Letter
from Sheppard A. Guryan dated July 14, 2022. Defendants responded that this plan would also
greatly damage the property’s value, implicating all their prior concerns. Id.
More issues were raised in a submission to the Court on March 24, 2023. First, the proposed
change would mean the playground being situated much closer to the parking lot and roadway.
Ex. K, Cert. of William T. Iafe. Next, the new position of the trash enclosure would force the
garbage truck to stop traffic, which means it would be difficult to find a trash collector willing to
service the property. Id. The enclosure would likely also cause odor and noise for residents. Id.
Third, introducing public traffic to previously private entrances would increase conflict, and the
design would be dangerous for pedestrians. Id. Additionally, the Fire Department likely would not
approve the proposed position of the shed of maintenance equipment. Id. Fifth, the proposal would
result in exacerbated parent queuing for Columbus School. Id.
In essence, both parties have submitted competing opinions from engineers.
C. Unnecessary Taking
Defendants oppose that the taking is necessary to achieve the alleged public use, which is
contrary to the tenet of New Jersey law that dictates that takings must be limited to such reasonable
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necessities. Tex. Eastern Transmission Corp. v. Wildlife Preserves, Inc., 48 N.J. 261, 269 (1966).
The Court in Texas Eastern, in remanding for a plenary hearing held:
[T]he ultimate burden of proving arbitrariness in the choice of route will be
on [Defendant]. Procedurally, however, if it introduces reasonable proof of
(1) the serious damage claimed to result from installation of the pipeline on
the path chosen by plaintiff, and (2) an apparently reasonably available
alternate route or routes, which will avoid the serious damage referred to, the
burden of going forward with the evidence will shift to plaintiff.
Id. at 275. In fact, condemners “must establish a record that contains more than a bland recitation
of applicable statutory criteria and a declaration that those criteria are met. Gallenthin Realty Dev.,
Inc. v. Borough of Paulsboro, 191 N.J. 344, 373 (2007). Here, Defendants contend that the
easement will not accomplish its intended purpose of improving traffic and would instead make it
worse.
Defendants claim that Plaintiff never provided supporting documentation surrounding the
need for the new roadway. Cert. of Anthony F. Della Pelle at 6-7. Defendants also assert that they
filed an OPRA request regarding the justification for the project, to which Plaintiff replied that
there were no responsive documents. Id. at 6. As such, Defendants argue that dismissal is
warranted because (1) there has been no showing of need; (2) the proposed design is unsafe and in
violation of both Carteret’s own ordinances and applicable planning and engineering practices and
standards; and (3) the taking will cause significant safety-related and other impacts upon the
remaining portions of the property.
D. Failure to Conduct Bona Fide Negotiations
Defendants argue that Plaintiff did not engage in bona fide negotiations, as required by
N.J.S.A. 20:3-6, which amounts to a jurisdictional deficiency. Indeed, Defendants’ counsel’s
certification describes a multitude of communications between the parties, including Plaintiff’s
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provision of requested documents.1 Plaintiff then asserted it would file the Verified Complaint
after not receiving a counteroffer from Defendants. Defendants now claim that Plaintiff has not
responded to the property owners’ concerns regarding planning, engineering, and safety since the
filing of the Verified Complaint. Cert. of Anthony F.
IV. PLAINTIFF’S REPLY
In response to the Defendants’ arguments, the Plaintiff asserts that on April 8, 2021, the
Borough Council adopted Ordinance No. 21-3, which authorized the acquisition of the relevant
properties. Therefore, the Plaintiff argues that the Defendants’ contention that the Plaintiff is
without a legal right to acquire the property is without legal basis.
Additionally, the Plaintiff contests that it has sufficiently demonstrated a need for the
acquisition of the easements and has participated in extensive negotiations with the Property
Owners. The Plaintiff argues that the taking is not arbitrary or capricious, as the easements serve
a public purpose, and the reduced standard used in Texas Eastern does not apply because the
property owners are ordinary, and their use of the property is conventional. Specifically, the
Plaintiff asserts that in the present matter, the Property Owner’s use is not for the purposes of
conserving land or preserving wildlife. Instead, the Property Owners own apartment complexes,
making their use ordinary and conventional; therefore, the Plaintiff contests that the reduced
standard articulated in Texas Eastern should not apply.
Further, the Plaintiff argues that the Borough has complied with the statutory requirement
to engage in good faith negotiations. Specifically, the Borough asserts that it properly estimated
the just compensation due to the Property Owners, considered the concerns raised by the Property
Owners, and revised the concept plans to minimize its impact on the Complexes. Moreover, the
1 A confidential settlement communication dated February 3, 2023 confirms that the parties also had a meeting.
After same, there was still disagreement.
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Plaintiff contests that the parties have been unable to reach an agreement through fault of the
Defendants rather than the Plaintiff. In support of this claim, the Plaintiff argues that the Property
Owner’s identification of concerns and requests for information were meant to convince the
Borough to abandon its pursuit of the Carteret Avenue Extension project rather than negotiate a
resolution. As such, the Plaintiff reasserts that the Complaint should not be dismissed, and the
Court should enter the requested Order for Judgment and Appointing Commissioners.
V. DISCUSSION
N.J.S.A. 40A:12 grants government entities the power to acquire real property within
certain parameters. See generally N.J.S.A. 40A:12. The power of condemnation (i.e., eminent
domain) is subject to the following constitutional limits: “the property acquired must be taken for
a ‘public use,’ the State must pay ‘just compensation’ in exchange for the property, and no person
shall be deprived of his or her property without due process of law.” Twp. of West Orange v. 769
Assocs., L.L.C., 172 N.J. 564, 572 (2002) (citing N.J. Const. art. I, ¶ 20; State v. Heppenheimer,
54 N.J.L. 268, 272 (1892)). Moreover, in New Jersey, condemnation proceedings are governed by
the provisions of the Eminent Domain Act, N.J.S.A. 20:3-1 et seq. (the “EDA”) and New Jersey
Court Rules, R. 4:73-1 to -11, which require a condemning authority to make a written offer to the
property owner and engage in bona fide negotiations prior to filing an action.
A Court must decide any challenge surrounding the Plaintiff’s right to exercise the power
of eminent domain before the Court appoints commissioners and enters judgment in a
condemnation matter. State v. Orenstein, 124 N.J. Super. 295, 298 (App. Div. 1973) (citing State
v. N.J. Zinc. Co., 40 N.J. 560, 572 (1963)). While condemnations usually proceed summarily,
factual issues created by proof in affidavits may establish a prima facie case requiring a plenary
hearing. Tex. Eastern Transmission Corp. v. Wildlife Preserves, Inc., 48 N.J. 261, 275 (1966). An
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evidentiary hearing is required under New Jersey eminent domain law when summary disposition
is inappropriate due to genuine disputed issues of reasonableness and evidentiary sufficiency.
Glassboro v. Grossman, 457 N.J. Super. 419, 436-37 (App. Div. 2019).
A. Plaintiff’s Right to Acquire Property by Eminent Domain
Under New Jersey statute, “[a]ny county or municipality may acquire: (a) real property,
capital improvement, personal property or any interest or estate whatsoever therein . . . either
within or without the county or municipality, except that no such property belonging to the State
or any of its agencies, a county, or municipality shall be acquired without its express consent”.
N.J.S.A. 40A:12-4. The plain language of the statute grants the plaintiff the authority to condemn
the subject property. However, the defendants invoke the subsequent section of the statute, which
reads: “[a]ny county, by resolution, or any municipality, by ordinance, may provide for the
acquisition of any real property, capital improvement, or personal property: (1) By purchase, gift,
devise, lease, exchange, condemnation, or installment purchase agreement”. N.J.S.A. 40A:12-5
(emphasis added). The Defendants contend that the complaint fails to mention any ordinance that
has been approved by the governing body; as such, the Defendants suggest that there is no
ordinance that exists to justify the taking, and thus, the complaint must be dismissed. But this is
not the applicable section of the statute — the former cited section is, as it expressly grants
authority to municipalities to take. In contrast, the latter section grants permission should the
government entity wish to create law surrounding property acquisition.
Even if N.J.S.A. 40A:12-5 did provide the standard, Plaintiff would still be within its
authority to take under Borough of Carteret Ordinance No. 21-3 (hereinafter “Ordinance”). KPM
Cert., Ex. B. In the Ordinance, the Borough determined that “a need exists to acquire the following
real property (or portions thereof) in the Borough, necessary to effectuate public parking, roadway
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extensions, sidewalk/traffic signal improvements, Waterfront access road easements, and such
other public purposes as are authorized by law. . . ” Id. The Ordinance names the property subject
in these cases and authorizes such acquisition “by purchase, gift, devise, lease, exchange,
condemnation or installment purchase agreement” pursuant to N.J.S.A. 40A:12-1 et seq.
Therefore, regardless of which section of the Statute is implicated, Plaintiff is within its authority
to take in the present matter.
B. Reasonability and Necessity of the Taking
1. Reasonability of Taking
Property may be condemned when (1) it is taken for a “public use,” (2) the State pays “just
compensation” in exchange for the property, and (3) there is no deprivation of property without
due process of law. Twp. of West Orange v. 769 Assocs., L.L.C., 172 N.J. 564, 572 (2002) (citing
N.J. Const. art. I, ¶ 20; State v. Heppenheimer, 54 N.J.L. 268, 272 (1892)). Generally, New Jersey
courts have liberally construed what property may be condemned for public use, allowing it to
relate to any property that demonstrates a ‘public benefit,’ ‘public advantage,’ or ‘public utility.’
Id. at 572-73 (citing State v. Totowa Lumber & Supply Co., 96 N.J. Super. 115, 199 (App. Div.
1967)).
At present, the Plaintiff seeks to acquire portions of the property to construct a public
roadway that would serve as an extension of Carteret Avenue through the private development.
Specifically, the Plaintiff seeks to acquire permanent easements for a sidewalk, traffic signal, and
right-of-way extension, and two temporary construction easements in a portion of the land and
premises designated on the Tax Maps of the Borough as Block 7401, Lot 1, and 4. Additionally,
the Plaintiff seeks one permanent easement for right-of-way extension and two temporary
construction easements in a portion of the land and premises designated on the Tax Maps of the
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Borough as Block 302, Lots 3 and 4. These acquisitions of property qualify under the public use
requirement. See id. at 572 (citing North Baptist Church v. Orange, 54 N.J.L. 111, 113 (1891)
(“[T]he condemnation of private property for use as a public road fulfills the public use
requirement.”).
Additionally, there is a reasonable purpose for the acquisition of the property. The
acquisition of the property is primarily to facilitate the construction of the Carteret Avenue
Extension, which will allegedly connect the Borough’s downtown area to the waterfront area. The
DOT allegedly evidenced its support of this construction through the DOT Bid Approval. Taylor
Cert., Ex. G. In addition, Middlesex County has demonstrated further support of this construction
through its construction of traffic signals at intersections in the area. See id. at Ex. F. As such, the
construction serves a public purpose that will contribute to the general welfare and prosperity of
the community. Thus, the taking is not unreasonable.
2. Necessity of the Taking
The Defendants additionally assert that the taking is unnecessary, and therefore arbitrary
and capricious. The New Jersey Supreme Court has stated that “when private property is
condemned the taking must be limited to the reasonable necessities of the case, so far as the owners
of the property taken are concerned.” Tex. Eastern Transmission Corp. v. Wildlife Preserves, Inc.,
48 N.J. 261, 269 (1966) (emphasis added). In their opposition, the Defendants argue that the taking
is unnecessary because the Plaintiff (1) has not undertaken the proper due diligence to justify the
taking of portions of the Property for a public road, (2) the current design of the proposed road
extension violations the Borough’s own ordinances and engineering standards, is unsafe, will
create new traffic, etc., and (3) the taking will cause significant impacts to the remainder of the
Property. Defendant’s Brief at 11.
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It is undisputed that the taking will result in impacts to the Complexes. The nature of the
taking involves construction that aims to connect the Borough’s downtown area to the waterfront
area. Such construction will inevitably lead to an increase in visitation to the area, which will
impact traffic flow in the area as the Defendants assert. Though harm is expected given the nature
of the taking and subsequent construction, both parties have submitted competing opinions from
engineers surrounding the site design and engineering issues discussed throughout the parties’
moving papers and further addressed in oral argument. Specifically at issue is the safety of the
current design of the taking and whether the taking has the potential to make conditions at the site
worse. Also in dispute is whether the taking is arbitrary and capricious because it will not serve its
intended purpose of improving traffic.
While condemnation matters are ordinarily initiated as summary proceedings, factual
issues created by proof in affidavits in such matters may establish a prima facie case that requires
dismissal or a plenary hearing. Id. at 275. A trial court is within its discretion to either dismiss a
complaint or order a plenary hearing when the facts and circumstances reveal fraud, bad faith, or
arbitrary or capricious action by the condemning authority. Id. at 275-76. Moreover, when
summary disposition is inappropriate due to genuine disputed issues of reasonableness and
evidential sufficiency, an evidentiary hearing is required under New Jersey eminent domain law.
Glassboro v. Grossman, 457 N.J. Super. 416, 436-37 (App. Div. 2019). As such, the parties’
competing opinions and arguments surrounding the site design and engineering of the construction
create a genuine dispute of fact that warrants limited discovery to decipher whether the method
and manner of the construction is truly necessary, or conversely, arbitrary and capricious.
Pursuant to New Jersey law, when the right of a condemning authority to take property has
been challenged, this issue must be determined before a judgment is entered and the court appoints
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commissioners. N.J.S.A. 20:3-8. Therefore, the Court now elects to allow the parties to engage in
limited discovery surrounding the site design and engineering issues presented. However, the
limited discovery shall be limited to the testimony of relevant engineers and experts to ascertain
the necessity of the present taking.
VI. CONCLUSION
For the foregoing reasons, the Court directs the parties to engage in limited discovery
surrounding the site design and engineering issues discussed in the moving papers and oral
argument. Such discovery shall be limited to the testimony of relevant engineers and experts
surrounding the site design and engineering issues presented with a subsequent hearing expected
to be held on August 15, 2023.
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