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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. MID-L-001308-23 05/10/2023 Pg 1 of 13 Trans ID: LCV20231505107 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. MID-L-001308-23 05/10/2023 Pg 2 of 13 Trans ID: LCV20231505107 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, MID-L-001308-23 05/10/2023 Pg 3 of 13 Trans ID: LCV20231505107 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 MID-L-001308-23 05/10/2023 Pg 4 of 13 Trans ID: LCV20231505107 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 MID-L-001308-23 05/10/2023 Pg 5 of 13 Trans ID: LCV20231505107 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 MID-L-001308-23 05/10/2023 Pg 6 of 13 Trans ID: LCV20231505107 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. MID-L-001308-23 05/10/2023 Pg 7 of 13 Trans ID: LCV20231505107 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 MID-L-001308-23 05/10/2023 Pg 8 of 13 Trans ID: LCV20231505107 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 MID-L-001308-23 05/10/2023 Pg 9 of 13 Trans ID: LCV20231505107 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 MID-L-001308-23 05/10/2023 Pg 10 of 13 Trans ID: LCV20231505107 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. MID-L-001308-23 05/10/2023 Pg 11 of 13 Trans ID: LCV20231505107 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 MID-L-001308-23 05/10/2023 Pg 12 of 13 Trans ID: LCV20231505107 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. MID-L-001308-23 05/10/2023 Pg 13 of 13 Trans ID: LCV20231505107