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A.R. Casella Trust v. Borough of High Bridge

A-5023-00T5 (N.J. Super. App. Div. 2002) (Unpublished)

CONDEMNATION; INVERSE— The adoption of a resolution authorizing a taking by eminent domain does not constitute a taking and no claim for inverse condemnation will be upheld just because a contract buyer cancels the contract when the resolution is adopted.

The owner of four adjacent parcels of land entered into a contract to sell the property to a residential real estate developer. Thereafter, the municipality adopted an ordinance authorizing the acquisition of the property for open space preservation and other public purposes. After learning of the ordinance, the developer cancelled its contract. The owner sued the municipality, seeking invalidation of the ordinance on various grounds, including allegations that the purpose of the ordinance was to prevent residential development of the property and that the municipality failed to furnish appraisals or negotiate a fair compensation for the owner. The municipality then adopted a second ordinance authorizing the acquisition of the property. It included different appraisal, negotiation, and condemnation provisions than those included in the first ordinance. The owner then amended its complaint by adding an inverse condemnation claim. The owner contended that, but for the adoption of the first ordinance, the developer would not have cancelled the contract to purchase the property, and that the cancellation of the contract was an interference by the municipality of the owner’s prospective economic gain. On motions for summary judgment, the lower court held for the municipality. It concluded that “the ordinances were merely authorization ordinances and not expenditure ordinances. The ordinance authorized the proper officials to take reasonable steps towards the negotiated acquisition of the property.” Further, the lower court “found that there were no proofs as to why the contract was cancelled to support the ... representation that the contract was cancelled solely because of the ordinance.” Thereafter, the municipality initiated condemnation proceedings. The owner appealed the lower court judgment. The Appellate Division affirmed the lower court holding, adding that the “ordinances ... were adopted to authorize the condemnation for public purposes, a valid exercise of municipal authority. The passage of the ordinances does not constitute a taking and thus, [the owner] is not entitled to any damages for inverse condemnation or a destruction of the value of the property.”

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