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City of Asbury Park v. McLoughlin

A-3964-07T1 (N.J. Super. App. Div. 2009) (Unpublished)

CONDEMNATION; PROJECT INFLUENCE DOCTRINE — The project influence doctrine, as applied to valuation in condemnation cases, was developed to protect both landlords and the government from appreciation or diminution in value due to an impending taking and it means that any increase or decrease in value attributable to the government project for which the property is to be acquired may not be considered in calculating just compensation; but, just because a parcel of land is not specifically listed in a redevelopment plan, it does not necessarily mean that it is outside the scope of the redevelopment project and would not be subject to the project influence doctrine.

Two individuals purchased a house with a partial ocean view. Unbeknownst to them, the property was in the middle of a waterfront redevelopment zone. Thus, despite the fact that the new owners renovated the house, the municipality filed a complaint to condemn the property. The owners agreed to waive any objections to the municipality’s right to condemn their property, agreeing that “the sole remaining issue” was the amount of just compensation to be paid. Condemnation Commissioners were appointed and opined as to the value of the property. Their valuation was appealed.

After a trial, a jury verdict with respect to the fair market value was reached. Prior to the jury making its determination of value, the lower court instructed it to consider the effect of “project influence” on the subject property beginning as of the date the municipality adopted its Redevelopment Plan. The property owners did not object to this instruction, but moved for additur or a new trial once the verdict was reached. When the lower court denied their motion, they appealed.

The Appellate Division determined that it was not plain error for the lower court to instruct the jury that it consider the effects of “project influence” on the value of the property between the date the municipality adopted its Redevelopment Plan and the date the condemnation suit was filed. The Court recited that the “project-influence” doctrine was developed to protect both landowners and the government from appreciation or diminution in value due to an impending taking; any increase or decrease in value attributable to the government project for which the property is to be acquired may not be considered in calculating just compensation. It held that simply because a parcel of land was not specifically listed in the Redevelopment Plan did not necessarily mean that it was outside the scope of the redevelopment project and thus would not be subject to the project-influence doctrine. According to the Court, when a project contemplates the taking of certain tracts of land, but not all of them are initially taken, the owners of the subsequently taken tracts should not enjoy an artificially inflated valuation.

Here, the Court ruled that all that had been shown was that during the course of the planning or original construction it became evident that land so situated would probably be needed for public use. Since the subject property was located almost squarely in the middle of the development zone, the Court believed that it was “probably within” the scope of the project from the outset of the Plan.

Finally, it ruled that when a jury returns a verdict for damages, the lower court should not interfere with the quantum of damages assessed unless it is so disproportionate as to shock the judicial conscience such that to sustain the award would be manifestly unjust. As to this matter, the Court ruled that the lower court did not err when it upheld the jury verdict because such verdict did not shock its judicial conscience.


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