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The Borough of Somerville v. Pathmark Stores, Inc.

A-5578-06T2 (N.J. Super. App. Div. 2008) (Unpublished)
  • Opinion Date: September 17, 2008
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CONDEMNATION — Once a tenant abandons its premises and withdraws compensation funds deposited with the court as part of a condemnation proceeding, it abandons its right to challenge the condemning authority’s right to condemn the property.

A municipality brought an action to condemn a supermarket’s lease for the purpose of redeveloping the shopping center where the supermarket was located. The supermarket challenged the municipality’s right to condemn and also argued that the municipality acted in bad faith by choosing a valuation method that included the value of the supermarket’s trade fixtures and relocation costs but did not include the leasehold interest. The lower court found that the municipality had the right to condemn the supermarket’s lease and that the supermarket was not entitled to compensation for the remaining lease term. The lower court then appointed commissioners to value the supermarket’s interest exclusive of the remaining leasehold interest. The supermarket later vacated the premises and withdrew the compensation funds that were deposited by the municipality as part of the condemnation proceeding.

The supermarket appealed, but the Appellate Division held that the lower court’s appointment of commissioners was interlocutory and not final because it was not essential to the determination of the municipality’s right to condemn and because the matter regarding damages was still pending in the lower court. It pointed out that the supermarket brought, but did not prevail on, an earlier action challenging approval of the site plan for the shopping center’s redevelopment, and found that it could not re-litigate the matter especially in light of the fact that the supermarket did not appeal the lower court’s judgment. The Court also found that since the supermarket quit the premises and withdrew the compensation funds, it had abandoned its right to challenge the municipality’s authority to condemn the property. The supermarket’s appeal of the lower court’s finding in favor of the municipality’s right to condemn was dismissed. The matter involving the lower court’s appointment of commissioners was deemed moot since the matter of valuation and damages remained open.

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