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Casino Reinvestment Development Authority v. Hauck

317 N.J. Super. 584, 722 A.2d. 949 (App. Div. 1999)

CONDEMNATION; INTEREST—Regardless of the date used for valuation of condemned property, interest on the unpaid award runs from the date of filing of the condemnation complaint.

The Eminent Domain Act of 1971 provides three alternative valuation dates: (1) the date the condemnor takes possession of the property; (2) the date upon which the condemnation action is commenced; and (3) the date in which action is taken by the condemnor which substantially affects the condemnee’s use and enjoyment of the property. The issue in this case was whether interest on a condemnation award runs from: (a) the date of a valuation based on something other than an actual taking, or (b) the filing of a condemnation complaint. The condemning authority filed a complaint for the condemnation of six lots. The property owner rejected the authority’s offer as too low. The parties thereafter sought a hearing to determine a date for valuing the lots. Following an evidentiary hearing, the lower court issued a letter of opinion in which it found that “as early as June 1991, [the property owner’s] use and enjoyment of [its] property had been affected by the action of the [authority].” It then rejected the authority’s argument that the date of filing of the complaint should control for valuation purposes and held, instead, that the value of the property should be determined as of the date the authority interfered with the property owner’s use and enjoyment of its property. A jury rendered a verdict after a trial. The property owner then sought an award of interest for the amount of the jury’s verdict in excess of the sum the authority had already deposited with the court. In its application, the owner asked the Court to apply interest from the valuation date. The lower court, however, believing that the property owner’s unreasonable demands had “contributed to the delay” in disposing of the case, concluded that interest should run from the date that the condemnation complaint was filed. N.J.S. 20:3-31 clearly states that interest shall be paid by the condemnor from the date of the commencement of the action until the date of payment of compensation. It didn’t matter to the Court that the interference with the owner’s use and enjoyment of its property had commenced before the complaint was filed. In its view, when the Legislature directed that valuation be fixed as of the date the condemnor’s actions had “substantially affected” the condemnee’s “use and enjoyment of the property,” the Legislature intended to eliminate project-generated fluctuations in value from the determination of just compensation. Both the valuation date section of the statute and the interest section of the statute were enacted on the same date. Therefore, the Court believed that the Legislature was obviously aware that it was providing alternative dates for valuation, but nevertheless choose to provide for the running of interest solely from “the date of the commencement of the action.” In addition the Court did not perceive any constitutional requirement for the payment of interest from the date that the condemnor’s action “substantially affects” the condemnee’s use and enjoyment of its property. In the Court’s view, the property owner blurred or confused the critical distinction between the “substantial destruction” of property rights necessary to constitute a taking and the “substantial effect” necessary to trigger a valuation.


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