Case Law Summaries

Elizabeth Board of Education v. New Jersey Transit Corporation

• Opinion Date: May 25, 2001
• Real Property Law
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LEASES; EXCULPATION—A freely negotiated exculpation clause in a lease, even if extremely broad, will be enforced.

A board of education wanted to acquire property owned by the New Jersey Transit Corporation. That corporation is “an instrumentality of the State exercising public and essential governmental functions.” Negotiations ensued, but the state agency refused to sell the property. Then, the board of education filed a complaint for condemnation, a notice of lis pendens, and a declaration of taking. Initially, the lower court allowed the board to take immediate possession and title to the property, but in response to a motion from the state agency to dismiss the complaint, the lower court divested the board of title to the property, voiding and nullifying the declaration of taking. The lower court then gave the state agency thirty days to seek a hearing regarding damages, counsel fees, and costs. The board appealed, but in the meantime, the lower court awarded attorney’s fees to the state agency. On appeal, the board contended that there were no restrictions in Title 18A on its power of condemnation. It argued that the Legislature “explicitly barred condemnation of State property by counties and municipalities by statute, but [had] not barred condemnation by boards of education.” The state agency responded that “no statute expressly or impliedly authorizes a board of education to condemn property.” The lower court opined that the power of eminent domain “is a power with limitation and not a power that is absolute or without limitation.” Further, “the power reposing in the State is so encompassing that it must include the ability to say yea or nay as to the disposition of its property, and that would be so compromised where a board of education [be] found to have the ability to condemn… .” The statute authorizing a board of education to condemn property contains the phrase, “in the manner provided by law relating to the taking and condemnation of property for public purposes.” According to the lower court, this was an apparent reference to the Eminent Domain Act. The statutory provision that bars counties and municipalities from “acquiring” State property, including by condemnation, does not, however, fall within the Eminent Domain Act. Therefore, the board felt it appropriate to argue that had the Legislature wanted to restrict boards of education from condemning State property, it would have expressly done so. Basically, the board relied on a legal maxim that says “the express mention of one thing implies exclusion of all others.” The lower court, however, rejected this as a “hide-bound rule of law,” instead, holding that such an implication must be clear and compelling. To the lower court, it was “fundamental that local boards of education, as creations of the State, are capable of exercising only those powers which are granted expressly or by necessary or fair implication by the Legislature.” Here, according to the Court, there was no “express grant of the power to condemn State property.” Further, the Court did not believe that the express withholding of the power from counties and municipalities necessarily implied “any certainty that boards of education may acquire State property by eminent domain.” In short, it did not find such an implication to be “clear and compelling.” As to the award of attorney’s fees, the relevant statute provides that where a court renders final judgment that the condemnor cannot acquire the real property by condemnation, the intended condemnee is entitled to be reimbursed for reasonable costs including reasonable attorney’s fees. According to the Court, the lower court properly dismissed the board’s complaint, and an award of counsel fees was mandated, if requested by the state agency.

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