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City of Linden v. Benedict Motel Corp.

370 N.J. Super. 372, 851 A.2d 652 (App. Div. 2004)

EMINENT DOMAIN; RIGHTS OF WAY—Where a taking for a highway widening intrudes into established parking spaces, it doesn’t matter that in utilizing the parking spaces, drivers had historically maneuvered into the existing highway’s right of way.

As part of a redevelopment plan to widen an adjacent highway, a municipality instituted a condemnation proceeding against a motel (and other interested parties) to take a section of land, including parking in front of the motel. The major issue was the legal status of these parking spaces. The municipality claimed that the parking was illegal because no approval had ever been granted for them. Relying on prior case law, it claimed that because use of the parking required maneuvering within the State’s right-of-way, the motel was not entitled to damages for the loss of the spaces.

The core of the dispute focused on approvals allegedly granted thirty years earlier when the motel was expanded. The municipality’s claim relied on the recollection of, and documentation supplied by, the architect retained for the expansion. Although the architect said that approval did exist for the parking spots, the municipality’s engineer found no record of approval other than that for additional rooms. The available records made no mention or indication of approval for additional parking.

Also, the manager of the road improvement project observed that the parking spaces were illegal because vehicles entering and backing out of the spaces had to use the State’s right-of-way, which he defined as “the area that encompasses both a roadway that the public travels along, as well as a distance beyond the edge of a roadway . . . [which is] what would be your sidewalk area.” Here, the claimed right-of-way at the time of the taking was about ten feet from the then-existing curb. Based on this, the municipality’s valuation expert testified that a buyer would not consider the front parking spaces in assessing the property’s value. Therefore, according to him, the condition of the property before and after the taking would be the same.

The motel’s real estate experts reached a different conclusion, i.e., there would be a major detrimental impact on the motel due to the total loss of parking spaces. They opined that loss of the parking spaces would lead to an unacceptable number of spaces in comparison to the number of motel rooms, thereby adversely impacting the value of the site by drastically decreasing its rental potential and rendering the motel a nonconforming use.

The lower court held that the thirty year old variance for the motel’s expansion included the front parking. It reasoned that the parking had to be located in the front because it was the only available location on the site. In addition, it ruled that the spaces were protected by grandfathering under the State Highway Access Code.

The Appellate Division agreed, also noting that while vehicles utilized the State-owned right-of-way to maneuver out of the front parking spaces, it was actually the taking that caused the parking loss. The new right-of-way line was within the parking spaces, effectively rendering all of the parking spaces on one side of the building unusable. This was distinguishable from prior case law presented by the municipality, where the right-of-way only provided additional room to maneuver, and the taking of such land only made maneuverability difficult. In this case, it simply made parking impossible.

The municipality argued that the parking spaces were not grandfathered. It believed that the spaces were illegal because their use required maneuvering in the State’s right-of-way, and therefore their use could not be grandfathered. The Court rejected that contention. The municipality’s code allowed “continuation of lot access and use in existence on July 1, 1976.” The only requirements the motel needed to satisfy quality for exemption were that the lot’s access and use existed prior to July 1, 1976, and the parking spaces did exist at that time. To adopt the municipality’s view would have required the motel to comply with a regulatory scheme from which it was then exempt under the grandfathering provisions.

The municipality also argued that, thirty years ago, its code prohibited use of any part of a highway’s right-of-way for the servicing or display of vehicles or to conduct private business. Following that argument, the use of the right-of-way would have been prohibited when the parking spaces were constructed, rending the use unlawful. That would have defeated the grandfathering. The Court rejected that logic because the taking itself resulted in the loss of the parking spaces.

The municipality also argued that equitable estoppel did not apply because it never approved the parking spaces and therefore, the motel had nothing upon which it could, in good faith, rely. The Court also rejected that contention. Though infrequently applied to municipalities, based on prior case law, “[e]quitable estoppel may be invoked against a municipality ‘where interests of justice, morality and common fairness clearly dictate that course.’” Equitable estoppel may apply where a party, in good faith, properly relied upon such authority. Even when a permit is not validly issued, and a municipality has in fact issued permission in violation of a zoning ordinance, estoppel can be applied when defendants have relied in good faith. Applying this law to the case, the Court found that the municipality approved the parking spaces when it approved the motel expansion.

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