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Mehta v. Jersey City Redevelopment Agency

A-3890-01T2 (N.J. Super. App. Div. 2005) (Unpublished)

CONDEMNATION; ENTIRE CONTROVERSY — A property owner may not bring a claim for just compensation if he or she has already filed an action in which similar issues were raised and adjudicated.

A husband and wife purchased property with two attached buildings from a municipality. The deed required that the couple rehabilitate the property within a certain time period in order for it to comply with local property maintenance code. If the couple failed to renovate the property within the designated time frame, the property would automatically revest in the municipality where the property was located. In order to pay for the rehabilitation, the couple received funding commitments from the municipality’s redevelopment agency and from a savings and loan association. The agency and association later rescinded their offers and the couple filed a complaint seeking specific performance of the funding commitments and damages. The case was tried before a jury and dismissed in its entirety.

The couple filed a motion for a new trial, which was denied. Shortly thereafter, the municipality’s department of housing and economic development notified the couple that the municipal council had passed an ordinance which gave the couple two years to begin renovations on the property. The couple once again sought to obtain financing for rehabilitation costs, but was unsuccessful. The couple then transferred title to the property to a wholly owned corporation. One year later, the municipality’s redevelopment agency hired a company to prepare an appraisal report for the property. The report set forth the fair market value of the property, which the redevelopment agency offered to the couple. The couple refused to accept the amount. Shortly thereafter, a summary hearing was held before the municipality’s construction official, which the couple did not attend. Evidence was presented at the hearing regarding the poor condition of the exterior of the property. The official issued an order directing that the buildings be demolished if they were not repaired within thirty days. The couple moved pro se to stay the order and to amend the complaint to add a community activist as a plaintiff. The lower court ruled that the couple could not represent their corporation pro se and that they were required to obtain counsel to proceed. It also refrained from adding the activist as an additional plaintiff. It stayed the demolition for forty-five days. The couple filed an emergency application with the New Jersey Supreme Court. The Court ordered that a hearing be held on the matter before the lower court. At the conclusion of the hearing, the lower court ordered the demolition of the buildings. The couple appealed the lower court’s ruling, which the Appellate Division affirmed.

The couple then filed a separate eminent domain action against the municipality, the redevelopment agency, and the appraisal company, seeking just compensation for the taking of their property. The community activist was added as an additional plaintiff. The municipality filed a motion to dismiss based on the entire controversy doctrine, which was granted. The couple appealed. The Appellate Division affirmed the lower court’s ruling. It held that the eminent domain claim should have been raised by the couple in the prior proceeding regarding the demolition of the property. It ruled that the couple was barred from bringing the claim now pursuant to the entire controversy doctrine. The Court noted that title to the property was in the name of the couple’s corporation. It ruled that the couple’s pursuit of damages was frustrated by their unwillingness to obtain counsel to represent the corporation as previously directed by the court. It further held that the community activist could not be named as an additional plaintiff because he lacked standing against the municipality and other defendants.

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