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Mosteller v. Naiman

416 N.J. Super. 632, 7 A.3d 803 (App. Div. 2010)

TREES; DAMAGES — When a neighbor wrongly removes trees that belong to an adjacent property owner, damages in accordance with the replacement cost approach are appropriate only when the trees have peculiar value to the owner; otherwise, the damages are to be measured by the standard approach for determining the property’s diminution in value.

A rental property was purchased for approximately $440,000. A neighboring property owner then removed several trees on what she believed to be her property. The buyer believed the trees were his and commissioned a survey of the property. Thus, he confirmed that the trees were his, even though they were located on the neighbor’s side of a chain link fence. The buyer then sued for damages resulting from removal of his six trees. As a measure of damages, he argued that he was entitled to recoup the replacement cost for six mature trees on his property. He claimed that the loss of the trees resulted in the loss of shade, privacy, and protection against erosion. The replacement cost for installing mature trees to replace those cut down totaled approximately $436,750, with the cost of a single tree being approximately $130,000. The neighbor claimed that the “replacement cost” approach for calculating damages was inappropriate and that the correct measure was a “diminution in value” approach. The neighbor argued that since the owner could not prove the trees were of peculiar value to him, the replacement cost approach was not warranted.

The lower court agreed with the neighbor that the correct approach for calculating damages was diminution in value and not replacement cost. The then parties entered into a provisional settlement for $20,000 which allowed the buyer to appeal the lower court’s finding that damages were to be measured based on diminution in value. The parties agreed that if the Appellate Division found that replacement cost was the proper measure of damages, the owner could vacate the settlement.

In that appeal, the Appellate Division affirmed, noting that the leading case in New Jersey regarding the measurement of damages for removal of trees was Huber v. Serpico, 71 N.J. Super. 329 (App. Div. 1962). In that case, the Appellate Division acknowledged that where trees have a peculiar value to the owner, then a replacement cost approach was appropriate. Otherwise, the correct approach for measuring damages is the diminution in the property’s value as a result of the loss of the trees. In that case, the owner’s property contained a grove of old trees and the owner used the property for his enjoyment and recreation. However, in this case, the trees had no peculiar value to the owner. He resided in Virginia and merely used the property for rental income. In addition, there was no evidence that removal of the trees resulted in the loss of any tenants, as the property continued to be rented and the tenants did not complain. Therefore, the Court found that the replacement cost approach should not be used and that the standard approach, diminution in value, was appropriate. The Court also noted that, in balancing the equities, using the replacement cost approach would have been inappropriate anyway. In this case, the owner paid about $440,000 for the entire property including the buildings. Requiring the neighbor to pay almost as much for the replacement of six trees as he paid for the entire property would have been inequitable.


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