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State of New Jersey v. George F. Kempf Supply Co., Inc.

A-3372-03T1 and A-3373-03T2 (N.J. Super. App. Div. 2005) (Unpublished)

CONDEMNATION; AWARDS— Under the New Jersey Eminent Domain Act, a condemnor is required to enter into bona fide negotiations with a property owner before commencing condemnation proceedings to acquire the owner’s property.

The State of New Jersey sought to construct improvements on a public roadway. In order to do so, it had to acquire a portion of two properties owned by a supply company. A state representative informed the company of its construction efforts and sent an appraiser to access the value of the land to be taken. During the appraiser’s inspection, the company expressed concerns that the proposed construction would adversely affect its daily operations. It requested that the state order an engineering study to determine the damages that would result from the takings. The state did not request an engineering study, but instead sent an appraiser to reinspect the properties. After the inspection, the state’s negotiator told the company that the valuation process had been completed and that the negotiation process would commence. The negotiator then presented the corporation with the state’s offer for the properties. The offers covered damages resulting from the taking of the properties, but did not include damages the corporation would suffer to its business operations. The corporation expressed concern over the state’s offer and once again requested that an engineering study of the property be ordered. In response, the state’s negotiator met with the corporation’s representatives and acknowledged that the takings would have a great effect on the corporation’s storage area. The negotiator offered to pay for the installation of new shelving to decrease the impact that the takings would have. The corporation refused this offer and again requested an engineering survey. No such survey was ever conducted, but the state demanded that the corporation either accept or reject the offer. The corporation did not reply to this demand and the state commenced a condemnation action pursuant to the New Jersey Eminent Domain Act. In its Answer, the corporation asserted that the state should not be permitted to take its properties because it never entered into a bona fide negotiations prior to instituting the action as required under the Act. The lower court found that the state had adequately negotiated with the corporation prior to filing the action, and ruled in its favor. The corporation appealed.

The Appellate Division affirmed the lower court’s determination for substantially the same reasons expressed by the lower court. It found that the state had attempted to reach an agreement with the corporation regarding compensation for the takings and even offered to install shelving to compensate for the damage to the corporation’s business operations. It held that the state could not be found to have breached its duty to negotiate just because it did not accede to all of the corporation’s demands. Accordingly, it affirmed the lower court’s ruling.

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