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Township of Montville v. MCA Associates, L.P.

A-4327-05T2 (N.J. Super. App. Div. 2008) (Unpublished)

CONDEMNATION — A property owner does not have standing to assert an inverse condemnation claim when it is only contesting the amount of compensation and not the condemning authority’s right to take its property.

In a condemnation action, a landowner challenged the size of the award. The commissioners who were appointed to fix compensation for the property took into account the loss of value resulting from environmental regulations enacted after a consent judgment had been signed by the New Jersey Department of Environmental Protection (DEP) and the landowner’s predecessor in title. The landowner appealed. The lower court held, as a matter of law, that the consent judgment did not exempt the property from subsequent environmental regulations applying to the property and ruled a jury should be instructed as such if necessary. The order permitted the landowner to file an action against the DEP and to offer the consent judgment into evidence. The landowner alleged that the DEP caused an inverse condemnation, but the DEP was eventually dismissed from the suit. During the course of litigation, the landowner settled on a compensation amount with the municipality and entered into a consent judgment for that amount. The landowner appealed both the lower court’s ruling that the earlier consent judgment did not protect the property against further environmental regulations, and the dismissal of the action against the DEP.

First, the Appellate Division found the lower court properly dismissed the action against the DEP, agreeing that there could be no inverse condemnation. It held that the landowner did not have standing to assert an inverse condemnation claim because it wasn’t contesting the municipality’s right to take the property but only the amount of compensation. The Court also ruled that the earlier consent judgment addressed neither the wetlands regulations nor prevented application of future adopted, more stringent environmental regulations to the property. Therefore, it found that nothing in the consent judgment protecting the landowner from experiencing a diminution in its property’s value because of any future environmental regulation. The Court affirmed the lower court’s rulings.

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