Township of West Windsor v. Nierenberg

150 N.J. 111, 695 A.2d 1344 (1997)
  • Opinion Date: June 30, 1997

CONDEMNATION; DAMAGES—In a taking, one of the possible valuation dates is the date on which action is taken which substantially affects the use and enjoyment of the property. In this case, that date was ruled to be the date upon which the town sent a letter saying that it might acquire the land for use as a park.

A partnership purchased a tract of land and prepared a plan for subdivision. On July 29, 1988, after the partnership submitted a subdivision plan to the town, the town administrator sent a formal letter indicating that the town might acquire the property for development of a community park. After numerous negotiations concerning various partition options, the town adopted a resolution purchasing most of the property. In return, the partnership would develop the remaining land, subject to a rezoning of the property and planning board approval. The town did not approve the rezoning, but did agree to purchase the entire tract for approximately $1,000,000 less than the partnership had paid for the land two years earlier. Shortly thereafter, the partnership filed a complaint seeking just compensation for the town’s destruction of the value of the property. Continued negotiations produced a new plan, but when the partnership rejected the town’s monetary offer, the town filed a complaint for condemnation. The trial court concluded that the date of the town’s initial letter, July 29, 1988, was the proper date for valuation of the property. The Appellate Division reversed, holding that the initial letter was merely a preliminary step to a potential future condemnation and did not substantially affect use and enjoyment of the land. The Supreme Court, however, agreed with the trial court.

The Supreme Court found the critical issue to be whether use and enjoyment was “substantially affected.” The Court defined “substantially affected” to be the occasion when the condemnor takes action which directly, unequivocally, and immediately causes a fluctuation in value directly attributable to a future condemnation. It agreed with the trial court’s findings that the initial letter disclosed the town’s intentions and prohibited unrestricted use of the property, causing a reduction in value of approximately 25%. Next, the Court addressed the legislative objective of eminent domain law, and found it to be identification of events that affect the value of property such that it would be unfair to allow any subsequent price fluctuation to be reflected in the condemnation award. In short, the legislature wanted to protect landowners from a diminution in value resulting from condemnation of the property. The Court concluded that the initial letter substantially affected the value of the property, and therefore, the date of the letter is the date used for purposes of valuing land taken under power of eminent domain.