The Appellate Division has addressed the appraisal and good faith negotiation obligations of a condemning authority under N.J.S.A. 20:3-6. In County of Morris v. Randolph Town Center Associates, L.P., the court held that the County of Morris made a fair offer and attempted to initiate bona-fide negotiations, despite the property owner’s objections to the contrary.
The Facts of the Case
In October of 2012, the County of Morris (County) informed Randolph Town Associates, L.P. (Randolph) that it planned to take an easement on a strip of land along Brookside Road for road widening and drainage. The undeveloped property had no curb or storm-water drainage structures. By letter dated June 27, 2013, the County offered Randolph $9750 for the easement, relying on its appraisal and appraisal review. In response, Randolph requested a copy of the construction plans, which the County supplied.
Over the course of several months, the County attempted to contact Randolph via written correspondence and telephone to resolve the matter. In September 2013, the County mailed a letter stating that, in light of Randolph’s lack of response, the County satisfied its duty to conduct good faith negotiations, and would resort to legal action. Randolph finally responded in October, submitting a brief memorandum from its engineer that raised concerns about the impact of the construction on the remainder of the property.
Randolph made several proposals to address the drainage. However, the County rejected them because it believed that the proposed plans would violate requirements set by the New Jersey Department of Environmental Protection (NJDEP). On January 2, 2014, the County filed an order to show cause to proceed summarily, followed by a declaration of taking on January 9, 2014. Randolph responded by asserting the County failed to engage in good faith negotiations.
The Court’s Decision
The appeals court rejected Randolph’s argument that the County’s appraisal was deficient by its failure to investigate or disclose the impact of the modifications to storm runoff on the remainder of the property. According to the panel, the County need not investigate all possible issues at that early stage. As explained in the opinion:
Imposing an affirmative duty on a condemnor’s appraiser to affirmatively investigate all potential issues could have an impact upon the value of the taking, would front-load the condemnation process, and enable a condemnee to defeat any condemnation action by simply raising a novel issue not addressed by the appraiser. Moreover, such a holding could incentivize condemnees during negotiations to withhold issues affecting value that are known to them but unknown to the condemnor, impeding fair and efficient settlement.
With regard to the County’s duty to negotiate in good faith, the appeals court also rejected Randolph’s claims. In reaching its decision, the court specifically cited the “diligence with which the County pursued settlement, the often-delayed responses of Randolph, the well-articulated reasons for rejecting Randolph’s counteroffers, and the fact that no offers were pending when the County resorted to legal action.”
For more information about the court’s decision or the legal issues involved, we encourage you to contact a member of Scarinci Hollenbeck’s Government Law Group.