Hoagland v. City of Long Branch, A-1583-11T2; Appellate Division; opinion by Haas, J.S.C., temporarily assigned; decided October 11, 2012; approved for publication October 16, 2012. Before Judges Axelrad, Nugent and Haas. On appeal from the Law Division, Monmouth County, L-2308-10, L-2750-10, L-2808-10 and L-3358-10. DDS No. 21-2-7941 [16 pp.]

This case returns after remand proceedings directed by a previous opinion involving a redevelopment plan adopted by Long Branch in 1996. In 2005 and 2006, the city filed condemnation actions against the defendants, who filed motions to dismiss. The trial court denied the motions and granted judgments in favor of the city, appointing condemnation commissioners. The trial court had decided these cases prior to the Supreme Court’s decision in Gallenthin Realty Development, Inc. v. Borough of Paulsboro, which reaffirmed that the New Jersey Constitution requires a finding of actual blight before private property may be taken for purposes of redevelopment. Therefore, the judgments appointing commissioners were reversed and remanded to afford the city the opportunity to amplify the record to meet the Gallenthin standard.

On remand, Long Branch abandoned its condemnation actions and agreed to pay litigation expenses to the affected property owners. There were two classes of defendants who settled, those who executed releases of their claims for further compensation from the city and those who did not. Only the releasing defendants were permitted to seek redeveloper status with the city and to obtain tax benefits if they were successful. The nonreleasing defendants, however, retained the right to file new actions against the city to seek compensation for the alleged “taking” of their properties as a result of the city’s now-abandoned condemnation actions.

Plaintiffs in this action were nonreleasing defendants in the prior condemnation actions. The current plaintiffs sought additional compensation based on their contention that the condemnation actions had constituted a “temporary taking” of their properties. Plaintiffs appeal the trial court’s order granting the city’s motion for summary judgment.

Held: Because there was no “unconstitutional taking” of their properties, the trial court appropriately found that plaintiffs are not entitled to any additional compensation apart from payment of litigation expenses.

In New Jersey, the Eminent Domain Act sets forth the mechanism by which municipalities, like the city, may condemn and take private property. The act requires that a municipality negotiate with the affected property owner to attempt to determine the appropriate compensation for the taking before a condemnation action may be commenced. When negotiations do not produce an amicable resolution, the municipality may file a complaint to condemn the property. Within 14 days of filing the condemnation complaint, the municipality shall file and record a notice of lis pendens concerning the property.

As they did in the trial court, plaintiffs again argue that, under the act, the mere filing of condemnation complaints and the accompanying lis pendens by the city constituted a temporary taking of an “interest in their properties” for which they should be compensated. The appellate panel disagrees.

The terms of the act are clear. A taking of the property does not occur until the municipality files and records a “declaration of taking.” The municipality may simultaneously file a declaration of taking with its condemnation complaint and, if it follows that course, it has “the right to the immediate and exclusive possession and title to the property.” Alternatively, the municipality may withhold the filing of the declaration of taking, preserving its right to dismiss the action at a future time. If the municipality decides to abandon its condemnation action, rather than to file a declaration of taking to obtain possession of the property, it is required to pay the property owner its litigation expenses.

That is exactly what happened in this case. After the city filed its condemnation complaints and lis pendens, plaintiffs objected by denying the authority of the city to take their properties through eminent domain. They filed motions to dismiss the complaints so they could retain their properties. The city did not file or record any declarations of taking during the pendency of the condemnation litigation, the ensuing appeal, or the proceedings on remand. Instead, the city decided to abandon all of the condemnation actions and to pay plaintiffs’ litigation expenses pursuant to the act. Because no declarations of taking were filed by the city and because, under the act, a taking does not occur unless and until such a declaration is filed, there was no taking of plaintiffs’ properties by the city.

The panel also rejects plaintiffs’ argument that a temporary taking occurred. Plaintiffs contend their properties lost value and they were unable to sell or develop their properties until the condemnation actions were abandoned. As the trial court found, however, there is no factual support for these claims in the record. The city neither took plaintiffs’ properties nor prevented them from improving, selling or developing them. The litigation commenced by the city did not destroy the beneficial uses of the properties.

Because there was no “unconstitutional taking” of their properties, plaintiffs are not entitled to any additional compensation.

For appellants — Peter H. Wegener (Bathgate, Wegener & Wolf). For respondent — Lawrence H. Shapiro (Ansell Grimm & Aaron).