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N.J. Superior Court, Appellate Division A-2805-02T1; Appellate Division; opinion by Carchman, J.A.D.; decided February 11, 2004; approved for publication June 22, 2004. Before Judges Carchman, Wecker and Weissbard. On appeal from the Law Division, Union County, 4460-00 and 4470-00. [Sat below: Judge Beglin.] DDS No. 44-2-5801 The trial judge correctly concluded that the parking spaces at issue in this condemnation action had been lawfully created as part of the approval of an expansion to defendant-motel, even though their use involved maneuvering on the State right-of-way, that they were grandfathered by the Highway Access Management Code, and that defendant is entitled to compensation for their taking as part of a highway-widening project; Faps Realty Corp. is distinguished. Defendants Stanley Nathanson and his son David Nathanson purchased the Benedict Motel on the northbound side of Routes 1 and 9 in Linden in 1967, when it had 72 rooms. In 1971, the motel was expanded to add 13 units and 15 parking spaces were added to the property front. In September 2000, plaintiff city of Linden filed a complaint to effect a taking of a 15-foot wide strip of motel property to widen Routes 1 and 9. The widening is part of a road improvement project connected with the city’s plan to redevelop that area of Linden. The most dramatic impact of the taking is the elimination of the 15 parking spaces fronting on Route 1. The city claims that no approval was granted for those spaces and that their use requires maneuvering within the state right-of-way, and the motel is therefore not entitled to damages for the loss of the spaces. Much of the dispute regarding the status of the parking spaces focused on the approvals allegedly granted in the 1971 expansion of the motel. While the record is expansive and contradictory as to the “legality” of the spaces, the claim relies on the recollection of and documentation supplied by Stanley Goodman, the architect retained to perfect the 1971 expansion. He said that the zoning approval included approval of the parking. The plan offered at trial did not contain indicia of approval from the city, but the site plan depicted 13 angled parking spaces in front of the motel. A critical dispute arose as to whether the zoning approval included approval of this parking. The city engineer claimed that no record of their approval was found, despite contradictory indications from the city that parking would have been explored if a variance had been required. Regarding the site plan and the impact of the taking, Goodman said that he designed the access to allow cars to decelerate while entering the motel. The motel office was placed in the corner to provide the best vantage point from which to control and monitor the motel’s activities. The taking impacted on the property by eliminating the front parking, relocating the office to maintain the ability to supervise the traffic into and out of the motel, and effecting the loss of additional parking spaces due to the relocation of a dumpster. With the loss of the parking, the site became a nonconforming use and failed to maintain the number of required spaces per unit. Thus, if the motel were to seek any future alterations to the building, it would require a variance. Not only would the waiver process prove more costly and time-consuming, but the motel had no guarantee of approval. Critical to the primary issue in dispute, Karl A. Pehnke, plaintiff’s expert witness and manager of the road improvement project undertaken by the state Department of Transportation, observed that the Goodman plan would not have worked because a car backing out of the space would have only a 10-foot wide aisle in which to maneuver. He noted that the spaces, though entirely on motel property, were illegal because the aisle of circulation for vehicles entering and backing out of the spaces included the state right-of-way. As a result, plaintiff’s valuation expert, Paul T. Beisser, stated that a buyer could not consider the front parking spaces in assessing valuation. Therefore, the condition of the property before the taking and the condition after the taking were the same. Using comparable land sales and making appropriate adjustments, he concluded that the amount of just compensation was $115,700. He did not use the income-capitalization method because he found no damage to the remainder. Subsequently, Beisser prepared an alternative appraisal. It assumed that the 15 parking spaces were illegally approved and then considered that after the taking and reconfiguration of the parking area, the motel would retain seven usable spaces. After analyzing the data on an income basis, he opined that the damages to the remainder was $500,000. Defense real estate expert Donald Helmstetter opined that the taking resulted in “significant impact on the ongoing operation of the motel property specifically due to the loss of a number of parking spaces that existed prior to the taking.” The remaining parking spaces were not enough to support the motel and therefore, would adversely impact the value of the site. As no convenient off-site parking existed, the loss of parking would result in “a commensurate loss of rental potential for the motel operation.” Using an income approach, he concluded that the damages were $1,280,500. Contrary to Pehnke’s view that the city’s after-taking access proposal and the motel’s access proposal were substantially the same, defense expert Eric L. Keller concluded that the existing access was unsafe and inappropriate from both a design and operational perspective. He said the better access design placed the access at the north end of the property, resulting in two additional lost spaces. Additionally, the motel proposed to relocate the office and widen the passageway into the courtyard to allow for two-way traffic, resulting in an additional space being lost. The total parking after the taking would be 71: 89 before-taking spaces, minus 15 front spaces, minus three spaces due to access and office relocation. At the conclusion of the evidence, defendants sought a determination that the front parking spaces were approved spaces such that their loss was a proper element of damages, arguing that they were approved with the approval of the 1971 motel expansion and grandfathered under the 1979 city zoning ordinance. They also argued that the parking was grandfathered under the Highway Access Management Code regulations, N.J.A.C. 16:47-1.1 to -9.1, implementing the State Highway Access Management Act, N.J.S.A. 27:7-89 to -98, that grandfathered any access and use that existed prior to July 1, 1976. They finally argued that neither the city nor the state had ever cited the motel for “improper parking or improper use of the State’s right of way.” The judge found that the variance for the motel’s expansion was approved and that the approval included the front parking. As the city approved the unit expansion, the parking had to be located in the front as that was the only available location on the site. He found that the parking enjoyed protection in terms of any subsequent changes on the site and that access to and use of the 15 spaces in the front were grandfathered under the act. The city moved for a new trial based on allegedly newly discovered evidence � a 1970 city ordinance relating to parking requirements and David Nathanson’s tax appeals. The judge denied that motion, finding that the evidence was not material to the issue and could have been discovered with due diligence. Plaintiff’s primary argument on appeal is that Judge Beglin erred in determining that Comm’r of Transp. v. Faps Realty Corp., 197 N.J. Super. 44 (App. Div. 1984), did not bar the motel’s claim for damages caused by the elimination of the front parking spaces. In Faps, the state acquired “a narrow strip of defendant’s land along the right-of-way” to widen Route 9. Id. at 46. Before the taking, access to the property was uncontrolled and “drivers could use some 20-odd feet of State-owned property between the traveled way and the easterly line of the right-of-way to back out and maneuver from the area immediately in front of the commercial buildings.” Id. at 47. However, the state in addition to the taking planned to construct a grassy berm in front of defendant’s property and three access driveways, thereby modifying access to the property. The taking alone would have left sufficient maneuvering room; the loss of parking resulted from “the access change which prevent[ed] use of the State-owned land.” Id. at 47-48. Faps noted that the state owned the property on which the driveways were to be constructed before; that is, the property at issue was the state-owned right-of-way as it existed before the taking. As such, defendant was not entitled to compensation for damages arising from “the use by the State of the State’s own uncondemned property,” nor was defendant entitled to compensation for damages arising from “[t]he limitation of access resulting from the installation of the berm.” Ibid. As defendant’s expert “was unable to separate the effect the change in access had on his [] damage computation” from the effect of the taking itself, the case was remanded for a new trial. State v. Van Nortwick, 287 N.J. Super. 59, 62 (App. Div.), certif. denied, 143 N.J. 320 (1995), further considered Faps and its application. In Van Nortwick, the state acquired part of defendant’s property as part of a highway-improvement project. As a result, access to the property was limited to the easterly end, the depth of the property failed to meet the minimum zoning requirement, and the amount of buildable area was reduced. Defendant’s expert acknowledged that his assessment of damages “all had a common thread, i.e., diminution of access,” but that “the location of the permitted access,” rather than “the denial of access to the property [] caused these damages.” Id. at 66. The state’s argument that that testimony should have been barred “because defendant’s expert could not separate out his access per se damages from his on-site damages,” id. at 73, was rejected. Faps was distinguished, as Van Nortwick involved on-site damages resulting from “the restriction and location of the limited access, combined with the prevailing zoning requirements in the town,” while the damages in Faps resulted from “[t]he loss of on-site maneuverability . . . due to the State’s change in use of its own property which had previously been made available to the patrons of the property owner.” Id. at 72-74. Judge Beglin explained that Faps “spoke of compensability for access for parking spaces located within the public right of way, not located outside of that right of way, but requiring usage of the right of way for maneuverability.” However, since as here, “the loss of the parking spaces results directly from the taking, not from highway access modification,” he found Faps inapplicable. Although the judge inaccurately placed the parking spaces in Faps outside of defendant’s property, the error is of no moment. In Faps, the taking alone would not have eliminated the parking. The construction of a berm area effectively eliminated the vehicles’ ability to maneuver. The loss of the front parking was due to the loss of the use of state-owned land, a loss for which defendant was not entitled to compensation. Defendant was not entitled to continue to use state-owned property for private purposes nor to demand continued unlimited access. Here, while vehicles had used the state-owned right-of-way to maneuver out of the front parking spaces, the taking itself causes the loss of the parking. Defendants did not simply lose maneuvering space for parking; they lost the parking itself. The city argues that defendants bore the burden of showing that it had approved the front parking spaces, a burden that they failed to meet. “[T]he basic issue in a condemnation proceeding is the amount of just compensation which the owner is to receive for the property taken by the condemning authority.” Paterson Redevelopment Agency v. Bienstock, 123 N.J. Super. 457, 459 (App. Div. 1973). “The burden of proof concept has no place in such an inquiry.” Id. at 460. More meaningful is the parties’ burden to “produce competent evidence of the fair market value of the condemned party.” Ibid. However, the burden may properly be placed on the property owner with respect to property value, where zoning regulations prevent the highest and best use of the land, thereby lowering the property value in a condemnation proceeding, or where the uniqueness of the improvements makes the comparable sales approach to valuation impractical and the landowner seeks “to demonstrate that the property has some value.” The situation here is analogous. The city argues that Judge Beglin effectively placed the burden on it to show the plan had not been approved when he did not find significant “[t]he absence [] of any recordation of separate approval of parking,” as the city was entitled to choose the manner of its own record-keeping. Held: A judge’s factual determination, here that the spaces were approved with the expansion, will be deferred to if the finding is supported by sufficient, credible evidence. His findings meet that standard. His finding that defendants received approval for the front parking spaces with the approval for the expansion is supported by Goodman’s testimony that the parking was approved and Goodman’s site plan indicating the front parking and approval granted for the expansion. As a result of these factually supported findings, Linden Code 31-36.1, providing that “the lawful use of land or buildings existing at the date of the adoption of this chapter may be continuous,” applies, protecting defendants’ use of the parking spaces. A critical determination was that the use of the front parking spaces was grandfathered under the access code. The city argues that, as a matter of law, the front parking spaces are illegal because their use required maneuvering in the state right-of-way, and therefore, their use could not be grandfathered by that code. N.J.S.A. 27:7-92a requires access permits for anyone seeking access to a state highway, but “grandfathers” access “in existence prior to January 1, 1970,” as if a permit had been issued. N.J.A.C. 16:47-1.1 extended the grandfathering period to July 1, 1976. Further, “[g]randfathered permits are subject to the same regulations as actual permits.” 16:47-1.1. N.J.A.C. 16:47-3.5(11), however, now prohibits approval of access points “for parking areas that require backing maneuvers within the State highway right-of-way.” Additionally, “[a]ll off-street parking areas must include on-site maneuvering areas and aisles to permit vehicles to enter and exit the site without hesitation.” 16:47-3.5(1). The city argues that the front parking violates these regulations, making it unlawful at the time the code was enacted and now. Paul Kimball Hosp. v. Brick Township Hosp., 86 N.J. 429, 440 (1981), explained that “[g]randfather clauses operate to exempt from the requirements of legislative enactments certain defined individuals or entities that, at the time the requirements become effective, meet specific defined criteria.” Relying on Kimball, the city asserts that “[a] use that was unpermitted in the first place cannot be grandfathered.” The city’s argument is rejected. “Grandfather clauses reflect the legislative policy that the new regulatory process shall be effective prospectively.” Id. at 441. “Beneficiaries of grandfather clauses being exempt from a regulatory scheme created under the State’s police power are not within the ambit of all requirements of that scheme.” Ibid. Here, the “specific defined criteria” identified in Kimball that defendants must meet to be exempt from the code’s requirements are simply that the lot access and use existed on July 1, 1976; the parking spaces existed on that date. The city also argues that in 1971, the code prohibited the use of any “part of highway right-of-way . . . for servicing of vehicles, displays, or to conduct private business.” Thus, the use of the right-of-way by vehicles entering and exiting the parking spaces was prohibited at the time they were constructed, rendering such use unlawful. Consequently, the access and use of the spaces could not have been grandfathered by the code. The taking itself effected the loss of the parking spaces here. The “lot access and use” were grandfathered under N.J.A.C. 16:47-1.1 as they existed on July 1, 1976. A plain reading of this regulation allows continuation not only of the access to the lot, but the use of the lot. Judge Beglin properly found that the spaces were grandfathered under the access code. The city next argues that equitable estoppel does not apply, as it never approved the parking spaces and therefore, defendants had nothing on which they could, in good faith, rely; the city could not have approved the spaces as they constituted an unlawful use, precluding the application of equitable estoppel; and that defendants failed to satisfy the elements of equitable estoppel. These arguments are rejected. Though sparingly applied against municipalities, “[e]quitable estoppel may be invoked against a municipality ‘where interests of justice, morality and common fairness clearly dictate that course.’” Middletown Township Policemen’s Benevolent Ass’n v. Township of Middletown, 162 N.J. 361, 367 (2000). When a municipal corporation “irregularly,” but in good faith, uses a legislatively granted power, the conduct is ultra vires in the secondary sense, and equitable estoppel may apply where a party in good faith properly relied on such authority. In County of Oean v. Zekaria Realty, Inc., 271 N.J. Super. 280, 281-83 (App. Div.), cert. denied, 513 U.S. 1000 (1994), the county had exacted a permanent easement from defendant as a condition of variance and site-plan approval for renovations. The approval “contained no approval for parking in front of [defendant's] building on the strip subject to the permanent easement.” Id. at 282. Despite the easement grant and “without municipal or County approval, defendant subsequently used spaces for roadside parking on the available frontage which was not part of the driveway entrance.” Ibid. Years after the grant, the county decided to widen the road and condemned a 27-foot wide strip of defendant’s lot. “Due to the 15-foot easement previously granted, as well as the lack of any known or permitted use for the strip, the County’s appraisal report provided for no compensatory damages to defendant for the acquisition of that part of the property.” Ibid. The exaction was found unconstitutional. However, the court held that defendant was not entitled to compensation due to its failure to challenge the “donative” conveyance of the easement. The easement remained, rendering defendant’s use of the space for parking unlawful and preventing defendant from receiving any compensation for the taking, as the property was rightfully owned by the county. While the parties are reversed here, equitable estoppel equally applies. The city’s position is a means to avoid payment of just compensation for the taking. The disputed spaces fronted defendants’ property for approximately 30 years, without any action by the city. The city was equitably estopped from arguing that no approval was given for these spaces. The last two issues raised by the city involve discretionary determinations made by the judge. The first involves a denial of a motion for a new trial based on newly discovered evidence (that defendant David Nathanson gave willfully false answers to interrogatories by failing to disclose tax appeals taken by him); the second raises the issue of whether certain comments made by the motel’s attorney during the course of the trial warrant a reversal of the jury verdict. Neither issue warrants a new trial. Affirmed. � Digested by Judith Nallin [The slip opinion is 34 pages long.] For appellant � Peter A. Buchsbaum (Greenbaum, Rowe, Smith, Ravin, Davis & Himmel, and Fahey & Fahey; Buchsbaum and Brian W. Fahey of counsel; Michele Gibson and Dean A. Gaver on the brief). For respondents � William J. Ward (Carlin & Ward; Ward, John J. Carlin Jr. and Arthur G. Warden III on the brief).

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