Borough of Carteret v. Bonifacio Blanco

• Court: New Jersey Superior Court Appellate Division
• Decided: March 17, 2025
• Docket: A-3971-22
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-3971-22

BOROUGH OF CARTERET,

Plaintiff-Appellant/Cross- Respondent,

v.

BONIFACIO BLANCO and MARIA C. BLANCO, husband and wife,

Defendants-Respondents/ Cross-Appellants,

and

ANESTHESIA CONSULTANTS OF NEW JERSEY, LLC, ST. JAMES HOSPITAL, AMBULATORY SURGICAL CENTER, OVERLOOK HOSPITAL, and MIDDLESEX WATER COMPANY,

Defendants.

Submitted March 5, 2025 – Decided March 17, 2025 Before Judges Sabatino and Jacobs.

On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-6679-19.

McManimon, Scotland & Bauman, LLC, attorneys for appellant/cross-respondent (Kevin McManimon and Malcolm X. Thorpe, of counsel and on the briefs).

McKirdy, Riskin, Olson & DellaPelle, PC, attorneys for respondents/cross-appellants (Joseph W. Grather, of counsel and on the brief).

PER CURIAM

The parties before us appeal and cross-appeal a final judgment based on a

jury verdict in a condemnation case after a three-day trial.

The property at issue contains a two-family home on a .18-acre parcel

located in a redevelopment zone in Carteret. Through its powers of eminent

domain, plaintiff, the Borough of Carteret, executed a declaration of taking on

August 4, 2020. The owners of record, defendants Bonifacio Blanco and Maria

C. Blanco, husband and wife, have not contested the bona fides of the Borough's

taking.

At trial, the Borough's expert presented to the jury a valuation of $349,000

(adjusted to $363,000 for the parties' stipulated valuation date). Defendants'

expert presented a competing valuation of $710,000 (adjusted to $670,000 for

A-3971-22 2 the stipulated valuation date). The jury returned what appears to be a

compromise verdict, valuing just compensation for the property at $550,000.

The Borough now appeals the verdict as being too high. Defendants

oppose that contention, and further argue in a cross-appeal that the valuation

date must be the date of the taking because the stipulated date is

unconstitutional.

After jury selection on the first day of trial, the Borough moved in limine

under Rule 4:25-8 to preclude defendants' expert from presenting opinions that

violate what is known as the "project influence" doctrine. As we will elaborate,

the doctrine precludes a condemnation jury from considering enhancements in

the property's value expected to occur as a result of the government's acquisition

and associated redevelopment activities. See Jersey City Redevelopment

Agency v. Kugler, 58 N.J. 374, 379 (1971) ("[In condemnation cases] the proper

basis of compensation is the value of the property as it would be at the time of

taking (or at the time fixed by the statute . . . ) disregarding either the

depreciating threat of or the inflationary reaction to the proposed public

project.") (emphasis added).

The trial court denied the Borough's motion on both substantive and

procedural grounds. Substantively, it found the challenged expert testimony

A-3971-22 3 admissible. Procedurally, it deemed the motion to be the equivalent of an

improper eleventh-hour summary judgment motion disallowed under Cho v.

Trinitas Regional Medical Center, 443 N.J. Super. 461 (App. Div. 2015).

On appeal, the Borough maintains: (1) defendants' expert testimony

opining that the property's highest and best use was the use intended under the

Borough's redevelopment plan—for which the property was condemned—

should have been barred under the project influence rule; and (2) the court erred

in deeming its motion in limine to exclude that expert testimony procedurally

barred because it was not brought at least thirty days in advance of trial.

Meanwhile, in their cross-appeal, defendants urge the United States

Constitution and the New Jersey Constitution mandates the date of valuation to

be the date of the Borough's actual taking, notwithstanding that the parties had

stipulated to an earlier date.

In assessing these points, we apply familiar principles of appellate review.

Generally speaking, "[w]hen a trial court admits or excludes evidence, its

determination is 'entitled to deference absent a showing of an abuse of

discretion, i.e., [that] there has been a clear error of judgment.'" Griffin v. City

of E. Orange, 225 N.J. 400, 413 (2016) (second alteration in original) (quoting

State v. Brown, 170 N.J. 138, 147 (2001)). Even so, we review an evidentiary

A-3971-22 4 ruling de novo if the trial court applied the wrong legal standard. Hassan v.

Williams, 467 N.J. Super. 190, 214 (App. Div. 2021).

We review the court's application of Rules 4:25-7, 4:25-8, and 4:46 de

novo. DiFiore v. Pezic, 254 N.J. 212, 228 (2023) ("[W]e review the meaning or

scope of a court rule de novo, applying ordinary principles of statutory

construction to interpret the court rules.").

As a threshold matter, we first consider the trial court's treatment of the

Borough's motion in limine it filed under Rule 4:25-8(b) as a late and improper

summary judgment motion that should have been brought more than thirty days

before trial under Rule 4:46. This classification was an error of law, under the

circumstances presented.

The main case the trial court cited to support its procedural ruling, Cho,

443 N.J. Super. at 464, is not analytically on point. In Cho, we held that a

defendant's application, styled as a motion in limine, which had been filed on

the brink of trial, was unfair and improper because if the motion were granted it

would have been dispositive and would have required the dismissal of the

plaintiff's complaint. Id. at 475.

That is not the situation here. The Borough's motion to preclude the

discrete portions of the defense expert's valuation opinions that violated the

A-3971-22 5 project influence rule would not have ended the case. All that the motion would

have accomplished would have been to curtail aspects of the expert's testimony

that were out of bounds. Defendants' expert still would have been allowed to

present opinions about the value of the property that did not take into account

future post-redevelopment impacts—such as when using the alternative

valuation method under the "income" approach.

The Rule of Court adopted after Cho, Rule 4:25-8(a)(1), defines a motion

in limine "as an application returnable at trial for a ruling regarding the conduct

of the trial, including admissibility of evidence, which motion, if granted, would

not have a dispositive impact on a litigant's case." (Emphasis added). It further

defines a dispositive motion as one that "would include, but not be limited to,

an application to bar an expert's testimony in a matter in which such testimony

is required as a matter of law to sustain a party's burden of proof." Ibid.

The Borough's motion in this instance was restricting of evidence, but not

dispositive. The Borough sought only to exclude that portion of the appraiser's

testimony that was impermissibly influenced by the redevelopment plan—not

the entirety of the expert testimony. Significantly, defendants' expert conducted

an alternative valuation of the property that was unaffected by the project

influence rule and that was presented to the jury.

A-3971-22 6 And, even if the Borough's motion were construed to have dispositive

characteristics, the Supreme Court has instructed that the preferred approach in

such situations is to adjourn the trial, if possible, and afford the parties a

mutually fair opportunity to litigate the dispositive issue. See Jeter v. Sam's

Club, 250 N.J. 240, 251 (2022) (observing that the trial judge "should have

decided the motion in limine and postponed trial for a minimum of thirty days

to give both parties time to file briefs with supporting affidavits and

certifications on the question of summary judgment").

We also point out that a party is not required to make use of the rule, and

that the party may wait and object when the allegedly improper testimony is

tendered during the trial by the opponent. Rule 4:25-8(c) explicitly provides

that "[t]he failure to submit a motion in limine under this rule shall not preclude

a party from seeking to admit evidence, or objecting to the admission of

evidence, during trial." See also Pressler & Verniero, Current N.J. Court Rules,

cmt. on R. 4:25-8 (2025) ("Section (c) makes clear that parties failing to file a

motion in limine under his rule will not be barred from introducing or objecting

to evidence at trial.").

We are cognizant that it surely would have been better if the Borough had

raised the in limine issue sooner, before flagging it in its amended pretrial

A-3971-22 7 exchange under Rule 4:25-7(b). But the suboptimal timing of the invocation of

the issue must be balanced against the policies that underlie the trial court's

gatekeeping responsibilities over evidence presented to a jury in a condemnation

trial. The trial judge had the responsibility to act as a gatekeeper to bar evidence

the jury should not have heard. Borough of Saddle River v. 66 E. Allendale,

LLC, 216 N.J. 115, 142-43 (2013).

That brings us to the merits of the project influence issue. The project

influence rule instructs that, in valuing a condemned property, the effect on the

property's value caused by the government's action necessitating the

condemnation is not to be considered. See e.g., Kugler, 58 N.J. at 379; see also

U.S. v. Reynolds, 397 U.S. 14, 16-17 (1970); Twp. of W. Windsor v.

Nierenberg, 150 N.J. 111, 130 (1997); Twp. of Piscataway v. S. Washington

Ave., LLC, 400 N.J. Super. 358, 373 (App. Div. 2008). The project influence

rule thus requires that when just compensation is determined as of the date of a

taking, only market factors unrelated to the condemnation action can be

considered, despite the general requirements for determining fair market value.1

1 Fair market value is generally understood to be the "value that would be assigned to the acquired property by knowledgeable parties freely negotiating for its sale under normal market conditions based on all surrounding circumstances at the time of the taking." State by Com'r of Transp. v. Caoili,

A-3971-22 8 The Supreme Court aptly explained the rationale for the project influence

rule in Kugler, 58 N.J. at 378-79. In that case, landowners of a property that

was subject to condemnation because of a redevelopment alleged that N.J.S.A.

20:3-302 was unconstitutional. They argued that fixing the date for valuation

as the date of the declaration of blight by the governing body failed to

compensate them justly for the government taking. The plaintiffs charged that

the statute violated the Fifth Amendment of the United States Constitution and

Article I, paragraph 20 of the New Jersey Constitution, which provide that

private property shall not be taken for public use without just compensation.

Ibid.

The Court held in Kugler that valuation of a condemned property prior to

the actual taking can be constitutionally permitted so long as landowners are not

deprived of the value of inflation and other market factors that are separate from

135 N.J. 252, 260 (1994) (quoting State by Com'r of Transp. v. Silver, 92 N.J. 507, 514 (1983)). 2 N.J.S.A. 20:3-30 provides that "just compensation shall be determined as of the date of the earliest of the following events: (a) the date possession of the property being condemned is taken by the condemnor in whole or in part; (b) the date of the commencement of the action; (c) the date on which action is taken by the condemnor which substantially affects the use and enjoyment of the property by the condemnee; or (d) the date of the declaration of blight by the governing body upon a report by a planning board pursuant to section 38 of P.L.1971, c. 361 (C. 20:3-38)." A-3971-22 9 the government action underlying the condemnation action. Id. at 384-85.

When a property's value is shown to have increased due to unrelated factors, the

valuation date becomes the date of the taking, but not if the increase is due to

the government action. Id. at 379. See also Piscataway, 400 N.J. Super. at 373.

This is the essence of the project influence rule.

In the present case, as part of his alternative methods for appraising the

value of the parcel, defendants' expert did take into account the enhancement in

value resulting from the redevelopment plan. Specifically, the defense expert

concluded in his report that the "highest and best use" of the property would be

if it were developed in accordance with the uses set forth in the redevelopment

plan, including a higher density, multi-family residential use, perhaps requiring

assemblage with neighboring properties.

Based on that assumed use, the defense expert concluded the property's

value was $710,000 as of September 16, 2020. This value was amended to

$670,000 at trial to reflect the lower value of the property, as of the parties'

stipulated date of value, September 24, 2019. Notably, this figure was

substantially higher than an alternative valuation of $458,298 that the defense

expert had based on an income approach.

Despite the Borough's earlier pretrial objection, the defense expert's

A-3971-22 10 opinions about the property's valuation affected by the redevelopment plan were

explicitly presented to the jury. In relevant part, he testified: "[T]he property

was a two-family dwelling on a fairly large lot in a redevelopment zone. So my

job is to determine what would be the highest value that the property could

obtain in the open market based on the definition of market value." (emphasis

added).

A proper application of the project influence rule would have barred such

testimony. The defense expert's opinions did not tease out the market forces

that independently could have raised the property's value, had the redevelopment

not occurred. Instead, the expert made assumptions about the parcel's highest

and best use based upon expectations insofar as they were altered by the

redevelopment plan. That is a plain violation of the project influence rule. The

verdict consequently was tainted by the legal error.

We cannot disregard this error as being harmless. The jury's $550,000

award was well above the alternative valuation of the property that did not

consider the redevelopment plan's positive financial impact. The error was

clearly capable of producing an unjust result. R. 2:10-2. Hence, a new trial is

necessary.

Lastly, we briefly address defendants' cross-appeal respecting the date of

A-3971-22 11 valuation. The Borough initially took the position that, under N.J.S.A. 20:3-30,

the proper date of valuation is the date the Borough adopted the redevelopment

area resolution, March 21, 2019. However, the Borough and defendants

eventually stipulated to a valuation date of September 24, 2019. In their cross-

appeal, defendants argue the stipulation should be disregarded and that a later

date of August 26, 2020—the actual date of taking—must control under

constitutional principles.

The trial court did not err in using the parties' stipulated date as the

valuation date. "[G]enerally litigants should be held to their stipulations and the

consequences thereof." Negrotti v. Negrotti, 98 N.J. 428, 432 (1985). When

such stipulations are set forth in pretrial orders with respect to the date for

determination of value in blighted area cases, they "are generally binding on

parties." Hous. Auth. of City of Hoboken v. Segal, 112 N.J. Super. 359, 362

(App. Div. 1970).

We recognize that case law under our federal and state constitutions

supports the use of the government's date of taking to value a condemned

property. See e.g., Caoili, 135 N.J. at 260; City of Ocean City v. Maffucci, 326

N.J. Super. 1, 15 (App. Div. 1999). However, it is a "well-settled principle" that

"parties, by agreement, may waive statutory and constitutional rights." Midland

A-3971-22 12 Funding, L.L.C. v. Giambanco, 422 N.J. Super. 301, 310 (App. Div. 2011)

(emphasis added) (citing LaManna v. Proformance Ins. Co., 184 N.J. 214, 226

(2005)). Therefore, although the date of the taking would usually govern had

defendants shown a change in the property value separate from the government

action, there is no reason to find the stipulation in this case unenforceable.

In sum, we reverse the trial court's admission of the defense expert's

valuation testimony insofar as it violated the project influence rule, but we

affirm the court's use of the stipulated valuation date.

Reversed and remanded for a new trial.

A-3971-22 13