NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-2413-19
STATE OF NEW JERSEY, by the DEPARTMENT OF ENVIRONMENTAL PROTECTION,
Plaintiff-Respondent,
v.
BAY HEAD IMPROVEMENT ASSOCIATION,
Defendant-Appellant. __________________________
Argued June 21, 2021 – Decided July 12, 2021
Before Judges Fisher and Fasciale.
On appeal from the Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-2904-17.
Peter H. Wegener argued the cause for appellant (Bathgate, Wegener & Wolf, PC, attorneys; Peter H. Wegener, of counsel and on the briefs; Daniel J. Carbone, on the briefs).
Jason M. Hyndman argued the cause for respondent (Decotiis, Fitzpatrick, Cole & Giblin, LLP, attorneys; George G. Frino, of counsel; Jason M. Hyndman, on the brief).
PER CURIAM
As part of the Manasquan Inlet to Barnegat Inlet storm damage reduction
project (the project), the State of New Jersey, Department of Environmental
Protection (plaintiff or DEP) took an easement over beachfront property owned
by Bay Head Improvement Association (defendant or BHIA). The court-
appointed commissioners valued the property and fixed just compensation at
more than $2 million. A jury determined defendant was entitled to zero
compensation for the taking, finding the property plaintiff offered as a substitute
was similar to what plaintiff had taken and enhanced the value of defendant's
remainder property, because it was larger and had greater storm protection.
Defendant was unsuccessful on its motions for judgment notwithstanding the
verdict (JNOV) and a new trial.
On appeal, defendant argues that the judge improperly permitted the jury
to consider whether defendant mitigated its damages, the evidence did not
comply with the requirements of State, by Comm'r of Transp. v. Weiswasser,
149 N.J. 320, 330 (1997), and the evidence did not support the verdict.
We are unpersuaded by these contentions and affirm.
A-2413-19 2 I.
We reject defendant's argument that the judge erred by permitting the jury
to consider the doctrine of mitigation of damages because—as defendant points
out—it was not seeking severance damages. We conclude that even though
defendant did not explicitly seek severance damages, the judge correctly
instructed the jury to consider mitigation because the evidence supported a
finding that the condemnation was a partial taking and the remnant retained
some value.
The judge instructed the jury that defendant was entitled to just
compensation—the difference between the fair market value (FMV) of
defendant's property before and after the taking. Additionally, the judge
instructed:
[I]n determining the [FMV] of the taking[,] you must consider the property owner's duty to mitigate damages resulting from the taking by applying a cost to cure analysis to the computation of damages. Under this analysis you must consider evidence of availability and use of similar replacement property when under all of the surrounding circumstances such property would reasonably affect the [FMV] of the property. . . . Accordingly, both parties' appraisers have concluded that the highest and best use for these properties is for beach recreation.
What is critical in a cost to cure evaluation is not whether a property owner may be compelled to acquire
A-2413-19 3 a substitute property[,] but whether under all of the surrounding circumstances reasonable and willing parties would consider . . . the availability and use of such property as bearing on the market value of the owner's remaining property. . . . The threshold issue in the analysis of cost to cure mitigation is the comparability of the replacement property. That is the extent to which the replacement property is sufficiently similar to the property taken. The similarity of such property bears on whether it may be considered useful and available in conjunction with the remainder property. The similarity of the property in this context requires the jury to evaluate not only the location and the physical characteristics of the property as the proposed substitute property but you as jurors . . . also evaluate the ownership interest and the quality of the title to the property being offered as a substitute property as that property taken from [defendant]. The basic issue that you must evaluate is whether it is reasonable and fair to consider the proposed property as an adequate substitute for the property taken. The cost to cure measure of damages is . . . applicable only when the replacement property would totally cure the damage caused by the condemnation to that portion of the land not condemned. The evidence must show that [defendant] will be as well off with the replacement land as it was with the land it lost prior to the actual taking. The issue of similarity of replacement property is primarily factual. The degree of similarity is relevant to the issue of whether under all of the circumstances [it is fair] for [defendant] to accept the nature and the quality of the property being offered as substitute property it lost through the imposition of the [S]tate's easement.
In the event the jury determines that the property proposed as substitute by [plaintiff] is similar to the property lost by [defendant,] the jury must then go on
A-2413-19 4 to consider under all of the surrounding circumstances whether the substitute property would reasonably affect the [FMV] of the remainder of property.
In deciding defendant's motion for a new trial, the judge acknowledged
that defendant had not sought severance damages, but instead, had requested a
finding that the property was a worthless economic remnant. The judge noted
that defendant's expert considered the property after the taking to be worth
$350,000, and, therefore, not worthless. The judge also expressed that the
substitute land offered to defendant was beachfront property that had been
created by the project's distribution of "hundreds of thousands of tons of sand"
that had "redefined the shore-line" and shifted the water's edge in an easterly
direction.
Fair compensation for the value of property taken pursuant to
condemnation is the difference between the value of the parcel before the taking
and the value of the remainder after the taking. State, by Comm'r of Transp. v.
William G. Rohrer, Inc., 80 N.J. 462, 464 (1979). Where a partial taking has
drained the property of all economic worth, the result is the creation of an
"uneconomic remnant." Id. at 464-65. "If as a result of a partial taking of
property, the property remaining consists of a parcel or parcels of land having
A-2413-19 5 little or no economic value, the condemnor, in its own discretion or at the request
of the condemnee, shall acquire the entire parcel." N.J.S.A. 20:3-37.
When the State takes private property for a public purpose under the provisions of the Eminent Domain Act of 1971, the property owner is entitled to just compensation. Where the whole of a property is taken, the measure of damages is the [FMV] of the property as of the date of the taking, determined by what a willing buyer and a willing seller would agree to, neither being under any compulsion to act.
....
[W]here only a portion of a property is condemned, the measure of damages includes both the value of the portion of land actually taken and the value by which the remaining land has been diminished as a consequence of the partial taking. The diminished value of the remaining property constitutes the severance damages visited upon that property as a result of the taking.
[State, by Comm'r of Transp. v. Silver, 92 N.J. 507, 513-14 (1983) (citations omitted).]
New Jersey courts have used two methods to compute severance damages.
Id. at 514. One method is to take the market value of the land taken, plus the
difference in FMV before and after the taking of the remainder area. Ibid. The
other method is to take the difference between the FMV of the entire tract before
the taking and the value of the remainder area after the taking. Ibid.
A-2413-19 6 FMV is the value assigned "by knowledgeable parties freely negotiating
. . . under normal market conditions based on all surrounding circumstances at
the time of the taking." Ibid. A determination of FMV requires a finding as to
the "highest and best use of the property." State, by Comm'r of Transp. v. Hope
Rd. Assocs., 266 N.J. Super. 633, 641 (App. Div. 1993). "Highest and best" use
is "[t]he reasonably probable and legal use of . . . an improved property, which
is physically possible, appropriately supported, financially feasible, and that
results in the highest value." Id. at 641-42 (alterations in original) (citing
Chevron U.S.A., Inc. v. City of Perth Amboy, 10 N.J. Tax, 114, 145 (1988)).
In Weiswasser, the Court held that a condemnee seeking severance
damages in a partial condemnation case has a duty to mitigate damages resulting
from the taking by applying a "cost to cure" analysis to the computation of
damages in a partial taking. Weiwasser, 149 N.J. at 330 (citing 4A Nichols on
Eminent Domain § 14A.04 (3d ed. rev. 1997)). To determine just compensation
and whether a condemnee has properly mitigated damages in a partial taking
condemnation case, evidence may be admitted regarding the "availability and
use of similar replacement property, when, under all of the surrounding
circumstances, such property would reasonably affect the [FMV] of the
remainder property." Id. at 337-39. The Weiswasser Court considered other
A-2413-19 7 jurisdictions' determinations regarding requiring a condemnee to accept
substitute property instead of monetary compensation. Id. at 331-34, 343.
Nevertheless, [the FMV analysis] is not one which is mandated in every condemnation matter. Where the property involved has a single special use by virtue of controlling ordinances or covenants, it is within the power and discretion of the factfinder to utilize other approaches which may be more realistically applicable to the unusual circumstances.
So long as the determination is rational, is supported by the evidence, and constitutes the "just compensation" mandated by the New Jersey Constitution, the means of arriving at such determination may be varied and flexible, dependent upon the character and use of the property involved.
[Middlesex Cnty. v. Clearwater Vill., Inc., 163 N.J. Super. 166, 173 (App. Div. 1978) (citation omitted).]
In Jersey City Redevelopment Agency v. Kugler, 58 N.J. 374, 383-84,
(1971) (citing United States v. Cors, 337 U.S. 325, 332 (1949)), the New Jersey
Supreme Court stated:
There is no precise and inflexible rule for the assessment of just compensation. The Constitution does not contain any fixed standard of fairness by which it must be measured. Courts have been careful not to reduce the concept to a formula. The effort has been to find working rules and practical standards that will accomplish substantial justice such as, but not limited to, market value.
A-2413-19 8 Construction of a dune for purposes of shore protection is, by definition,
a benefit to oceanfront property owners. Borough of Harvey Cedars v. Karan,
214 N.J. 384, 414 (2013).
A different method of compensation is used when the condemnation
involves a taking of public lands. State, by Comm'r of Transp. v. S. Hackensack
Twp., 65 N.J. 377, 383-84 (1974). In such circumstances, the property may be
valued under the substitute facilities doctrine. Ibid. This method is based upon
the "inadequacy and incongruity of a monetary award as compensation for" the
condemnation of public property. Id. at 383. In such cases, "just compensation
should take, not the form of market value, but rather the cost of replacing the
facility with a substitute or replacement." Id. at 383-84.
The condemnor must furnish "an adequate, substantially equivalent
substitute facility" but it does not need to be "an exact duplicate of what has
been taken." Id. at 385. To apply the substitute facilities doctrine, the
condemnee must be a municipality or some other agency of government. Ibid.
In Matthews v. Bay Head Improv. Assoc., 95 N.J. 306 330 (1984), the
New Jersey Supreme Court found as follows with respect to defendant:
The Association's activities paralleled those of a municipality in its operation of the beachfront. The size of the beach was so great that it stationed lifeguards at five separate locations. The beach serviced about 5,000
A-2413-19 9 members. The lifeguards performed the functions characteristic of those on a public beach. They posted warnings with respect to the safety of swimming. They stood ready to render assistance to anyone in need of aid. These guards were available daily throughout the summer months. The beach was maintained and kept clean by crews who worked each day. These crews cleaned the beach from end to end, including properties not leased to the Association. Membership badges were sold and guards were stationed at entrances to the beach to make certain that only those licensed could gain admittance. Further, some guards patrolled the beach to make certain that members and guests complied with the Association's rules and regulations. When viewed in its totality—its purposes, relationship with the municipality, communal characteristic, activities, and virtual monopoly over the Bay Head beachfront—the quasi-public nature of the Association is apparent.
Defendant argues that even though the judge acknowledged defendant had
not requested severance damages, it nonetheless believed it was constrained by
Weiswasser to permit the jury to consider mitigation of damages. This was
incorrect, according to defendant, because the taking was total, thereby
rendering the remainder an uneconomic remnant. In fact, the remainder land
where the dune was constructed was merely a walkover to the beach that could
not be used or occupied. Because it maintained that the taking was total and not
partial, defendant never requested severance damages, and therefore, defendant
contends the judge should not have permitted the jury to consider whether its
damages were mitigated.
A-2413-19 10 Plaintiff responds that defendant's argument rests on "simultaneously
accepting the contradictory positions" that on the one hand, the 2.93 acres
encumbered by the easement and the 2.37 acres of unencumbered land lost all
economic value, and, on the other hand, that there was no severance damage to
the remainder. Plaintiff also asserts that even if defendant did not explicitly
request severance damages, it did, in fact, pursue those damages. This is
because the easement encumbered only 2.93 acres of the 5.30 acres of land, but
defendant's own appraiser valued the entirety of the properties and reduced the
value of the property from $20 to $2 per square foot, including the 2.37 acres of
unencumbered land. This, according to plaintiff, essentially established
defendant's claim for severance damages.
We disagree with defendant's characterization of the remainder property
as an uneconomic remnant. As the judge noted, Graziano valued the property
after the taking as having an FMV of $350,000. Graziano considered the price
per square foot after the taking to have been reduced from $20 per square foot
to $2. Although this represents a significant decrease, based on defendant's own
calculations, we nevertheless do not agree that the remainder property had no
economic value.
A-2413-19 11 Because the remainder was not an uneconomic remnant, the taking was
partial and not total. Thus, despite the fact that defendant did not formally
request severance damages, the judge correctly instructed the jury to consider
mitigation. Weiswasser stands for the proposition that where there is a
remainder property that retains value, the defendant must mitigate damages. 149
N.J. at 337-39. Weiswasser does not require a defendant to request severance
damages in order for mitigation to apply.
When determining whether jury instructions were erroneous, the question
is whether the charge was clearly capable of producing an unjust result. Prioleau
v. Ky. Fried Chicken, Inc., 223 N.J. 245, 257 (2015). Instructions given in
accordance with the model charge, or which closely track the model charge, are
generally not considered erroneous. Mogull v. CB Commercial Real Est. Grp.,
Inc., 162 N.J. 449, 466 (2000). Here, the judge instructed the jury on whether
the substitute property would affect the FMV of the remaining property.
Moreover, the judge's instruction closely tracked Model Jury Charges (Civil),
"Condemnation—Partial Taking (Severance Damages)" (approved Apr. 1996).
Therefore, even if the judge did not explicitly use the term severance damages
in his instructions, and even if defendant did not specifically request those
A-2413-19 12 damages, the judge clearly instructed the jury about them. We do not believe
the charge as a whole was capable of producing an unjust result.
Defendant argues that the judge erred by allowing plaintiff to present a
substitute facilities theory under the guise of mitigating damages. We disagree.
The analysis of mitigation in Weiswasser requires consideration as to whether
substitute property offered by the condemnor is similar and adequate to cure the
loss caused by the condemnation. Weiswasser, 149 N.J. at 337-39. Thus, to
properly analyze whether damages were mitigated requires an analysis of the
substitute property offered. However, as noted, the substitute facilities doctrine
espoused in Hackensack is only available for the condemnation of public lands.
65 N.J. at 383-85.
Here, the judge was very clear that the substitute facilities theory was not
applicable because defendant was not a public entity, but instead a private non -
profit corporation. We do not agree with defendant that the judge permitted
plaintiff to present a substitute facilities argument under the guise of mitigating
damages. The judge's instructions were clearly in conformance with the
mitigation theory of Weiswasser and not with the substitute facilities theory of
Hackensack.
A-2413-19 13 II.
"Determining the [FMV] of a parcel is not a science, but rather it involves
an estimation based on a number of variables." Borough of Merchantville v.
Malik & Son, LLC, 429 N.J. Super. 416, 433 (App. Div. 2013) (quoting City of
Asbury Park v. Asbury Park Towers, 388 N.J. Super. 1, 9 (App. Div. 2006)).
"Where . . . no part of the land is taken in fee, but only a limited interest in the
land, the measure of the owner's damages is the difference in the [FMV] of the
property before and after the taking." Tenn. Gas Transmission Co. v. Maze, 45
N.J. Super. 496, 501-02 (App. Div. 1957). "To segregate the owner's loss by
way of the diminution of the value of the fee in the easement strip itself . . .
would ordinarily be impracticable[.]" Id. at 502.
"[C]ost to cure and replacement cost are not of themselves precise
mathematical measures of damages, but they are useful evidence and tools in
arriving at a proper award." Weiswasser, 149 N.J. at 334 (citation omitted). The
similarity of replacement property "bears on whether it may be considered useful
and available in conjunction with the remainder property. The basic issue is
whether it is reasonable and fair to consider that property as a substitute for the
property taken." Id. at 336.
The issue of the similarity of replacement property is primarily factual. The degree of similarity is relevant
A-2413-19 14 to the issue of whether under all of the circumstances it would be reasonable for the condemnee to accept property that is available and contiguous to the remainder property as a suitable substitute or replacement for the property taken when that will reduce or eliminate the damages to the remainder property. It is an issue that can be presented readily through testimony and evidence, including the opinions of experts, and determined by the fact-finder.
Accordingly, we now hold that a condemnee seeking severance damages in a partial-taking condemnation action has a duty to mitigate those damages. The court may consider evidence of the availability and use of similar replacement property, when, under all of the surrounding circumstances, such property would reasonably affect the [FMV] of the remainder property. Such evidence may be used in mitigation of damages in determining just compensation in a partial-taking condemnation case.
[Id. at 337.]
Defendant distinguishes Weiswasser because, there, the State offered
substitute property with a fee simple interest. Here, the substitute property
offered by the State was not in fee simple. In essence, defendant argues that
plaintiff's proposed riparian easement did not under "all of the surrounding
circumstances" reasonably affect or enhance the market value of the remainder
property. This is because prior to the taking, defendant owned the property in
fee simple and now owns it subject to the storm damage reaction easement
(SDRE).
A-2413-19 15 But Weiswasser does not require that ownership rights in the condemned
property and the substitute property be equivalent. Ibid. Rather, the Court
requires consideration of "the availability and use of similar replacement
property, when, under all of the surrounding circumstances, such property would
reasonably affect the [FMV] of the remainder property." Ibid. The FMV of the
remainder property is not exclusively a matter of ownership interest.
In fact, it was the province of the factfinder to determine whether the
property offered by plaintiff was an adequate substitute to cure the loss from the
condemnation. The jury heard Graziano's testimony that the ownership interests
had changed, and the riparian easement and tidelands license were worthless.
The jury also heard Graziano's hypothetical analogy of "[y]ou can live in my
house, [and] give me your house." The jury considered all the circumstances
and found that the substitute property was reasonable. This factual finding is
supported by evidence in the record.
Defendant argues that, at a pretrial hearing, plaintiff stated it would set
forth through its expert testimony evidence that there was still a market for the
underlying fee. According to defendant, Brodowski did not introduce evidence
of the market value for the underlying fee. In fact, defendant argues, the
A-2413-19 16 underlying fee can no longer be transferred, and its property now has virtually
no marketable value.
It is true that at the pretrial hearing plaintiff stated it would set forth
evidence of the market value for the underlying fee. Brodowski provided
evidence of the value of the entire tract before and after the taking.
Nevertheless, she acknowledged the scarcity of evidence for this type of
appraisal because most vacant beach land is owned by a municipality, and
because there are few comparable sales for properties before and after placement
of a dune. In any case, both experts provided evidence of the value of the
property, and this was sufficient to comply with the requirement in Weiswasser
to determine "the availability and use of similar replacement property, when,
under all of the surrounding circumstances, such property would reasonably
affect the [FMV] of the remainder property." 149 N.J. at 337.
According to defendant, continued operation of the beach does not
mitigate its losses and is not relevant to a determination as to the value of the
remaining property. Instead, defendant argues that plaintiff should be required
to pay just compensation for the property taken, or the difference between the
before and after value as determined by the jury as $1,961,700.
A-2413-19 17 Defendant is a non-profit which operates the local beaches. Defendant
has never sold any of its property, but instead is dedicated to providing public
access to the beach for the benefit of the Bay Head community. The jury's
finding that defendant's damages were mitigated was based on competent
evidence in the record.
Defendant notes in a footnote that the judge did not address the issues
raised in the motion for the new trial, but, instead, deferred to the Appellate
Division for guidance. Rule 2:6-2(a)(5) does not permit arguments to be raised
in the footnote of a brief. Almog v. Israel Travel Advisory Serv., Inc., 298 N.J.
Super. 145, 155 (App. Div. 1997). Nevertheless, because the judge requested
guidance from this court, we will provide some brief remarks.
During oral argument on the motion for a new trial, the judge raised a
concern that defendant was receiving substitute property with inferior ownership
quality (because it was less than a fee simple, as a result of the easement) and
with less control (because defendant was not permitted to use the area where the
dune was constructed). The judge also expressed concern as to whether the jury
should determine whether substitute facilities are adequate when there is a
change in the title and quality of ownership, or whether that should be
determined by the judge, as a matter of law.
A-2413-19 18 The judge noted that in other beach litigation currently before New Jersey
courts, the parcels contain residences, and the jury must determine if the benefit
from the beach improvement project offsets the loss to the property owners. But
here, the property had no residence and instead was entirely beach front and
used for public recreation. Thus, the judge requested guidance from this court
as to whether an alteration in the title should prevent the jury from evaluating
whether the substitute property is substantially similar. The judge suggested
that if a similar matter arose in the future, a trial judge could make a preliminary
determination as to whether the quality of the title is similar, and the jury could
thereafter determine whether the usage and functioning of the property provides
an adequate remedy.
However, in State v. 1 Howe St. Bay Head, 463 N.J. Super. 312, 345 (App.
Div. 2020), we addressed a similar easement, and the court determined that "it
was reasonable for the appraisers to conclude the properties would be more
valuable after the condemnation because the Project overall would enhance
shore protection for the entire area." The quality of ownership of the parcel was
not the main consideration, but rather the judge considered the benefit to the
shore as a whole. Also, State v. N. Beach 1003, LLC, 451 N.J. Super. 214, 233-
39 (App. Div. 2017), stands for the notion that DEP, for purposes of shore
A-2413-19 19 protection, may take a perpetual easement and is not required to take a fee
simple. Even though the perpetual easement in that case, similar to the SDRE
here, impacted the fee simple ownership of the condemned land, this court
approved of the appraiser's valuation of the condemned property. Id. at 245.
We did not require the factfinder to make a separate determination as to how the
change in ownership affected the value of the condemned land. Ibid.
It is a factual determination for the jury whether the substitute property is
adequate, and part of that determination might be the change in ownership. The
key issue is not whether there is a residence benefiting from the shore protection,
because, in fact, the whole shore benefits from the project. Ibid. In our view, it
would be reasonable for the trial judge to explain to a jury the meaning of terms
used for describing ownership such as "easement" and "fee simple." However,
our case law establishes that the ultimate factual determination as to whether the
substitute property mitigates damages is a fact question for the jury.
III.
Next, defendant argues the judge erred by permitting the jury to consider
whether the substitute property interests offered by plaintiff mitigated its
damages.
A-2413-19 20 In ruling on a pretrial application, the judge agreed that defendant was not
a public entity, and therefore, the substitute facilities theory espoused in
Hackensack did not apply. The judge determined that defendant was a private
non-profit corporation, notwithstanding the Supreme Court's findings in
Matthews.
As noted, the judge instructed the jury to determine whether the property
interest offered by plaintiff was an adequate substitute for the property taken,
and whether the replacement property would "totally cure the damage caused by
the condemnation."
At oral argument on the motion for a new trial, the judge noted that had
he been the finder of fact, it might have found differently than the jury because
the level of ownership in the property changed as a result of the SDRE.
Nevertheless, the judge concluded that the adequacy of the substitute property
was a factual determination for the jury, and here, the jury verdict was supported
by the evidence.
In deciding the motion for a new trial, the judge stated:
Substitute property is not to be evaluated in terms of worthiness for an in-kind exchange for the land which was taken through condemnation. The availability of substitute property is strictly a "cost to cure" analysis.
A-2413-19 21 Comparability of substitute land requires the fact finder to undertake an evaluation of the before and after utility of the property in the condition once the substitute property has been acquired by the condemnee. Because the alternate property is a substitute by definition, it is not the same. No two properties will ever be the same, however, the fair and reasonable consideration of a substitute requires a broader evaluation. Does the substitute property remedy the damage suffered by the remainder from the taking? Does the substitute property permit the remainder to function in its highest and best use as it would have prior to the taking? The perception that no two parcels of real property are alike does not call for the reflexive and rigid rule that evidence of replacement property must be equated with the forced acquisition of the property.
The parties did not appeal the judge's determination that the substitute facilities
doctrine did not apply. Nevertheless, defendant argues that notwithstanding the
judge's determination, he applied the doctrine of substitute facilities as
enunciated in Hackensack. For example, defendant argues that on the one hand,
the judge stated he was constrained by Weiswasser, but then "reversed" himself
and conflated the doctrine of mitigation with the doctrine of substitute facilities.
Defendant surmises that perhaps the judge was trying to create a hybrid by
characterizing defendant as a quasi-public trust.
We do not agree that the judge created a hybrid valuation method or
confused the doctrines of mitigation and substitute facilities. The judge was
A-2413-19 22 clear that Hackensack did not apply because the property did not encompass
public lands, and the judge never revisited that determination. Nevertheless, as
noted, in Weiswasser, a consideration of substitute property was a necessary part
of the analysis as to whether a defendant's damages were mitigated. Thus, the
judge was correct to instruct the jury to consider substitute property in the
context of mitigation of damages.
Weiswasser and Hackensack utilize the term "substitute" for the land
offered by the condemnor. But in Hackensack, as noted, the analysis only
pertains to public lands. Here, the judge did not consider defendant's property
to be public lands, although there was support in the record for such a finding,
given defendant's devotion to promoting the public welfare in Bay Head.
Further confusing the issue, at a point, the judge referred to defendant as a
"quasi-public entity," a term that was used in Matthews to describe defendant.
The judge's point was that before the taking, defendant's sole purpose was to
promote the public welfare through the operation of the beach in Bay Head, and
after the taking this was still defendant's purpose. But the judge's statement is
not tantamount to a finding that because defendant was a public entity, the
substitute facilities doctrine espoused in Hackensack should apply.
A-2413-19 23 In response to the judge's statement that defendant was a quasi-public
entity, defendant argues at length distinguishing the holding in Matthews where
the Supreme Court found that defendant was a quasi-public entity because of its
dedication to the public good. But the analysis in Matthews would only be
relevant if the judge had applied the doctrine of substitute facilities espoused in
Hackensack. As noted, the judge declined to do so.
In any case, we do not agree that the judge intended to create a hybrid of
the valuations described in Weiswasser and Hackensack. As noted, the judge's
charge closely tracked the model jury charge for severance damages, as
discussed in Weiswasser, and was not capable of producing an unjust result.
Instead, the judge correctly instructed the jury that in a partial taking, a
defendant must mitigate damages, and part of that cost to cure analysis is
whether the substitute property offered by plaintiff is similar and adequate to
the land that was condemned.
IV.
Defendant argues that the evidence in the record did not support the jury's
verdict. We disagree.
The judge may have created some confusion during oral argument on the
motion for JNOV when he expressed concern that Brodowski did not provide a
A-2413-19 24 value for the property encumbered by the SDRE. Nevertheless, the judge
ultimately correctly determined the verdict was supported by adequate evidence
in the record.
"A jury verdict shall not be reversed as against the weight of the evidence
'unless it clearly appears that there was a miscarriage of justice under the law.'"
Kassick v. Milwaukee Elec. Tool Corp., 120 N.J. 130, 134-135 (1990) (quoting
R. 2:10-1). "[W]hat the trial judge must do is canvass the record, not to balance
the persuasiveness of the evidence on one side as against the other, but to
determine whether reasonable minds might accept the evidence as adequate to
support the jury verdict[.]" Velop, Inc. v. Kaplan, 301 N.J. Super. 32, 48 (App.
Div. 1997) (citing Kulbacki v. Sobchinsky, 38 N.J. 435, 444-45 (1962)).
A trial judge's denial of a motion for JNOV shall not be reversed unless it
"clearly appears that there was a miscarriage of justice under the law." R. 2:10-
1. Our review focuses on whether the evidence submitted to the jury, and any
legitimate inferences which can be drawn from that evidence, support the jury
verdict. Dolson v. Anastasia, 55 N.J. 2, 5-6 (1969). A jury's factual
determinations will be disturbed only if this court finds that the jury could not
have reasonably used the evidence to reach its verdict. Sons of Thunder v.
Borden, Inc., 148 N.J. 396, 416 (1997).
A-2413-19 25 This standard also applies to expert testimony. In re Accutane Litig., 234
N.J. 340, 392 (2018). We accept the factual findings of the trial judge unless
they are shown to be clearly erroneous. Allstate Ins. Co. v. Northfield Med.
Ctr., P.C., 228 N.J. 596, 619 (2017).
An expert opinion may be based upon "facts or data" so long as they are
of the type reasonably relied upon by experts in that field. N.J.R.E. 703. Experts
may not state bare conclusions, unsupported by factual evidence, which are
inadmissible as a "net opinion." Davis v. Brickman Landscaping, Ltd., 219 N.J.
395, 410 (2014).
The net opinion rule requires an expert witness to give the why and
wherefore of his or her expert opinion, not just a mere conclusion. Davis, 219
N.J. at 410 (citing Pomerantz Paper Corp. v. New Cmty. Corp., 207 N.J. 344,
372 (2011)). The failure of an expert to give weight to a factor thought important
by an adverse party does not reduce his or her testimony to an inadmissible net
opinion, if he or she otherwise offers sufficient reasons which logically support
the opinion. Rosenberg v. Tavorath, 352 N.J. Super. 385, 401-02 (App. Div.
2002).
For expert testimony to be admissible,
(1) the intended testimony must concern a subject matter that is beyond the ken of the average juror; (2)
A-2413-19 26 the field testified to must be at a state of the art that such an expert's testimony could be sufficiently reliable; and (3) the witness must have sufficient expertise to offer the intended testimony.
[DeHanes v. Rothman, 158 N.J. 90, 100 (1999).]
Expert opinions must "be grounded in 'facts or data derived from (1) the
expert's personal observations, or (2) evidence admitted at the trial, or (3) data
relied upon by the expert which is not necessarily admissible in evidence but
which is the type of data normally relied upon by experts.'" Townsend v. Pierre,
221 N.J. 36, 53 (2015) (quoting Polzo v. Cty. of Essex, 196 N.J. 569, 583
(2008)).
A judge's evidentiary rulings are entitled to substantial deference. Est. of
Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 383-85 (2010). The
judge's determination to admit evidence will not be reversed absent a finding of
abuse of discretion. Griffin v. City of E. Orange, 225 N.J. 400, 413 (2016). The
valuation of real estate generally requires expert testimony. See Torres v.
Schripps, 342 N.J. Super. 419, 430 (App. Div. 2001).
Defendant argues plaintiff did not present facts as to the value of the
remainder after the taking, or as to the effect the proposed property interests
offered by DEP would have on the value of defendant's remaining properties .
Defendant also claims Brodowski offered a net opinion because she did not
A-2413-19 27 analyze the value of the new beach land created as a result of the project, the
value of the revocable license offered by the State, or the value of the riparian
easement plaintiff offered. Notably, defendant did not object at trial to
Brodowski's opinion and did not expressly raise this argument below. However,
at oral argument on the motion for a new trial, defense counsel referred twice to
Brodowski's opinion as "net." The judge made no ruling in this regard. On
appeal, defendant states that its motion for a new trial was primarily based on
its argument that Brodowski's opinion was net. This was not, however, clear
from the record.
Issues not raised below will not be considered on appeal. Zaman v. Felton,
219 N.J. 199, 226-27 (2014). In any case, we conclude that Brodowski did not
give a net opinion.
Brodowski testified it was difficult to find comparable properties to
facilitate her appraisal. This is because most properties sold in the market place
were not beachfront parcels used as public beaches. Despite the scant market
information available to her, Brodowski gave her reasoning as to the appropriate
valuation of defendant's property before the taking and why the property interest
was enhanced as a result of the larger beach and increased shore protection. She
gave a value for the remainder property, inasmuch as she stated that the entire
A-2413-19 28 property was devalued by fifty percent, but the net value was increased by five
percent because of the benefits of the project. Brodowski clearly explained the
"why and wherefore" as to how she arrived at her analysis that there was a five
percent enhancement to the property as a result of the construction of the dune.
Given the constraints and scarcity of market comparables, her opinion was
grounded in facts and data of the type normally relied upon by experts, and also
derived from her personal observations. Townsend, 221 N.J. at 53. Thus,
Brodowski did not render a net opinion.
Next, defendant argues that because there was no evidence presented, the
jury was forced to speculate, which is evidenced by the jury verdict sheet. For
example, in question four, the jury valued the property after the placement of
the easement at $2,311,700. But according to defendant, there was no basis in
the record for this determination, given that Brodowski valued the property
before the taking at $2,311,700, and after the taking at $2.4 million. Defendant
argues that a simple calculation establishes that in Brodowski's opinion, the
property lost forty-five percent of its value, or approximately $1,040,265,
without taking into consideration mitigation. But the jury verdict sheet did not
reflect the calculations of either expert. Defendant notes that even the judge
A-2413-19 29 acknowledged at oral argument that there was no testimony as to the value of
the proposed substitute property.
But "the factfinder may accept some of the expert's testimony and reject
the rest." Torres, 342 N.J. Super. at 430. Also, "a factfinder is not bound to
accept the testimony of an expert witness, even if it is unrebutted by any other
evidence." Id. at 431.
Brodowski provided sufficient evidence to determine the difference in
value between the property before and after the taking notwithstanding the
judge's statements at oral argument. The jury verdict sheet did not indicate the
jury was confused. Instead, it showed that the jury found that the mitigation of
damages—the substitute lands given by plaintiff combined with the riparian
easement and tidelands license—mitigated defendant's damages. The jury found
that the value before and after the taking was the same. The jury was not
required to accept all of the experts' calculations. Instead, it was permitted to
accept some of Brodowski's opinion and reject other aspects of it, which it did.
Defendant argues the jury verdict was not based upon any facts in
evidence and the judge's decision was devoid of any recitation of facts or
testimony to support the jury's verdict. In his oral decision, the judge referenced
his prior written decision that contained a recitation of facts. The judge made
A-2413-19 30 findings that: the parcels consisted of vacant beach parcels; defendant was a
non-profit organization providing beach access; the commissioners made a
valuation; defendant lost vacant beach land; plaintiff created new beach land
adjacent to what was condemned; plaintiff deposited hundreds of thousands of
tons of sand to create the new beach; and defendant's expert established the value
of the remainder to be $350,000. The judge also noted Graziano's statement of
"you take my house and I'll live in yours." The judge correctly concluded there
were adequate factual grounds for the jury's decision.
In sum, Brodowski did not render an inadmissible net opinion, and there
exists sufficient evidence in the record to support the jury's verdict.
Affirmed.
A-2413-19 31