State of New Jersey, Etc. v. 1.581-Acres of Land in the Borough of Point Pleasant Beach

New Jersey Superior Court Appellate Division·Decided November 4, 2024·No. A-1761-22·Unpublished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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-1761-22

STATE OF NEW JERSEY, by the DEPARTMENT OF ENVIRONMENTAL PROTECTION,

Plaintiff-Appellant,

v.

1.581-ACRES OF LAND IN THE BOROUGH OF POINT PLEASANT BEACH, OCEAN COUNTY, NEW JERSEY, and BAY POINTE DUNES HOMEOWNERS ASSOCIATION, INC., a New Jersey Corporation, Fee Owner,

Defendants-Respondents.

Submitted October 9, 2024 – Decided November 4, 2024 Before Judges Mayer, Rose and DeAlmeida.

On appeal from the Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-2898-17.

Rutter & Roy, LLP, attorneys for appellant (Brian W.

Keatts, on the briefs).

Bathgate, Wegener & Wolf, attorneys for respondent Bay Point Dunes Homeowners Association, Inc. (Peter H. Wegener, on the brief).

PER CURIAM Plaintiff New Jersey Department of Environmental Protection (Department) appeals from a September 27, 2022 jury verdict awarding $964,000 to defendant Bay Pointe Dunes Homeowners Association, Inc. (Bay Pointe) as just compensation for the Department's taking of 1.581 acres of beachfront property owned by Bay Pointe (Property). The Department also appeals from a January 4, 2023 order denying its motion for a new trial or, alternatively, remittitur. We affirm both orders on appeal.

We recite the facts from the trial record. Bay Pointe owns property in Point Pleasant Beach, known as Lots 2, 3, and 4 in Block 179.04. The Department sought to construct a dune and berm system to protect coastal communities from storm damage (Project). To complete the Project, the Department required a Storm Damage Reduction Easement (SDRE) across the Property.

The Department exercised the power of eminent domain and filed a condemnation action to acquire the Property to complete the Project. The parties

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agreed the valuation date for the Department's taking of the Property was October 16, 2017.

As of the taking date, there were no structures on the Property. The parties acknowledged the Property was once a privately owned beach. However, the Department used federal funds for the Project, the parties acknowledged the Property allowed unrestricted beach accessible to the general public.

The Project included construction of a twenty-two-foot dune and extension of existing berms. According to the Department, the Project would create 42,000 square feet of additional beach area.1 Further, under the Project, the Department would renourish the area, if needed, every four years at no cost to Bay Pointe.

Because the parties did not agree on the amount of compensation due Bay Pointe as a result of the Department's taking of the Property, the matter was scheduled for a trial. Prior to trial, the parties exchanged expert appraisal reports proffering divergent opinions regarding the value, or "just compensation," to be paid to Bay Pointe. In anticipation of trial, the Department retained Donald

1 The Department proffered evidence that the Property's usable beach area would increase by thirty-eight percent upon the Project's completion.

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Moliver, Ph.D., as its expert appraiser and Bay Pointe retained Robert Gagliano as its expert appraiser.

Prior to trial, the Department moved in limine to preclude Gagliano's use of an "Easement Impact Chart" (Chart). In partially granting the Department's motion, the judge prohibited Gagliano from referring to any outside expert resources in generating the Chart. Further, the judge allowed Gagliano to use the Chart so long as Gagliano did not mention the name of the Chart's original creator or the creator's article explaining the purpose of the Chart. The judge also permitted Gagliano to tell the jury the Chart reflected his methodology in arriving at an award of just compensation.

The jury heard testimony from September 20, 2022 through September 27, 2022. In addition to the expert appraisal testimony, the jury heard testimony from Dr. Stewart Farrell, the Department's expert in marine science and coastal research. Dr. Farrell described the benefits to be conferred on the Property as a result of the Project. Specifically, Dr. Farrell explained the Project's enhanced storm damage protection for the area.

The Department also presented testimony from Keith Watson, who worked at the United States Army Corps of Engineers and managed the Project. Watson testified the SDRE required public access to the Property based on the

A-1761-22

use of federal funds to complete the Project. Watson agreed the SDRE was a "perpetual and assignable easement . . . to . . . operate, maintain, . . . and replace a public beach." Watson told the jury the "perpetual" language meant the Property was "subject to public use and access in perpetuity."

The Department also offered testimony from William Dixon, who was the director of the Department's Division of Coastal Engineering. Dixon explained the SDRE allowed Bay Pointe to operate the beach subject to the right of public access. According to Dixon, Bay Pointe could not profit from any fees collected for the public's use of the Property.

In support of its valuation for the Property, the Department presented Moliver's appraisal testimony. Moliver admitted the Property's only reasonable use after the Department's taking was as a public beach, and the Property lacked any economic use "on a commercial basis." Further, before the taking, Moliver agreed Bay Pointe "could always sell the [P]roperty for a private use." According to Moliver, the Property's market value prior to the taking was $880,000, and its market value after the taking, with mitigation,2 was $923,700.

2 In his appraisal report, Moliver explained mitigation "consider[ed] the added benefit of the expanded beach area that [would] be constructed as part of the Project and a Tidelands license that the owner may obtain from the [S]tate to use the new beach area for its operation."

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Using these values, Moliver concluded $6,300 represented just compensation for the Property.

In support of its valuation for the Property, Bay Pointe presented Gagliano's testimony. In arriving at his calculation of just compensation, Gagliano prepared an appraisal report and Chart.3 According to Gagliano, the Property lost ninety-five percent of its value as a result of the Project. Specifically, Gagliano testified the market value of the Property before the taking was $1,530,000, and the market value after the taking was $80,000. Thus, he calculated $1,450,000 as just compensation for the Department's taking of the Property.

After considering the testimony, reviewing the documentary evidence, and hearing the judge's instructions, the jury awarded the sum of $964,000 to Bay Pointe representing just compensation for the Property.

Three weeks later, the Department filed a motion for a new trial or, alternatively, remittitur. In a January 4, 2023 order, the judge denied the motion in its entirety.

The Department appeals from the jury's awarding $964,000 as just compensation for its taking of the Property. Specifically, the Department argues

3 The Chart was the subject of the Department's in limine motion.

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the judge used a confusing jury verdict sheet and provided flawed jury instructions. It further contends the judge made incorrect evidentiary rulings during the trial. The Department also asserts comments by Bay Pointe's counsel during summation were improper and inflammatory. Based on these asserted trial missteps, the Department contends the judge erred in denying its motion for a new trial or remittitur. We reject these arguments.

I.

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