NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-3964-15T4
TOWNSHIP OF READINGTON, a municipal corporation of the State of New Jersey,
Plaintiff-Appellant/Cross- Respondent,
v.
SOLBERG AVIATION COMPANY, a New Jersey partnership,
Defendant-Respondent/Cross- Appellant,
and
JOHN HROMOHO, THOR SOLBERG, JR., WATERS McPHERSON McNEILL, PC, FOX, ROTHSCHILD, O'BRIEN & FRANKEL, LLP, THOR SOLBERG AVIATION, NEW JERSEY DEPARTMENT OF THE TREASURY, DIVISION OF TAXATION, and TOWNSHIP OF READINGTON,
Defendants. ______________________________________ Argued January 7, 2019 – Decided March 1, 2019
Before Judges Sabatino, Sumners and Mitterhoff.
On appeal from Superior Court of New Jersey, Law Division, Hunterdon County, Docket No. L-0468-06.
Richard P. Cushing argued the cause for appellant/cross-respondent (Gebhardt & Kiefer, PC, attorneys; Richard P. Cushing and Kelly A. Lichtenstein, on the briefs).
Laurence B. Orloff argued the cause for respondent/cross-appellant (Orloff, Lowenbach, Stifelman & Siegel, PA, attorneys; Laurence B. Orloff, of counsel and on the brief; Matthew T. Aslanian, and Xiao Sun, on the brief).
PER CURIAM
Nearly ten years ago, this court remanded this eminent domain litigation
to the Law Division after vacating summary judgment that had been
improvidently entered in favor of the condemnor, the Township of Readington.
We remanded this matter for trial. Twp. of Readington v. Solberg Aviation Co.,
409 N.J. Super. 282, 320, 324 (App. Div. 2009).
A marathon non-jury trial ensued, which took place over thirty-nine
intermittent days between May 2014 and January 2015. Following that trial, the
now-retired judge issued a comprehensive fifty-four-page written opinion
concluding that the Township had pursued the condemnation and the taking of
A-3964-15T4 2 defendants' property rights in bad faith. The judge accordingly dismissed the
condemnation action and awarded defendants counsel fees and litigation costs.
The award was offset by property taxes assessed on a portion of the
property, corresponding to the period of time the Township's declaration of
taking was in effect. A different judge determined the amount of the property
tax offset.
The Township appeals the judgment dismissing its condemnation action
and the associated award of counsel fees and litigation costs. Defendants cross -
appeal the tax offset, arguing it is barred as a matter of law and also was over-
calculated to include the value of a residence located on the property.
As to the Township's appeal, we affirm the trial judge's decision and his
detailed findings of bad faith. The findings are supported by abundant credible
evidence in the record, and are consistent with the applicable law. Defendants
met their burden of proof in showing that the Township's asserted reason for the
taking, i.e., open-space preservation, was pretextual, and that the condemnation
was actually motivated to stifle aviation-related activities on the property.
As our opinion will explain, our affirmance of the judgment is without
prejudice to the Township's right to pursue, if it so chooses, a new condemnation
action against defendants encompassing appropriate portions of defendants'
A-3964-15T4 3 property, so long as the taking does not conflict with the use of the property for
aviation-related activities and an associated buffer zone. The precise boundaries
of a permissible future taking must abide an updated development of facts,
ideally including testimony from current officials with the state and federal
regulatory agencies who can address the airport's projected future role.
As to defendants' cross-appeal, we reject their argument that they are
exempt from all property taxes for the period of the taking. However, we vacate
the trial court's offset and remand for the limited purpose of fixing a revised
assessment that duly reflects defendants' temporary loss of the legal right to use
the residence.
I.
The reader's familiarity with our 2009 opinion and the trial judge's
detailed recitation of the long history of this case in his 2015 written opinion is
presumed. We briefly summarize the pertinent facts and procedural history, as
follows.
The Solberg Family and the Airport
Solberg Aviation Company ("Solberg") is a New Jersey partnership that
owns in fee simple the subject property in Readington Township. The property
A-3964-15T4 4 spans approximately 726 acres, comprising facilities for the Solberg-Hunterdon
Airport ("SHA"), and surrounding farmland and open space.
The partnership's members--siblings Thor Solberg, Jr. ("Thor") 1, Lorraine
P. Solberg, and Suzanne Solberg Nagle--inherited the business and property
from their father, who had achieved wide recognition for his accomplishments
in aviation, including a knighthood by the King of Norway and a designation as
a "Great American" by President Franklin D. Roosevelt for his contributions to
national security around World War II. He established the airport in 1939, had
it recognized by the Township as a "commercial" airport two years later, and
acquired for it over the following decades the land now at issue. Since his death,
his children steadfastly attempted to keep the airport operating and viable as a
going concern.
The Property
SHA is a public use general aviation airport accommodating traffic
primarily of smaller aircraft by business and recreational clients. Its facilities
comprise one paved and two unpaved runways, a terminal building, two hangars,
1 Thor passed away during the pendency of this appeal. We intend no disrespect in referring to him by his first name to distinguish him from his siblings. A-3964-15T4 5 and other structures and equipment necessary to the airport enterprise, as well
as a house that had been used by Thor as a single-family residence.
SHA has been designated by the Federal Aviation Administration
("FAA") and the New Jersey Department of Transportation ("NJDOT") as a
"reliever airport," which may serve to reduce congestion at nearby Newark
Liberty International Airport.
SHA's physical structures are all situated within the 102-acre portion of
the property the Township designated in its declaration of taking as the "airport
facilities area," with the exception of a VORTAC tower, a navigational aid,
which lies outside. Surrounding the facilities area is SHA's "airport safety
zone," established and made subject to state regulation pursuant to the Air Safety
and Zoning Act of 1983 ("ASZA"), N.J.S.A. 6:1-80 to -88, to prevent the
creation of airport hazards detrimental to the safe operation of the airport and
the public it serves.
The airport safety zone extends beyond Solberg's property, but the portion
of it that lies within the property, according to evidence presented by the
Township at trial, comprised an area of approximately 408 acres.
Defendants introduced evidence that their property is also used for other
aviation-related activities, which occur in whole or in part outside those
A-3964-15T4 6 highlighted areas. Most prominently, that included an annual hot air balloon
festival, which has involved up to 125 balloons on much of the property,
including areas of block 56, lot 3, falling outside the facilities area or safety
zone. Blimps require a substantial amount of open space and consequently
cannot be accommodated by many other airports in the region besides SHA.
They have in the past set up "all over the property" and, in particular, have used
block 56, lot 3, and block 67, lot 2, the latter of which falls entirely outside the
facilities area, for mooring.
In addition, members of a longstanding radio-controlled model airplane
club operate their sizable models, which run about as large as an office desk, in
an area of block 56, lot 3, that falls outside the facilities area or safety zone.
The bulk of the property surrounding the airport facilities is assessed as
farmland. All told, the property comprises approximately 449.585 acres of
agricultural lands with 397.776 acres of prime farmland soils, about two thirds
of that with soils of statewide importance, 194.967 acres of woodlands, 77.857
acres of wetlands and wetland transition areas, and about 455 acres of grassland
species habitat. The property, moreover, spans two stream corridors,
specifically those of Holland Brook and Chambers Brook, and serves as a bridge
for the movement of wildlife between them. A Township expert identified these,
A-3964-15T4 7 along with the property's size, as among the reasons the municipality prioritized
the property for preservation.
The Township's Efforts with Respect to Open Space Preservation
As mentioned, the Township claimed at trial and maintains on appeal,
consistently with the text of its declaration of taking, that the condemnation was
meant in large part to foster the preservation of open space. The Township
represents approximately one tenth of Hunterdon County's land area, comprising
farms, residential suburbs, and historical villages. Roughly forty-five percent
of its greater than 30,000 total acres were developed as of the time of trial.
The Township has actively sought, since the formation of an Open Space
Committee and approval of a referendum first authorizing the necessary funding
in the late 1970s, to acquire open space and farmland for preservation,
eventually setting a goal of preserving 8000 acres of farmland but no specific
quota for open space. The property at issue here had been identified as a
prospect for acquisition for farmland preservation as early as 1979 in the
municipality's Open Space Master Plan of that year. As of the time of
condemnation, the Township had successfully preserved 11% of its acreage for
open space and about 13% as farmland, all through voluntary transactions. As
A-3964-15T4 8 of the time of trial, those figures rose to about 12% for open space and 1 7% for
farmland preservation.
Circumstances Leading to Condemnation of the Airport
Defendants, meanwhile, maintain that the condemnation was pretextual
and that its true, improper purpose was to prevent expansion of the airport.
Indeed, tensions between the airport and the surrounding community began as
early as 1967, after then-Governor Richard J. Hughes announced an intention to
recommend SHA to federal authorities as a fourth metropolitan jetport in the
region. Plans for expansion of the airport to accommodate jet traffic were
ultimately abandoned in response to public pressure, but hostility arose again in
the 1980s, when Solberg applied for and received a grant from NJDOT to extend
the pavement on its primary runway from the existing 1800 feet to its full
licensed length of 3735 feet. Although the project had already received approval
from both NJDOT and the Township, the Township issued a stop work order
just before construction began, forbidding the runway from being paved beyond
3000 feet.
Later that decade, the FAA and NJDOT, at the time anticipating Linden
Airport's closure in favor of commercial development, considered SHA as an
alternative to absorb the traffic. A committee of federal, state, and local officials
A-3964-15T4 9 conducted a feasibility study on the matter and ultimately recommended that
SHA be designated as a replacement site, requiring improvements to the airport,
including the full paving of its existing runways and taxiways. Though the
Solbergs expressed willingness to have their airport accept the extra traffic and
undertake the necessary development, the Township vehemently opposed the
plan. Indeed, local newspaper articles reported comments from the Township's
mayor openly contemplating the municipality's "fallback option" of
condemnation.
In August 1990, as the dispute continued, Thor met with then-Mayor Steve
Mirota, as well as Township attorney William Savo and Committeeperson Ron
Monaco, at which meeting Savo, in the following recorded exchange, threatened
the option of condemnation:
[Solberg]: [Y]ou're taking away my livelihood.
[Monaco]: No, we're not.
[Mirota]: Not necessarily.
[Solberg]: You know that's what -- you want to take the land.
[Monaco]: We haven't done that yet.
[Solberg]: It's our land.
A-3964-15T4 10 [Savo]: Let me tell you what our options are. We could go down ther[e] tomorrow, right? And [take] just enough to put the airport out of business. I wouldn't say anything.
[Emphasis added.]
Plans for the closure of Linden Airport never came to fruition.
In July 1993, NJDOT authorized an Airport Master Plan Study for SHA
and invited the Township to participate in the process, explaining that
community involvement and input would be "important aspects of that . . .
study." In April 1996, while the study remained ongoing, the Township
Committee passed a resolution protesting the findings of several interim reports,
fretted that SHA might transition to commercial activities, and stated that a
commercial airport was a "highly inappropriate" enterprise in a "totally rural
residential zone." The resolution further made clear that the Committee
"strongly oppose[d] any increase in [SHA's] runway length," as well as "any
type of commercial expansion that would increase the use of turbine powered
aircraft."
Another resolution followed in February 1997, challenging conclusions
drawn in the same interim reports, as well as a recent master plan draft. Again,
the Committee took issue "most notably [with] the need for a longer runway,"
asserting that the "runway length as it exist[ed] provide[d] adequate safety for
A-3964-15T4 11 existing aircraft," characterizing suggested improvements as creating a
"commercial airport in a totally rural residential zone," and reiterating that that
placement would be "highly inappropriate." It "strongly" invited the county
freeholder board to likewise pass a resolution opposing the airport's "proposed
expansion."
During the comment period for the master plan, the Township submitted
extensive objections, stating that it "formally and strenuously" objected to the
master plan conclusions. The Committee passed yet another resolution in May
1997, this time objecting specifically to the FAA's plan to increase the number
of flights utilizing the VORTAC at SHA, and another in February 1998 more
broadly opposing "any expansion" of the airport.
Tensions continued to flare after the FAA granted conditional approval to
the airport's layout and master plans in October 1998. At a January 1999
Committee meeting, the mayor promised to "continue to take bold steps to
control unwanted growth," including by "continuing to hold the line against the
expansion" of SHA, and the Committee authorized additional legal fees in
anticipation of litigation regarding the master plan. After NJDOT followed in
conditionally approving the layout and master plans, the mayor wrote a letter to
the agency expressing her and the Township Committee's "shock and disbelief"
A-3964-15T4 12 at the decision and characterizing the master plan as "inadequate, self-serving,
and in many instances inaccurate and misleading." Notably, she added:
We are convinced that we are within our rights as a Township in a state devoted to Home Rule, to defend the future health, welfare and safety of our community, and to maintain our rural atmosphere. We will not allow the degradation of our environment, as this proposed airport expansion is most certain to do. We, in conjunction with our neighbor Branchburg Township, will do everything in our power to maintain the status quo of Solberg Airport.
[Second emphasis added.]
Over the next few months, Township officials discussed the master plan's
conditional approval and its consequences with residents at two successive
Committee meetings, assuring at one that there was no credible threat of
residential development on the airport property as an alternative to expansion
and that, while the Township was "happy to be the host municipality for a quaint
recreational airport," officials would "draw a line in the sand" with regard to any
expansion. At around the same time, the Township updated its official website
with information about the Branchburg/Readington Airport Action Coalition
(BRAAC), a group opposed to airport expansion, and formally retained a law
firm explicitly for services "[p]ertaining to [a]cquisition of [l]and ."
A-3964-15T4 13 In September 1999, the Township passed a resolution opposing an
assembly bill intended to prohibit the assessment of local property taxes on
property occupied by small private airports in favor of state taxation, lamenting
that the legislation would expand the reach of NJDOT's powers and encroach on
the "home rule" exercised by the municipalities in which such airports were
situated. It passed another resolution the following summer opposing on similar
grounds other proposed legislation meant to authorize NJDOT's acquisition of
development rights for certain public use airports, pointing out that the
legislation made no provision for municipal approval, input, or even
notification, and characterizing the bill as a "travesty against the citizens of New
Jersey."
The Township ultimately announced notice of an intent to take the Solberg
airport property by eminent domain in October 2000. It adopted a relevant
amendment to its master plan the following July and solicited expert reports
evaluating the property and recounting the benefits of municipal acquisition. In
response, the Hunterdon County Agricultural Board held a public hearing and
ultimately released a report opposing the condemnation and concluding that the
proposed taking would have a negative impact on both the operation of the
airport and the Township's farmland preservation program. The county
A-3964-15T4 14 freeholder board also opposed the planned condemnation and, in a resolution to
that effect, "respectfully urge[d]" the Township "not to condemn the airport
under the guise of [o]pen [s]pace or [f]armland [p]reservation" (emphasis
added).
The Township persisted nevertheless and enacted Ordinance #27-2001 in
October 2001, authorizing condemnation of the property, but it initiated no
action and rescinded the ordinance the following year after Solberg reached an
agreement for sale of the airport with NJDOT, subject to necessary approval.
After the sale fell through a few years later, the Township introduced and then
quickly withdrew a bond ordinance ahead of the November 2005 election to fund
acquisition of Solberg's property in its entirety.
Yet potential expansion of the airport remained prominent among the
issues of that year's municipal election campaigns. Committeeperson Julia
Allen circulated campaign literature imploring voters to "stop the [a]irport's
expansion," including a flyer urging citizens to vote for her and, by extension,
"NO ON AIRPORT EXPANSION." The flyer elaborated:
Committeewoman Julia Allen and Mayor Frank Gatti stand with the residents of Readington who have spoken out strongly against the planned expansion of Solberg Airport.
A-3964-15T4 15 With airport expansion sure to destroy Readington's environment and quality of life, Allen and Gatti are currently negotiating to maintain Solberg as is.
It concluded "Vote to keep jet traffic out of Readington. Vote Frank Gatti and
Write-in Julia Allen."
The issue, moreover, was discussed at a well-publicized Township
Committee meeting soon after the election in January 2006. There, Mayor
Gerard Shamey explained that the reason recent negotiations between the
Township and Solberg concerning the airport had come to an impasse was that
"it appear[ed] that Solberg Aviation remain[ed] committed to lengthening the
runways, widening the runways, increasing the thickness of the runways with a
view towards attracting a corporate jet business environment and facility."
Later, he candidly added:
The most important thing to me and to this Committee, and I think for all of us on the Committee, is to retain decision-making power over development of the site here in Readington . . . . The thing with airports is they are unique, and once an airport is approved to handle certain types of aircraft, once an airport receives funding from the [f]ederal [g]overnment, that is the FAA, a great deal of control, if not total control is lost to the Township. Once those funds are received from the federal government, restrictions become much more difficult with operations and such . . . .
A-3964-15T4 16 Testimony from a Township aviation consultant at the same meeting likewise
emphasized the loss of local control that could attend expansion of the air port
with authorization and funding from relevant federal and state authorities. The
Mayor sent a letter to residents a few weeks later summarizing the discussion at
the meeting and reiterating that if Solberg "accept[ed] federal funding for
improvements, there [would be] an FAA preemption of local controls."
At its following meeting on February 6, 2006, the Township Committee
approved a resolution authorizing its counsel to take certain steps in anticipation
of condemnation and introduced a $22-million bond ordinance for funding the
municipality's acquisition of SHA. It then adopted the bond ordinance at its
February 21, 2006, meeting, at which Mayor Shamey again reiterated his
concerns for the municipality's power over the airport with regard to state a nd
federal authority.
Ahead of the ensuing referendum, the Township's public relations
consulting firm, retained not long before the Township began undertaking
formal steps toward condemnation, issued a "[s]trategy" memo suggesting,
among other things, that Readington representatives advocate that an affirmative
vote on the referendum would "stop[] outsiders from taking over our
government." The firm also prepared two "frequently asked questions"
A-3964-15T4 17 documents, which the township distributed to the public prior to the election,
and which included the following response to the inquiry of whether the
Township could "regulate or prevent development at the airport without buying
these rights":
[Municipal] decisions are subject to review and overrule by NJDOT, and in some cases the FAA . . . . Two recent New Jersey court decisions have upheld the supremacy of state priorities over local concerns . . . . So long as the Solberg family owns the rights to develop their property, they are free to pursue an expansion of the airport into a regional jetport. The Township's legal counsel has explained at public hearings that acquiring land and development rights is the only way for the Township to guarantee that the airport is preserved as it is today.
The bond referendum ultimately passed with an affirmative vote of 56%, and
the Township adopted the ordinance authorizing the taking and spawning this
litigation on July 11, 2006.
The Township's Filing of a Complaint in 2006
The Township filed a verified complaint on September 15, 2006, to
acquire by condemnation the development rights to the approximately 102 -acre
portion of Solberg's property comprising SHA's "airport facilities" and fee
simple title to the 624-acre balance of the property. It filed a declaration of
taking to that end and deposited $21,378,000, representing its estimate for the
A-3964-15T4 18 fair market value of the property, into the Superior Court Trust Fund Unit on
October 4, 2006.
Defendants Solberg and Thor (collectively, defendants) filed an answer,
counterclaim, and third-party complaint2 on October 20, 2006.
The 2008 Summary Judgment Rulings
On October 26, 2007, after discovery had been completed, both sides filed
motions for summary judgment. The trial court issued a written opinion and
pair of orders on January 16, 2008, granting the Township's motion and denying
defendants' own motion, thereby permitting the condemnation to proceed, but
granted a stay of her decision pending appeal. Defendants timely appealed.
2 Defendants' counterclaim and third-party complaint requested, among other things, a mandatory injunction requiring the Township and its committeepersons to enact, in compliance with the ASZA, an ordinance designating the airport as a conforming use on the land it occupies. The Township enacted an ordinance purportedly conforming with that legislation, which ordinance became the subject of a prerogative writ action by Solberg and, in turn, an interlocutory appeal, Docket No. AM-106-16T4, that the Township sought to consolidate with this one. We denied its motion for leave to appeal, and denied its motion to consolidate without prejudice to any similar application it might bring upon resolution of the prerogative writ action. That action has since been disposed of below, and our docketing system shows no record of any appeal.
A-3964-15T4 19 This Court's 2009 Reversal
In our published opinion issued on August 19, 2009, we reversed the grant
of summary judgment to the Township, affirmed the denial of summary
judgment to defendants, and remanded the matter for trial. Solberg Aviation
Co., 409 N.J. Super. at 320, 324.
The Remand and the Marathon Trial
Following considerable motion practice entailing two unsuccessful
attempts by the Township to amend its complaint and the dismissal of three of
defendants' four counterclaims in favor of their resolution in the parallel
prerogative writ matter, Judge Paul W. Armstrong presided over trial in this
condemnation action from May 8, 2014, to January 22, 2015.
Judge Armstrong's May 2015 Opinion
Judge Armstrong issued a lengthy opinion on May 4, 2015, finding that
the condemnation was invalid in its entirety, revesting fee simple title in the
property to Solberg, and granting other related relief, and entered an order to the
same effect on May 20, 2015.
The judge concluded that the evidence surrounding the condemnation
ordinance "clearly and convincingly" demonstrated that its stated reasons were
merely a "pretext for Readington Township's true purpose, which was to limit
A-3964-15T4 20 the airport's capacity to remain economically competitive and to limit its
Specifically, the judge cited evidence of the Township's longstanding
hostility to the airport and its efforts to oppose any expansion during the years
leading up to condemnation, particularly the chain of events following the
release of the final master and airport layout plans. The judge thoroughly
recounted testimony from Township officials involved in initiating the
condemnation action, and notably found, in the context of the record and in light
of his own observations of the witnesses' demeanor, their testimony "un-
forthright, evasive, untrustworthy, argumentative, [and] lacking credibility."
Indeed, he concluded their testimony "reveal[ed] a studied attempt to obscure
the true purpose of the condemnors in the instant taking."
Judge Armstrong went on to consider defendants' claim of arbitrariness,
finding that the Township's purported goal of open space preservation was a
valid public purpose, albeit not the true one. He found that, in light of
substantial expert testimony introduced at trial, the Township's asserted purpose
did not outweigh the significant public benefit conferred by the airport. The
evidence did not show that the taking was either reasonable or necessary,
A-3964-15T4 21 particularly in light of the abundant open space already preserved in the
municipality.
The judge concluded his analysis with these important findings:
Regardless of whether certain parcels are preempted by state law and others are open to condemnation under open space designation, it is clear . . . that the objective evidence depicts nothing less than deliberate subterfuge on the part of Readington Township in its efforts to obfuscate the desire to preclude airport expansion under the auspices of environmental policy.
The Township's bad faith in that regard thus gave rise to a "manifest abuse of
the power of eminent domain," which warranted invalidation of the entire
The trial judge denied the Township's motion for reconsideration on June
10, 2015.
Post-Trial Issues
With respect to the two primary issues that remained outstanding, the
court appointed a special master to determine the quantum of fees and expenses
due to defendants for the failed condemnation pursuant to N.J.S.A. 20:3-26(b),
and ordered an appraisal of the value of the 102-acre facilities area to the extent
left unencumbered by the Township's declaration of taking and the consequent
property taxes due while the declaration of taking remained in effect.
A-3964-15T4 22 The parties ultimately entered into a consent order on January 22, 2016,
fixing the fee award at $3,027,705, consistently with the special master's report
and recommendation, and a different trial court judge entered an order on March
29, 2016, awarding a net credit of $206,916.42 against that figure to account for
property taxes, as calculated in light of the appraisal. The judge entered an order
awarding additional attorney fees and expenses to Solberg, thus resolving the
only issue that remained outstanding, on April 6, 2016.
The Township appealed. Solberg filed a cross-appeal, challenging only
the assessment of property taxes.
II.
We begin with a discussion of the Township's appeal. Represented by
new counsel, the Township argues the trial judge erred in concluding this
condemnation action was brought in bad faith and that its effort to take Solberg's
future development rights is arbitrary and capricious. The Township claims the
judge's findings are contrary to the weight of the evidence and inconsistent with
legal principles.
Among other things, the Township argues the judge erred in two
evidentiary rulings: (1) excluding from consideration a transcript of an interim
decision of a different trial judge (who, parenthetically, is also now retired) in
A-3964-15T4 23 an oppressed shareholder dispute among the Solberg siblings 3; and (2) admitting
"net opinions" presented in testimony from Solberg's aviation expert, Arlene
Feldman.
The Township further argues that the judge's finding of bad faith did not
suffice to undermine the entire condemnation. It asserts the judge failed to carry
out our direction on remand to determine which portions of the property fell
inside or outside the airport facilities area and safety zone and to evaluate
Solberg's challenge to the condemnation with respect to each portion
accordingly.
Additionally, the Township asserts the condemnation did not conflict with
any superseding interest of state or federal aviation authorities concerning the
regulation or development of the airport, that the condemnation would achieve
its stated purposes of airport and open space preservation and conservation, and
that the condemnation was otherwise reasonable and necessary.
We have carefully considered each of these arguments. In doing so, we
have been keenly mindful of the well-established principle that a trial judge's
findings of fact after a bench trial are entitled to deference on appeal so long as
they are supported by sufficient credible evidence in the record. Rova Farms
3 Nagle v. Solberg, Docket No. HNT-C-14022-11 (Ch. Div. May 5, 2014). A-3964-15T4 24 Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 483-84 (1974). That is
particularly so where those findings depend on the court's credibility
determinations made after a full opportunity to observe the witnesses testify,
Balsamides v. Protameen Chems., Inc., 160 N.J. 352, 367-68 (1999), or, more
broadly, on its "feel of the case," State v. Johnson, 42 N.J. 146, 161 (1964). By
contrast, a trial court's "interpretation of the law and the legal consequences that
flow from established facts are not entitled to any special deference," and are
subject to de novo review. Manalapan Realty, L.P. v. Twp. Comm. of
Manalapan, 140 N.J. 366, 378 (1995).
Having applied these principles of appellate review, we affirm the trial
court's invalidation of the Township's present condemnation action,
substantially for the cogent reasons articulated in Judge Armstrong's
comprehensive written opinion. The judge's decision is legally sound and amply
supported by substantial evidence in the record. His evidentiary rulings were
not an abuse of discretion, and his analysis of the proofs was logical and clear.
We do add several comments and caveats.
As we recognized in our opinion remanding this case a decade ago, the
Eminent Domain Act ("EDA"), N.J.S.A. 20:3-1 to -50, confers broad authority
on municipalities to acquire private property for public use by eminent domain .
A-3964-15T4 25 Solberg Aviation Co., 409 N.J. Super. at 310 (citing Deland v. Twp. of Berkeley
Heights, 361 N.J. Super. 1, 19 (App. Div. 2003)). That authority can include
the purpose of preserving land for open space. Mount Laurel Twp. v. MiPro
Homes, L.L.C., 379 N.J. Super. 358, 371-72 (App. Div. 2005), aff'd, 188 N.J.
531 (2006).
Our courts "traditionally have granted wide latitude to condemning
authorities in determining what property may be condemned for 'public use,'"
Twp. of W. Orange v. 769 Assocs., 172 N.J. 564, 572 (2002), and, in particular,
accord a presumption of validity and considerable deference to a municipal
ordinance authorizing condemnation, Borough of Essex Fells v. Kessler Inst. for
Rehab., Inc., 289 N.J. Super. 329, 337 (Law Div. 1995). Such a presumption
may be overcome by an "affirmative showing of fraud, bad faith[,] or manifest
abuse." Twp. of W. Orange, 172 N.J. at 571 (quoting City of Trenton v. Lenzner,
16 N.J. 465, 473 (1954)).
As we reaffirmed several weeks ago in Borough of Glassboro v.
Grossman, ___N.J. Super. ___, ___ (App. Div. 2019) (slip op. at 17), a
municipality's eminent domain powers are not boundless, and the municipality
cannot "take a parcel arbitrarily or capriciously, or based on fraudulent conduct
or bad faith motives." See also Casino Reinvestment Dev. Auth. v. Birnbaum,
A-3964-15T4 26 ___ N.J. Super. ___ (App. Div. 2019) (applying similar principles to an eminent
domain action by a state agency).
The term "bad faith," as pertinent here, "generally implies the doing of an
act for a dishonest purpose" and "'contemplates a state of mind affirmative ly
operating with a furtive design or some motive of interest or ill will.'" Essex
Fells, 289 N.J. Super. at 338 (quoting Lustrelon Inc. v. Prutscher, 178 N.J.
Super. 128, 144 (App. Div. 1981)). That said, when entertaining a claim of bad
faith specifically in the condemnation context, our "courts traditionally
distinguish between the motives of the individuals who adopted the legislation
and the purposes of the condemnation itself." Solberg Aviation Co., 409 N.J.
Super. at 311-12.
As we recognized in our 2009 opinion in this case, "'there may be
situations where a court should not take at face value what the legislature has
said'" as to the purpose of a condemnation action. Solberg Aviation Co., 409
N.J. Super. at 319 (quoting Franco v. Nat'l Capital Revitalization Corp., 930
A.2d 160, 169 (D.C. 2007)). Even "when the condemning authority's stated
purpose is preservation of open space and the condemnation will likely achieve
that purpose," a court may nonetheless "examine the stated public purpose of a
condemnation when that condemnation infringes on an important state interest
A-3964-15T4 27 or otherwise suggests a true purpose that is discriminatory or illegal." Id. at
319-20.
In MiPro, we considered the validity of an ordinance authorizing the
acquisition of property within a municipality explicitly for purposes of op en
space, farmland, and historic preservation and parks and recreation, but where
evidence showed that the motive underlying the ordinance was a desire to
impede residential development. 379 N.J. Super. at 363. The particular parcel
of property at issue, which had initially been intended for development of an
assisted living facility with units available to low- and moderate-income
residents, became a target for acquisition by the municipality only after it was
sold to a developer who planned instead to construct twenty-three single-family
homes. Id. at 365-66.
We concluded in MiPro that, even if the primary goal of the municipality's
open space program had been to impede residential development, and the
municipality had no immediate plans to put the property acquired to active use,
the municipality's resort to the condemnation process to acquire the property for
that purpose nonetheless did not constitute either bad faith or an abuse of its
power of eminent domain. Id. at 375-76. We explained that the municipality's
concerns for the consequences of residential development, including increased
A-3964-15T4 28 traffic, pollution, and stress on municipal services, were legitimate, and that the
condemnation served both the goal of addressing those legitimate concerns and
the stated purpose of preserving open space. Id. at 376. But we cautioned that
at issue there was "not a case in which a condemnation action ostensibly brought
for a legitimate public purpose, such as acquisition of additional open space,
was actually brought for a discriminatory reason or other improper motive." Id.
at 377 (emphasis added).
Here, defendants asserted and presented evidence at trial of an improper
purpose for the condemnation, namely that it was undertaken by the Township
to prevent the expansion and improvement of the airport in a manner beyond the
municipality's ordinary zoning authority. In our prior opinion, we made clear
that, while the Township retained zoning power with respect to property
comprising an airport, such power was "narrowly circumscribed." Solberg
Aviation Co., 409 N.J. Super. at 307-08. The exercise of municipal authority
must conform with requirements imposed by federal and state law and regulation
regarding the location and operation of airports. Ibid. Even then, local power
remains subject to override by state and federal aviation authorities. Ibid.
Before our remand, the trial court here initially granted summary
judgment to the Township, concluding that defendants had failed to make a
A-3964-15T4 29 sufficient showing that the condemnation had been undertaken in bad faith for
that improper purpose. We reversed that motion ruling. Id. at 324. In doing so,
we observed that, even considering the evidence in the light most favorable to
the Township, there was no support for a finding that the condemnation of
development rights to property within the airport facilities area would actually
serve its stated purposes of preservation of open space, the airport, or
community character. Id. at 312-14. We noted that the objective context
suggested that the decision to condemn those rights had been tainted by an
inappropriate desire to control the airport's operations. Id. at 314-15. We
reached the same conclusion with respect to the Township's taking of title to any
property within the airport's safety zone, adding that such action would not
likely preserve any additional open space than would attend ordinary operation
of the nearby airport. Id. at 315-16.
As we stated:
In sum, defendants' evidence strongly suggested that the Township's true purpose in condemning the land within the airport facilities area and safety zone was to secure ultimate control over airport growth and expansion. Because this purpose is contrary to express State purposes and beyond the power delegated to the Township by the Legislature, the condemnation of any parcels falling within the facilities area or safety zone must be set aside and determined after a full hearing on the merits. If any parcels fall outside of the facilities
A-3964-15T4 30 area and safety zone, the condemnation of those parcels must be revisited consistent with MiPro.
[Id. at 320 (emphasis added).]
We further noted that defendants could appropriately raise the issue of the
public purpose served by the airport in establishing its claim for the arbitrariness
of the condemnation. Id. at 322-23. Based on the then-existing summary
judgment record, we noted that defendants had presented "substantial evidence,"
both of the existence of that purpose and its impairment by the condemnation,
thereby raising a dispute of material fact necessitating trial. Id. at 323.
Consequently, we directed that:
As part of our previously ordered remand, the court must conduct a trial on defendants' arbitrariness claim. If the court determines that defendants have made a prima facie showing of arbitrariness, then the Township should be required to prove that the condemnation is reasonable and necessary. In analyzing the reasonableness of the condemnation, the court should consider the public purpose served by the airport as compared to the public purpose to be achieved through the condemnation. With regard to necessity, the court should consider the amount of open space already available to the Township, how defendants' property fits into the Township's existing plans for continuous greenways, and whether the Township's goals could be achieved with a lesser taking.
[Ibid.]
A-3964-15T4 31 The trial court carried out that direction and presided over a lengthy trial
that spanned nearly a year. After meticulously considering the trial proofs,
Judge Armstrong concluded in his detailed opinion that not only were there
"substantial" indicia of bad faith and arbitrary conduct on the part of the
Township (as we had preliminarily detected), but that the proofs clearly
established such improper motives and arbitrariness. We uphold the judge's
findings, affording them the due deference they deserve. We also agree with
Judge Armstrong that the proven bad faith and arbitrariness taint the entirety of
this eminent domain action, and not just a portion of it.
The Township's claims of evidentiary error do not warrant setting aside
the judge's findings. The judge reasonably found that the Solbergs' intrafamily
oppressed shareholder litigation has little or nothing to do with the issues
presented in this case, or that it had any bearing upon the bona fides of the
municipal decision to condemn defendants' property. The court did not
misapply its wide discretion under N.J.R.E. 403 to exclude from this case the
transcript from that separate lawsuit.
Nor are we persuaded that the judge was obligated to reject the testimony
of defendants' aviation expert as inadmissible net opinion. The expert, a former
Director of the State Division of Aeronautics, sufficiently provided the "whys
A-3964-15T4 32 and wherefores" for her opinions about the airport's public purpose. Townsend
v. Pierre, 221 N.J. 36, 54-55 (2015). We discern no abuse of discretion in the
judge's admission and consideration of her expert views. In re Accutane Litig.,
234 N.J. 340, 391 (2018) (reiterating that an abuse-of-discretion scope of review
generally applies to appeal of evidentiary rulings by civil judges).
In affirming the trial court's findings of arbitrary and bad faith conduct
that underlie the present eminent domain case, we must make clear, however,
that we do so without prejudice to the Township's ability to pursue a future
eminent domain action concerning portions of the Solberg parcel that is suitable
in scope and not tainted by bad faith motives.
By way of analogy, this court similarly adopted a "without prejudice"
disposition in the Glassboro v. Grossman case, in which we ruled that although
the municipality had not shown in that case "reasonable necessity" to acquire
the landowners' parcel, the municipality could bring a new complaint that was
properly supported by such a showing of necessity. ___ N.J. Super. at ___ (slip
op. at 26, 29-30). Similarly here, the Township is not precluded from bringing
a future condemnation case based upon good faith motives and with non-
arbitrary objectives and dimensions.
A-3964-15T4 33 We reject defendants' assertion that the trial court's decision confers, in
essence, a blanket and perpetual protection of their entire 700-plus-acre tract
from the Township's eminent domain powers. To be sure, as we previously
noted in our 2009 opinion, the "airport facilities" area and the "airport safety
zone" portions of the property are presumptively insulated from condemnation,
due to the preemptive federal and state regulatory authority over airport s and
aviation. But we cannot and need not offer more guidance than that about a
future lawsuit that may never come to fruition. See Crescent Park Tenants Ass'n
v. Realty Equities Corp. of N.Y., 58 N.J. 98, 107 (1971) (noting that our courts
generally do "not render advisory opinions or function in the abstract").
We are acutely mindful that our 2009 opinion had anticipated that, on
remand, the parties and the trial court would have been able to identify with
precision and metes and bounds designations, "which, if any, of the seven
parcels named in the Township's condemnation action fall outside of the airport
facilities area and safety zone." Solberg, 409 N.J. Super. at 320. Unfortunately,
on reflection, it appears that our premise of feasibility and our instruction in that
regard was not easily or sensibly capable of being fulfilled.
Among other things, the proofs at trial showed that some of the areas
outside of what might be considered such airport facilities and safety areas have
A-3964-15T4 34 at times been used for the balloon events and other aviation-related purposes.
The trial judge in his decision frankly noted that "[t]he evidence presented by
both parties shows that there is continued uncertainty about whether any
particular block and lot falls outside the airport's zone of operations." The judge
added that "[s]uch specific determinations are contingent upon the final layout
of the airport and the implementation of one of the proposed plans [for its future
use or possible expansion]."
We now appreciate the practical difficulty the trial judge encountered in
considering whether parcel-by-parcel clear lines can be drawn in determining
what specific portions of the whole parcel are beyond the municipality's
condemnation powers. As it turned out, the judge did not analytically need to
resolve this parcel-designation problem because he determined that the
complaint was invalid in its entirety due to bad faith and arbitrary conduct.
We respectfully decline the parties' request that we attempt to resolve this
unresolved parcel-designation question ourselves on the present record, by
invoking our discretionary original jurisdiction under Rule 2:10-5. Among other
things, as Judge Armstrong reasonably perceived, the "continued uncertainty"
stems largely from the uncertainty of the future plans for the airport and the
policies and expectations of federal and state aviation officials. The record is
A-3964-15T4 35 very stale on this point and is based upon documents from more than a decade
ago, including a letter from a former NJDOT Commissioner who is now
deceased. No current NJDOT or FAA officials testified at trial. It is highly
speculative to presume that the quite-dated documentary record reflects what
regulatory authorities now regard as the future appropriate role of this airport
within the region's overall aviation scheme. Although we by no means
encourage future litigation, we suggest that if another condemnation action is
filed by the Township and contested by defendants, the court be supplied with
testimony from one or more current aviation officials with responsibility for the
airport.
In sum, we affirm the trial court's decision invalidating the present action
and dismissing the Township's complaint, without prejudice to a possible futur e
complaint.
III.
We can address more succinctly defendants' cross-appeal on the tax
assessment issue.
First, we reject defendants' position that the Township's eminent domain
action exempted them from liability for real property taxes on the entire parcel ,
including the 102 acres within the airport facilities' zone. The EDA explicitly
A-3964-15T4 36 contemplates that a condemning authority may take less than a fee simple
interest in property, as the Township here purported to do with respect to the
airport facilities area:
The title to property condemned and acquired by the condemnor hereunder, shall be a title in fee simple, free and discharged of all right, title, interest and liens of all condemnees, and shall include all the right, title and interest of each condemnee therein, provided, however, that if the complaint or any amendment thereof shall specify a lesser title, the lesser title so specified shall be the title condemned and acquired.
[N.J.S.A. 20:3-20 (emphasis added).]
Where that situation is involved, for example, as with a leasehold or
easement, our Supreme Court has explained that the condemnor may take that
lesser interest "separate and apart from, and without the condemnation of, the
fee simple." Town of Kearny v. Discount City of Old Bridge, Inc., 205 N.J. 386,
392-93, 405-06 (2011). The corollary is that, once condemnation is complete,
the property owner continues to hold title, albeit to property that no longer
includes the interests taken through the condemnation, and that taxes may
continue to be assessed on the property accordingly. See Borough of Englewood
Cliffs v. Estate of Allison, 69 N.J. Super. 514, 516-18, 530 (App. Div. 1961)
(where property was restricted by terms of decedent's will to its use as a park
for public benefit, property was not exempt from taxation, but assessment could
A-3964-15T4 37 not "include elements of value . . . transferred to the community at large in the
form of public rights"). The same result must obtain, as here, for the period that
the declaration of taking remained in effect, even if the condemnation ultimately
failed.
The trial court's conclusion that Solberg remained liable for property taxes
on the 102-acre parcel comprising the airport facilities area was therefore sound.
Defendants' arguments to the contrary provide no grounds for reversal.
We also reject the Township's contention that the incidental tax issues in
this case were decided in the wrong forum and now must be transferred to the
Tax Court. Given the idiosyncratic and unusually extensive nature of this
marathon litigation dating back to 2006, we discern no reason to have the tax
issues at this very late stage referred to a Tax Court judge.
That said, we do agree with defendants' contention that at least one aspect
of the trial court's tax ruling requires modification. Their challenge to the
amount of the assessment focuses solely on the value of the right to use the
property's single-family residence, which Thor undisputedly used at least "at
times" during the period the declaration of taking remained in effect.
The parties quarreled over whether the assessment should account for the
use of that residence. Defendants argued that it should not, since the declaration
A-3964-15T4 38 of taking made no explicit exemption for residential use. The Township
contended that it should, noting that defendants nonetheless could and did enjoy
continued use of the residence while the declaration of taking remained in effect.
Since the special master was not qualified to resolve this legal issue, he
arrived at two separate valuations based on his research and the parties'
submissions. He adopted a cost approach for both valuations, extrapolating the
value of the land as of the relevant dates from contemporary sales of comparable
properties, either with a residential right of use in the first instance or without
that right in the second, and adding to those estimates the depreciated value of
improvements represented by the structures found on Solberg's property. He
then calculated the property taxes due based on those figures.
Following submission of the special master's report, the trial court
concluded that the better approach was to value the property with a residential
right of use. It acknowledged that the declaration of taking carved out no
specific exemption for continued use of the residence, but believed that its actual
"continued use during the period," to which defendants admitted, "require[d]
that the tax assessment reflect as much." Further, it found that the special
master's analysis, based on sales of properties on which a comparable single-
A-3964-15T4 39 family house could be constructed, was sound, accepted his determination as
adequate, and set the assessment accordingly.
Defendants maintain on appeal that the property should not have been
assessed with a residential right of use. Relying on our opinion in the prior
appeal, they assert that liability for taxation turned on the holding of title – rather
than possession of the property – once the Township filed its declaration of
taking. Because, as the trial court acknowledged, the declaration of taking did
not explicitly leave defendants with a residential right of use, they reason that
title to the property could not include such an interest and, consequently, that an
appraisal of the value of the property must exclude that interest for taxation
purposes.
Defendants acknowledge that the residence's physical structure does
remain on the property, but note that the special master had included the value
conferred by that structure in his appraisal of the property even without a
residential right of use. They add that, because the determination whether to
include the value of that right in the final assessment was a purely legal one,
depending as it does on interpretation of the declaration of taking, the court's
decision in that regard should not be entitled to any deference on appeal.
A-3964-15T4 40 Defendants' argument concerning the tax treatment of the residence is
correct. While it may be, as the trial court emphasized, that defendants
continued to enjoy residential use of the property throughout the proceedings,
we made clear in our prior opinion that the vesting of title and right of possession
were distinguishable concepts under the EDA, and that liability for taxation
turned on the former rather than the latter. Solberg Aviation Co., 409 N.J. Super.
at 326, 329. As we have already discussed, liability must be limited to the value
of the property retained by the taxpayer, see Estate of Allison, 69 N.J. Super. at
530, which may be ascertained here only from the declaration of taking.
The declaration of taking specifies that the Township sought to acquire
only "development and easement rights" to the airport facilities area. But, rather
than explicitly enumerating the rights it was thereby taking, which may have
proved impossible as a practical matter, the Township instead explicitly
enumerated the rights with which defendants would be left after the taking,
specifically "conservation and passive recreational use, as well as agricultural
use, airport uses and uses ancillary to a principal airport use." It appropriately
then went on to identify which specific uses would be classified as ancillary to
the principal airport use.
A-3964-15T4 41 On its face, the declaration of taking left no authorized uses to defendants
other than those enumerated, and none of the uses enumerated were residential.
The consequence is that, while the Township never took physical possession of
the structure and thereby prevented defendants from using it as a residence, the
declaration of taking nonetheless removed a right to such use from the set of
property interests comprising the title retained while the document remained in
effect.
Because the assessment the trial court adopted, as a matter of law, does
not reflect that restriction on the property, its judgment is reversed in that narrow
respect. The matter is remanded for the limited purpose of fixing a modified
assessment that excludes a residential right of use. No other issues may be raised
on remand.
IV.
We conclude with a parting observation. The present litigation has carried
on for more than a dozen years. Presidents and Governors have come and gone.
And babies who were born when this case started will soon become teenagers.
During that time considerable public and private funds have been expended on
the case, with many days of proceedings. Although we appreciate the fine
advocacy of both sides, we respectfully suggest that, before any further litigation
A-3964-15T4 42 is pursued, the parties might consider renewing their efforts to bring an end to
this seemingly-interminable battle with an amicable resolution. If such a
resolution is not desired or attained, however, the trial court is surely available
for the filing of a new complaint.
Affirmed in part and remanded in part. We do not retain jurisdiction.
A-3964-15T4 43