State of New Jersey, by Comm’r of Transportation v. St. Mary’s Church Gloucester, decided October 10, 2012.

The property owner in this case challenged the partial taking of its property on the basis of the State of New Jersey’s failure to conduct pre-complaint bona fide negotiations and to reasonably disclose the manner in which the amount of the State’s offer was calculated as required by N.J.S.A. 20:3-6. The trial court denied the owner’s motion to dismiss the condemnation complaint and the Appellate Division affirmed.

Among other things, the defendant contended that in addition to two appraisal reports by different appraisers that the State did provide, the State should also have provided during pre-complaint negotiations the following: 1) the “addendum memo” identified in the appraisal report on which the State based its offer referring to revisions and modifications, in response to the State’s review appraiser; and 2) the State’s “review appraisal”.

As to the addendum memo, the trial court concluded that, as this did form the basis of the State’s offer, it should have been provided as part of pre-complaint bona fide negotiations.  However, the court characterized the State’s failure as a “de minimis” infraction and observed that, with limited exceptions, the information contained in the addendum memo was contained in the offer appraisal report provided to the owner. The Court did order the State to produce the addendum memo and allowed time for additional post-complaint negotiations, and concluded that the State had displayed “a good faith process of disclosure.” 

As to the review appraisal, the trial court described it as not related to the manner in which the amount of the offer was calculated, but rather that it confirmed that the manner was valid.  The court also ordered the State to produce post-complaint the review appraisal.  The owner had described the review appraisal as a certified opinion of fair market value of the subject property, whereas the State described it not as an appraisal report, but as part of its internal deliberative process. 

Relying substantially on the factual record and the trial court’s reasoning, the Appellate Division affirmed the judgment of the State’s proper exercise of eminent domain, stressing that the statute requires “reasonable” disclosure.