NJ Supreme Court: Property owners get counsel fees on abandonment of condemnation

West Orange v. 769 Associates  (A-113-07)

Today the New Jersey Supreme Court unanimously decided that a condemnee may recover counsel fees and costs upon abandonment of a condemnation proceeding, pursuant to N.J.S.A. 20:3-26 (b), from the point at which the property is formally targeted for condemnation through the filing of the condemnation complaint and ensuing litigation. The court held that calculation of fees, as in all other cases, is governed by the reasonableness principles of RPC 1.5. Significantly, the Court held that, in the context of abandonment,  the right to recover costs and fees is not contingent to any degree on the success of the property owner’s defense strategy and, therefore, was not subject to modification by the application of RPC 1.5(a)(4) regarding the amount involved or the results obtained. Justice Virginia Long wrote for the Court. Download the opinion.

However, fees associated with the filing a prerogative writ, such as fighting a blight designation, are not recoverable. The tolling point in pre-litigation begins once the property owner receives notice that the property will be formally targeted for condemnation, such as receipt of an offer letter based on an appraisal. In the pre-litigation period,  any fees incurred in order to participate in bona fide negotiations per N.J.S.A 20:3-6, such as the costs of attorneys, appraisers, engineers and other experts, apply.  A condemnation complaint must be filed, and it must be either abandoned - no longer required for the project, or dismissed due to defenses raised by propery owner. The trial court has the discretion to mitigate the fees.

Listen to the N.J. Supreme Court oral arguments in West Orange v. 769 Associates LLC.

See prior blog post on the on the appellate division decision, "Recovering litigation costs when condemnation is abandoned" (December 28, 2007).