Eminent Domain Valuation: Payment in Liu (Long Branch, NJ)

The condemnation trial lasted 12 weeks in the City of Long Branch v. James Liu. The eminent domain case was concluded after weeks of intermittent testimony when a Monmouth County jury, sitting before Judge Robert Coogan in Freehold, awarded the family of the defendant property owner Jimmy Liu (deceased) $1.45 million for his oceanfront commercial properties. The New Jersey Constitution Article I, Paragraph 20 mandates that private property shall not be taken for a public use without just compensation.

A condemnation trial is essentially a battle of real estate experts. The experts value the property condemned as of the date of taking, which in this case was May 14, 2001. The property is valued in accordance with its highest and best use as determined by size, location, and zoning. Most experts will develop their value based on comparable sales of other similarly situated property. The sales will be adjusted for time, location, and physical characteristics. The experts will put all of the sales data on a grid, and based on the adjusted values, they will come up with an opinion of the value indicated to the subject property based on the comparable sales.

In this case, the jury’s award was closer to the city’s expert (Hugh McGuire) opinion of $1 million than the opinion of Liu’s expert (Donald Molliver) at $2.5 million. The award represents a 45 percent increase over McGuire’s appraisal; And according to the city’s attorney, Paul Fernicola, the city was prepared to offer more in settlement. This assertion was not confirmed by the property owner's attorney, Peter Wegener of Bathgate & Wegener, Lakewood, N.J. The city appears to consider this result a "victory." However, in terms of percentage over their approved appraisal, it speaks volumes as to how low Mr. McGuire’s appraisal actually was and, more importantly, how little credibility even the city places on his opinions. It should be noted that the Liu’s are entitled to interest on the amount recovered over the initial deposit at the Superior Court rate, N.J.S.A. 20: 3-31, R. 4:42-11(a) (iii). This would be $450,000 compounded annually from the date of taking, May 14, 2001, to the date of payment. Borough of Wildwood Crest v. Smith 235 NJ Super 404 (App.Div 1988)

Mr. Fernicola was quoted in the Asbury Park Press as saying that the city was prepared to offer a “much higher number to settle the trial.” How much higher? 60 percent? 70 percent? McGuire is notorious among property owners in Beachfront North Phase I for the low amount of his appraisals.

The condemnation was filed May 14, 2001. It is ludicrous that this case took almost five years to come to trial and, even more startling, that the trial itself lasted 12 weeks in fits and starts. A condemnation trial with four experts and one or two fact witnesses should take no more than five days. Judges usually assert tight control on the pace of a trial. So why did it take so long? Apparently there were extensive motions in limine, drawn out oral arguments and lengthy consideration by the Court. In limine is a Latin term which means literally “on the threshold.”

Motion in limine (Latin: "at the outset") is a motion, raised before or during trial, to allow or exclude (usually the latter) the presentation of certain evidence to the jury. This is done in judge's chambers, out of hearing of the jury. If a question is to be decided in limine, it will be for the judge to decide. Usually it is used to shield the jury from possibly inadmissible and harmful evidence.

The rule in New Jersey with regard to in limine rulings has been clearly stated by the court in Bellardini v. Krikorian, 222 N.J. Super. 457, 464 (App. Div. 1988):

“We have noted an increase in limine rulings on evidence questions in recent times. Such rulings are often in the abstract and not in the context of facts adduced at trial. Requests for such rulings should be granted only sparingly and with the same caution as requests for dismissals on opening statements.” See also Passaic Valley Sewerage Com'rs. v. Geo. M. Brewster, Inc., 32 N.J. 595, 605-607 (1960); Nelson v. Great Atlantic & Pacific Tea Co., 48 N.J. Super. 300, 305 (App.Div.1958).

Mr. Fernicola, who argued on behalf of the City of Long Branch, opines that the jury verdict somehow validates the city’s appraisal and discounts the owner’s appraisal. An examination of just the numbers does not say this. One might question the lack of momentum and duration of the trial and its impact on the jurors. Only the jurors can say what they thought was valid or invalid about the respective appraisers. Jimmy Liu was a fixture on the beach for 45 years. This was beachfront commercial property. Although the emotional component of losing one’s home or business deeply affects the property owners, juries may be more sympathetic to homeowners. This verdict in this case in no way validates what the city of Long Branch has done in its efforts to implement its three beachfront redevelopment projects.

Written By:Gopal Panday On April 5, 2006 09:37 PM

Laws are man made and reflect a period in time; It would be logical to assume, since life as much as society is dynamic in nature, that we human beings are supposedly the most advanced form of existance and should adjust to the times accordingly.
Now, pertaining to business valuation in eminent domain takings, an entity which is supporting two, three, or more families' livelihoods and creating enormous amounts of taxes for various levels of government, all of a sudden becomes worthless. Does it stand to reason? Should the condemnee not be compensated at least to be able to replicate his or her source of livelihood along with others tied along with that business in the process? Thanks for your efforts to bring some equity and fairness in our society.

Gopal Panday

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