(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interests of brevity, portions of any opinion may not have been summarized).
Argued November 9, 1999 -- Decided February 3, 2000
PER CURIAM
These appeals by the owners of property condemned by governmental entities involve the manner in which
interest on a condemnation award is calculated.
Walter and Virginia Hauck owned property in Atlantic City condemned by the Casino Reinvestment
Development Authority. After a jury trial and verdict, the trial court granted interest on the award, computing interest at
the rate set in Rule 4:42-11 and calculating it from the date the condemnation action was filed.
On appeal to the Appellate Division, the Haucks challenged the interest portion of the award, taking the
position that the trial court should have granted interest from the date of the valuation of the property and that an interest
rate different from that prescribed in Rule 4:42-11 should have been applied.
Yvette Nierenberg, whose property is the subject of a condemnation proceeding by the Township of West
Windsor, intervened in the Appellate Division.
The Appellate Division concluded that the Eminent Domain Act of 1971, N.J.S.A. 20:3-1 to -50, establishes
that interest on a condemnation award runs from the date on which the condemnation action began until the date
compensation is paid to the property owners and affirmed the judgment of the trial court, including application of the
interest rate in Rule 4:42-11.
The Supreme Court granted the petitions for certification filed by the Haucks and Yvette Nierenberg.
HELD: Interest at the rate established in Rule 4:42-11 was properly added to the condemnation award from the date the
condemnation action began until the date compensation was paid.
1. The Eminent Domain Act of 1971, clearly establishes that interest on a condemnation award runs from the date the
condemnation action is commenced until the date compensation is paid; interest does not run from the date of valuation
of the property. (p. 3)
2. To establish a governmental taking of property that implicates the constitutional standard requiring payment of
interest from the date of the taking, there must be proof that the value of the property has been substantially destroyed
and that governmental activity has been a substantial factor in bringing that about. No such proof was presented by the
Haucks. (pp. 3-4)
3. The trial court properly concluded that the interest rate established in Rule 4:42-11 best indemnified the Haucks for
the loss of the use of the compensation to which they were entitled from the date the condemnation action was begun.
Application of a different interest rate may be warranted in some cases, such as in times of great interest fluctuations,
when the rate prescribed by the court rule is inadequate to indemnify the owner of the condemned property. (p. 4)
The judgment of the Appellate Division is AFFIRMED.
CHIEF JUSTICE PORITZ and JUSTICES O'HERN, GARIBALDI, STEIN, COLEMAN, LONG and
VERNIERO join in the opinion of the Court.
SUPREME COURT OF NEW JERSEY
A-99/
100 September Term 1998
CASINO REINVESTMENT DEVELOPMENT
AUTHORITY, a public corporate body
of the State of New Jersey,
Plaintiff-Respondent,
v.
WALTER J. HAUCK and VIRGINIA HAUCK,
husband and wife,
Defendants-Appellants,
and
STATE OF NEW JERSEY, NATIONAL
WESTMINSTER BANK, JOHN DOE(S), an
unknown claimant(s), fictitious
name(s), who is (are) or may be
tenant(s) CITY OF ATLANTIC CITY and
ATLANTIC CITY MUNICIPAL UTILITIES
AUTHORITY,
Defendants,
and
YVETTE NIERENBERG,
Intervenor-Appellant,
and
STATE OF NEW JERSEY and TOWNSHIP OF
WEST WINDSOR,
Intervenors-Respondents.
Argued November 9, 1999 -- Decided February 3, 2000
On certification to the Superior Court,
Appellate Division, whose opinion is reported
at
317 N.J. Super. 584 (1999).
Peter H. Wegener argued the cause for
appellants (Bathgate, Wegener & Wolf,
attorneys).
Edward D. McKirdy argued the cause for
intervenor-appellant (McKirdy and Riskin,
attorneys).
Paul V. Fernicola argued the cause for
respondent (Giordano, Halleran & Ciesla,
attorneys; Mr. Fernicola and Nicole Devaney,
on the brief).
Richard L. Rudin argued the cause for
intervenor-respondent Township of West
Windsor (Weiner Lesniak, attorneys).
George P. Ljutich, Deputy Attorney General,
argued the cause for intervenor-respondent
State of New Jersey (John J. Farmer, Jr.,
Attorney General, attorney; Mary C. Jacobson,
Assistant Attorney General, of counsel).
PER CURIAM
On certification granted,
160 N.J. 476 (1999),See footnote 11 Walter and
Virginia Hauck, property owners in Atlantic City, challenge the
interest portion of a judgment entered upon a jury verdict in a
condemnation action instituted against them by the Casino
Reinvestment Development Authority. More particularly, they
claim that the trial judge erred in failing to grant interest as
of the date of the valuation of the property and in applying the
rate of interest prescribed in Rule 4:42-11. We affirm
substantially for the reasons expressed by the Appellate
Division in Judge Baime's opinion reported at
317 N.J. Super. 584 (App. Div. 1999). As the Appellate Division concluded, id.
at 592-94, the Eminent Domain Act of 1971, N.J.S.A. 20:3-1 to
-50, clearly establishes that interest on a condemnation award
runs from the date of the commencement of the action until the
date of payment of compensation, N.J.S.A. 20:3-31, and not from
the date of valuation which serves an entirely different
statutory purpose. See Township of W. Windsor v. Nierenberg,
150 N.J. 111, 126-27 (1997) (quoting Report of Eminent Domain
Revision Commissioner of New Jersey, 27-28 (1965)).
Moreover, even where the condemned property is valued
pursuant to N.J.S.A. 20:3-30(c) on the basis of governmental
action that substantially affects use and enjoyment of the
property, satisfaction of that standard for valuation purposes
falls short of meeting the constitutional standard requiring
payment of interest from the date of taking. See N.J. Highway
Auth. v. Ellis,
24 N.J. 1, 7 (1957). As the Appellate Division
observed, 317 N.J. Super. at 592, to establish a taking that
implicates the constitutional demand for compensation, there
must be proof “that there has been substantial destruction of
the value of [the] property and that defendant's activities have
been a substantial factor in bringing this about.” Washington
Mkt. Enters. v. Trenton,
68 N.J. 107, 123 (l975). No such proof
was offered by the condemnee.
Concerning the application of the interest rate established
in Rule 4:42-11, we are satisfied, as was the Appellate
Division, that, in this case, the trial court considered the
Haucks' expansive documentary submissions concerning interest
and properly concluded that the rate set forth in the rule best
indemnified the Haucks for the loss of the use of the
compensation to which they were entitled from the date of the
institution of the condemnation action. Township of Wayne v.
Cassatly,
137 N.J. Super. 464, 474 (App. Div. 1975), certif.
denied,
70 N.J. 137 (l976).
That is not to suggest that such a rate will always be
appropriate. Indeed, in times of great interest fluctuations,
where the interest rate prescribed by the court rule is
inadequate to indemnify the condemnee, application of a
different rate may well be warranted. See Cassatly, supra, 137
N.J. Super. at 474. We hold only that, on the facts presented,
the application of the Rule 4:42-11 rate was proper.
The judgment of the Appellate Division is affirmed.
CHIEF JUSTICE PORITZ and JUSTICES O'HERN, GARIBALDI, STEIN,
COLEMAN, LONG, and VERNIERO join in the Court's opinion.
NO. A-99/100 SEPTEMBER TERM 1998
ON APPEAL FROM
ON CERTIFICATION TO Appellate Division, Superior Court
CASINO REINVESTMENT DEVELOPMENT AUTHORITY, a public
corporate body of the State of New Jersey,
Plaintiff-Respondent,
v.
WALTER J. HAUCK and VIRGINIA HAUCK, husband and wife,
Defendants-Appellants,
and
STATE OF NEW JERSEY, NATIONAL WESTMINSTER BANK, JOHN
DOE(S), an unknown claimant(s), fictitious name(s), who is (are) or may
be tenant(s) CITY OF ATLANTIC CITY and ATLANTIC CITY
MUNICIPAL UTILITIES AUTHORITY,
Defendants,
and
YVETTE NIERENBERG,
Intervenor-Appellant,
and
STATE OF NEW JERSEY and TOWNSHIP OF WEST WINDSOR,
Intervenors-Respondents.
DECIDED February 3, 2000
Chief Justice Poritz PRESIDING
OPINION BY PER CURIAM
CONCURRING OPINION BY
DISSENTING OPINION BY
Footnote: 1 1 We simultaneously granted certification to Intervenor Appellant Yvette Nierenberg who claimed that our decision could affect the outcome in a pending condemnation action involving her property in West Windsor. Township of West Windsor v. Nierenberg, 150 N.J. 111 (1997). Like the Haucks, she is bound by our disposition here.