Recovery of Owner’s Attorneys’ Fees Limited in “Complicated” Inverse Condemnation Case

A New Jersey appeals court recently limited a Bergen County property owner’s ability to recover attorneys’ fees in an inverse condemnation proceeding to those fees actually and reasonably incurred in connection with the condemnation.  The plaintiff, NJ Capital Partners, LLC, filed an inverse condemnation action after the Oakland Planning Board denied its subdivision application twice. After analyzing what the court described as a “complicated” procedural history, it concluded that plaintiff was only entitled under N.J.S.A. 20:3-26(c) to attorneys’ fees  which were incurred after it was no longer seeking to develop its property at board hearings and through prerogative writ actions.  Accordingly, the fee recovery was limited to fees incurred in pursuing an inverse condemnation remedy.

The court distinguished awarding fees at an earlier date in this case from the previous holding of the New Jersey Supreme Court in Twp. of West Orange v. 769 Assocs., LLC, 198 N.J. 529 (2009).  In 769 Assocs., an ordinance targeted a property for condemnation and litigation ensued, including a prerogative writ to challenge a planning board decision.  The court found the property owner was entitled to fees under N.J.S.A. 20:3-26(b) from the commencement of its action because they were a direct response to an eminent domain proceeding.  Both decisions refine the reasoning in Essex County Imp. Auth. v. RAR Devel. Assocs., 323 N.J. Super. 505 (Law Div. 1999), in which a trial court denied attorneys’ fees after a condemnation action had been abandoned but had “not progressed far enough.”  (The property in RAR was represented by McKirdy & Riskin’s  Anthony F. Della Pelle, Esq.

A copy of the court’s opinion in NJ Capital Partners, LLC, v. Oakland Planning Board can be found here.   The matter was remanded to the trial court so the award attorneys’ fees could be established and calculated in accord with the Appellate Division’s opinion.

The author wishes to acknowledge the assistance of Cory K. Kestner, Esq., of McKirdy & Riskin, PA, in the preparation of this article.