Dropping the Ball: Another "Oops" Moment for the Condemnor

Last week, a New Jersey Superior Court judge granted a landowner’s summary judgment motion to dismiss the Township of Lakewood’s (“Township”) condemnation actions.  In Tp. of Lakewood v. Garzo, the Township instituted four condemnation actions after designating areas as being “in need of” redevelopment.  The Township initially believed that it had owned the subject properties for more than forty years by virtue of a foreclosure judgment issued in 1973 (no property taxes were paid on the subject properties for over 40 years).  In July 2014, the Township adopted an ordinance authorizing the Township to move forward with the condemnation proceedings.  By August 2014, the Township hired an expert to appraise the subject properties and the reports were finalized by October 1, 2014.  The Township proceeded to file its condemnation actions with the court on December 5, 2014.

While proceeding with its plan, the Township failed to notice that a recent deed was recorded on October 7, 2014 naming the pro se defendant in the present matter, Kenneth Garzo, as the current owner of the subject properties.  The Township did not provide the appraisal report to Garzo nor engage in any communication or negotiation with him because the Township was blind to this recent development.  As a result, Garzo filed a summary judgment to dismiss the condemnation actions for failing to provide him the opportunity to accompany the appraiser during the inspection of the properties, and for not receiving an offer in writing prior to the December 5, 2014 commencement date of the complaints.  In addition, Garzo argued that the Township failed to comply with the bona fide negotiations requirement of N.J.S.A. 20:3-6 before a condemnation action is instituted.  In response, the Township argued that Garzo’s interpretation of the statute was misguided.  Contrary to Garzo’s understanding of the statute, the Township claimed that N.J.S.A. 20:3-6 permits the court to waive the negotiation requirement if the holder of title is “unknown, resides out-of-state, or for other good cause.”  Given that Garzo resides in California, the Township thus argued that the statute permits the court to dispense with the negotiation requirement.

The court was not persuaded by the Township’s argument.  The court’s decision to dispense with the negotiations requirement is entirely discretionary as the statute clearly indicates that the court “may dispense with the necessity of such negotiations if the title holder resides out-of-state.”  The court’s decision to decline exercising its discretion to dispense with the negotiation requirements was due, in part, to the Township’s neglect to notice the recorded deed prior to filing its complaint.  The Township’s reliance solely on the tax rolls for verifying and confirming the current owners of the properties was simply inexcusable by the court.  Moreover, Garzo may have resided in California but after recognizing the condemnation action filed against the properties, he expressed willingness to negotiate with the Township making the bona fide negotiation requirement all the more important.

This was certainly not the first time a condemning authority failed to comply with N.J.S.A. 20:3-6.  In Borough of Rockaway v. Donofrio, a 1982 Appellate Division decision, the condemning authority made a monetary offer to the landowner but, among other things, failed to permit the owner to accompany the condemnor’s appraiser and also failed fully disclose the purpose and critical details of the proposed partial taking.  The Appellate Division set precedent by dismissing the condemnation action “for [the Borough’s] failure to honor the statute.”

Given what is at stake, one would expect the condemning authority to be more careful and diligent in their efforts in identifying the owners of the properties.  The Township of Lakewood certainly fell short and now heads back to square one.

A copy of the court’s opinion in Garzo may be found here.

McKirdy & Riskin‘s Ed McKirdy and Jack Buonocore served as counsel to the property owner in the Rockaway v. Donofrio case cited above.