Is “Discovery” Permitted in a New Jersey Condemnation Case?

by: Michael Realbuto
20 Jul 2023

In civil litigation, the “discovery” process is a valuable tool for the parties to receive and exchange certain facts, documents, and other information (i.e., evidence) relative to the issue(s) at hand. Most causes of action permit liberal discovery which can be an expensive and timely endeavor for litigants and counsel. However, condemnation cases in New Jersey follow a separate rule where the conventional discovery process is significantly streamlined.

Goal of the Property Condemnation Process

The goal of a condemnation trial is to determine the just compensation owed to property owner that results from a governmental taking. Determining what is “just compensation” hinges on the jury’s assessment of appraisal testimony. Rules of court relating to depositions, interrogatories, discovery and inspection of documents and property are not applicable to condemnation proceedings before commissioners except by leave of court. R. 4:73-11(a). In New Jersey, R. 4:73-11(b) contains discovery exchange requirements for both the commissioners hearing and trial on appeal from the report of commissioners. R. 4:73-11(b) provides in pertinent part that, “prior to the hearing before the commissioners, the parties shall exchange the names, addresses, and written appraisal reports of any person who will be called to testify as a valuation expert and a list of comparable sales and leases intended to be established by proof which list shall set forth as to each comparable sale and lease the following information: names of seller and purchaser or landlord and tenant; location of property by block, lot, street, street number and municipality; date of sale or date and duration of lease; the consideration for the sale or amount of rent; and book and page number of the recording of the deed.” Moreover, the commissioners’ hearing itself can be a useful mechanism for the parties to obtain discovery since the Court Rule is limited.

Upon appeal from the commissioners’ award, R. 4:73-11(b) provides that, 40-days prior to trial, “the parties shall exchange the name, address and written report of any expert, including but not limited to appraisers, who will be called to testify…” and “a listing of each comparable sale or lease that will be utilized by any witness to establish or rebut market value. The list shall contain the same sale or lease information that is required to be furnished prior to the commission hearing.” The penalty for failure to include the required information can be severe: “Unless the parties consent or the court otherwise orders, no party shall be permitted to offer testimony of any expert witness whose name and report has not been provided or of any comparable sale or lease for which the aforementioned information has not been timely exchanged.” R. 4:73-11(b).

An additional limit on discovery in a condemnation case is found in N.J.S.A. 20:3-12(d). N.J.S.A. 20:3-12(d) provides that, “There shall be no discovery on the issue of the right to condemn except by leave of court.” However, section 12(d) relates to the hearing before the commissioners, which happens after the entry of judgment appointing commissioners and is unrelated to the return date of the order to show cause. If there is a genuine issue of material fact respecting the condemnor’s authority to condemn precluding disposition of the action on the return date, the objecting party should be entitled to appropriate discovery. The condemnee should not be precluded by the summary nature of the proceedings from challenging the condemnation but must make a prima facie showing sufficient to warrant discovery and an evidential hearing. See West Orange v. 769 Assoc., LLC, 341 N.J. Super. 580 (App. Div. 2001) (trial court permitted discovery on right to take).

It is important to also note a seminal case on the right to discovery (to the extent that it is permitted) in a condemnation case. In State by Comm’r of Transp. v. Town of Morristown, 246 N.J. Super. 156 (App. Div. 1991), rev’d on other grounds, 129 N.J. 279 (1992), the Appellate Division interpreted the Eminent Domain Act to mean that condemnees are entitled to receive sufficient information to the extent that they may “be assured that the government is treating them with absolute candor and fairness and that such an assurance can only be given where there is full disclosure during negotiations of all the information upon which the government relies in making its offer.” Therefore, if a condemnee demonstrates the need for information (such as neighboring appraisal reports) in order to achieve just compensation, he or she is entitled to such information. In sum, the Morristown case provides codnemnees with a vehicle to discover appraisals and underlying methodologies used by the government in arriving at its offer of compensation. As always, the government must turn “square corners” when dealing with the private sector and it has an overriding obligation to deal forthrightly and fairly with property owners whose land is subject to a taking. F.M.C. Stores, Co. v. Borough of Morris Plains, 100 N.J. 418, 426-427 (1985).

The Property Condemnation Process – We Can Defend Your Rights

For over 55 years, McKirdy, Riskin, Olson & DellaPelle, P.C. has concentrated its practice in this special area of the law and has earned a reputation for persistently defending its clients’ property rights. Our firm has successfully handled a broad range of eminent domain cases involving almost every type of property, including commercial buildings, industrial properties, development land, single and multi-family residential properties, hotels/casinos, oil/ gas pipelines, water rights and beachfront property, airports, farmland, and many more. If you are confronted with the threat of eminent domain, please feel free to contact us for a free consultation.