Affirmed! N.J. Court Rejects Property Owner’s Request to Overturn Bench Trial

If you have been following our eminent domain blog, you probably know that it’s tough sledding for a party seeking to overturn a trial court’s “just compensation” determination. On November 7, 2025, the New Jersey Appellate Division reaffirmed this bleak reality for many litigants.

In State v. Krismic Associates, Inc., the New Jersey Department of Transportation (NJDOT) took a portion of Krismic Associates’ property in Hillsborough Township for a roadway improvement project. The property originally consisted of 3.375 acres with significant frontage on Route 206. NJDOT condemned a 0.59-acre “flag-type” parcel, reducing the frontage from 624 feet to 390 feet. NJDOT also took permanent and temporary easements on the property.

After a six-day bench trial, the trial court awarded Krismic $447,000 in just compensation:

• $366,000 for the land taken
• $30,000 for easements
• $51,000 for “damages to the remainder”

The trial court also awarded “simple” prejudgment interest at the rate prescribed by N.J. Court Rule 4:42-11(a)(iii). Krismic appealed, challenging both the valuation methodology and the interest calculation. Krismic argued that the “damages to the remainder” should have been calculated using a “discount” from a reasonably probable future value rather than a “premium” approach. Moreover, Krismic contended that the trial court should have applied market rates and compound interest rather than the Rule 4:42-11 rate.

The Appellate Division affirmed the trial court’s judgment, concluding that:

1. The trial court acted within its discretion in adopting a valuation approach that applied a “premium” for the probability of obtaining a second egress permit rather than using a “discount” method. The Court rejected Krismic’s argument, citing State v. Caoili, which recognizes that both methods are valid so long as they yield a current value rather than a speculative future value. The Court held that during a bench trial, judges may adopt expert opinions in whole or in part, provided that the result reflects fair market value at the time of taking. The Court found that the trial court largely relied on Krismic’s own expert’s square-foot valuation and capitalization rate, but then adjusted the damages figure to reflect “practical considerations.” Ultimately, the Court upheld the trial court’s finding of minimal “damage to the remainder.”
2. The award of simple interest at the Rule 4:42-11 rate was appropriate and did not constitute an abuse of discretion. The Appellate Division disagreed with the owner’s arguments, noting that trial judges have broad discretion under the Eminent Domain Act, N.J.S.A. 20:3-1, et seq., to set interest rates that indemnify the condemnee for the loss of use of funds. The Court found that the trial court’s review of mortgage rates, prime rates, and ACLI data was proper before it concluded that the Rule 4:42-11 rate was most reasonable given rate stability during the relevant period in question.

Practical Lessons for Property Owners and Practitioners

• Valuation Flexibility: Courts may choose between premium and discount approaches when valuing damages related to reasonably probable future benefits, such as additional access or zoning changes. See State v. Caoili.  Both methods are acceptable if they produce a fair current value.
• Expert Testimony Matters: While the trial court relied heavily on Krismic’s expert’s price per square foot value, it exercised discretion to adjust figures based on practical realities. Strong, market-based expert testimony remains critical to support any damage claim in a condemnation case. The Court or a jury may adopt expert opinions in whole or in part, provided that the result reflects fair market value at the time of taking.
• Interest Awards Are Discretionary: Although interest is constitutionally required as part of just compensation when the full amount of compensation is not paid at the time of the taking, courts often rely on Rule 4:42-11 for simplicity and consistency, especially when the evidence is limited or rates are stable for the years in question. Parties seeking higher rates or compound interest should present compelling evidence and expert testimony to the Court.

Conclusion

The Court’s holding in Krismic reinforces several key principles of eminent domain law: flexibility in valuation, judicial discretion in interest awards, and the importance of a market-based compensation position. One of the easiest ways for a property owner to fight back against eminent domain is to retain experienced counsel as early as possible. 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’ constitutionally-recognized property rights. If you are confronted with the threat of eminent domain, please feel free to contact us for a free consultation