STATE OF NEW JERSEY, by the COMMISSIONER OF TRANSPORTATION VS. ST. MARY'S CHURCH (L-3076-10, CAMDEN COUNTY AND STATEWIDE) ( 2020 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4452-18T3
STATE OF NEW JERSEY,
by the COMMISSIONER OF
TRANSPORTATION,
APPROVED FOR PUBLICATION
Plaintiff-Appellant/ August 14, 2020
Cross-Respondent, APPELLATE DIVISION
v.
ST. MARY'S CHURCH
GLOUCESTER, a New Jersey
Religious Corporation; THE
DIOCESE OF CAMDEN, NEW
JERSEY, a New Jersey Religious
Corporation, Trustee;
Defendants-Respondents/
Cross-Appellants,
and
BOROUGH OF BELLMAWR, in
the County of Camden, a Municipal
Corporation of New Jersey,
Defendant.
______________________________
Argued telephonically May 7, 2020 –
Decided August 14, 2020
Before Judges Alvarez, Suter, and DeAlmeida.
On appeal from the Superior Court of New Jersey, Law
Division, Camden County, Docket No. L-3076-10.
Matthew R. Weiss, Deputy Attorney General argued
the cause for appellant/cross-respondent (Gurbir S.
Grewal, Attorney General, attorney; Melissa H. Raksa,
Assistant Attorney General, of counsel; Matthew R.
Weiss, of counsel and on the briefs).
Drew K. Kapur argued the cause for respondents/cross-
appellants (Duane Morris LLP, attorneys; Drew K.
Kapur, of counsel and on the briefs).
The opinion of the court was delivered by
DeALMEIDA, J.A.D.
Plaintiff State of New Jersey, by the Commissioner of Transportation
(Commissioner), appeals from the May 3, 2019 order of the Law Division
awarding six percent interest pursuant to N.J.S.A. 27:7-22 on an award of just
compensation to defendants St. Mary's Church Gloucester and the Diocese of
Camden, N.J. (collectively St. Mary's) for the condemnation of St. Mary's
property. St. Mary's cross-appeals from the May 3, 2019 order, arguing the trial
court erred by awarding simple, rather than compound, interest. We reverse and
remand.
I.
The facts are undisputed. The Commissioner condemned property owned
by St. Mary's for use in a highway construction project in Camden County.
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Pursuant to a trial court order, the Commissioner deposited $1,865,000 into the
Superior Court trust fund as estimated compensation for the taking. St. Mary's
subsequently withdrew those funds. A jury thereafter awarded St. Mary's just
compensation of $2,960,000. The verdict left a balance due to St. Mary's of
$1,095,000, with interest.
The parties disputed the amount of interest due on the balance of the just
compensation award. The Commissioner submitted a proposed order awarding
pre-judgment interest of 3.5%, which reflects 1.5% interest plus 2% per annum
in accordance with Rule 4:42-11(a)(iii), and post-judgment interest in annual
rates ranging from 2.25% to 3.5%, also in accordance with Rule 4:42-11(a)(iii).
The Commissioner argued that N.J.S.A. 20:3-32 vests in the trial court broad
discretion to set an interest rate on awards of just compensation and relied on
Rule 4:42-11(a)(iii) as a guideline for the exercise of the court's discretion.
St. Mary's, on the other hand, submitted a proposed order awarding it pre-
judgment and post-judgment interest of six percent per annum. St. Mary's
argued that six percent interest per annum is mandated by N.J.S.A. 27:7 -22 on
all awards of just compensation for the condemnation of property by the
Commissioner. The Commissioner countered that N.J.S.A. 27:7-22 was
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impliedly repealed by N.J.S.A. 20:3-50, leaving N.J.S.A. 20:3-32 as the
controlling statute.
The trial court issued an oral opinion finding that N.J.S.A. 20:3-50 did not
impliedly repeal N.J.S.A. 27:7-22. The court concluded it was bound by
N.J.S.A. 27:7-22 to award interest of six percent per annum to St. Mary's. The
court explained,
[s]o the statute is clear and unambiguous as to this
point. In the times we live in, this may be a high
interest rate and something for the Legislature to look
at, but the Court certainly does not rewrite legislation.
....
And, though, I may have a personal decision as to the
rate of the interest and it being high for our times, I
don't have the authority. . . . [I]t's clear on its face a
[six] percent interest may be imposed.
With respect to whether the interest should be compound or simple, the
court held that N.J.S.A. 27:7-22 "itself says 'per annum' . . . which is typically
looked at as a simple interest calculation." The court noted that it would have
had discretion to determine whether to award simple or compound interest had
it been making a decision pursuant to N.J.S.A. 20:3-32 but that it had previously
determined that statute does not apply. On May 3, 2019, the court entered an
order memorializing its decision.
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This appeal and cross-appeal followed. The Commissioner makes the
following arguments for our consideration.
THE TRIAL COURT ERRED IN DETERMINING
THAT IT WAS BOUND BY THE [SIX PERCENT]
INTEREST RATE IN N.J.S.A. 27:7-22.
A. THE EMINENT DOMAIN ACT OF 1971
REQUIRES THE TRIAL COURT TO SET A PRE-
AND POST-JUDGMENT INTEREST RATE WHEN
THE PARTIES DISPUTE THE RATE.
B. THE TRIAL COURT ERRED IN
CONSIDERING ITSELF BOUND BY N.J.S.A. 27:7-
22 BECAUSE THE EMINENT DOMAIN ACT OF
1971 REPEALED THE PORTION OF N.J.S.A. 27:7-
22 WHICH SETS A FIXED [SIX PERCENT]
INTEREST RATE.
On the cross-appeal, St. Mary's makes the following argument.
THE TRIAL COURT ERRED IN AWARDING
DEFENDANTS ONLY SIMPLE INTEREST, AS
COMPOUND INTEREST IS A CONSTITUTIONAL
ELEMENT OF JUST COMPENSATION
NECESSARY TO MAKE CONDEMNEES WHOLE.
II.
On appeal, issues of statutory interpretation, considered questions of law,
are reviewed de novo. In re Liquidation of Integrity Ins. Co., 193 N.J. 86, 94
(2007) (quoting Toll Bros., Inc. v. Twp. of W. Windsor, 173 N.J. 502, 549
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(2002)). Our analysis necessarily begins with the text of the statutory provisions
at issue.
N.J.S.A. 27:7-22 vests in the Commissioner the authority to acquire land
through "condemnation in the manner provided in chapter 1 of the Title Eminent
Domain (§ 20:1-1 et seq.), except as otherwise provided by this section." An
exception appears later in the statute:
If the amount of the award as finally determined by the
court shall exceed the amount . . . deposited [into court],
the person or persons to whom the award is payable
shall be entitled to recover from the department the
difference between the amount of the deposit and the
amount of the award, with interest at the rate of [six
percent] per annum thereon from the date of the making
of the deposit.
[N.J.S.A. 27:7-22.]
The subsequently enacted Eminent Domain Act of 1971 (the Act), on the
other hand, provides that
[w]henever any condemnor shall have determined to
acquire property pursuant to law . . . the condemnation
of such property and the compensation to be paid
therefor[,] . . . and all matters incidental thereto and
arising therefrom shall be governed, ascertained and
paid by and in the manner provided in this act . . . .
[N.J.S.A. 20:3-6.]
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Another provision of the Act states that "[i]nterest as set by the court upon
the amount of compensation determined to be payable hereunder shall be paid
by the condemnor . . . ." N.J.S.A. 20:3-31. In addition, the Act provides
"[u]nless agreed upon by the parties, the amount of such interest shall be fixed
and determined by the court in a summary manner after final determination of
compensation . . . ." N.J.S.A. 20:3-32. This statute vests broad discretion in the
court to set an interest rate. Borough of Saddle River v. 66 E. Allendale, LLC,
424 N.J. Super. 516, 540 (App. Div. 2012), rev'd on other grounds, 216 N.J. 115
(2013). Setting an interest rate under this provision may require "a hearing . . .
during which expert evidence as to prevailing commercial and legal rates of
interest" is presented. Twp. of Wayne v. Cassalty, 137 N.J. Super. 464, 474
(App. Div. 1975); accord Casino Reinvestment Dev. Auth. v. Hauck, 317 N.J.
Super. 584, 594 (App. Div. 1999).
According to N.J.S.A. 20:3-50, another provision of the Act,
[a]ll acts and parts of acts inconsistent with any of the
provisions of this act are, to the extent of such
inconsistency, hereby repealed. This act shall apply to
every agency, authority, company, utility or any other
entity having the power of eminent domain exercisable
within the State of New Jersey except as exempted in
section 49 of this act.
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Section 49 of the Act exempts "bodies organized and administered as a result of
or under compacts between States." N.J.S.A. 20:3-49. The Department of
Transportation does not fall within the N.J.S.A. 20:3-49 exemption.
We are, therefore, presented with conflicting statutes: N.J.S.A. 27:7-22,
which provides that the Commissioner must comply with the Act, except with
respect to the award of a statutory six percent per annum rate of interest on
awards of just compensation; and the subsequently enacted N.J.S.A. 20:3-50,
which provides that the Act, which includes a provision vesting the courts with
discretion to set an interest rate on awards of just compensation, applies to all
entities with the authority to condemn property in the State and repeals all
inconsistent statutory provisions. We uncovered no precedential authority
addressing the issue before the court. 1
1
The two opinions on which St. Mary's relies are not precedential. In Cassalty,
we examined interest under the then-newly enacted N.J.S.A. 20:3-32 in the
context of a condemnation by a municipality, not the Commissioner. 137 N.J.
Super. at 471-72. We stated the statute does not "explicitly set forth the rate of
interest allowable on condemnation awards, although N.J.S.A. 27:7 -22[,] the
provision dealing with condemnation for highway purposes, continues to specify
a [six percent] [r]ate of interest in highway condemnation cases." Id. at 472
This statement is dictum, given that it is "not necessary to the decision then
being made . . . ." Jamouneau v. Div. of Tax Appeals, 2 N.J. 325, 332 (1949).
The holding in State, by Commissioner of Transportation v. Pia Star Realty Co.,
118 N.J. Super. 55 (Law Div. 1971), that N.J.S.A. 27:7 -22 requires six-percent
interest was decided one day prior to the enactment of the Act.
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It is well settled that the primary purpose of "statutory interpretation is to
determine and 'effectuate the Legislature's intent.'" State v. Rivastineo, 447 N.J.
Super. 526, 529 (App. Div. 2016) (quoting State v. Shelley, 205 N.J. 320, 323
(2011)). We start by considering "the plain 'language of the statute, giving the
terms used therein their ordinary and accepted meaning.'" Ibid. (quoting
Shelley, 205 N.J. at 323). Where "the Legislature's chosen words lead to one
clear and unambiguous result, the interpretive process comes to a close, without
the need to consider extrinsic aids." Ibid. (quoting Shelley, 205 N.J. at 323).
We do "not 'rewrite a plainly-written enactment of the Legislature [or] presume
that the Legislature intended something other than that expressed by way of the
plain language.'" Id. at 529-30 (alteration in original) (quoting Marino v.
Marino, 200 N.J. 315, 329 (2009)). However, "[a]n enactment that is part of a
larger statutory framework should not be read in isolation, but in relation to
other constituent parts so that a sensible meaning may be given to the whole of
the legislative scheme." Vitale v. Schering-Plough Corp., 447 N.J. Super. 98,
115 (App. Div. 2016) (quoting Wilson ex rel Manzano v. City of Jersey City,
209 N.J. 558, 572 (2012)).
We cannot rely solely on the plain language of the statutes because their
provisions, when given their ordinary meanings, express conflicting mandates.
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The Commissioner argues that N.J.S.A. 20:3-50 impliedly repealed N.J.S.A.
27:7-22, which existed at the time N.J.S.A. 20:3-50 was enacted and was in
conflict with that statute. St. Mary's argues that N.J.S.A. 27:7-22 plainly applies
here because it expressly exempts the Commissioner from the interest provision
of the Act, existed when N.J.S.A. 20:3-50 was enacted, and was not expressly
repealed. We conclude the Commissioner's interpretation of N.J.S.A. 20:3-50
best aligns with the Legislature's intent and comports with the Act's overall
structure.
A general repealer, as opposed to a statute that expressly names a statute
that is being repealed, "predicate[s] repeal upon the condition of a substantial
conflict between the act and prior statutes." Central Constr. Co. v. Horn, 179
N.J. Super. 95, 100-01 (App. Div. 1981). To determine which statutes or parts
of statutes a general repealer is intended to repeal, we look to legislative intent.
See Mahr v. State, 12 N.J. Super. 253, 261 (App. Div. 1951) (citing French v.
Bd. of Comm'rs, 136 N.J.L. 57 (Sup. Ct. 1947)).
[W]here the intention to effectuate a repeal is clear and
compelling; where there is a clear repugnancy between
the two acts, or a manifest intention to cover the same
subject matter by way of revision; or where,
considering the specific provision in relation to the
general object of a statute, the purpose to repeal prior
legislation is revealed, it is the judicial function to
effectuate it.
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[Id. at 261 (internal citations omitted).]
Each of these factors militate toward a conclusion that N.J.S.A. 20:3 -50
repealed the interest provision of N.J.S.A. 27:7-22. Our Supreme Court has held
that the Legislature's primary purpose when enacting the Act was "to make
uniform the legal requirements for all entities and agencies having the power to
condemn." Cty. of Monmouth v. Wissell, 68 N.J. 35, 43 (1975). This intention
is evident in N.J.S.A. 20:3-50, which provides that the Act applies "to every
agency, authority, company, utility or any other entity having the power of
eminent domain," with a limited exception not applicable here. This
demonstrates an intention by the Legislature to cover the same subject addressed
in N.J.S.A. 27:7-22 and to establish uniformity in condemnation.
In addition, it is clear that N.J.S.A. 20:3-32 and N.J.S.A. 27:7-22 are
repugnant to each other. One provision establishes a statutory rate of interest in
the circumstances before the court. The other vests in the trial court the
discretion to set a rate of interest in the same circumstances. Given the
Legislature's intent to create uniformity, the newer statute should supersede the
prior one because the earlier law is "so clearly in conflict . . . that the two cannot
stand together reasonably . . . ." See Dep't of Labor and Indus. v. Cruz, 45 N.J.
372, 380 (1965).
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Significantly, the legislative history of the Act reveals that the Legislature
considered adopting a six-percent fixed interest rate for all condemnations but
rejected that approach. An early version of the legislation that ultimately
became the Act included a fixed rate of interest that mirrored that in N.J.S.A.
27:7-22. Amendments to the proposed legislation removed the fixed interest
rate provision, replacing it with N.J.S.A. 20:3-32. This, along with the implied
repealer in N.J.S.A. 20:3-50, is evidence the Legislature intended uniformity in
condemnation to include interest rates set through the exercise of judicial
discretion.
St. Mary's argues that N.J.S.A. 27:7-22, the more specific provision, given
its application only to the Commissioner, should control over the generally
applicable provisions of N.J.S.A. 20:3-32. See Zoning Bd. of Adjustment v.
Serv. Elec. Cable Television, Inc., 198 N.J. Super. 370, 381 (App. Div. 1985).
This argument would be more persuasive if St. Mary's had identified a
reasonable basis for requiring the Commissioner to pay a fixed rate of interest
on just compensation awards while vesting the courts with authority to set an
interest rate for condemnations by all other State agencies. St. Mary's has
offered no justification, and we can identify none, for treating owners whose
property has been condemned by the Commissioner differently from those
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whose property has been condemned by other State entities. While the trial court
in this instance viewed the six-percent rate in N.J.S.A. 27:7-22 as too high for
present conditions, adhering to N.J.S.A. 27:7-22 could, in other circumstances,
result in the property owner receiving less interest than would be awarded under
N.J.S.A. 20:3-32.
Therefore, the trial court erred in determining that N.J.S.A. 27:7-22
mandated six percent interest on St. Mary's just compensation award. The fixed-
interest provision of that statute was impliedly repealed by N.J.S.A. 20:3-50.
We reverse the May 3, 2019 order and remand for the trial court to determine an
interest rate on St. Mary's just compensation pursuant to N.J.S.A. 20:3-32.
Because the trial court concluded a simple rate of interest was mandated
by N.J.S.A. 27:7-22, we also reverse that aspect of the May 3, 2019 order. We
leave to the trial court, in the first instance, to determine whether to award simple
or compound interest and to address St. Mary's constitutional arguments. We
agree with St. Mary's suggestion that the matter be assigned to a different judge
on remand, given the trial court's observations that it had formed an opinion as
to the amount of interest to award had it had the discretion to do so and that a
six percent rate was too high for current conditions.
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Reversed and remanded for further proceedings consistent with this
opinion. We do not retain jurisdiction.
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