Entrepreneurial Inmate Loses Lawsuit

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Jail (pd)While pro se lawsuits by prisoners are not unusual, you don't see ones like Tormasi v. Hayman every day.

In Tormasi, plaintiff sued several officials from the prison in which he was serving a life sentence. In the lawsuit, he claimed that they improperly seized his intellectual property assets and corporate records. As the Appellate Division explained: "During his incarceration, plaintiff acquired various intellectual property assets, which he assigned to Advanced Data Solutions Corporation (ADS) in exchange for sole ownership of the corporation." At some point during his incarceration, prison officials seized plaintiff's personal property, including: "1) miscellaneous corporate paperwork related to ADS . . 2) patent-prosecution documents; 3) an unfiled provisional patent application; 4) several floppy diskettes; and 5) various legal correspondence." Plaintiff sued in federal court, asserting a claim under the Takings Clause of the Fifth Amendment to the U.S. Constitution, various federal civil rights claims, and a state law claim for inverse condemnation.

 

Continue reading “Entrepreneurial Inmate Loses Lawsuit”

Of Parking Spots and Snow Blowers

Snow blower (pd)One of the things I like about the law, and litigation in particular, is the "just when you think you've seen it all . . . " aspect of it. In a recent decision, Sevinc v. Fulton House, the Appellate Division resolved a dispute that reminds us that we have not seen it all, and probably never will. At its core, the case was about the alleged breach of a contract between plaintiff and defendant. What made it interesting was the subject matter of the alleged breach — plaintiff accused defendant, a residential co-op corporation, of improperly appropriating a portion of his parking space and using it to store a snow blower.

In Sevinc, plaintiff purchased both a unit in the co-op and a parking space in the co-op's parking lot. The lease for the parking space did not describe the space's size, shape, or dimensions, but the size and shape were depicted on the architectural plans that the co-op included in its Public Offering Statement. There was no standard sizes for the parking spaces in the co-op's lot, and some spaces, including plaintiff's space, were larger than others because of where they were situated in the irregularly shaped lot. The size of his space was important to plaintiff because he was a limousine driver and needed extra room to park his Lincoln Town Car.

For almost two years, plaintiff parked in his space without incident. One day in the spring of 2011, however, he pulled in and found that a "metal box" had been placed in the left front corner of his space. A few days later, he saw the building's superintendent installing metal strips to hold the box in place. The superintendent told plaintiff that the co-op was relocating a snow blower to the front of his space and that the metal box would be used to store gas cans for the snowblower. Shortly thereafter, the co-op had white and yellow lines painted on the left side of his space, "all the way from the rear of his space to the front, where the snow blower and gas can container were now located." The newly-configured space was ten-feet wide, the same size as other spaces in the lot but one-third smaller than plaintiff's original space. Plaintiff's car still fit in the space, but pulling in and out was more difficult. 

 

Continue reading “Of Parking Spots and Snow Blowers”

Municipality Need Not Negotiate With Mortgage Holder Before Condemning Property

By: Peter J. Gallagher

Last year, we told you about a decision from the Appellate Division holding that a condemning authority does not have to engage in bona fide negotiations with a mortgage holder that has obtained final judgment on the property that the authority is seeking to condemn. Click here for the prior post. The Supreme Court has now affirmed the Appellate Division’s decision.

Under New Jersey law, before condemning real property, a condemning authority must, among other things, engage in bona fide pre-litigation negotiations with the party that "owns title of record to the property."  N.J.S.A. 20:3-6. Prior case law had made clear that this limitation meant that a condemning authority was not required to negotiate with a leaseholder or some other party that might have an "interest" in the property, but was instead required to negotiate only with the record title owner. In Borough of Merchantville v. Malik & Son, LLC, however the Supreme Court was faced with a slightly different question — whether a municipality needs to negotiate with an entity that held the mortgage on the underlying property, had obtained final judgment of foreclosure against the title owner, and was on the verge of taking the property to sheriff’s sale. The Supreme Court ruled that it does not.

 

Continue reading “Municipality Need Not Negotiate With Mortgage Holder Before Condemning Property”

Eminent Domain Reform Advances In The Garden State

by:  Peter J. Gallagher

New Jersey is one step closer to updating its eminent domain laws for the first time since the U.S. Supreme Court handed downs its landmark Kelo v. City of New London decision in 2005. On March 4, 2013, the Senate Community and Urban Affairs Committee voted unanimously to approve a bill (S-2447) that would, according to a press release from Senate Democrats, “create a two-track system for redevelopment, establishing separate requirements for redevelopment projects that would involve condemnation and for those that would not.” The two tracks would protect homeowners whose properties might otherwise be subject to condemnation, while also creating a more streamlined process for municipalities undertaking redevelopment projects that do not involve condemnation.

According to the press release:

The legislation would require municipalities to advise property owners within a proposed redevelopment area of the municipality’s intent to use or not use eminent domain to facilitate a redevelopment plan at the outset of the redevelopment study as well as to provide specific notice of such designation. Unless a municipality notifies owners of property located in a proposed redevelopment area that the designation will allow the municipality to take property located in the area by eminent domain – or that the proposed area is a Condemnation Redevelopment Area – the “Local Redevelopment Housing Law” would not authorize the use of eminent domain.

The bill would also authorize municipalities that intend to implement redevelopment initiatives without using eminent domain to do so but to still take advantage of the other tools available under the LRHL that encourage and facilitate economic development activities, create job opportunities, increase commerce, and enhance ratable values within their communities during these difficult economic times. This process would require designating the proposed area as a Non-Condemnation Redevelopment Area.

Having made it out of the Senate Community and Urban Affairs Committee, the bill now heads to the Senate Budget and Appropriations Committee. Stay tuned for more updates.

Condemning Authority Not Required To Negotiate With Mortgagee

by:  Peter J. Gallagher

 In a recent opinion, Borough of Merchantville v. Malik & Son, LLC, the New Jersey Appellate Division held that a condemning municipality was not required to negotiate with a party that had obtained a final judgment of foreclosure on the property that the municipality was looking to condemn.  Under New Jersey law, before condemning real property, a condemning authority must, among other things, engage in bona fide pre-litigation negotiations with the party that "owns title of record to the property."  Prior case law had made clear that this limitation meant that a condemning authority was not required to negotiate with a leaseholder or some other party that might have an "interest" in the property, but was instead required to negotiate only with the record title owner. 

In Malik & Son, a lienholder argued that, by virtue of it having obtained final judgment of foreclosure on the property, it stepped into the shoes of the record title holder, and the municipality should have been negotiating with it instead of the record title holder.  Specifically, the lienholder argued that it was not like a leasholder or even a "mere mortgage holder," but was instead the true "stakeholder and only party with a genuine interest in negotiating the sale of the property" because it had possession of the property, the right to sell it, a final judgment of foreclosure, and had scheduled a sheriff's sale by the date of the taking .  Relying on the plain language of the relevant statutes, the trial court rejected this argument, and the Appllate Division affirmed its decision.  The Appellate Division further explained that the municipality did not preclude the record title holder from discussing the negotiations with the lien holder, and that the lienholder — as a "condemnee with a compensable interest," albeit not the record title holder — could participate in subsequent valuation and allocation eminent domain proceedings. 

“Put Your Makeup On, Fix Your Hair Up Pretty, And Meet Me Tonight In Atlantic City.”

by:  Peter J. Gallagher

Apparently there is more than fist bumping (pumping?) going on "down the Shore."  The PropertyProf Blog has an interesting story about what it calls "A Non-Taking On The Jersey Shore."  If nothing else, the story gives me a work-related reason to go down to Atlantic City.  I don't really want to go down to the casinos, I have to do it for the sake of the blog . . .

The article tells the story of a tiny lot sandwiched in between Trump Plaza and Cesar's Palace.  It is zoned for gambling, which the post notes "doesn't exactly seem like the highest and best use."  But, the lot has some history, as it was at the center of a high-profile takings case from the early days of the once booming (now not really booming) gambling mecca:

Vera Coling and her husband bought the property in 1961, when Atlantic City was still a thriving beachtown. A decade later, as the city fell into decline, it made the drastic decision to legalize gambling and welcome big-time casino development.  The prime location of Coking's three-story house quickly attracted the interest of the real estate industry. In 1983, for example, Bob Guccione (the founder of Penthouse), offered to purchase the house for $1 million to build a casino. Coking said no.

Soon enough, the property attracted the attention of another tycoon – Donald Trump.  Unlike Guccione, Trump had the local redevelopment agency attempt to acquire the property through eminent domain for $250,000, a much reduced price.  Coking sued Trump and the redevelopment agency, claiming that the taking was not for a public purpose.  The Superior Court in New Jersey agreed with Coking.  It ruled that because there were few restrictions on what Trump could do with the property, there were "no assurances that the public interest will be protected."

The post notes that the arguments raised in the case are "[o]f historical interest for property profs" and other folks interested in takings, because it was "the Institute for Justice's first test case for the theories it later advanced in Kelo [v. City of New London]," the controversial eminent domain/takings case decided by the U.S. Supreme Court a few years back.

Also of historical interest is the interview with Donald Trump embedded in the post, which presents a much younger, pre-Apprentice, less coiffed, but no less pompous, version of the Donald. 

Finally, in case you are interested, the property is for sale.  Here is the listing.  It can be yours for only $5 million, or slightly less than what this guy took from the Tropicana in a marathon gamling session a few weeks ago.