Opinion
DOCKET NO. A-6036-10T3
06-12-2013
TOWNSHIP OF MONTVILLE, Plaintiff-Appellant, v. LOTTA LETTUCE J.T.S. FARMS, LLC and STATE OF NEW JERSEY, DEPARTMENT OF ENVIRONMENTAL PROTECTION, Defendants-Respondents, and COUNTY OF MORRIS, Defendant.
Jeffrey D. Gordon and Gary S. Rosensweig argued the cause for appellant (Archer and Greiner, P.C., attorneys; Mr. Gordon, Mr. Rosensweig, and A. Paul Genato, on the brief). Anthony F. Della Pelle argued the cause for respondent Lotta Lettuce J.T.S. Farms, LLC (McKirdy & Riskin, P.A., attorneys; Mr. Della Pelle, of counsel; Cory K. Kestner, on the brief). Helene P. Chudzik, Senior Deputy Attorney General, argued the cause for respondent Department of Environmental Protection (Jeffrey S. Chiesa, Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel; Ms. Chudzik, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Yannotti, Harris, and Hayden.
On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-1821-04.
Jeffrey D. Gordon and Gary S. Rosensweig argued the cause for appellant (Archer and Greiner, P.C., attorneys; Mr. Gordon, Mr. Rosensweig, and A. Paul Genato, on the brief).
Anthony F. Della Pelle argued the cause for respondent Lotta Lettuce J.T.S. Farms, LLC (McKirdy & Riskin, P.A., attorneys; Mr. Della Pelle, of counsel; Cory K. Kestner, on the brief).
Helene P. Chudzik, Senior Deputy Attorney General, argued the cause for respondent Department of Environmental Protection (Jeffrey S. Chiesa, Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel; Ms. Chudzik, on the brief). PER CURIAM
This is an eminent domain and declaratory judgment action relating to a farmer's well and the water rights associated with land located in Montville. Plaintiff Township of Montville appeals from the Law Division's orders of March 25, May 12, and December 2, 2011, which together found that (1) aspects of Montville's local legislation restricting the establishment and operation of wells within the municipality was preempted by state law and defendant Department of Environmental Protection (DEP) regulations; (2) Montville had temporarily taken certain property rights of defendant Lotta Lettuce J.T.S. Farms, LLC (Lotta Lettuce) through inverse condemnation; and (3) Lotta Lettuce was entitled to reallocation of certain costs, disbursements, and expenses pursuant to N.J.S.A. 20:3-26(c). We affirm in part and reverse in part.
I.
The parties' dispute has its genesis in 1998, when Montville and Lotta Lettuce's predecessor-in-title entered into a license agreement giving Montville the right to enter the twenty-eight-acre property (Block 32, Lot 28 on the municipality's tax map) and install a "water production test well." Montville sought to use the well to monitor water levels in the Towaco Valley Aquifer — serving Montville's 20,000 residents — located beneath the subject property. The license agreement was for five years, with an expiry in November 2003. According to DEP records, the monitoring well was installed in August 1998. In March 2002, Lotta Lettuce acquired the property as protected farmland and continued to devote the land to agricultural uses.
The licensee was the Montville Township Municipal Utilities Authority, which has since ceased to exist. The municipality apparently succeeded to all of the Authority's rights.
Montville operated three separate production wells drawing water from the Towaco Valley Aquifer at different locations. The monitoring well that is the subject of this appeal is known as the Cooks Lane Monitoring Well.
The Well Record filed with the DEP describes the infrastructure and appurtenances that were associated with the monitoring well at the time it was installed. The finished depth of the well was 153.5 feet, comprised of a six-inch diameter steel casing extending two feet above grade. A temporary submersible pump was placed inside the casing approximately ninety feet below the land surface. According to a 2005 certification, "there are no electrical connections or water production lines. Access is obtained by a municipal employee walking up to the monitoring well with a hand-held cable that is inserted into the well to measure the elevation of the water." The record further suggests that Montville installed a locking device on the aboveground casing, giving it sole access to the contents of the monitoring well.
On February 25, 2003, Montville adopted Ordinance No. 2003-12, which, except for individual private residences, sought to prohibit new commercial wells in the area of Lotta Lettuce's property. Lotta Lettuce immediately (and informally) objected to Ordinance No. 2003-12, writing, "the . . . Right to Farm Act[,] N.J.S.[A]. 4:1C-1 et seq.[,] clearly and unequivocally prohibits the Township from enacting requirements that will have the direct or indirect effect of preventing . . . farming use of the property."
In short order, Montville conceded that Lotta Lettuce was exempt from Ordinance No. 2003-12, and hence was entitled to drill a well of its own. In the letter recognizing Lotta Lettuce's rights, Montville also expressed the municipality's interest in acquiring a permanent easement for the monitoring well already on the property because the license agreement was to expire in November 2003.
On July 14, 2003, Lotta Lettuce provided Montville with written notice that the license would not be renewed, and requested that, pursuant to the terms of the license agreement, Montville "remove all improvements placed on the licensed area, seal the well and restore the property." Accordingly, by its terms, the license agreement expired on November 19, 2003. Notwithstanding the end of the arrangement, Montville did not cap the well, and its employees continued to make use of it from time to time for monitoring purposes.
On January 27, 2004, Montville adopted Ordinance No. 2004-05, which authorized its municipal attorney to "take any and all legal steps and proceedings . . . to acquire title to a portion of Block 32, Lot 28 . . . from Lotta Lettuce . . . for public use and purposes by the Township of Montville." Although the title of the ordinance was "Ordinance Authorizing the Acquisition of a Well Access Easement Over a Portion of Block 32, Lot 28, (Lotta Lettuce J.T.S. Farms, LLC) By Condemnation" the enactment section of the ordinance made no mention of the well, water rights, or an access easement to the wellhead.
Notwithstanding the clumsy drafting of this enabling ordinance, we are guided to its interpretation by the principle that "[l]egal formalisms should not be permitted to defeat substance, for it is the actual intent of the [governing body] that is the central concern as opposed to the manner in which it has expressed itself." Asbury Park Press v. Ocean Cnty. Prosecutor's Office, 374 N.J. Super. 312, 325 (Law Div. 2004).
Five months later, on June 25, 2004, Montville filed the pleading that started this litigation: a one-count eminent domain complaint stating its intention to acquire through condemnation a "permanent easement" consisting of 4982.70 square feet on Block 32, Lot 28. The complaint said nothing about the well itself or the water rights under the surface. Montville offered $1000 as compensation for the property interest it sought to acquire based upon an August 7, 2003 appraisal report. Montville did not then file a declaration of taking pursuant to N.J.S.A. 20:3-17, nor did it deposit the estimated compensation with the clerk of the Superior Court in accordance with N.J.S.A. 20:3-18.
On September 29, 2004, Lotta Lettuce filed its answer and counterclaim. It asserted that although Montville had the authority to acquire lands or rights therein by condemnation pursuant to N.J.S.A. 40A:12-5(a)(1), it denied that "such authority [had] been properly exercised with respect to the subject property."
In its counterclaim, Lotta Lettuce sought limited declaratory relief relating to Montville's alleged abandonment of the monitoring well itself and the appurtenances that remained on Lotta Lettuce's land. The counterclaim did not expressly seek inverse condemnation remedies for either a physical invasion or a regulatory taking. After the issues were joined, the parties attempted to resolve their differences through court-sponsored mediation. That process was unsuccessful, and the parties resumed active litigation a few months later in March 2005.
At the time the counterclaim was filed, there was no factual basis for an allegation of a regulatory taking because Ordinance No. 2003-12, which constrained the installation of commercial wells, was then conceded to have no effect upon Lotta Lettuce.
Shortly after Lotta Lettuce's answer and counterclaim were filed, Montville adopted Ordinance No. 2004-64 on October 12, 2004. This ordinance sought to regulate existing irrigation wells, and expressly prohibited the drilling of a new irrigation well unless it "replace[d] an on-site private individual well which was existing and utilized at the time that the building and premises were connected to the Township's water system, and was continuously maintained for irrigation purposes only."
In March 2005, without asking permission to file an amended complaint, Montville obtained from the Law Division an ex parte injunction seeking to "enjoin and restrain [Lotta Lettuce] from placing a production well on the subject . . . property and from taking any actions whatsoever regarding the Township of Montville monitoring well located on the property." Lotta Lettuce responded with, among other things, a motion to dissolve the temporary restraints. It also proceeded to file an Agricultural Water Usage Registration Application with the DEP for permission to divert water from the Beaver Brook for irrigation purposes. While that application was pending, Lotta Lettuce added a request to the DEP for emergency approval of a well re-designation to permit its use of the monitoring well for irrigation purposes. The DEP granted the permit (No. AGR050001) on June 29, 2005, nine days after the ex parte injunction was vacated by the Law Division.
The claimed emergency was that Lotta Lettuce had "planted sweet corn on the property which needs irrigation in order to produce a marketable crop." The DEP changed the well's designation from a "test well" to an "irrigation well."
Instead of challenging the DEP's well re-designation by filing an appeal of the agency's action in this court, Montville returned to the Law Division in early July 2005 seeking to (1) amend its eminent domain complaint, (2) add the DEP as a party for declaratory judgment purposes, and (3) obtain a new injunction against Lotta Lettuce. On July 18, 2005, the Law Division entered an order (1) permitting the complaint to be amended; (2) enjoining Lotta Lettuce from "taking any action whatsoever" (a) regarding the monitoring well and (b) regarding permit No. AGR050001; and (3) staying the condemnation action. Additionally, the order provided that Montville would make available to Lotta Lettuce — mostly free of charge — a connection to a nearby fire hydrant to obtain "up to 100,000 gallons [of water] per day at 140 [pounds per square inch]," supplementary to Lotta Lettuce's permitted right to draw water from the Beaver Brook for irrigation purposes.
In support of its application to amend the complaint, Montville averred, "[i]n preparing for [m]ediation and during [m]ediation, it became apparent that the language used in the [c]omplaint may not have clearly identified the facts and relief sought."
The eminent domain amended complaint indicated that the property interest Montville now sought was "a permanent easement for non-exclusive access to and in the lands supporting the monitoring well located therein." Lotta Lettuce's answer and counterclaim did not expressly seek inverse condemnation remedies for either a physical invasion or a regulatory taking, even though by the counterclaim's July 20, 2005 filing date, the monitoring well had remained on its property without a license agreement in place for almost two years, and the Law Division's injunction — preventing Lotta Lettuce's use of the monitoring well and permit No. AGR050001 — had been issued days earlier.
Montville finally filed a declaration of taking on March 8, 2006, and deposited the $1000 estimated compensation with the clerk of the court on the same day. Attached to the declaration of taking was a survey drawing depicting a "well access easement" fifteen feet wide by 332.18 feet long, within which was drawn a small circle denominated "monitoring well." The easement provided access from Cooks Lane — across Lotta Lettuce's land — to the monitoring well.
Thereafter, the parties engaged in extensive motion practice, with Lotta Lettuce seeking to vacate the injunction, and Montville seeking summary judgment declaring its right to condemn. The Law Division ultimately entered judgment on the eminent domain action in Montville's favor on December 19, 2006 The order for judgment of that date recited,
the plaintiff, Township of Montville, has duly exercised its power of eminent domain as to the property rights described and depicted in the Amended Complaint dated July 7, 2005[,] as modified on the record by the Plaintiff to seek an unallocated, rather than dedicated, access easement to reach the exclusive 2' X 2' easement to the subject matter well site."Montville was granted leave to file a "[s]econd [a]mended [c] omplaint and [d]eclaration of [t]aking . . . to further clarify the property rights" against which Montville exercised the power of eminent domain. Condemnation commissioners were appointed pursuant to N.J.S.A. 20:3-12(b) with instructions to file their report pursuant to Rule 4:73-4 "within 120 days from the date upon which the "[s]econd [a]mended [c]omplaint and [d] eclaration of [t]aking are filed." The order also continued the injunction embodied in the Law Division's July 18, 2005 order enjoining Lotta Lettuce from "taking any action whatsoever" regarding the monitoring well and permit No. AGR050001.
Still relying upon Ordinance No. 2004-05, Montville's second amended complaint — almost identical to the first amended complaint except for the eminent domain count (count one) — was filed in late July 2007. The record does not reveal whether a responsive pleading was ever filed by Lotta Lettuce.
Montville now described the property to be condemned as "an exclusive permanent easement to and in the lands immediately adjacent to and supporting the monitoring well located therein within a two square foot footprint" and "a permanent non-exclusive access easement to and in the lands supporting the monitoring well." Inexplicably, in two exhibits attached to the pleading, Montville described the area directly adjacent to the monitoring well as "3' wide X 3' deep." An amended declaration of taking was filed on August 1, 2007, which consistently described the wellhead area as "three feet by three feet."
On December 10, 2007, the condemnation commissioners rendered their report, determining that $18,000 was the proper compensation for the property interest taken by Montville. On December 28, 2007, Lotta Lettuce, believing that the "loss of reliable irrigation" affected the value of its property to a much greater extent, filed an N.J.S.A. 20:3-13 appeal in the Law Division. In early 2008, Lotta Lettuce unsuccessfully attempted to obtain a municipal permit to install another irrigation well on its land.
Lotta Lettuce ultimately sought $276,000 as compensation. This amount appears for the first time in the record in Lotta Lettuce's June 2, 2008 appraisal, which was to be utilized in its appeal of the condemnation commissioners' award.
Almost three years elapsed without any significant movement in the litigation, which now consisted of (1) Lotta Lettuce's appeal of the condemnation commissioners' award, (2) Montville's declaratory judgment action against the DEP, and (3) Lotta Lettuce's declaratory judgment counterclaim against Montville. Apparently, the parties' energies were mostly directed to resolving their disputes but we cannot readily account for the lengthy lag in disposing of the case. The case did not settle.
Eventually, in late 2010, a trial date was scheduled, triggering a flurry of motion practice. The DEP and Montville each moved for summary judgment relating to the question of the relationship between Montville's and the DEP's authority over the establishment and operation of agricultural wells in the municipality. Lotta Lettuce cross-moved against Montville only, seeking declarations that (1) Lotta Lettuce had the right to divert water notwithstanding Ordinance No. 2004-64 and (2) Montville had "effected a de facto taking of Lotta Lettuce's water rights based on its action in this matter."
Montville's retort was that the eminent domain action relating to the access easement never sought all of Lotta Lettuce's water rights. Nevertheless, as to the monitoring well, it argued, "the Town owns the spot on the earth where this hole was drilled," and it conceded, "[it] did take . . . the right to take subsurface water from this location." Lotta Lettuce's comeback was the following:
this is analogous to an inverse condemnation finding where their physical actions have
shown what they have actually acquired or taken without our consent, and under that situation it would then move into the next phase of an inverse condemnation case, which is a regular condemnation in a valuation proceeding.
The Law Division held that Montville's eminent domain proceeding was limited to the contours of Ordinance No. 2004-05, thereby resulting in "a surface taking, nothing more. Well rights were not taken." The court observed that Montville had prohibited Lotta Lettuce from "exercising [its] rights to operate under the [DEP] permit," but "nobody has briefed the issue of whether inverse condemnation has occurred." Believing that the issue was present but unaddressed in the papers, the court granted the parties an opportunity to weigh in by submitting briefs regarding a possible regulatory taking emanating from the well construction prohibition in Ordinance No. 2004-64 and the July 18, 2005 injunction.
After receiving the parties' written positions and affording a second round of oral argument, the Law Division ruled against Montville.
Montville argued that not only was the issue of inverse condemnation never pled in Lotta Lettuce's responsive pleadings, but it was now barred by the six-year limitation of actions rule of N.J.S.A. 2A:14-1. The municipality also contended, "it was the Township ordinances, not this . . . action and the condemnation that resulted in this deprivation of water rights," and Lotta Lettuce never demonstrated "a total loss of use of the property."
Lotta Lettuce argued that notwithstanding the filing of the eminent domain action in 2004, Montville engaged in "a course of conduct which involves both physical actions and regulatory actions which have deprived [Lotta Lettuce] of the use of the ground water on [its] property" since March 2005. Conceding that its pleadings never expressly averred a cause of action for inverse condemnation, Lotta Lettuce nevertheless contended that Montville was on notice of Lotta Lettuce's grievance — a putative deprivation of property rights — since at least July 2005.
The motion court determined that Montville "prevented the valid permit issued by the State of New Jersey to be employed by [Lotta Lettuce]. That constitutes inverse condemnation." Finding "the bottom line" to be, "once the DEP permit was issued there was a duty to honor that permit," the municipality had "exceeded its rights." The court found that this was a permanent taking unless "the Town withdraws its injunction, seeks to withdraw its injunction, [and] allows full access."
The court rejected the limitation of actions argument, and further treated Lotta Lettuce's 2005 counterclaim and 2008 appraisal for its valuation appeal as "seek[ing] damages for something which was not included within the declaration of taking."
On the preemption issue, after canvassing the relevant statutes, the court declared that Montville's ordinance did not prevail over the DEP's regulations and the Right to Farm Act, N.J.S.A. 4:1C-1 to -10.4, and any DEP permit issued to Lotta Lettuce "is a valid permit." The court stated that it was unnecessary to invalidate the ordinance "by virtue of the fact that this is [a] somewhat unique circumstance[]," and "it's sufficient to say that the ordinance has no application to this particular piece of property as long as it's used for agricultural purposes."
An order memorializing the court's preemption decision was entered on March 25, 2011. A separate order regarding inverse condemnation was entered on May 12, 2011, which was followed by a June 10, 2011 consent order vacating the July 18, 2005 injunction. On July 22, 2011, an order was entered appointing condemnation commissioners to adjudge compensation for the regulatory taking — now treated, as agreed by the parties, as a temporary taking beginning on July 18, 2005, and ending on June 30, 2011. Presumably, the valuation trial that was initially triggered by Lotta Lettuce's appeal of the 2007 condemnation commissioners' award was obviated, and any unresolved issues emanating therefrom would be addressed, if necessary, after the second commissioners' report was issued. This appeal followed.
On October 28, 2011, we entered an order of limited remand to permit the Law Division to rule on Lotta Lettuce's motion for counsel fees and costs. On December 2, 2011, the motion court reallocated $16,825 pursuant to N.J.S.A. 20:3-26(c).
II.
A.
All of the contested issues in this case were resolved through summary judgment motion practice. Accordingly, we are tasked to review the matter de novo and are governed by the same standard governing the motion court under Rule 4:46. Khandelwal v. Zurich Ins. Co., 427 N.J. Super. 577, 585 (App. Div. 2012). Thus, the "'trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference.'" McDade v. Siazon, 208 N.J. 463, 473 (2011) (quoting Estate of Hanges v. Metro Prop. & Cas. Ins. Co., 202 N.J. 369, 382-83 (2010) (citing Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)).
B.
We start with the preemption issue. Montville claims that the Law Division erred in concluding that the DEP-issued permit No. AGR050001 superseded Ordinance No. 2004-64's prohibition of well construction in designated areas. The municipality argues that it shares concurrent jurisdiction with the DEP over the municipal water supply, and its constraint on Lotta Lettuce's well activities was reasonable. Furthermore, it contends that Ordinance No. 2004-64, by prohibiting new irrigation wells in the vicinity of the Towaco Valley Aquifer, does not seek to regulate the public aquifer in a manner inconsistent with the DEP, but instead provides greater protection to the public, which is not inconsistent with DEP's goals. We do not agree with any of these contentions.
Statewide legislation and DEP implementing regulations regarding water supply (see e.g., N.J.S.A. 58:1A-1 to -17 and N.J.A.C. 7:19-1.1 to -18.6), well construction (see, e.g., N.J.S.A. 58:4A-4.1 to -28 and N.J.A.C. 7:9D-1.1 to -4.8), and agricultural activities and water usage (see, e.g., N.J.S.A. 4:1C-1 to -10.4 and N.J.A.C. 7:20A-1.1 to -4.4) together evince a clear intention to preempt local legislation on the same subject. Accordingly, we discern nothing erroneous in the motion court's conclusion that Ordinance No. 2004-64 had "no application to this particular piece of property as long as it's used for agricultural purposes, [and] that the permit prevails over local ordinance[s]."
Among the goals of the Legislature is the direction to the DEP to manage the State's water resources "to ensure an adequate supply and quality of water for citizens of the State, both present and future, and to protect the natural environment of the waterways of the State." N.J.S.A. 58:1A-2. The DEP is obliged to adopt "a monitoring, inspection and enforcement program, a program to study and manage the State's water resources and plan for emergencies and future water needs, and regulations to manage the waters of the State during water supply and water quality emergencies." Ibid.
Montville's ability to thwart these purposes, if Ordinance No. 2004-64 were to be granted concurrent vitality with DEP's state-wide oversight, is obvious. Simply because the ordinance limits certain diversionary activities does not mean that it can co-exist with DEP's contrary purpose, as implemented in this case by the issuance of Lotta Lettuce's authorization to divert water by stream and well. Moreover, the interplay of water management with the salutary purpose of fostering of agricultural activities, see, e.g., In re Agricultural, Aquacultural, & Horticultural Water Usage Certification Rules, 410 N.J. Super. 209, 226 (App. Div. 2009), cannot be harmonized with Montville's local ordinance that effectively overrides contrary state policy, as here.
Preemption is a "judicially created principle based on the proposition that a municipality, which is an agent of the State, cannot act contrary to the State." Overlook Terrace Mgmt. Corp. v. Rent Control Bd. of W.N.Y., 71 N.J. 451, 461 (1976). "Preemption analysis calls for the answer initially to whether the field or subject matter in which the ordinance operates, including its effects, is the same as that in which the State has acted. If not, then preemption is clearly inapplicable." Bubis v. Kassin, 184 N.J. 612, 629 (2005) (citation and internal quotation marks omitted). Whether a local ordinance is preempted turns upon the intention of the Legislature. Where it appears the Legislature intended "its own actions, whether it exhausts the field or touches only part of it, to be exclusive," the local ordinance is preempted. Mack Paramus Co. v. Mayor & Council of Paramus, 103 N.J. 564, 573 (1986) (citation and internal quotation marks omitted).
In Overlook Terrace, the Court outlined five factors to consider in determining whether the Legislature intended preemption:
1. Does the ordinance conflict with state law, either because of conflicting policies or operational effect (that is, does the ordinance forbid what the Legislature has permitted or does the ordinance permit what the Legislature has forbidden)?We are satisfied that the array of water management and farming protective statutes involved in this appeal fully answer each of the foregoing five factors of Overlook Terrace in favor of preemption. Ordinance No. 2004-64 detrimentally impinges upon the DEP's statewide authority to make water allocation decisions and detracts from the recognition that water is a public asset, which must be planned for and managed as a common resource for everyone in this State. Accordingly, Montville's parochial attempt to protect only its citizens through the application of Ordinance No. 2004-64, and thereby prevent Lotta Lettuce's implementation of DEP permit No. AGR050001, was preempted and ineffectual. The Law Division's conclusion to that effect was correct.
2. Was the state law intended, expressly or impliedly, to be exclusive in the field?
3. Does the subject matter reflect a need for uniformity?
4. Is the state scheme so pervasive or comprehensive that it precludes coexistence of municipal regulation? [and]
5. Does the ordinance stand "as an obstacle to the accomplishment and execution of the full purposes and objectives" of the Legislature?
[Id. at 461-62 (citations omitted).]
We view both Borough of Avalon v. New Jersey Department of Environmental Protection, 403 N.J. Super. 590 (App. Div. 2008), certif. denied, 199 N.J. 133 (2009), and McGovern v. Borough of Harvey Cedars, 401 N.J. Super. 136 (App. Div. 2008), as inapposite. In both cases, we held that local regulations were not preempted by the Coastal Area Facilities Review Act (CAFRA), N.J.S.A. 13:19-1 to -21, because in "conferring regulatory authority upon the DEP over land uses in the coastal zone, the Legislature did not authorize the DEP to preempt the basic municipal power to manage and control municipally-owned beaches, including deciding when those areas should be open to the public," Borough of Avalon, supra, 403 N.J. Super. at 601, and "[t]he ordinance thus protects both the dunes and the buildings [and] CAFRA does not prevent municipalities from providing more protection to the dunes than CAFRA would allow," McGovern, supra, 401 N.J. Super. at 151. In the present case, the confluence of the State's stewardship of the water supply, comprehensive oversight of well construction, and protection of farming activities demonstrably bespeak the need for a one-voice approach unlike the overlapping circumstances implicated by the CAFRA and its undeniable shared-power structure.
C.
Montville next challenges the Law Division's determination that it "exceeded its rights" and "an act of inverse condemnation took place. . . . [O]nce the DEP permit was issued there was a duty to honor that permit. That's the bottom line." Regardless of whether such a regulatory taking actually occurred, Lotta Lettuce never asserted a State or Federal Constitutional taking claim, either temporary, permanent, or by inverse condemnation. Nor did it claim that Montville physically entered its property, yet it knew of the existence of the uncapped monitoring well on its land since at least November 19, 2003, when the license agreement expired. Instead, when confronted by Montville's 2004 eminent domain complaint it merely sought vague declaratory relief relating to the proper disposition of the monitoring well and its appurtenances; it neither sought nor claimed constitutional remedies. Nevertheless, almost seven years later, the Law Division sua sponte converted what had been pled as a declaratory judgment counterclaim into an inverse condemnation action. This was a mistake.
We discern several problems with the way this case was litigated, not the least of which has been the lengthy and lethargic manner of addressing the myriad issues. As early as October 12, 2004, when Ordinance No. 2004-64 was adopted, Lotta Lettuce knew its ability to extract water from a well on its property was detrimentally affected. By the entry of the injunction to that effect on July 18, 2005, any doubts about Montville's actions evaporated. Nevertheless, a challenge to Montville's conduct never appeared in a pleading. Instead, rather than directly place in issue the municipality's prohibitory activities, Lotta Lettuce waited until mid-2008 to spring a $276,000 damage claim on the municipality by weaving it into the valuation appeal of the first condemnation commissioners' award.
Lotta Lettuce argues that among Montville's drafting blunders and litigational gaffes, the municipality failed to abide the square corners doctrine in its dealings with Lotta Lettuce. See Klumpp v. Borough of Avalon, 202 N.J. 390, 413 (2010) ("It should go without saying that turning such square corners is minimally what citizens should be able to expect from their government. . . ."). That may be so, but the square corners doctrine is a two-way street. Indeed, the reciprocal obligation to deal fairly with the government springs from the doctrine's jurisprudential source. See Island, Ark. & La. R.R. v. United States, 254 U.S. 141, 143, 41 S. Ct. 55, 56, 65 L. Ed. 188, 189 (1920) ("Men must turn square corners when they deal with the Government."). In this case, we need not actually tar one party or the other with a label of unfair treatment; even in the face of municipal bungling, it is enough that Lotta Lettuce never joined the issue of the inverse condemnation in an appropriate manner and is therefore disqualified from pursuing such latecomer claims now. The motion court's detection of a potential issue that was not presented by the supposed aggrieved party had no capacity to render that issue viable.
"In an inverse condemnation action, a landowner is seeking compensation for a de facto taking of his or her property." Greenway Dev. Co. v. Borough of Paramus, 163 N.J. 546, 553 (2000). A property owner must be "deprived of all or substantially all of the beneficial use of the totality of his property" in order to bring a claim for inverse condemnation. Ibid. (citation and internal quotation marks omitted). Where the government "seizes property without first bringing a condemnation proceeding, the burden shifts to the individual to bring an action to compel condemnation, known as 'inverse condemnation.'" Klumpp, supra, 202 N.J. at 406. The Eminent Domain Act of 1971, N.J.S.A. 20:3-1 to -50 governs all condemnation cases, N.J.S.A. 20:3-4, including cases for inverse condemnation. Schiavone Constr. Co. v. Hackensack Meadowlands Dev. Comm'n, 98 N.J. 258, 265 (l985).
Even if its claim were properly and timely presented, Lotta Lettuce never proved its entitlement to inverse condemnation remedies. It is well settled that not every impairment in value establishes a taking. Karam v. Dep't of Envtl. Prot., 308 N.J. Super. 225, 235 (App. Div. l998), aff'd, 157 N.J. 187, cert. denied, 528 U.S. 814, 120 S. Ct. 51, 145 L. Ed. 2d 45 (1999). A constitutional taking may occur by a physical taking, in which the government takes title to or authorizes a physical appropriation of private property, or by a "regulatory taking, through which a government regulation deprives the property owner of all economically viable use of" its land. Klumpp, supra, 202 N.J. at 405. By either method, the takings clause requires the government to compensate the property owner. Ibid.
Here, Lotta Lettuce failed to present sufficient evidence to raise a genuine issue of material fact to demonstrate that either Ordinance 2004-64 or the July 18, 2005 injunction completely deprived it of all economically beneficial use of its property. Prohibiting the construction of a new irrigation well did not constitute a permanent invasion of Lotta Lettuce's property; nor did the inability to access subsurface waters prevent the use of the land for agricultural purposes. Any diminution in value — temporary or otherwise — is non-compensable. Accordingly, the motion court's declaration that inverse condemnation had occurred was incorrect. Additionally, its reallocation of expenses under N.J.S.A. 20:3-26(c) was entirely unwarranted.
Arguably, the monitoring well's presence on Lotta Lettuce's land, and Montville's utilization of it for monitoring purposes, between the time the license agreement expired (November 19, 2003) and the filing of the amended declaration of taking (August 1, 2007) was a physical invasion of the land. However, Lotta Lettuce never sought compensation for this governmental action, and the six-year period to assert such a claim expired on November 19, 2009.
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In summary, we affirm the Law Division's March 25, 2011 orders regarding DEP permit No. AGR050001 and Lotta Lettuce's rights thereunder. We reverse the May 12, 2011 order, which found that inverse condemnation had occurred; the July 22, 2011 order appointing commissioners; and the December 2, 2011 order reallocating fees and costs. To the extent that the parties have not fully litigated the valuation of the property interest taken pursuant to the December 19, 2006 order for judgment, as ultimately appealed by Lotta Lettuce in December 2007, the matter is remanded to the Law Division for expedited disposition of such dispute.
Affirmed in part; reversed in part; and remanded for further proceedings in conformance with this opinion. We do not retain jurisdiction.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APELATE DIVISION