Community Corner

Supreme Court Throws Out $375K Dune Judgment

Case remanded to trial court; future jury will have to consider whether Karans received benefit from dune protection

In a landmark ruling that could lead to the reshaping of New Jersey's coastline, the state Supreme Court issued an opinion Monday that threw out a $375,000 jury award a Harvey Cedars couple received after a sliver of land in front of their oceanfront home was taken in order to allow a dune replenishment project to move forward.

Perhaps more importantly, the ruling remanded the case back to an Ocean County trial court and ordered that the special storm protection Phyllis and Harvey Karan's home received from the project must be considered when a value for the easement is assessed.

Several municipalities on Long Beach Island, including Ship Bottom and Long Beach Township, are waiting for oceanfront homeowners to sign easements to allow a replenishment project there to go forward. The ruling is also particularly applicable to Ocean County's northern barrier island, where an $86M replenishment project has been designed and funded but has not started due to easement holdouts.

Earlier this year, Mantoloking hired an attorney to pursue eminent domain claims against holdouts there.

The Karans, after the borough took the small easement, claimed the 22 foot-high dunes blocked their ocean view and diminished the value of their property. Harvey Cedars officials argued that the Karans' property value remained nearly the same since the loss of view was tempered with increased storm protection. However an Ocean County trial court judge ruled that the potential value of the storm protective measure – what is known legally as a "special benefit" – was not to be considered by the jury.

Writing for the majority, Justice Barry T. Albin said the jury should have been instructed to consider whether the Karans received a special benefit through the replenishment project before they were awarded $375,000 for the taking of land.

"The trial court’s charge required the jury to disregard even quantifiable storm-protection benefits resulting from the public project that increased the fair market value of the Karans’ property," Albin wrote. "In short, the quantifiable decrease in the value of their property -- loss of view -- should have been set off by any quantifiable increase in its value -- storm- protection benefits."

"The Karans are entitled to just compensation, a reasonable calculation of any decrease in the fair market value of their property after the taking," Albin continued. "They are not entitled to more, and certainly not a windfall at the public’s expense."

In its decision, the high court ruled that in future proceedings, the borough will have the opportunity to present testimony to a jury on "non-speculative, reasonably calculable benefits" the Karans would have received at the time of the 2009 taking.

The Karans' E. 68th St. home survived Superstorm Sandy.

If juries – and, first, municipalities in their initial estimates – in future cases are allowed to consider whether oceanfront homeowners who receive dunes in front of their homes will directly benefit from such a project, potential six-figure awards could be reduced to as little as a few hundred dollars.

Coastal municipalities would then be more likely to use eminent domain to take easements from oceanfront homeowners who refuse to allow their land to be used in beach replenishment projects and, as a result, hold up such projects in their entirety.


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