Harvey Cedars couple settles partial-taking case for $1

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Settlement will affect future just compensation payments in shore towns

TRENTON – A settlement Wednesday, Sept. 25 in the Harvey Cedars legal dispute regarding just compensation for the partial taking of beachfront property has far-reaching implications for all shore towns, according to acting Attorney General John J. Hoffman and Department of Environmental Protection Commissioner Bob Martin.

Hoffman and Martin announced Wednesday that the legal dispute has been settled for $1 as compensation for an easement obtained by the borough of Harvey Cedars for its construction of a storm-abating sand dune.

Ocean City is currently in the process of obtaining 200 easements from 24th Street to 59th Street for a southend beach replenishment project. For any easements not granted, the city will file a declaration of taking and try to negotiate fair compensation for the portion of the property taken, solicitor Dottie McCrosson said in July.

On July 8, an appellate decision in the eminent domain partial-taking case was reversed by the New Jersey Supreme Court. The court ordered a retrial for Harvey and Phyllis Karan, who had been awarded $375,000 by a jury after the borough of Harvey Cedars took a portion of their beachfront property for dune construction.

The case arose when Harvey Cedars used the power of eminent domain to take the easement for the construction of a 22-foot high dune in front the Karans’ property as part of a government-funded replenishment project on Long Beach Island. The dunes partially obstruct the Karans’ view.

The borough and the Karans failed to agree on the amount of just compensation for the taking of more than a quarter of the property, and the case found its way to a jury trial.

Just compensation is the difference between the fair market value of the property before the taking and the fair market value of the remaining property after the taking.

In reversing the jury award, the New Jersey Supreme Court held that homeowners who are subject to property-taking on behalf of public projects “are not entitled to a windfall.”

The settlement Wednesday was reached given the new state of the law in New Jersey governing compensation for shoreline easements since Hurricane Sandy, and should guide all future disputes and settlements, according to a release from the state attorney general and New Jersey Department of Environmental Protection.

“This settlement represents an important outcome for the citizens of New Jersey, for our precious natural resources along the coast, and for the rebuilding of our Jersey Shore communities. It is to the Karans’ credit that they were willing to put a halt to this protracted legal dispute following the Supreme Court’s decision,” Hoffman said.

“Superstorm Sandy proved that beaches and dunes built to Army Corps of Engineers’ specifications work – they protected property and they saved lives,” Martin said. “The Christie administration is committed to securing the remaining easements needed to build a full coastal protection system for New Jersey that meets these standards. Now is the time for the remaining holdouts to step forward and provide easements that will protect not only their own properties but will also protect their neighbors’ properties and their entire town. To them we say, do the right thing and help us to protect the shore, which all of us share and treasure.”

Assistant Attorney General Christopher S. Porrino, who also argued the matter in the Supreme Court, said that the state expects that other beachfront property owners will take their cue from the outcome in this case.

Separate and apart from the $1 compensation paid to the Karans for the borough’s easement, the borough agreed to reimburse counsel’s out-of-pocket litigation costs of $24,260. No legal fees were paid. No post-Sandy cases going forward will be treated in this regard. The reimbursement for litigation costs was appropriate in this situation because the Karans’ original complaint predated the recent change in law by the Supreme Court, according to the news release from the attorney general’s office.

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