NJ Supreme Court issues opinion in “a bizarre condemnation” case

This morning the New Jersey Supreme Court issued an unanimous opinion in the inverse condemnation/regulatory takings/adverse possession case Klumpp v. Borough of Avalon, No. A-49-09 (June 22, 2010), for which the New Jersey Law Journal coined the phrase “a bizarre condemnation.”

In the wake of the 1962 Atlantic nor’easter storm that devastated much of the New Jersey shore, the Borough of Avalon built a protective dune on property owned by plaintiffs Edward and Nancy Klumpp. Plaintiffs’ appeal challenges the Borough’s failure to adhere to procedural requirements in executing the taking of their private beachfront property and raises the question whether they should be denied relief on the basis that their claim is out of time.
-Excerpted from the Syllabus of the Court’s June 22, 2010 Opinion

In its unanimous decision, the New Jersey Supreme Court found in favor of the property owners – providing an opportunity for the owners to amend their original complaint to include inverse condemnation and remanding the case to the trial court for further proceedings to determine the amount of just compensation the Borough must pay to the property owners. The decision in a nutshell:

1. Following the storm in 1962, the Borough of Avalon adopted resolutions permitting it to take possession of beachfront property for the purpose of constructing a protective dune system, without first paying just compensation. By the end of 1965, Avalon had built a dune on the Klumpps’ property, erected a fence to limit access to it and constructed a footpath across the property for public beach access. The Borough’s actions amount to a physical taking of the Klumpps’ private property.
2. The normal relief for a property owner in a situation similar to that faced by the Klumpps would be to pursue an inverse condemnation action, for which a 6-year statute of limitations exists. However, given the unique facts of this case, application of the 6-year statute of limitations does not satisfactorily resolve this case.
3. Although property owners should notice the physical invasion of or taking of their property by the government and should seek to protect their property interests, the government should also provide some form of notice to affected property owners before and after a physical taking, in addition to the physical appropriation of the property itself. In the instant case, the Borough of Avalon did no such thing. Rather the Borough effectively skirted the issue for years through its contradictory positions on the issue. Further, by charging property taxes and designating the Klumpp property as private on the official Borough map, Avalon effectively confused the the property owners into believing that they always held title to their property.
4. “Equity demands that the Klumpps be allowed the opportunity to amend their complaint to include a claim for inverse condemnation.” (Opinion at p. 33). The case is, therefore, remanded to the trial court for further proceedings to determine the amount of just compensation the Borough must pay to the property owners for the taking of their private property. Further, the property owners are entitled to value of property as of date of taking, in this case on or around 1965, plus interest for the last 45 years.

Thanks to Robert Thomas for alerting us to the release of the opinion in this case, despite his vantage point in Hawaii/West Coast, he always seems to know about these things before we do here on the East Coast. For Robert’s commentary on this “bizarre condemnation” visit his blog here and here.

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