May 6, 2013

High Court Declines Hearing on Partial Taking of Cemetery

Posted by Joseph Grather under Court Decisions, In the news | Tags: , , , , , , , |
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Last week, the New Jersey Supreme Court denied a petition for certification filed by the Diocese of Camden in behalf of St Mary’s Cemetery in Bellmawr.  As reported by the Republic.com, in 2010, the New Jersey Department of Transportation acquired by exercise of eminent domain a six acre parcel owned by the church for its Route 295 Direct Connection Project.  The part taken did not include any grave sites, but the Diocese claimed that several of the interred may need to be relocated because the roadway project “might disturb the tranquility” of some sites.   The church has operated the cemetery site for 50 years.

The State had offered $1.9 million for the acquisition, but the church argued that the land was worth more than ten times that amount when taking into consideration the relocation costs (which apparently were not included in the offer amount). See Courier Post Online story.  Therefore the church challenged the NJDOT’s right to take, which was initially affirmed by the Appellate Division in October of 2012.

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Photo Courtesy –   CHRIS LaCHALL/COURIER-POST.

Absent making application for certiorari to the United States Supreme Court, the case will proceed to a valuation proceeding where the property owner will have an opportunity to present its theories to a panel of Condemnation Commissioners and then to a Camden County Jury.  The second part of the process is designed to protect the property owners constitutional right to just compensation.

We’ll keep you posted.

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April 25, 2013

Mantoloking (NJ) Contemplates Use of Eminent Domain for Dune Easements

Posted by Joseph Grather under In the news, Uncategorized | Tags: , , , , , , , |
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This just in – Mantoloking has decided to use eminent domain to acquire private property for the purported public use of dune replenishment. See articles from  CBS News and NJ.com.  McKirdy & Riskin’s Tony DellaPelle was interviewed and quoted in the CBS news video about the constitutional issues raised by attempting to require that oceanfront property owners donate their property in order to provide storm protection benefits to the public at large.

ImagePhoto courtesy Andrew Mills/Star Ledger.

You may remember when we blogged about the proposed easement that the town asked all of its beachfront residents to sign back in February.  Well, apparently not everyone was keen on donating their private property for beach/dune replenishment.

We’ll keep you posted.

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March 25, 2013

More from the Shore – Proposed Legislation Seeks to Limit Just Compensation

Posted by Joseph Grather under In the news, Legislative Developments | Tags: , , , , , , , , , , , , |
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Photo courtesy of Associated Press

Owners of property along the Jersey shore continue to be battered, this time by their own elected officials.  The New Jersey Senate recently introduced S-2618, which provides:

“Just compensation for an easement over a portion of beachfront property condemned for the purpose of dune construction or beach replenishment shall include consideration of the increase in value to the entire property due to the added safety and property protection provided by the dune or replenished beach. Any additional rights of the public to access property held in the public trust arising as a result of the easement, or the dune construction or beach replenishment, shall not be considered to cause a diminution in the value of the entire property.”

The State Assembly has a companion bill mirroring the above - A-3896 - introduced on March 7, 2013.  Similar legislation has also been introduced in the State Senate and Assembly by other legislators, S-2599 and A-3889.  These bills are awaiting legislative committee review.

So we all understand the jumping off point, “just compensation” is a constitutional term and is found in the New Jersey Constitution (N.J. Const. Art. 1, Par. 20) and the U.S. Constitution (5th Amend.)  The text of the New Jersey Constitution reads: “Private Property shall not be taken for public use without just compensation.”

Every court in the history of the United States has interpreted the Fifth Amendment as limiting government’s authority to take private property.  Within the clause there are two limitations expressed.

First, the taking must be for a “public use.”  Second, government must pay “just compensation”.

While most, if not all, may agree that government taking of private property in order to replenish New Jersey beaches damaged by Superstorm Sandy would satisfy the “public use” criteria of the Constitution, legislation like the bills mentioned above that attempt to legislatively satisfy the “just compensation” part of the analysis appears to be constitutionally infirm for several reasons.

First, it would violate the fundamental concept that the just compensation is to be determined by judicial processes, not by legislative mandate.  United States v. Cors, 337 U.S. 325 (1949);   Monongahela Navigation Co. v. United States, 148 U. S. 312  (1893).   In other words, “there is no precise and inflexible rule for the assessment of just compensation.” State v. Gallant, 42 N.J. 583 (1963).

Second, the proposed legislation might allow government to acquire private property “without just compensation” in violation of the Constitution.  If a statute mandates a particular valuation rule which fails to afford “just compensation”, it is contrary to the constitutional mandate.

Third,  the proposed statute seeks to preemptively decide the issues pending before the New Jersey Supreme Court is a case known as Borough of Harvey Cedars v. Karan, 425 N.J. Super. 155 (App. Div. 2012).  The issue in Karan is whether the decision of an Ocean County jury to award a property owner “just compensation” for the taking of their private property should be affirmed.  The government has appealed the award of just compensation arguing that the property owners should not receive more than $1 dollar for the taking of their private beachfront property because the government put a public dune on the part taken that benefits the entire beach-going public, as well as the inland residences and businesses occupying the barrier island.  The trial court and the Appellate Division rejected the government’s argument, and the Supreme Court decided to take the case before Superstorm Sandy struck.

Finally, any legislation which seeks to treat some people or classes of people differently than others may itself violate the Equal Protection Clause contained in the 14th Amendment to the U.S. Constitution.

Now, in the aftermath of a devastating natural disaster, government seeks to remedy the devastation – that it alone could have prevented – by making private property owners the scapegoat.

But the property owners are not to blame. Let’s not forget that the Army Corps warned of these very dangers decades ago, and government failed to prepare use for the coming storms.  Let’s not let government attempt to foist its responsibility on the narrow shoulders of a small group of property owners.

For more on these issues, see our prior blog postings:

In the Wake of a Superstorm the Debate Continues – Who Should Pay for the Dunes?

Rebuilding After Sandy: Government Assistance at Odds With Private Property Rights

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March 7, 2013

Eminent Domain Bill Clears Senate Committee, Would Update Redevelopment Procedures

Posted by Anthony F. Della Pelle under In the news, Legislative Developments | Tags: , , , , , , , |
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Legislation that would rework some of the procedures used by local governments to their redevelopment powers cleared a State Senate committee earlier this week.  The bill, S-2447, codifies certain protections to property owners which were decided in court decisions in recent years, and also would provide a negotiation alternative to using eminent domain in local redevelopment projects.

The Senate Community and Urban Affairs Committee voted 5-0 for the bill, which is sponsored by committee chairman Jeff Van Drew, D-Cape May, and Sen. Ronald Rice, D-Essex.  It shares some of the provisions which had been included in earlier legislative efforts by Senator Rice that failed to pass before the full Senate two years ago.

S-2447 codifies Gallenthin Realty Development Inc. v. Paulsboro, 191 N.J. 344 (2007), in which the New Jersey Supreme Court held that a blight determination requires a finding of a “deterioration or stagnation that has a decadent effect on surrounding property,” which could not ordinarily be applied to a large tract of vacant land.  The Gallenthin scrutinized the then-common use of municipalities in New Jersey of a standard in the Local Redevelopment and Housing Law, N.J.SA. 40A:12A-5(e) — a “stagnant or not fully productive condition”  to justify that an area was blighted, or “in need of redevelopment”.

S-2447 also codifies Harrison Redevelopment Agency v. DeRose, 398 N.J. Super. 361 (App. Div. 2008), in which an appeals court held adequate written notice of condemnation for redevelopment needs to be provided during the redevelopment planning process.

The other significant provision in the bill, and its companion bill in the State Assembly (A-3615),   is that local governments will be given an option as to whether they will be empowered to use eminent domain to acquire properties in redevelopment areas.

“The bill says municipalities can go with Option A or Option B,” says Michael Cerra, the senior legislative analyst with the New Jersey State League of Municipalities.

If enacted, this bill could help to spur redevelopment in certain areas without having to threaten the property rights of the existing owners.

The companion bill in the Assembly is scheduled for consideration in the Assembly Economic Development and Commerce Committee today.

PolitickerNJ reported on the bill earlier this week in this article.

Stay tuned for more on this legislative development.

 

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February 7, 2013

Mortgagee Not Entitled to Bona Fide Negotiations

Posted by Joseph Grather under Court Decisions | Tags: , , , , |
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On February 5, 2012, the Appellate Division published its decision in a condemnation case captioned Borough of Merchantville v. Malik & Son, LLC (full text here).  The property was acquired by the municipality in connection with an earlier “in need of redevelopment” designation.  In short, the Appellate Court affirmed a trial court’s rejection of a “right to take” challenge based on an alleged failure to engage in bona fide negotiations.  The court also held that a condemnor had no duty to engage in bona fide negotiations with the “assignee of a mortgagee.”

Regarding the mortgagee’s assignee, the appellate court published its decision despite its comment that the trial court’s decision was based on “established principles” of case-law and the language of the act.  Section 6 requires a condemnor to negotiate with the person or entity “holding the title of record to the property being condemned.”  The trial court’s decision was therefore consistent with the express terms of the statute as interpreted by existing cases. City of Atlantic City v. Cynwyd Investments, 148 N.J. 55 (1997); and Town of Kearney v. Discount City, 205 N.J. 386 (2011).   Again, even though the case was published, it would appear that the holding is based on a clear reading of the statute and existing case-law.

Regarding the appellate court’s affirmance on the bona fide negotiations claim – it too was based on existing case-law.  The property owner rejected the offer in writing but failed to include any substantive basis or facts that would require the condemnor to reconsider the bona fides of its offer.  For instance, the property owner did not tell the condemnor about the two prior offers to purchase ($1,850,000 and $1,250,000), or the amount of the existing liens on the property.  Simply stated, a mere rejection of the offer without more cannot form the basis of a later bona fide negotiations defense.

 

February 5, 2013

More on Dune Replenishment – Taking Private Property Without Just Compensation

Posted by Joseph Grather under In the news, Legislative Developments | Tags: , , , , , |
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Photo courtesy of wirednewyork.com

Photo courtesy of wirednewyork.com

The Borough of Mantoloking is one of several beachfront municipalities that has asked owners of beach-front property to donate their private property to the municipality.  A copy of the most recent form of dedication agreement (identified as an easement) is available on the Borough’s website here.  The Borough is attempting to force property owners to turn-over their private property for the public good, without payment of compensation.   The guilt trip being laid on the property owners is that the Borough will not be able to participate in an Army Corps of Engineers dune replenishment program without the easements in hand.  The sign-off on the website – ” Thank you all for your patience with this process.  We will do all that we can to make this project happen once we have the easements in hand.  The very existence of our community depends on it.”   This last statement underscores the public necessity of the easements, and underscores why the Constitution demands just compensation – the purpose of the taking is to benefit the general public at large.  A private citizen cannot be forced to pay for a public improvement project by forced donation of private property.  It’s no different from exacting a cash payment from only the beachfront property owners in order to benefit the entire community.

Toms River is another municipality that is seeking to exact private property without just compensation.  As reported by the Toms River Patch, legal counsel for that municipality suggests that the town is without the lawful authority to rebuild the dunes without beachfront property owners’ donating their property.  If dune replenishment is a public use, the municipality is reposed with the lawful authority from the ultimate source of law – the New Jersey Constitution.  But, again, the municipality wants to lay the blame on the property owner.

Notably, the Army Corps Report referenced in the Mantoloking easement was issued 10 years ago!  It is only now, post-Superstorm Sandy devastation, that they believe they have the political sway to engage in such unconstitutional conduct.   Why didn’t they implement the program ten years ago?  The cost to replenish the dunes is only a fraction of the cost of repairing the damage caused by Sandy.

I’m sure many of our readers do not own property along the shore-line or live on the beachfront (yours truly does not).  Yet, if we permit government to take that first step down the slippery slope of unconstitutional conduct, we have only ourselves to blame when we’re looking down the wrong end of the barrel of some other heavy-handed government conduct.

And, in the end, we, the taxpayers of the United States of America, have already paid the bill to restore the beaches the tune of $51 billion dollars ($4 billion of which has been allocated to the Army Corps to rebuild the beaches).   Notably, over the past 50 years, the total expenditure of beach replenishment in New Jersey has been about $1 billion.  Let’s insist that government spend that money wisely and do the rebuilding job right the first time.   Why should the beachfront owners have to pay for this benefit twice?

For more background on these issues, check out our earlier blog posts:

NJ Beach Replenishment Saga Continues, This Time in Sea Bright

NJ Beach Replenishment Town Seeks End Around in Federal Court

Harvey Cedars Complaining About Payments to Property Owners For Beachfront Takings

 

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January 7, 2013

Rebuilding After Sandy: Government Assistance At Odds With Private Property Rights

Posted by Joseph Grather under In the news, Legislative Developments | Tags: , , , , , , |
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The following quote is attributed to President Ronald Reagan:

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One example of government assistance post-Hurricane Sandy was the removal of an entire house because it was allegedly in the right of way:

Ortley Beach home removed

Well, photographic and video evidence proved that the house was not in the right-of-way, but the State removed and demolished it anyway.

Another example, a local government unit in LBI decided that sand removed from the right-of-way was best deposited on a private property owner’s front yard.  It cost the small homeowner thousands of dollars to remove the sand from his front yard and then the government refused to reimburse the property owner for his removal costs.

Finally, a clear example of government failure can be found in its dune replenishment policy.  In 1999, thirteen years before Sandy struck, the United States Army Corps of Engineers came up with a plan to protect all private property owners from a tidal surge.  That plan was not fully implemented before October 29, 2012.  Part of the problem is that plan implementation was left up to local government, and various local government agencies had varied levels of interest, participation, and results with the plan.

Now, those local politicians are looking for a scapegoat.  Private citizens who happen to own beachfront property are in the cross-hairs.  The politicians have cried foul because of the property owner’s refusal to give-up their private property for the public good and the news agencies have trumpeted the cries almost on a daily basis:

NJ.com today – Tom’s River Homeowners Slow to Give Up Land Needed to Rebuild Protective Dunes;

NJ.com Dec. 2, 2012 – N.J. Shore Towns Near Showdown With Dune-Building Foes.

In mid-December, the Town of Mantoloking wrote to all beach-front property owner demanding that they donate their property by signing an easement before year’s end  (Merry Christmas!).  This practice has been followed by other municipalities in Monmouth and Ocean Counties, as they rush to build and replenish sand dunes before the next big storm hits.

Two of the most fundamental rights found in the bundle of rights known as “property” are the right to “exclusive possession” and the “right to security” defined as “immunity from expropriation.” (“Expropriation” is a synonym for “eminent domain”). See Denise R Johnson, Reflections on the Bundle of Rights, Vermont Law Review (2007).  Neither of those rights would be honored if the public forced private property owners to donate their property for the public good, i.e. without payment of just compensation.

Ms. Johnson’s article references Lucas v. South Carolina Coast Commission, 505 U.S. 1003 (1992).   That case examined the effect of the State’s adoption of  the Beachfront Management Act in 1988.  The South Carolina legislation created the Coastal Commission to manage its shoreline due to the regularity of hurricane strikes along its barrier islands and shoreline.  The Commission determined that Mr. Lucas, a beachfront property owner, would not be able to build a residence upon his land.  Lucas sued the Commission, and won at the trial level – a jury awarded $1.2 million for the taking, but he ultimately lost in State Court.  The United States Supreme Court reversed, holding “when the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good… he has suffered a taking.”

Perhaps our State should look at South Carolina’s Beachfront Management Act as a guide on how to rebuild after Sandy.  Regardless of whether a State or regional commission is created in New Jersey to manage coastal development, a serious, informed analysis of the issues and possible solutions must be undertaken on a statewide level, rather than continuing a piecemeal, hodgepodge and hurried set of “band-aid” responses.

We questioned the wisdom of the continuing these past practices which have proven problematic at best in our recent Op-Ed in the Asbury Park Press (“Don’t Vilify the Greedy“).  While legislators have recently suggested various “solutions”, unfortunately the pressures of getting the Jersey Shore “ready” for this coming summer is apparently standing in the way of a better, sustainable plan for coastal development which Sandy has given us an opportunity to create.

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November 9, 2012

Hurricane Sandy and the Dune Replenishment Dilemna

Posted by Joseph Grather under In the news | Tags: , , , , , , , , |
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Along with the destruction of thousands of homes and the devastation of the State’s power-grid (yours truly remains without power 12 days later) Hurricane Sandy’s super-storm surge has brought to the collective conscience the long running debate about who should pay for a public improvement project.

Those following our blog will recall that the Army Corps of Engineers designed a beach-dune system that would protect New Jersey’s coastline property from tidal surges, like Sandy. The good news – the Army Corps’ plan worked! (See NJ.com article by Seth Augenstein surveying damaged areas that were  not protected by dunes.)

The bad news – the Army Corp plan was not implemented along the entire coastline.

The following picture from NJ.com  identifies the portions that were completed when Sandy struck:

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Those on the side of government, particularly on Long Beach Island, have suggested that the program was not implemented because property owners refused consent to permit erection of a twenty-two foot high dune on their property.   Yet, government does not need a property owner’s consent to implement a public project.  Government has the power of eminent domain to prevent the exact situation where property owners refuse to donate their private property to the public good.  New Jersey is a “quick take” State, which means that the government agency using eminent domain powers is authorized to “take” the property in question at the earliest stages of the proceedings, even if it takes months or years after the taking occurs for the affected property owners to receive “just compensation” for the taking.

The only relevant limitation on the government’s authority to implement the Army Corps’ dune program is the payment of “just compensation” as mandated by the New Jersey Constitution.  In New Jersey, a jury decides how much is just. Not the government.  Not the property owner.

After the storm, government is foisting the blame on the property owners because of their refusal to consent, but again, consent is not an issue when implementing a public improvement project.  If the government wished or wishes to use eminent domain to acquire private property rights and to implement dune replenishment projects, it has the power to do so, without any legitimate worries about delay.

Our thoughts and prayers go out to the property owners whose homes and personal property were taken by Hurricane Sandy.  So long as it is utilized properly, there is no doubt that government has the awesome power to take private property along the ocean-front to protect those further inland.  But, even in the aftermath of this Statewide disaster we cannot forget “that a strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional way of paying for the change.” Pennsylvania Coal v. Mahon (Holmes, J.).

We’ll keep you posted – stay safe and warm.

 

More background on the debate:

http://njcondemnationlaw.com/2012/05/08/lbi-town-forum-shopping-to-avoid-paying-just-compensation/

http://njcondemnationlaw.com/2012/10/02/1386/

http://njcondemnationlaw.com/2012/08/14/new-jersey-beach-replenishment-town-seeks-end-around-in-federal-court/

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October 17, 2012

No “Temporary Taking” of Private Property in Long Branch

Posted by Joseph Grather under Court Decisions | Tags: , , , , , , |
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On October 11, 2012, the Appellate Division issued an opinion affirming dismissal of a property owner’s temporary taking claim. Hoagland v. City of Long Branch (A-0358-11T2; A-1583-11T2).  Absent successful petition for certification, so ends another chapter in Long Branch’s long history of redevelopment.

Before getting to the opinion, it must be noted that the only private property along New Jersey’s beautiful Atlantic coast-line that did not appreciate over the past six decades were those areas clouded by government redevelopment efforts.   Those efforts by the way, allowed private redevelopers to grab at least half of Asbury Park’s shoreline during the real estate boom of the early to mid 2000′s, the City’s redevelopers ran out of money when the market dried-up.  So, what happened to the owners whose property was blighted and clouded by condemnation more than a decade?  They got their property “back.”  No harm no foul?  I guess in New Jersey its, ‘no blood, no foul.’

The redevelopers were allowed to abandon these takings in 2008, and the property owners could either walk away with their expenses paid, or file new temporary takings claims.  The Hoagland case explains why the latter alternative was the road that should not have been taken.

The property owners argued that the filing of a complaint lis pendens effected a taking of their property.  The trial court disagreed, as did the appellate court. (Slip op. at 7).  In most simple terms, since the City never filed a “Declaration of Taking” and paid the property owners’ expenses after it abandoned the takings, the property owners were not entitled to relief.

In order to prove a taking of private property, one must show that some action by an entity with the power of eminent domain substantially destroyed the beneficial use of the property.  The property owners contended that “their properties lost value and they were unable to sell or develop their properties until the condemnation actions were abandoned.   As the trial court found however, there is no factual support for these claims in the record.” (Slip op. at 13).

A sampling of the redevelopment history is seen from our prior blogs:

Greetings from Asbury Park

Asbury Park Heads to Arbitration

Asbury Park Settlement Rejected

Asbury Park Asks Judge to Cancel Redevelopment K

Asbury Park Redeveloper’s Claim Against City Revived (2009)

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October 15, 2012

NJ Appellate Court Affirms Right to Condemn

Posted by Joseph Grather under Court Decisions | Tags: , , , , |
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Yesterday, the appellate division affirmed a trial court decision that rejected a property owner’s request to dismiss a condemnation action on the grounds that the State failed to engage in bona fide negotiations. State, DOT v. St. Mary’s Church (Docket A-5448-10T1).  The property owner argued that dismissal was warranted because the State failed to follow the correct pre-complaint procedures required for an entity to exercise eminent domain; i.e. produce a copy of an “addendum memo” authored by its appraiser when it made its offer, and for DOT’s failure to produce an internal “review appraisal.  The “addendum memo” was ultimately disclosed to the property owner, but the State refused to disclose the internal “review appraisal.”  After positing the issue as:  ”Does the failure to provide the addendum memo in the first instance require this court to dismiss the complaint… ?” The trial court found that it did not, and denied the property owner’s challenge.

The Appellate Division affirmed, and its reasoning is set forth in the following paragraph:

“In this case, Judge Millenky concluded that Black’s review appraisal was part of a deliberative process employed by the State to confirm the validity of the original appraiser’s report. The review appraisal added no new information that the State in turn used to “calculate[e] the amount if would offer” to St. Mary’s. Ibid.  Indeed, the original appraiser’s report fully set forth the method utilized in making the pre-litigation offer and incorporated comments and suggestions made by Black before it was served upon St. Mary’s. Additionally, St. Mary’s had another report which, utilizing a different method of calculation, set the fair value of the taking at a far greater amount. Together, these two appraisals were sufficient to “permit a reasonable, average property owner to conduct informed and intelligent negotiations.” Carroll, supra, 123 N.J. at 321. Judge Millenky held that the review appraisal was not subject to pre-litigation disclosure, and the failure by the State to serve it before filing the complaint was not a failure to engage in pre-litigation “bona fide negotiations.” N.J.S.A. 20:3-6. [Slip op. at 14].

These types of cases are highly fact sensitive, and the merits of each such case should be weighed closely before investing the substantial time and expense needed to mount a challenge to a condemnor’s right to take.

 

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