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City of Ocean City v. Maffucci

A-5224-97T2 (N.J. Super. App. Div. 1999) (Unpublished)

CONDEMNATION; VALUATION—Where the loss to a property owner arising from a taking increases over a prolonged period and is not fully known at the time of the taking, application of the statute requiring that appraisals be made as of the date of taking would be unconstitutional.

A municipality sought to purchase an easement from beachfront property owners. When a price could not be negotiated, it commenced a condemnation action. The three commissioners, who were appointed to appraise the value of the easement and set just compensation, issued a report declaring just compensation to be $1.00. The property owner appealed. One issue before the lower court was whether the property owner was entitled to severance damages. The property owner claimed that the easement damaged the remaining part of its property because it lost its direct access to the beach, its view of the ocean, and also lost privacy because of pedestrian traffic past the property. The testimony amply proved how the dune that was constructed on the easement adversely affected all three aspects of the property owner’s prior enjoyment of its property. This then left the lower court with the need to determine the value of damages incurred by the property owner. In that regard, the property owner’s chief appraiser testified as to the amount of damages, but it was clear that the appraiser could not testify as to the exact date either of the taking or on which it made its appraisals. When the lower court jury awarded the property owner damages in excess of what the taking authority thought to be proper, an appeal was taken. In that appeal, the municipality took the position that, by statute, the appraiser’s testimony was required to reflect both the date of valuation and the date of appraisal. Consequently, it argued that the lower court judge erred by allowing consideration of the appraiser’s testimony. The Appellate Division was concerned, however, that although there was, in fact, an exact date for the taking, the damage was not fully known on that date because the size and height of the dune continued to grow throughout the duration of a subsequent beach restoration project. Thus, the adverse impact of the dunes on the property owner’s right to an unobstructed view of, and access to, the ocean, and, hence, the amount of the severance damages occurring as a result of the taking, could not be calculated with any degree of accuracy or fairness as of the statutory date of the taking. Consequently, according to the Court, use of the statutory date of taking as the date of valuation must yield to constitutional considerations. Strict adherence to the date of taking as the legal date for valuation should not create a valuation other than just compensation. Citing a Utah case, “[w]hen valuation is fixed at a date prior to the actual taking and the value of the property increases during a prolonged condemnation proceeding so that the valuation does not reflect a fair valuation of the property and does not therefore constitute ‘just compensation’ the statute fixing the time of valuation is unconstitutional as applied.” No prior New Jersey case expressly addressed the question of whether the loss of ocean view and access are elements for which severance damages may be awarded. Nonetheless, where only a portion of a property is condemned, the measure of damages includes both the value of the portion of land actually taken and the value by which the remaining land has been diminished as a consequence. “Obviously, flexibility is the hallmark of such an inquiry because just compensation in a given case will depend on the character and use of the property involved.” Here, the municipality argued that the jury based its award on non-compensable considerations, namely, loss of ocean view, beach access, and privacy. The Appellate Division disagreed. To it, if the standard is a “wide factual inquiry into all material facts and circumstances - both past and prospective - that would influence a buyer or seller interested in consummating a sale of the property,” then ocean view, beach access, use and privacy all of which are fundamental considerations in valuing beachfront property must be taken into consideration. Every other jurisdiction which had considered this issue examined by the Court held that such losses were compensable. Reliance by the municipality on “highway access” cases to support its contention that the property owner’s loss of direct access to the beach was non-compensable, was found to be misplaced. In each of those cases, concern was directed to an “abutting” property owner’s right of access to and from a public highway. Here, the claim was not to a public highway, but to the property owner’s own property, loss of use of which is compensable.


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