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Raab v. Borough of Avalon

A-4735-03T3 (N.J. Super. App. Div. 2009) (Unpublished)

CONDEMNATION; INVERSE CONDEMNATION; STATUTE OF LIMITATIONS — A claim for compensation arising from inverse condemnation must be filed within a six year statute of limitations and a damages action under 42 U.S.C.A. Section 1983 must be brought within two years after the date that a cause of action accrues.

In 1962, a major storm obliterated numerous beachfront properties in a municipality. The municipality enacted a series of resolutions authorizing it to enter upon the beachfront properties to clear debris, and to immediately construct a protective barrier in the form of sand dunes along the beachfront. It also instituted a property-exchange program as a means of compensating property owners whose lots had been destroyed by the storm. The predecessor owner of certain lots within the affected area engaged in negotiations with the municipality under this program, seeking to exchange its destroyed lots for others owned by the municipality. The municipality seized predecessor owner’s property and deprived it of all reasonably beneficial use of the property. In 1965, the predecessor owner sent a letter to the municipality acknowledging that the municipality was taking such action. The predecessor owner unsuccessfully sought compensation for the taking, but no further efforts were made to resolve the dispute for several decades. During that time, the lots continued to be carried on the municipality’s tax records as being owned by the predecessor owner. The property was conveyed twice. The first conveyance was made to the principals of the corporate entity that owned the lots at the time of the storm, and the second conveyance was to the widow of one of the principals who had died. Thus, there were no innocent third parties here. The current owners sued the municipality claiming that they were not fairly compensated by the municipality for the taking.

The Law Division dismissed the action on statute of limitations grounds. It held that a claim for compensation arising from inverse condemnation was six years. It also held that a damages action under 42 U.S.C.A. Section 1983 must be brought within two years of the date that the cause of action accrued. Since the cause of action began to accrue in 1965, the lower court held that the statute of limitations for both claims had expired long ago. The property owners appealed.

The Appellate Division affirmed, agreeing with the lower court’s analysis and ultimate conclusion. As such, it found that: (a) the municipality’s actions in physically appropriating the property constituted a taking; (b) the municipality did not follow the procedures required for an eminent domain proceeding and deemed that its actions were, thus, an inverse condemnation; and (c) the taking was complete when the municipality came upon the property, took exclusive possession of it, and through a series of municipal resolutions, appropriated, transformed, and built upon the property to accomplish the express public purpose of restoring and protecting the shoreline. Despite these findings, it agreed that the actions were time barred.

The owners filed a motion with the lower court seeking to reopen the case, clarify the final judgment, and expunge and vacate recordation of final judgment in the clerk’s records. They also asserted that the recording statutes protected their title ownership, which was paramount to any claim of title by the municipality. The motion was denied and the property owners appealed.

The Appellate Division again affirmed the lower court’s ruling. It held that the owners’ arguments were nothing more than an effort to re-litigate issues already adjudicated. It agreed with the lower court that title to the property vested with the municipality as a result of the inverse condemnation. The Court pointed out that although it may have been the better practice for the municipality to have filed a timely declaratory judgment action to settle the issue, its failure to do so did not change the legal effect of what transpired. It concluded that the owners’ motion placed before the lower court the issue of title and sought a review of the documents recorded by the municipality as proof of its title interest. Having done so, the Court ruled that the owners should not be permitted to complain that the very issue they raised was decided by the lower court in a manner contrary to their expectations.


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