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Raab v. Borough of Avalon

392 N.J. Super. 499, 921 A.2d 470 (App. Div. 2007)

CONDEMNATION; INVERSE CONDEMNATION; STATUTE OF LIMITATIONS — An action alleging a taking by way of inverse condemnation must be filed within six years from the date of accrual, which is either when the landowner became aware, or should have been aware, of the taking through due diligence, or when the owner was deprived of all reasonably beneficial use of its property.

The owners of certain beachfront property could not build anything because of destruction from a violent storm. The municipality then adopted a resolution to restore its shoreline. The property in question lay within the zone of restoration and the municipality resolved to acquire the land. The resolution provided that the owners should be justly compensated for the taking. The plan was to use a property-exchange program between the existing owners and the municipality for municipality-owned lots of equal or greater value if the private owner paid the difference.

There was evidence in the form of a letter establishing that the previous owner of the beachfront property had been aware that the property could not be built upon and had wished to participate in the land-exchange program. The previous owner’s desired land-exchange was not acceptable to the municipality; therefore, no deal was made. After the present property owners had the land conveyed to them, street access was eliminated by way of another municipality ordinance. Later, the area was rezoned from residential use to public use. Later ordinances banned construction on the property as well.

The owners sent a letter to the municipality claiming that development had become impossible on the property. A later letter offered the property for sale to any willing buyer, including the municipality, based on the fair market value if a residence could be built on it; conversely, if the municipality did not want the property, the owners requested the property be rezoned for residential use. The municipality rejected this offer and the owners brought suit.

The Court framed the issue as determining what the appropriate limitation period was for the private land owners to bring an action challenging a taking of private property by a public entity, when the taking did not comply with governing statute’s safeguard provisions. It held the taking at issue to constitute an inverse condemnation because the municipality physically occupied the property without judicial process. The aggrieved landowner thus had the burden to discover the property encroachment and to take timely action to recover compensation.

The lower court found that the owners’ claims were time-barred. Since the owners were successors-in-interest to the original owners, the present owners were bound by a 1965 letter that displayed the then-owners’ awareness of the municipality’s intent to take the property. That is when the municipality took exclusive possession and built on the property to accomplish its express public purpose of restoring the shoreline. Therefore, the Court found that the doctrine of a “continuing wrong” could not be used by the new owners to extend the time for filing.

An action alleging a taking by inverse condemnation must be filed within six years from the date of the accrual, which is either the date the landowner became aware, or should have been aware of the taking through due diligence, or when the owner was deprived of all reasonably beneficial use of its property. Thus, the Appellate Division affirmed the lower court’s grant of summary judgment on this issue, since the owners filed more than six years after the accrual date.


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