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New Jersey Supreme Court Rules in Avalon

July 7, 2010 | No Comments
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What is the impetus behind many Supreme Court decisions?  Common sense, equity and a practical approach.  On June 22, 2010, the New Jersey Supreme Court rendered a unanimous decision in the Klumpp v. Borough of Avalon case.  In Klumpp,the plaintiffs’ home was destroyed as a result of a devastating nor’easter occurring in 1962.  Following the storm, the Borough took control of the property to construct protective sand dunes to secure the area.  Significantly, the Borough’s taking was without any concomitant compensation to the landowner.  Over time, the Borough continued to list the property as privately held on the public land records, and plaintiffs paid real estate taxes on the parcel over a number of years.  In turn, the Borough constructed the dunes and then proceeded to adopt laws which (1) restricted access to the property and (2) prohibited residential structures on the seized property.  The Court recognized that where a town physically takes property without first bringing a formal condemnation proceeding, property owners are permitted to initiate an inverse condemnation legal action, and to petition the court for just compensation for the taking.  Although acknowledging the applicable six-year statute of limitations which applies to inverse condemnation proceedings, the Court determined that the Borough of Avalon had a legal obligation to notify the property owner of the physical taking.  Consequently, the Court ruled that in light of the lack of notice to the land owner, the Borough must pay plaintiffs compensation as of 1965, the date the dunes were completed.  The Court emphasized that, although the property owners should have had constructive notice of the taking, e.g., from the physical limitations and fencing placed on the property, the owners were required to receive actual notice of the taking.  Writing for the Court, Justice LaVecchia pointed to the unjust result in permitting the Borough to both restrict the use of the land and also refuse to pay compensation for the taking.  This was an easy one.
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