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NJ Supreme Court overturns $375K award in dunes case; couple sued after losing ocean view
The Karans’ home.
- Article by: WAYNE PARRY , Associated Press
- Updated: July 8, 2013
- VIDEO STORY BY CBS NEWS
This case highlights the old malignant tension in the fabric of US society, between the unlimited rights of property issuing from a repugnant form of individualism still rampant in American society, and the common good. Even in what would seem as obvious situations, like a community and ecosystem’s protection from storms, in which everyone wins, the old libertarian reflex kicks in to throw a monkey wrench in the works. This despite the fact that climate change and other realities have made existing laws and governmental arrangements substantially obsolete. [/pullquote]
The sand dune in question saved the couple’s home from destruction in Superstorm Sandy in October.
The 5-year-old case is being closely watched at the Jersey shore, which was battered by Sandy. Officials want to build protective dune systems along the state’s entire 127-mile coastline, but towns fear they won’t be able to if many homeowners hold out for large payouts as compensation for lost views.
“Had we lost this case, I think beach replenishment would have been (over) in New Jersey,” Harvey Cedars Mayor Jonathan Oldham said. “We’re very pleased with the court’s ruling and look forward to competing with a fair set of rules. I’m happy for the whole island.”
The homeowners, Harvey and Phyllis Karan, had rejected the town’s offer of $300 in compensation for their lost views and insisted on a trial. Their Long Beach Island home is worth close to $2 million.
“Although the jury found that the Karans’ property decreased in value because the dune obstructed their view, a buyer would likely also consider the value provided by the dune in shielding the property from destruction,” the court wrote in its opinion. “The court did not allow the jury to consider evidence that the dunes — constructed at public expense to protect the island’s homes from minor and catastrophic storms— enhanced the value of the Karans’ property.
“The jury awarded the Karans $375,000 in damages, premised mostly on the loss of their oceanfront view,” the justices wrote. “Homeowners are entitled to the fair market value of their loss, not to a windfall, not to a payout that disregards the home’s enhanced value resulting from a public project.”
The court said a new trial is needed where jurors would be told to also consider the dune’s benefits. There was no immediate indication when a new trial might be held.
Gov. Chris Christie has repeatedly ridiculed homeowners’ complaints about dunes blocking their views and called the Karans’ and others in their circumstances “knuckleheads” during a recent public meeting on Long Beach Island. The state is trying to get oceanfront property owners all along the coast to sign easements allowing the government access to small strips of their land to carry out the dune projects.
“The Supreme Court’s decision embraces what Gov. Christie has been arguing ever since Sandy: that oceanfront properties protected from destruction are safer and more valuable than those that are not,” Christie spokesman Michael Drewniak said.
Government-funded dune systems “benefit everyone, including holdouts who selfishly refuse to provide easements to protect not just their own homes but the homes and businesses inland of them as well,” Drewniak said. “Those holdouts are the greatest beneficiaries of dune systems and are not entitled to a windfall at the public’s expense.”
Peter Wegener, an attorney for the Karans, argued before the court that the view is a valuable commodity that figures prominently in the selling prices of homes near the beach. He said he was not surprised at the outcome, given the skepticism several of the justices voiced toward the Karans’ legal position during oral arguments in May.
“It seems to sweep away 150 years of jurisprudence in an attempt to reach a solution to a political problem,” he said of the ruling. “Obviously the impact of the storm had a big impact on the court’s opinion.”
Neither Wegener nor Oldham, the Harvey Cedars mayor, could say whether the ruling might help or harm the chances of a negotiated settlement in the case.
Jeff Tittel, director of the New Jersey Sierra Club, hailed the ruling as an important step toward safeguarding the Jersey shore, parts of which remain vulnerable to future storms.
“Many of the areas without dunes got devastated, with these areas now wanting money to rebuild, but still do not want to put in dunes,” he said. “We cannot rebuild the shore smarter and better without building dunes, so this decision is important on how we rebuild our coast and natural systems.”
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Note: Captions below by the Staff of WSJ. Pullquotes by TGP editors.
Homeowners Draw a Line in the Sand Over Dunes
Some Homeowners Are Fighting Plan to Protect Jersey Shore
- By JOSH DAWSEY, WSJ
![[image]](http://si.wsj.net/public/resources/images/NY-CI877_DUNES_G_20130519182215.jpg)
Many coastal New Jersey residents are resisting a $1 billion state plan to shield shore-front towns from storms with towering dunes and a mix of protective measures.
[pullquote] Unwittingly, John McDonough represents the stubborn attachment to extensive private privileges in a deeply unequal society. That’s part of the didactic aspect of this seemingly unimportant “local” story. [/pullquote]
Gov. Chris Christie wants to gird New Jersey’s beaches against future storms, installing dunes and other protective measures that will cost hundreds of millions of dollars. But almost 2,000 coastal homeowners have declined to sign easements giving the government authority to use their land. Joshua Dawsey reports. Photo: Getty Images.
As some cite fears the sand-replenishment projects would drag down their property values, about 1,800 landowners have declined to sign agreements to allow construction on their property, said Larry Ragonese, a spokesman for the state Department of Environmental Protection. The state Supreme Court last week heard arguments on a resident’s lawsuit seeking more money for the agreement, known as an easement, and Gov. Chris Christie called dune opponents “knuckleheads.”
“It’s what everyone is talking about along the coast,” said Peter Reinhart, director of the Kislak Real Estate Institute at Monmouth University.
Emile Wamsteker for The Wall Street JournalToms River Mayor Tom Kelaher standing in front of pilings that will be used to support a boardwalk.
Superstorm Sandy highlighted the vulnerability of New Jersey’s coast, with tens of thousands of oceanfront homes either destroyed or heavily damaged. Efforts to replace the lost sand are already under way up and down the coastline, and Mr. Christie has vowed extensive projects to protect every beach.
“In the past, if we could not get easements from a town, the Army Corps of Engineers would not do a replenishment project,” said Mr. Ragonese. This time, “we will get the easements from everyone. We aren’t skipping any areas.”
Some property owners, however, said they fear the easements could encourage development in front of their homes, including commercial businesses and boardwalks. Others say they are simply opposed to the government operating on their land and want to make their own decisions about how to protect it.
The most common argument is that the dunes will obscure ocean views and reduce property values—for which some homeowners want to be compensated.
State officials said dunes would guard shore-front areas from severe flooding. They cite towns such as Seaside Park, which had 20-foot high dunes and was far less damaged during Sandy than nearby Seaside Heights and Mantoloking. State officials said protective approaches would be tailored to each town, but dunes would be a widely used option.
The issue’s course could shift depending on the outcome of a case heard last week in Supreme Court. Harvey and Phyllis Karan, who own a beachfront house in Harvey Cedars, have sued New Jersey for a 2010 project that put 22-foot dunes in front of their home. They were awarded $375,000 by a local jury in 2012, but the town has appealed. The Karans said the dunes blocked their ocean views and lowered their property’s value.
They were offered $300 by officials who pointed out that the project directly benefited them.
“God forbid we can spend billions on the project and not give the property owners a dime,” said the Karans’ attorney, Peter Wegener. “It’s a significant loss for private property and owners when government can come in and take what they want and not pay for it.”
The state said many people who haven’t signed easements are awaiting the case’s outcome. Mr. Ragonese said that paying every property owner would “bankrupt” the state, and that property owners should give up easements without money or concessions because they are protecting the property. The state Legislature is weighing a bill to require judges to consider dunes’ benefits.
The state Supreme Court is expected to rule this year on the Karans’ case. Mr. Wegener isn’t hopeful. “I would say the tenor of the argument did not suggest there was much respect for private property owners from the Supreme Court,” he said. “But the road to hell is lined with the bones of attorneys who thought they knew what judges were going to do.”
In Toms River Township, the fight has taken on a nasty edge. Town officials sent a news release May 7 blasting a resident, John McDonough, by name for refusing to sign easements. Mr. McDonough is a partial owner and a spokesman for owners of a stretch of beach that fronts hundreds of homes.
The release, sent to local and national media, said Mr. McDonough had fear of “big brother” government and called him obstinate.
“I’ve gotten a lot of letters thanking us for that news release,” said Debbie Winogracki, a town spokeswoman. “We’re not backing down. We’re not giving up. I promise, it will be worse for him if he doesn’t sign.”
Mr. McDonough said he wasn’t against dunes and agreed the beach needed more protection. But the beach has long been a private beach, maintained by private citizens. Once government begins working on the beach, he said he feared onerous rules would come. The town said it doesn’t trust his protections for the shore would be adequate.
“If you invite the federal government in, they will ultimately decide what you can do with the beach, whether or not you have to build bathrooms, whether you can charge people,” Mr. McDonough said. “We are then beholden to the state and the federal government.”
Mr. McDonough said he voted for Mr. Christie and would vote for him again, but he said the state would only get to erect dunes or other shore-front protection projects on his land if it used eminent domain and condemned the property.
“All I will say is we will do whatever it takes,” Mr. Ragonese, the state spokesman, said. “You can interpret that.”
Several residents who live behind the private beach are torn. While they support Mr. McDonough’s desire for privacy, they worry about future storms.
“We do like having a private beach,” said Shirley Combee, a resident of 50 years. “But I think the dunes are absolutely necessary, that’s my bottom line.”
—Ricardo Kaulessar contributed to this article.A version of this article appeared May 20, 2013, on page A19 in the U.S. edition of The Wall Street Journal, with the headline: A Line in the Sand.