In similar cases in Ocean City, an appeals court judge ruled on Monday (Oct. 28) that a lower court must decide how much the City of Ocean City should compensate beachfront property owners for lost ocean views — but it also must consider the "Borough of Harvey Cedars v. Karan."
In that case, the Supreme Court decided for the first time that the added value of a protective dune must be considered in addition to the lost value of an ocean view. The Supreme Court ruled that the costs are essentially offsetting and that led to the $1 settlement.
The decision emboldened the administration of Gov. Chris Christie to push for an ambitious plan to build a line of dunes to protect the entire New Jersey coastline in the aftermath of Superstorm Sandy.
The Ocean City cases started as part of the same lawsuit and stem from a promise the city made in easement agreements that were signed in the early 1990s when the city first received approval and funding for the federal beach replenishment program that maintains dunes and wide beaches in Ocean City.
In exchange for permission to build the dunes on private property, the city agreed to maintain the dune height at no more than three feet above the level of the bulkhead.
The promise was broken shortly after it was made. In 1994, new state Department of Environmental Protection regulations prohibited Ocean City from altering dunes that were growing taller through a natural process.
The owners of four of those properties appealed a lower court decision that ruled in favor of Ocean City.
In the opinion released Monday (download attached PDF for full text), Appellate Court Judge Anthony J. Parrillo ruled that Ocean City has to compensate the owners of three beachfront properties for its failure to maintain dune height — even though it was impossible for Ocean City to keep the promise.
Parrillo ruled that since the city got its easement agreement and the benefits of it, and since the owners lost their views, the city should have to pay them for it.
The judge said a lower court must determine the value of what the owners lost (ocean views), but it must be offset by what they gained (dune protection).
The property owners and plaintiffs include:
- Eustace and Suzanne Mita, 2813-15 Wesley Avenue
- Michael and James Scully, 2837-39 Wesley Avenue
- Stephen and Kathleen Tanner, 2723 Wesley Avenue
- Maureen Smith, 2709 Wesley Avenue
Frank Corrado, the Wildwood attorney representing the beachfront owners, said on Friday that his clients have not yet decided if they will continue with the appeal. They will consider the potential impact of the Harvey Cedars precedent before deciding whether to move forward.
In a separate case related to the same original lawsuit, two beachfront duplex owners on the 3400 block of Wesley Avenue (the alley on the beach side of Central Avenue) were awarded $35,000 (second-floor owner) and $70,000 (first-floor owner) for the loss of their views and access.
They had signed the same 1990s easement agreement — but after 1994, when Ocean City learned that the state regulations would prevent them from altering dunes. The lower court ruled in favor of the owners, because Ocean City signed an agreement it knew it could not keep.
The city, however, appealed the way the damages were calculated "in the absence of credible expert testimony."
Parrillo ruled that the owners are still entitled to compensation, but as in the other part of the case, he remanded the matter to a lower court to determine how much. And as in the other case, he required the lower court to consider the added value of the dunes in addition to the lost value of the ocean views.
City Solicitor Dorothy McCrosson said on Friday City Council will have to decide if it wants to continue to pursue the appeal.
The city is in the process of collecting a new set of easement agreements that include no promise of maintaining any particular dune height, so similar lawsuits in the future are unlikely.