On appeal from Superior Court, Law Division, Bergen County.
Shebell and Landau. The opinion of the court was delivered by Landau, J.A.D.
The State of New Jersey appealed from a judgment of the Law Division, Bergen County which directed it to institute condemnation proceedings against the property owned by plaintiff-respondent Laurjo Construction Co. Laurjo sued the State on an inverse condemnation theory two years after denial of its 1984 application to the New Jersey Department of Environmental Protection (DEP) for a stream encroachment permit to permit construction of a one-family house. The application was made under the Flood Hazard Area Control Regulation, N.J.A.C. 7:13-1.1 et seq.
Laurjo's complaint in the present matter contended that DEP's regulations which required such permit and the denial thereof deprived it of all reasonable use of its property without just compensation in violation of the State and Federal Constitutions.
Although the regulations permit application for a hardship waiver and for opportunity to agree to alternative requirements which protect the public health, safety and welfare, Laurjo elected not to apply for waiver or modification, or to follow up on an October 18, 1984 invitation by DEP to work further with them on efforts to approve its request.
The State contended at trial, as it does here, that Laurjo is barred from initiating this action by reason of failure to exhaust administrative remedies. R. 4:69-5. Laurjo says that it does not dispute that the DEP can exercise the State's police powers through Flood Hazard Area Control Regulations in the
manner employed. Rather it contends that, as applied to its property, such regulations constitute a compensable taking.
In Usdin v. Environmental Protection Dept. of N.J., 173 N.J. Super. 311 (Law Div.1980), aff'd 179 N.J. Super. 113 (App.Div.1981), it was held that temporary designation of certain land as a "floodway," thereby precluding development, was not a "taking" when the purpose of the restriction was primarily to prevent an abuse, or a danger to life and property. Usdin, 173 N.J. Super. at 331; Usdin, 179 N.J. Super. at 115. "[N]either property rights nor contract rights are absolute; for Government cannot exist if the citizen may at will use his property to the detriment of his fellows. . . ." Nebbia v. New York, 291 U.S. 502, 523, 54 S. Ct. 505, 510, 78 L. Ed. 940, 949 (1933).
The trial judge in the present case reasoned:
This case presents the question of whether a landowner who claims that he has lost all beneficial use of his land because it was 'taken' by State land use regulations -- which prohibit the use for which the landowner purchased the land and for which the property is zoned by local officials -- is entitled to just compensation (money damages) from the State. This court determines, consistent with the recent U.S. Supreme Court decision in First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, California [482 U.S. 304, 107 S. Ct. 2378, 96 L. Ed. 2d 250] 55 U.S.L.W. 4781 (June 9, 1987), that the instant facts present an instance of a temporary regulatory taking of private property for which the U.S. Const., Amend. V, made applicable to the states through Amend. XIV, and N.J. Const. (1947), Art. I, par. 20, requires just compensation to the plaintiff.
In so concluding, this Court does not take issue with the constitutionality or propriety of the subject regulations, nor has plaintiff raised this issue in its complaint. The Appellate Division in Usdin v. Environmental Protection Dep't. has already concluded that the State's enactment of flood control legislation was a proper exercise of the police power to further the public health and safety. 173 N.J. Super. 311 (Law Div.1980), aff'd 179 N.J. Super. 113 (App.Div.1981). After Lutheran Evangelical, when confronted with otherwise proper governmental interferences with property rights of the type that this Court is faced with here, the focus is on the constitutional remedy for such temporary deprivations of use. Contrary to the conclusion of the trial court in Usdin, 173 N.J. Super. at 329-330 that '(g)overnment must have the unfettered ability to protect the general welfare of its citizens without subjecting them to ...