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City of Ocean City v. New Jersey Dep't of Environmental Protection


September 26, 2008


On appeal from a Final Decision of the Department of Environmental Protection, Agency Docket No. 0508-02-0025.1.

Per curiam.


Submitted September 10, 2008

Before Judges Parrillo, Lihotz and Messano.

Petitioner, City of Ocean City (Ocean City), appeals from certain findings embodied in a final decision of the New Jersey Department of Environmental Protection (DEP) that denied Ocean City's application for a permit under the Coastal Area Facility Review Act (CAFRA), N.J.S.A. 13:19-1 to -21, to lower the height of sand dunes in the municipality by mechanical excavation. We perceive, however, no real dispute over the ultimate denial of a CAFRA permit. Rather, petitioner appears only to challenge two subordinate findings of the DEP, specifically: (1) that the agency had jurisdiction over Ocean City's dunes when certain easement agreements containing the height limitation were entered into with oceanfront property owners and prior to July 19, 1994, the effective date of CAFRA's amendment; and (2) the agency had not earlier approved these easement agreements.

However, it is well-settled that appeals are taken from final orders, not opinions, Glaser v. Downes, 126 N.J. Super. 10, 16 (App. Div. 1973), certif. denied, 64 N.J. 513 (1974); Credit Bureau Collection Agency v. Lind, 71 N.J. Super. 326, 328 (App. Div. 1961); Homeowner's Taxpayers Ass'n of S. Plainfield v. Borough of S. Plainfield Sewerage Auth., 60 N.J. Super. 321, 323 (App. Div. 1960), or reasons therefor. Isko v. Planning Bd. of Twp. of Livingston, 51 N.J. 162, 175 (1968), abrogated on other grounds, Commercial Realty & Resources Corp. v. First Atl. Properties Co., 122 N.J. 546 (1991). Consequently, a party may not seek appellate review of an adverse intermediate, interlocutory or subordinate factfinding without seeking relief from the outcome of the litigation as embodied in the judgment. Magill v. Casel, 238 N.J. Super. 57, 62 (App. Div. 1990). Thus, a litigant, seemingly satisfied with the final judgment, cannot have an advisory appellate evaluation of adverse intermediate, interlocutory or subordinate factfinding therein. Ibid. Nevertheless, for the sake of completeness, we have reviewed the entire record and are satisfied that the agency's final decision, as well as its subservient findings, are supported by substantial credible evidence and based soundly in law. Accordingly, we affirm.

By way of background, prior to 1987, Ocean City did not have a significant dune system to provide shore protection and, instead, relied upon dunes that were naturally created near 23rd, 24th, 29th and 32nd Streets. To rectify the problem, in 1989, Ocean City participated in a beach replenishment and dunes restoration program with a cost-sharing ratio involving the State and federal government. The project site, bordered by residential development to the west and the Atlantic Ocean to the east, consisted of sand dunes located on the beach in Ocean City from 14th Street to 26th Street and from 34th Street to 40th Street. The dunes exist along the entire shoreline from 14th Street to 40th Street in Ocean City.

Before pumping sand from the sea to create the dune system, however, the Army Corps of Engineers required that Ocean City either own the beach or enjoy access rights where the sand was to be placed. Thus, since a portion of the area identified for the dune system was privately owned, Ocean City would have to either acquire easements from beachfront property owners, or pursue the more time-consuming process of condemnation. Ocean City chose the former course.

To ease property owners' concerns over their beachfront views, and to meet its Spring 1992 timeframe, beginning on April 26, 1991, Ocean City proposed easements that contained a restriction that the municipality would construct and maintain the dune system with a height limitation of no greater than three feet above the average elevation of the bulkhead in the block in which the property was located. Although 1991 CAFRA regulations*fn1 did not require a municipality to seek a CAFRA permit for dune maintenance, Ocean City's solicitor, Gerald Corcoran, nevertheless shared the proposed easement form containing the three-foot dune height restriction*fn2 with certain DEP representatives, in particular, Mark Mauriello. According to Corcoran, he "knew that [Ocean City] would need written authorization [from the DEP] to reduce the height of the dunes." Corcoran's belief was based, in part, on a series of State Aid Agreements entered into between Ocean City and the State in 1987, 1989 and 1991 concerning construction of certain dune walkovers, creation and maintenance of dunes, and establishment of the municipality's first beach replenishment project. Specifically, paragraph 4 of the 1987 State Aid Agreement provided that "[t]he municipality shall not undertake any mechanical manipulation including, but not limited to, bulldozing, grading, scraping of the beach and dune areas unless written authorization is received from the Division of Coastal Resources."

This much is undisputed; however, the parties disagree over the extent of the agency's approval. In response to Corcoran's transmission, on March 12, 1992, Mauriello faxed to the solicitor a memorandum with a schematic drawing of a recommended dune system that would meet the 540 square foot Federal Emergency Management Agency (FEMA) design standard, but neither expressly endorsed nor condoned the height restriction. Although Corcoran insisted, based on the drawing which showed a bulkhead of twelve feet and the crest at sixteen feet, that Mauriello thereby acquiesced in at least a four-foot dune height restriction, Mauriello explained that the drawing's purpose was "to provide the City Solicitor with . . . a sketch of how the protective capacity of dunes is measured in a . . . schematic drawing. It was not based on any . . . actual survey data or analysis." According to Mauriello, who did not have agency authority for dune maintenance at the time, he "would never endorse any plan to bulldoze a dune for the purpose of lowering dune height . . .", because "[w]hen you're trying to maintain dune vegetation, excavating and cutting the top of a dune is going to have a direct impact on the vegetation that really holds the dune together, and . . . that disturbance of vegetation will accelerate erosion of the dune and loss of . . . that protection as well."

In any event, from May 1, 1992 to December 8, 1995, Ocean City acquired the necessary easements, including the three-foot height restriction, from individual beachfront property owners. Not surprisingly, between 1992 and 2000, the dunes grew in height and the affected property owners began requesting that Ocean City comply with the dune maintenance provision in their easement agreements. By this time, however, by virtue of CAFRA amendments effective July 19, 1994,*fn3 Ocean City was required to apply for a CAFRA permit prior to performing dune maintenance to alter the size or height of any dunes within the municipality.*fn4

Consequently, on May 29, 2002, Ocean City filed with the DEP a CAFRA permit application seeking to reduce the height of existing sand dunes to an elevation of three feet above the twelve-foot height of the existing adjacent bulkhead; to place the sand removed from the dune system on the eastern portion of the remaining dune; to re-vegetate the disturbed portions of the dune; and to maintain the new elevation. The agency deemed the application administratively complete, but on March 17, 2005 denied the permit for non-compliance with governing regulations, the Rules on Coastal Zone Management, specifically: N.J.A.C. 7:7E-3.16 (Dunes), N.J.A.C. 7:7E-3.18 (Coastal high hazard areas), N.J.A.C. 7:7E-3.19 (Erosion hazard areas), N.J.A.C. 7:7E-3.22 (Beaches), N.J.A.C. 7:7E-3.38 (Endangered or threatened wildlife or plant species habitats), N.J.A.C. 7:7E-3.39 (Critical wildlife habitats), N.J.A.C. 7:7E-3A.2(b)(4) (Standards applicable to routine beach maintenance), N.J.A.C. 7:7E-6.2 (Basic location rule) and N.J.A.C. 7:7E-1.5 (N.J.S.A. 13:19-10).*fn5

The contested matter was thereafter transmitted to the Office of Administrative Law (OAL) where, after hearings, the Administrative Law Judge (ALJ) affirmed the agency's permit denial, concluding that: the dune maintenance proposal is not authorized in the applicable regulations. A CAFRA rule change would be necessary for this to be permissible. Also, any reduction in the height of the dunes would disrupt the dune natural process including vegetation cover and root structure, causing destabilization. All this undermines the purpose and intent of the dune program and the shore protection value.

With specific regard to the issues at hand, the ALJ found that the height restriction in condition three was absent from Mauriello's memorandum, which although containing "casual references" to the bulkhead, did not specifically endorse or condone the height restriction. The ALJ also concluded that neither the State nor the federal government adopted the easements. As to the CAFRA regulations, the ALJ found that "[t]he 1991 CAFRA regulations did not require a municipality to seek a CAFRA permit for dune maintenance," and "the municipality was free to engage in beach maintenance activities without submitting an application for a CAFRA permit." The ALJ, however, further found that a CAFRA permit was required by the CAFRA amendments after 1995.

Exceptions were filed by both parties. In its final agency decision of April 27, 2007, the DEP affirmed the ALJ Initial Decision denying Ocean City's CAFRA permit application, but modified the Initial Decision in several respects, only two of which are challenged here. First, the DEP clarified the Initial Decision to reflect that "the [DEP] did not approve the easement agreements" between Ocean City and certain ocean front property owners. In particular, the agency adopted the following Initial Decision factual findings, including: "Gerald Corcoran, Esquire, Ocean City's Municipal Solicitor, prepared several drafts of the proposed form of easement"; "[t]he drafts were shared with representatives from DEP"; the State "was not a party to the easements"; DEP's Mark Mauriello outlined his thoughts regarding the easements in a memorandum that lacked any discussion about easement restrictions on what height Ocean City agreed to maintain the dunes; Mauriello's memorandum "does not specifically endorse or condone the dune maintenance condition at three feet above the bulkhead"; and "Mauriello testified that the memorandum was not an endorsement of the dune maintenance program, nor did he have . . . such authority."

Second, the final agency decision concluded that the DEP had jurisdiction over the Ocean City dunes prior to CAFRA's amendments effective July 19, 1994. Accordingly, the Initial Decision was modified to state that the State Aid Agreements since 1987 did require DEP approval before mechanically manipulating dune areas and that several easements at issue were executed after the CAFRA amendments went into effect. Thus, the final decision made clear that the 1987 State Aid Agreement required Ocean City to receive written authorization from the Division of Coastal Resources, now known as the Land Use Regulation Program, to mechanically manipulate beach or dune areas; and a CAFRA permit was not required prior to July 19, 1994.

On appeal, petitioner disputes the dual agency findings that "[DEP] did not approve the easement agreements[,]" and that the agency had jurisdiction over the Ocean City dunes prior to July 19, 1994. We are satisfied, however, that both findings, as well as the ultimate decision to deny petitioner's permit application, are amply supported in the evidence. Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980); Mayflower Sec. Co. v. Bureau of Sec., 64 N.J. 85, 92-93 (1973).

As to the first contested finding, neither municipal solicitor Corcoran nor DEP representative Mauriello testified that the DEP endorsed or condoned the dune maintenance height restriction. In fact, it is undisputed that the State was not a party to the easements, and it was Corcoran who drafted the final form of easement that was agreed to by the individual property owners. Moreover, Mauriello, whom the ALJ found to be credible, testified that he did not have "any direct correspondence" with Ocean City on the three-foot height restriction; "would never endorse any plan to bulldoze a dune for the purpose of lowering dune height"; and in any event, had no agency authority to approve the easement conditions relating to dune construction in Ocean City. In light of this and other evidence, we are satisfied the agency's finding in this regard, reliant in turn on the ALJ's factual and credibility determinations, was not unreasonable, arbitrary or capricious.

Equally supported in the record is the other contested finding that at all relevant times, the DEP had jurisdiction over the Ocean City dunes. Corcoran himself conceded that "[Ocean City] would need written authorization [from DEP] to reduce the height of the dunes," even before the 1994 CAFRA amendment. Indeed, DEP jurisdiction existed if only because of the State Aid Agreements since 1987 requiring the municipality to obtain the agency's written authorization before commencing a dune maintenance. As Christopher Dolphin, DEP's supervisor for the Division of Land Use Management, testified, due to the State Aid Agreements, the State gave "Ocean City money so . . . [the DEP] had the ability to say . . . [that] we're giving [Ocean City] money so [Ocean City will] . . . pay homage to the rules on coastal zone management" and comply with dune maintenance and management. Even more express, paragraph four of the 1987 State Aid Agreement stated, "[t]he municipality shall not undertake any mechanical manipulation including, but not limited to, bulldozing, grading, scraping of the beach and dune areas unless written authorization is received from the Division of Coastal Resources." As such, the agency's modification of the ALJ's Initial Decision to accurately reflect the effective date of the relevant amendment to CAFRA (July 19, 1994), and to clarify that prior thereto and since 1987 Ocean City needed approval for dune activities to comply with State Aid Agreements is neither unreasonable, arbitrary nor capricious.


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