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Raab v. Borough of Avalon

July 28, 2009


On appeal from the Superior Court of New Jersey, Law Division, Cape May County, Docket No. L-257-02.

Per curiam.


Argued May 18, 2009

Before Judges Lisa and Sapp-Peterson.

In Raab v. Borough of Avalon, 392 N.J. Super. 499, 502-03 (App. Div.), certif. denied, 192 N.J. 475 (2007), a panel of this court affirmed the summary judgment dismissal of plaintiffs' claims against the Borough of Avalon (Borough) which sought compensation for the physical taking of their property and damages under 42 U.S.C.A. § 1983. The issue in that case was a determination of "the applicable limitation period within which a private party must commence an action to challenge the taking of private property by a public entity, as an exercise of its police power, where the public entity's actions fail to comply with any of the statutory provisions governing the use of eminent domain." Id. at 502. We held "that the physical taking of real property by a governmental agency, without compliance with the statutory safeguards established by the Legislature for the lawful exercise of the power of eminent domain, constitutes an act of inverse condemnation." Id. at 503. We further held "that a cause of action against a governmental defendant to recover the value of the real property that was taken by inverse condemnation is governed by the provisions of N.J.S.A. 2A:14-1 -2, and must be filed within six years from the date of accrual, which is defined as the date the landowner becomes aware... that he or she has been deprived of all reasonably beneficial use of the property." Ibid.

The dispute involved several beachfront lots in the Borough owned by plaintiffs' predecessors. A major storm in March 1962 obliterated the lots. The Borough enacted a series of resolutions in the aftermath of the storm authorizing it to enter upon the beachfront properties from 13th Street to 80th Street, to clear debris, and to immediately construct a protective barrier in the form of sand dunes along the beachfront. Plaintiffs' lots were included within this area. Borough officials and contractors, in compliance with the authorizing resolutions, embarked upon the construction of a protective dune system for the protection of the barrier island on which the Borough is located and for the benefit of the general public and the promotion of the health and welfare of the community.

In November 1962, the Borough instituted a property- exchange program as a means of compensating property owners whose lots had been destroyed by the storm. Plaintiffs' predecessors engaged in negotiations with the Borough under this program, seeking to exchange their destroyed lots for others owned by the Borough. In a letter to the Borough dated April 29, 1965, plaintiffs' predecessors acknowledged that they had visited the lots on April 26, 1965, observed the dune system that had been constructed, were aware that they could not build on the lots, and requested exchange of their lots for property of comparable value owned by the Borough. That letter conclusively established that by April 29, 1965, plaintiffs' predecessors knew that the Borough had seized their property and that they had been deprived of all reasonably beneficial use of the property.

Through their efforts to participate in the property- exchange program, plaintiffs sought compensation for the taking of their property by the Borough. The negotiations proved unsuccessful, and no further efforts were made to resolve the dispute for several decades. During that time, the lots continued to be carried on the Borough tax records as owned by plaintiffs or their predecessors, and two conveyances were made, one from the corporate entity that had owned the lots at the time of the storm to its three principals, and another when one of the principals died to his widow. Thus, there were no innocent third parties involved here. The knowledge of plaintiffs' predecessors was properly imputed to plaintiffs.

The consideration for the conveyance to the deceased member's spouse was $70. The taxes were less than $2 per year.

In the first phase of this action, Judge Visalli granted summary judgment to the Borough and third-party defendant New Jersey Department of Environmental Protection on statute of limitations grounds. He held that plaintiffs' claim for compensation arising from inverse condemnation was six years, and for its § 1983 claim, it was two years. He concluded that plaintiffs' cause of action accrued no later than April 29, 1965. He therefore found their claims time barred and entered a final judgment granting defendant's motion to dismiss. That judgment was entered on June 6, 2005. On July 18, 2005, the Borough recorded the judgment and accompanying written opinion rendered by Judge Visalli in the Cape May County clerk's office pursuant to N.J.S.A. 46:16-1.1.

Plaintiffs appealed, and in our prior decision we affirmed. Raab, supra, 392 N.J. Super. at 509. We agreed with Judge Visalli's analysis and ultimate conclusion and concluded "that the Borough's actions in physically appropriating plaintiffs' property constituted a 'taking.'" Id. at 510. Further, because the Borough did not follow the procedures required for an eminent domain proceeding, the Borough's action "is viewed as an inverse condemnation, shifting the burden to the aggrieved landowner 'to discover the encroachment and to take affirmative action to recover just compensation.'" Ibid. (quoting United States v. Clarke, 455 U.S. 253, 257, 100 S.Ct. 1127, 1130, 63 L.Ed. 2d 373, 378 (1980)). We further concluded that "the taking was complete when the Borough came upon the property; took exclusive possession of it; and through a series of municipal resolutions, appropriated, transformed, and built upon the property to accomplish its express public purpose: the restoration and protection of the shoreline." Id. at 513.

After the conclusion of the appellate process, plaintiffs filed a motion with the trial court seeking to reopen the case. More particularly, the motion was "to open case, clarify final judgment and order and expunge and vacate recordation of final judgment and opinion in Cape May County Clerk's records."

Essentially, plaintiffs contended that the first phase of the action, including the issues decided on appeal, dealt only with the Borough's possession of the property, and not legal title to the property. Plaintiffs argued that the recording statutes protected their title ownership, which was paramount to any claim of title by the Borough.

Judge Visalli rejected the argument and issued a written opinion on April 25, 2008 denying plaintiffs' motion. The judge explained his decision this way:

Plaintiffs contend that the Order on its face grants no affirmative relief to Avalon, but simply dismisses Plaintiffs' Complaint. As to Plaintiffs' Cross-Motion on Avalon's Counterclaims, this Court made no substantive ruling but only stated that "Plaintiffs' Cross-Motion are (sic) therefore denied." The crux of this Motion centers upon Plaintiffs' contention that the Final Judgment and Opinion did not affect title to Plaintiffs' real property.

Plaintiffs dispute that... Avalon acquired legal and recordable title to the property in question as a result of the granting of Summary Judgment. Specifically, Plaintiffs contend that this Court's finding that Avalon took physical possession of Plaintiffs' property in 1962 is, was not and cannot be a finding that such physical possession of ...

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