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Borough of Harvey Cedars v. Harvey Karan and Phyllis Karan

March 26, 2012

BOROUGH OF HARVEY CEDARS, PLAINTIFF-APPELLANT,
v.
HARVEY KARAN AND PHYLLIS KARAN, TENANTS IN COMMON, DEFENDANTS-RESPONDENTS,



On appeal from the Superior Court of New Jersey, Law Division, Ocean County, L-3797-08.

APPROVED FOR PUBLICATION

Argued January 31, 2012

Before Judges Payne, Reisner and Hayden.

The opinion of the court was delivered by REISNER, J.A.D.

In this condemnation case, plaintiff Borough of Harvey Cedars appeals from trial court orders dated April 5, 2011, excluding certain evidence following a N.J.R.E. 104 hearing; April 11, 2011, entering a $375,000 judgment based on the jury's verdict on valuation; and May 13, 2011, denying plaintiff's motion for a new trial.*fn1

The central question on this appeal is whether public construction of an enormous oceanfront beach dune, for which plaintiff condemned an easement on defendants' land, conferred a special benefit on defendants' beach front property in Harvey Cedars. The dune is one part of a line of dunes, created by the Army Corps of Engineers (Corps), that will eventually run the length of the ocean side of Long Beach Island (LBI).*fn2 The formerly-spectacular ocean view from defendants' house is now partially blocked by the twenty-two-foot high dune, which occupies one-third of their land. However, their house is now safer from storm damage because the dune was constructed. Judge E. David Millard concluded that construction of the dune did not confer a special benefit on the property. Instead, he found that the only benefit conferred was the general benefit for which the dune was constructed, i.e., to protect the island and its inhabitants from the destructive impact of hurricanes and nor'easters. We find no legal error in that ruling, which is consistent with established case law.

We also find no error in Judge Millard holding a N.J.R.E. 104 hearing prior to the condemnation trial to determine whether plaintiff's proposed expert testimony could prove the existence - as opposed to the value - of a special benefit. Having determined that plaintiff's proofs were inadequate as a matter of law to establish a special benefit to defendants' property, he appropriately precluded plaintiff from presenting that evidence to the jury at the condemnation trial. We likewise find no error in the judge's evidentiary rulings during the trial. Finally, we find no basis to set aside or reduce the verdict as excessive. Consequently, we affirm all of the orders on appeal.

I

On August 27, 2010, the judge then assigned to hear motions on the case determined that the report of plaintiff's real estate expert, Donald Moliver, created a genuine issue of fact as to whether the dune conferred a special benefit on defendants' property and that the issue should be submitted to the jury in the condemnation trial. The judge suggested that the jury might be asked to answer a special interrogatory concerning the issue of special benefits.

Closer to the time of the trial, defendants moved for a N.J.R.E. 104 hearing to address the special benefit issue. Judge Millard, who had not decided the previous motion, determined that the threshold issue of "whether a particular benefit is a special or general benefit" was a legal issue for the court to decide. He reasoned that "it then becomes a fact question for the jury what the financial impact of any special benefits is on the property in question, but there is absolutely a preliminary threshold before this evidence [can] go in front of a jury." On that basis, the judge ruled that he would hold a N.J.R.E. 104 hearing to determine whether plaintiff's evidence established a special benefit or a general benefit.

At the hearing, plaintiff presented testimony from Randall

A. Wise, a civil engineer specializing in the design and engineering of coastal projects.*fn3 Wise, who was employed by the Corps, explained that to obtain Congressional funding for a project, such as the LBI dune project, the Corps had to analyze the national and local benefits of the project. One part of that analysis focused on the project's benefit in protecting private property. In that context, he had prepared an analysis of "the storm damage reduction benefits" that the dune construction project would provide "to Harvey Cedars shorefront properties."

His analysis included a projection of the type and frequency of expected storm cycles over a 500 year period. He testified that, according to that theoretical projection, without the dune project defendants' property would likely incur storm damage "at a 37-year return period," but with the dune in place "damage would not be expected up to the 200-year or greater" return period. He testified that "the difference" between those two projections represented "the benefit obtained by that property."

Wise also opined that properties closer to the beach were at greater risk of storm damage and therefore realized greater benefit from the project than properties located farther back from the beach. For example, he projected that without the project, defendants' property had a fifty-six percent chance of being "totally damaged" in the "next 30 years," while properties located along the next street back from the beach had a thirty-seven percent chance of incurring such storm damage. On cross-examination, Wise admitted that the studies about which he was testifying were not part of the Corps' report to Congress to justify the project, but instead he had prepared them specifically for purposes of this litigation.

On cross-examination, Wise also admitted that the LBI project was "an entire island project" that is, it had "been formulated for the island" as opposed to one discrete portion. He admitted that, because once the Corps builds a dune, the dune becomes public property and protects the beach, the project "provides public access and public enjoyment of the beaches." He agreed that the twenty-two-foot height of the dune was aimed at ...


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