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Jeffrey S. Chiesa, Attorney General of New Jersey,*Fn1 v. D. Lobi Enterprises

September 28, 2012

JEFFREY S. CHIESA, ATTORNEY GENERAL OF NEW JERSEY,*FN1 AND STATE OF NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION, PLAINTIFFS-RESPONDENTS,
v.
D. LOBI ENTERPRISES, INC. A/K/A D. LOBI, INC., T/A SURF RIDER BEACH CLUB; LBP CORPORATION T/A DONOVAN'S REEF BEACH CLUB; JNM HOLDINGSS, INC. T/A CHAPEL BEACH CLUB; RUMSON MANAGEMENT COMPANY, INC. T/A CHAPEL BEACH CLUB; NAUGHTY NORA'S, INC. T/A CHAPEL BEACH CLUB; JOHN A. AND NANCY B. MULHERN T/A CHAPEL BEACH CLUB; ROZINANTE, INC. T/A THE SANDS BEACH CLUB OF SEA BRIGHT; THE SANDS BEACH CLUB OF SEA BRIGHT; EDGEWATER BEACH, INC. T/A WATER'S EDGE BEACH CLUB; DRIFTWOOD BEACH CLUB; DRIFTWOOD CABANA CLUB T/A DRIFTWOOD BEACH CLUB; DIXIE LIME AND STONE CO. T/A DRIFTWOOD BEACH CLUB; DRIFTWOOD BEACH CLUB L.P. T/A DRIFTWOOD BEACH CLUB; DRIFTWOOD BEACH CLUB, INC. T/A DRIFTWOOD BEACH CLUB; SHIP AHOY, INC. T/A SHIP AHOY BEACH CLUB; SHIP AHOY, LLC T/A SHIP AHOY BEACH CLUB; RIVER TO OCEAN, LLC T/A SHIP AHOY BEACH CLUB; TRADE WINDS BEACH, INC. T/A TRADE WINDS BEACH CLUB; TRADE WINDS BEACH-II, INC. T/A TRADE WINDS BEACH CLUB; TRADE WINDS BEACH-III, INC. T/A TRADE WINDS BEACH CLUB; KARA HOMES, INC. AND BOROUGH OF SEA BRIGHT,
DEFENDANTS, AND SEA BRIGHT ASSOCIATES, INC. T/A SEA BRIGHT BEACH CLUB; SEA BRIGHT ASSOCIATES T/A SEA BRIGHT BEACH CLUB; DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Chancery Division, Monmouth County, Docket No. C-296-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued: February 1, 2012

Before Judges Cuff, Waugh, and St. John.

In 1993, in anticipation of a major beach replenishment project to restore rapidly eroding sand beaches along the Atlantic Ocean shoreline, Sea Bright Beach Club (the Club) granted a temporary construction easement to the State of New Jersey (the State) to enter its property "to pump, place, transport and spread sand beach fill" on its property. The Club also granted "a continuing easement for the purpose of conducting periodic beach nourishment" during the projected life of the project, and "a perpetual easement for a right of limited public access" limited to pedestrian right of transit and fishing, the latter activity subject to reasonable restrictions by the Club. Following a 2005 Supreme Court decision, Raleigh Avenue Beach Ass'n v. Atlantis Beach Club, Inc., 185 N.J. 40 (2005), in which the Court held that upland sand beach owned by a private club is required to be made available to the public under the public trust doctrine, the State filed a complaint against nine beach clubs, including the Club, and the Borough of Sea Bright seeking reformation of the 1993 Agreements.

Following mediation over a two-year period, all defendants but the Club settled. In response to cross-motions for summary judgment, the judge found that most of the Club's ocean frontage was ungranted State tidelands but denied summary judgment on the issue of remedy. Following a limited hearing, Judge Cavanagh granted summary judgment concluding the 1993 Agreement was void. Arguing that the State was equitably estopped from seeking reformation of the 1993 agreement, the Club contends the judgment should be reversed. We hold the provision granting limited public access to the dry upland beach area controlled by the Club is contrary to public interest and unenforceable. We remand for further proceedings to address the appropriate remedy.

I.

The Borough of Sea Bright (Borough) occupies a narrow 3.8 mile stretch of coastline immediately south of Sandy Hook Gateway National Recreation Area. The Atlantic Ocean borders the Borough to the east; the Shrewsbury River to the west. In 1988, Congress authorized $91 million for the Sea Bright portion of the Sandy Hook to Barnegat Inlet beach nourishment and replenishment project. Water Resources Development Act of 1988, P.L. 100-676.

Prior to construction, the Army Corps of Engineers (Army Corps) required the State to certify that it had obtained temporary construction easements for the project area and permanent public access easements for all nourished beaches. The Borough obtained easements or acquired property for most of the project area. However, nine private beach clubs, all of which were named as defendants in this complaint, refused to sign the easements.

In 1993, an Assistant Commissioner of the Department of Environmental Protection (DEP), the Borough, and the private beach clubs signed individual but identical three-party agreements (the 1993 Agreements). According to its agreement, the Club permitted temporary access to its property during the beach replenishment project and also permitted limited public access to and use of its beachfront. The 1993 Agreement provided that the public may only walk north to south, or fish during non-swimming hours, along a fifteen-foot-wide strip of dry sand along the water's edge.*fn2 The 1993 Agreement also provides that the agreement did not serve as a conveyance of State tidelands. Specifically, the 1993 Agreement provides:

"Nothing in this Agreement is intended to give [the Club] any right of ownership in lands below the Mean High Water Line; nor the right to control the use of lands below the Mean High Water [L]ine unless those lands are subject to a State Tidelands grant."

The Club occupies oceanfront property along Ocean Avenue. Its ocean frontage is 705 feet, only 80 feet of which is subject to a riparian grant from the State. Tidelands, or riparian lands, are all those lands now or formerly flowed by the mean high tide of a natural waterway. Generally, the State owns all lands naturally under tidal waters in the State oceanward of the mean high water line. Private property owners can obtain an interest in submerged tidal lands through a State tidelands conveyance.

It is undisputed that the New Jersey Constitution was amended in 1981 to provide that the State must specifically define and assert its claims to land, which had not been tidally flowed for a period of forty years, within one year of the date of adoption of the amendment. N.J. Const. art. VII, § 5, ¶ 1. On May 27, 1982, the Tidelands Resource Council (Council) approved the publication of 713 maps identifying the State's claims to riparian lands throughout the State. These maps relied on aerial photography conducted in 1977 and 1978.

The lines demarcating State ownership of riparian lands along the Atlantic Ocean are referred to as the 1977/78 Tidelands Claims Lines. On publication, the Council explained that the Claims Lines did not necessarily reflect valid riparian grants made by the State. Nevertheless, the Club does not contend it acquired a valid riparian grant to the 625 feet of ungranted tidelands.

Prior to the initial nourishment and replenishment work, erosion had eliminated the dry sand beaches in many areas in front of the clubs or narrowed the beach to a strip of dry sand in the Borough. At the Club, almost no dry sand remained except on the north end of its property where a jetty had been built.

In 1995, the Army Corps completed the first round of beach nourishment and replenishment. The dry sand beach in front of the Club expanded by approximately 250 feet. In 2003, the Army Corps returned to replenish beaches that had suffered erosion. Following this work, the width of the Club's dry sand ...


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