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New trial ordered in Shore dune v. view dispute

The sand dunes created to protect the Jersey Shore may be worth more than an unobstructed view of ocean. However, it is up to a jury to decide how much, if any, a Harvey Cedars couple should receive after a large piece of their property was taken by the state to construct 22-foot dunes that also blocked part of their view of Long Beach Island's surf.

A tractor moves sand in Harvey Cedars in this file photo. Mike Derer/Associated Press
A tractor moves sand in Harvey Cedars in this file photo. Mike Derer/Associated PressRead more

The sand dunes created to protect the Jersey Shore may be worth more than an unobstructed view of ocean.

However, it is up to a jury to decide how much, if any, a Harvey Cedars couple should receive after a large piece of their property was taken by the state to construct 22-foot dunes that also blocked part of their view of Long Beach Island's surf.

The New Jersey Supreme Court on Monday tossed out a $375,000 jury award to Harvey and Phyllis Karan in the case filed five years ago, sending it back to Ocean County for a new trial. The high court said the lower court erred in excluding some expert testimony for Harvey Cedars.

The case has been closely watched as Gov. Christie and legislators plan to construct protective dunes along the entire Shore, using eminent domain if necessary, as was done with the Karans years before Hurricane Sandy hit last October.

Officials feared that if the high court upheld the award to the Karans without consideration for the value brought with dunes, protecting the beach would be prohibitive in some communities.

Those with diverse interests declared victory from the unanimous decision. Preservationists say it empowers the state to build dunes needed to protect the beach. Lawyers for property owners say it reaffirms that the state must fairly compensate for land used.

Harvey Cedars Mayor Jonathan Oldham said he was pleased with the court's decision, and added that the value of dunes was especially clear after Sandy delivered a direct blow to the barrier island.

"It's hard to say whether their house would still be standing now," Oldham said of the Karans' three-story 68th Street summer home, valued at $1.9 million. "There are a number of people in Harvey Cedars who bought homes here because the dune project had been done."

Even more clear, Oldham said, were videos captured from helicopters as the governor and President Obama assessed damage from the unprecedented storm. Communities that created dunes had far less damage than those with no dunes.

The Karans' home survived Sandy's surge, one of the most costly hurricanes in the United States.

The governor, who maintains a high profile at the Shore, has called the Karans "knuckleheads" along with other property owners who dispute the value of dunes.

The Karans' Lakewood attorney, Peter Wegener, called the high court's decision "disappointing, politically motivated," and inconsistent with previous "well-thought-out" decisions.

"We'll settle the case," Wegener said, acknowledging that attitudes have changed since Hurricane Sandy. The Karans, who also own a home in North Jersey, are in their 80s. If the case goes to trial again, it could take years to resolve.

"I'll tell the judge for how much, but it would not be advantageous to discuss in the newspaper," Wegener said. "They have always been interested in settling the case."

The Karans had been seeking $500,000 in damages. Harvey Cedars argued that the amount was considerably less, based partly on an assessment by the Army Corps of Engineers.

The Supreme Court, with five of seven justices participating in the decision, did not say whether the Karans' panoramic ocean view was worth more than having protective dunes.

It said Harvey Cedars should have been allowed to argue at trial - as requested at the time - that the protective dunes added value to the Karans' home, because a house protected from a major storm and flooding is more valuable than one without protection.

The lower court excluded the town's expert, a decision upheld on appeal. Harvey Cedars petitioned to the Supreme Court.

As justices heard arguments in the Harvey Cedars case, property owners impacted by Sandy were bickering about how much the state should pay for their land or easements. Some donated land for dunes, while others dispute the need for so many of them.

Christie responded Monday that the Supreme Court's message was "pretty clear."

"I think this should be a clear message to the 1,400 or so folks who have not yet given easements along the 127 miles of New Jersey's coastline. You're not going to be paid a windfall for your easement."

The governor's spokesman, Michael Drewniak, said the decision benefits all New Jersey citizens.

"Engineered dune systems paid for with public dollars benefit everyone, including holdouts who selfishly refuse to provide easements to protect not just their own homes but the homes and businesses inland of them as well," Drewniak said.

Jeff Tittel, director of the New Jersey Sierra Club, agreed.

"This is a clear victory for the public," he said, adding that the dunes built in Harvey Cedars proves the need for them.

"As we rebuild our coast, having dunes and natural systems are critical to protect people and property from storms and storm surges," Tittel said. "This decision will also help governments build projects for the public good, whether it is bike paths, beach access, river walkways, protecting wetlands, or stream buffers."

Marlton lawyer Richard Hluchan, who specializes in land-use litigation, also praised Monday's decision, saying the Supreme Court recognized that property owners must be fairly compensated.

"Those who want to be paid are exercising their constitutional right to be paid," Hluchan said. "After Sandy, nobody disputes the public's interest in dunes."

Hluchan represented a Moorestown couple whose Avalon house was washed away in a 1962 nor'easter that wiped out their entire oceanfront block. The couple argued that the municipality never properly compensated them when the land was used to create dunes and they lost their ability to rebuild.

That case also went to the state Supreme Court. In the end, they won, but the court said they were only entitled to 1962 fair market value for the 9,000 square feet of property. That was estimated to be $5,400. With interest, the couple received $284,800. Avalon was also ordered to pay $366,000 in legal fees and expenses.

If Harvey Cedars and the Karans do not reach a settlement, lawyers say, jurors could potentially lower or eliminate the award if they decide the dunes are more valuable than the land itself and the view.