Couple to get $284,802 for Avalon property seized in 1965

This house was owned by Ed and Nancy Klumpp. in Avalon, N.J., in the early 1960s. (Family hand out photo)
This house was owned by Ed and Nancy Klumpp. in Avalon, N.J., in the early 1960s. (Family hand out photo)
Posted: April 05, 2012

What's a 9,000-square-foot beachfront property in Avalon worth?

Depends on who's doing the math.

In a convoluted legal dispute settled last week, a Superior Court judge in Cape May County has ordered the Borough of Avalon to pay a Moorestown couple $284,802 for a 90- by 100-foot lot at the end of 75th Street that the borough seized without compensation in 1965.

Edward and Nancy Klumpp had sought $5.5 million, based on current real estate values. The Klumpps lost a six-bedroom home on the site in the great storm of 1962.

Their property became part of the beachfront dunes the borough put in place after that devastating nor'easter, still referred to as the "storm of the century" by many locals. Property damage at the Jersey Shore totaled tens of millions of dollars.

"We didn't take their property, the storm did," said Michael Donohue, the lawyer representing Avalon.

The judge's ruling was "more in line with reality" than the millions sought by the Klumpps, Donahue said.

But the Klumpps' lawyer, Richard Hluchan, said he did not believe that Judge Daryl Todd "ever seriously considered our position."

And a humorous parable the judge included in his ruling "adds insult to injury," Hluchan said.

The Klumpps' case, filed in 2004, made its way to the New Jersey Supreme Court, which ruled in 2010 that the couple were entitled to compensation based on a legal concept known as inverse condemnation.

The court ruled that the Klumpps were never properly notified of the borough's intent to take their property. The couple had continued receiving and paying tax bills, which amounted to as little as $3 annually for a property assessed at just $100.

The bills continued, Hluchan said, even after their property had become part of the dunes that line the beach in the now-tony Cape May County resort.

The Klumpps learned in 1997 that they no longer owned the land when they sought borough approvals to build a new home on the site, Hluchan said. Six years after they filed suit, they got a ruling from the state Supreme Court that entitled them to compensation.

But the question was, how much?

In a ruling filed March 29, Todd pointed out the difficulties in calculating a fair value.

His ruling includes a humorous three-paragraph story about a mathematician, an accountant, and an economist. Each is asked what two plus two equals. The punch line has the economist asking, "What do you want it to equal?"

Todd used the joke to explain why he had rejected a professional appraisal submitted by the Klumpps' attorney that placed the value of the property at $5.5 million.

Instead, the judge said, the Klumpps were entitled to the interest that would have accumulated over 47 years on the value of their property at the time the borough took possession. That value was set at $5,400.

Based on an interest rate of 8 percent to 9 percent, the judge ruled that they were to be paid $284,802.

Todd also ordered the borough to pay legal fees of $337,706 and costs of $28,784 to the Klumpps' attorney.

But the ruling ignored a key issue in the case, Hluchan said Thursday. When the borough took beachfront property from dozens of owners in 1965, it offered an exchange program in which they were given the option of taking a different Avalon property.

The Klumpps, he said, were never notified of the program, nor were they offered a swap. In the lawsuit, an economist who testified for the Klumpps estimated that the property they could have received would today be worth about $5.5 million.

"I've been practicing law for 37 years, and I've never seen a situation where a judge found it necessary to tell a joke, and not a very good one at that," said Hluchan, who called the attempt at humor "demeaning, offensive, and inappropriate."

Contacted Thursday, Todd said he could not comment on a case that was subject to appeal. His ruling in the Klumpp case was one of his last. He retired March 30 after 12 years on the bench in Atlantic and Cape May Counties.

Hluchan described the Klumpps, who are in their 80s, as being "too upset" to comment. They have 45 days to decide, he said, but he believed an appeal would be filed.

Donohue said he would meet soon with Avalon borough officials to determine whether to challenge the judge's ruling. If an appeal is filed, he said, it would probably focus on the legal fees and costs the judge awarded.


Contact George Anastasia at 856-779-3846 or ganastasia@phillynews.com.

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