Harvey Cedars couple settle dispute over protective dune

Phyllis Karan and her husband had refused to sign an easement for dune construction.
Phyllis Karan and her husband had refused to sign an easement for dune construction. (BRIAN DONOHUE / Newark Star-Ledger)
Posted: September 27, 2013

A Harvey Cedars, N.J., couple locked in a long-running legal battle with the borough after it built a protective sand dune on part of their property have settled the case for $1, state officials announced Wednesday.

Meanwhile, Gov. Christie ordered the state Attorney General's Office to "immediately take action" to obtain easements from landowners to build more protective dunes along the shoreline in the aftermath of Hurricane Sandy.

"We can no longer be held back from completing these critical projects by a small number of owners who are selfishly concerned about their view while putting large swaths of homes and businesses around them at risk," Christie said in a statement.

The announcements followed a state Supreme Court decision in July tossing out a $375,000 jury award to Harvey and Phyllis Karan, an elderly couple who had argued that Harvey Cedars - which took an easement on part of their property in 2008 - reduced their property value by blocking their ocean view with the protective dune.

The court decided that Harvey Cedars officials should have been allowed to argue that the dune added value to the $1.9 million home, which survived Sandy.

Christie - who had referred to the Karans as "knuckleheads" - said Wednesday the impact of the court ruling "should now be clear to anyone who thinks they were in line for a big government check."

In a statement, acting Attorney General John Hoffman said it was "to the Karans' credit that they were willing to put a halt to this protracted legal dispute" after the Supreme Court decision. The borough will pay about $24,000 in out-of-pocket expenses to lawyers for the Karans.

Peter Wegener, who represented the couple, said his clients had settled because they were "exhausted by years of protracted litigation."

"They just want to go through their lives without being berated by politicians for believing they should be entitled to just compensation, and that the government should pay for the property they take," Wegener said.

If the couple had retried the case, the evidence would likely be the same, Wegener said.

"There's no marketplace evidence demonstrating people would pay more for a property with a dune in front of it," he said. An appraiser for the Karans testified the loss of the ocean view reduced the home's value by $500,000; the borough's appraiser testified that the value had not changed and that the couple could still see the beach from the second and third levels of the house.

What could have changed at a second trial, Wegener said, is the mentality of jurors after Sandy. Ocean County jurors who experienced the storm might not weigh the evidence fairly, he said.

Jonathan Oldham, mayor of Harvey Cedars, which took easements on a number of properties in 2008 to build a protective dune, said the settlement was "very fitting."

The Karans "received a benefit which outweighed any detriment to the view," Oldham said. "The bottom line is, we need to move forward and protect all the oceanfront homes up and down the coast."

The resolution was welcomed by other supporters of dune construction projects.

"Common sense has prevailed," said Jeff Tittel, director of the New Jersey Sierra Club. "This settlement shows one person should not be able to block projects that benefit everyone."

The case "will set a transparent and reasonable approach for requiring easement for dunes," he said.

State officials - who said they need about 1,000 easements - have maintained that building dunes is essential to protecting the state's 127-mile coastline from future storms.

The Army Corps of Engineers, partnering with the state and municipalities, has earmarked $1 billion for dune and beach projects in New Jersey, said Larry Hajna, a spokesman for the Department of Environmental Protection.

The projects have been moving forward where municipalities have secured easements, but where they haven't - holdouts are scattered along the coast, with a cluster in northern Ocean County - efforts have been delayed, Hajna said.

"Once we sort through this easement issue, we'll be able to move ahead with those," he said.

Christie also on Wednesday ordered the creation of an Office of Flood Hazard Risk Reduction Measures to coordinate DEP efforts to obtain property.

The Karans' settlement with Harvey Cedars will pave the way for landowners to cede easements, said Peter Reinhart, director of the Kislak Real Estate Institute at Monmouth University.

"I'd be surprised at the end of the day if there are any holdouts," Reinhart said. "Because the legal process is not going to be in their favor for getting a large sum of money."



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