STATE OF NEW JERSEY, BY THE DEP VS. MIDWAY BEACH CONDOMINIUM (L-2653-17, OCEAN COUNTY AND STATEWIDE) ( 2020 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2071-17T4
NEW JERSEY DEPARTMENT OF
ENVIRONMENTAL PROTECTION,
OFFICE OF FLOOD HAZARD
RISK REDUCTION MEASURES, APPROVED FOR PUBLICATION
April 16, 2020
Plaintiff-Respondent,
APPELLATE DIVISION
v.
MIDWAY BEACH
CONDOMINIUM
ASSOCIATION, INC.,
Defendant-Appellant.
_______________________________
Argued February 3, 2020 – Decided April 16, 2020
Before Judges Fasciale, Rothstadt and Moynihan.
On appeal from the Superior Court of New Jersey,
Law Division, Ocean County, Docket No. L-2653-17.
Anthony F. DellaPelle argued the cause for appellant
(McKirdy, Riskin, Olson & DellaPelle, PC, attorneys;
Anthony F. DellaPelle, of counsel and on the brief; L.
Jeffrey Lewis and Alan Zhang, on the briefs).
Avram S. Eule argued the cause for respondent
(Carella, Byrne, Cecchi, Olstein, Brody & Agnello,
PC, attorneys; Donald F. Miceli, of counsel and on the
brief; Avram S. Eule, on the brief).
The opinion of the court was delivered by
FASCIALE, P.J.A.D.
In this condemnation action, defendant Midway Beach Condominium
Association (Midway) appeals a December 1, 2017, final judgment in favor of
the Department of Environmental Protection (DEP), allowing DEP to take a
portion of Midway's private property for an easement as part of a shore
protection system, known as the Manasquan Inlet to Barnegat Inlet Hurricane
and Storm Damage Reduction Project (the Project). The judge considered
whether DEP's taking of the easement was proper given a preexisting dune
system. Defendant contends the judge erred by issuing a final judgment
authorizing the taking without a plenary hearing.
On appeal, defendant reiterates arguments made by the defendants in
related appeals, namely, that DEP failed to engage in bona fide negotiations,
that N.J.S.A. 12:3-64 does not authorize the taking, and that the taking was
arbitrary and capricious. Defendant also argues that DEP failed to include all
interested parties because it did not name all individual condominium owners
as defendants in its condemnation action. 1
1
We listed this appeal back-to-back with State v. 3.814 Acres of Land in the
Borough of Point Pleasant Beach, State v. 10.041 Acres of Land in the
Borough of Point Pleasant Beach, and State v. .808 Acres of Land in the
Borough of Point Pleasant Beach (collectively Risden's); sixty-three
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In September 2017, DEP filed a verified complaint and an order to show
cause against Midway, seeking an easement on Midway's beachfront property.
DEP offered Midway $500 based on a real estate appraisal performed by
Jeffrey Otteau. In October 2017, Midway submitted an expert report by
Andrew Raichle, who opined that the Project was unnecessary for shore
protection because of Midway's preexisting dune system. In November 2017,
DEP's representative William Dixon certified that despite the existing dune's
superfluous height, the dune did not provide adequate shore protection because
it contained gaps and cuts. He further emphasized that Midway's beach berm
was narrower than what the Project suggested. Midway sought a plenary
hearing to determine whether the Project was necessary. On December 1,
2017, the judge heard oral argument, denied the request for a hearing, and
entered final judgment in favor of DEP.
Midway's beachfront property consists of approximately seventy acres of
land, ten acres of beach, and 390 condominiums. Each condominium owner
owns a share of the beach area. Midway has a preexisting storm protection
system consisting of sand dunes anchored with recycled trees, fencing, and
consolidated cases known as State v. 1 Howe Street Bay Head, LLC (Howe);
and a pro se appeal entitled State v. Arthur Williams (A-1484-17) (Williams).
On today's date, we issued opinions in Howe, Risden's, and Williams.
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vegetation. The average peak elevation of the dunes is 27 North American
Vertical Datum (NAVD), and their width is greater than 150 feet. Midway
privately maintains its system.
According to Otteau's appraisal, after DEP's condemnation, Midway's
property size would not be reduced, the views from the condominiums would
improve or remain unchanged, and the beach area would increase from 8.98 to
12.57 acres. Otteau estimated that after the taking, the property's value would
increase from approximately $46 million to $48 million. Therefore, Otteau
speculated that DEP should pay Midway $500 in nominal consideration.
I.
Midway argues that the judge erred in her conclusions of law and refusal
to conduct a plenary hearing.
The judge stated:
[R]ecognizing the right of eminent domain, [the court]
does find that there is a lack of evidence that . . .
DEP's exercise of eminent domain was arbitrary,
capricious and unreasonable. The question is whether
or not there is sufficient evidence of arbitrariness
that's been raised by [Midway], that would warrant a
plenary hearing[.]
[I]t would be difficult to not come to the
conclusion that . . . DEP is within its rights to take the
action that it's taking.
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In concluding that DEP was within its rights to take the easement, the judge
relied on evidence presented in a related plenary hearing, which she presided
over in February 2017.
We are satisfied that no plenary hearing was required. Pursuant to Rule
4:67, DEP was authorized to bring its condemnation action in the trial court in
a summary manner. R. 4:73-1. In such an action, if there is no genuine issue
as to any material fact, the judge can dispose of the matter without a plenary
hearing. R. 4:67-5.
In this case, defendants failed to prove such a triable issue of fact. The
fact that a de minimis offer was made does not infer that bona fide negotiations
did not occur. Defendants do not dispute any of the underlying facts
surrounding the de minimis offer, and thereby should not be afforded a plenary
hearing. See Coastal Eagle Point Oil Co. v. Township of West Deptford, 353
N.J. Super. 212, 218 (App. Div. 2002) (requiring a plenary hearing when
defendant makes a prima facie showing of the asserted claim). Dixon's
certification demonstrated Midway's dune system was inadequate, including
that it was too small in certain areas and that there were gaps in it.
Because defendants failed to dispute any material fact, we conclude the
judge did not abuse her discretion by proceeding without a hearing.
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II.
Midway joins Howe and Risden's related appeals on the following
arguments: N.J.S.A. 12:3-64 does not authorize the taking; DEP acted
arbitrarily and capriciously because the taking was unnecessary; DEP did not
engage in bona fide negotiations; and this court should reject State v. North
Beach 1003, LLC, 451 N.J. Super. 214 (App. Div. 2017), and State v. Archer,
107 N.J. Super. 77 (App. Div. 1969). As to these issues, we rely on our
analysis in those opinions and reiterate the following.
This court in North Beach held that N.J.S.A. 12:3-64 expressly
authorizes DEP to condemn properties for shore protection and to acquire "any
type of property interest," including a perpetual easement to protect the
coastline. 451 N.J. Super. at 237-38. Because DEP could have taken the
property in fee simple, it also had discretion to take a lesser interest, such as an
easement with a right of public access and use. Id. at 234-35.
Defendant next contends that the taking was arbitrary and capricious
because DEP will not properly maintain the Project's dune and berm system
and therefore, the shore protection will be worse than when Midway's system
was in place.
Dixon certified that there were gaps and breaks in Midway's dune
system, and therefore opined that the Project was necessary to ensure
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uniformity and stability. The judge maintained: "The testimony in [related
matters] informed the [c]ourt that the plan was to have a continuous project
that went down to Island Beach State Park . . . it was felt that there was no
need for a dune system since there were no significant structures there[.]"
As we can infer from the judge's statement, this area would benefit from
a continuous dune system as there is a significant structure to protect
here⸺Midway's condominiums.
The judge declared:
And after a ten-day trial, I believe, on that
matter, that the [c]ourt determined . . . ultimately that
the actions of . . . DEP in making a decision to
proceed with this [P]roject and to do the
condemnation taking was not found to be arbitrary and
capricious even though I think reasonable people
could differ as to . . . whether or not there was an
alternative that was available that might have been just
as comprehensive, that it was within the discretion of
the taking authority to decide, based upon valid
engineering principles, what project it was going to
support and to do, and that there was no evidence of
any fraud or other unreasonable action by [DEP.]
The judge stated that it would be hard to find that DEP had no right to take the
easement.
Defendant presented no evidence of arbitrariness. Dixon's certification
corroborated the notion that the Project would provide additional protection
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where there were gaps in the existing storm protection system. Thus, the
taking of the easement was not arbitrary or capricious.
Defendant also argues that DEP did not engage in bona fide negotiations
because it offered a nominal amount, stating that the Project would increase
the value of the property, but did not consider the preexisting storm protection
nor negotiate in good faith. We disagree.
DEP sent Midway's counsel an offer letter wherein it announced its
intention to purchase the easement at fair market value. The offer letter
disclosed the valuation method used and the completed appraisal. Midway
never attempted to negotiate the voluntary grant of the easement. It claimed
that negotiations were futile, as it could not voluntarily provide the easement
because the association's bylaws required unanimous approval by its 390
members.
Furthermore, the judge found that there was an offer, which Midway
rejected. She stated that because there was an offer, this was not a bona-fide-
negotiations issue, but rather a valuation-of-property issue.
[T]he position of . . . DEP is that the taking actually
enhances the protection of the property and then
enhances the value of the property. That is disputed by
the association. It is not the function of this [c]ourt to
decide the issue of. . . which theory of valuation
prevails but rather, to find that [there] is an issue that
is best left to the determination of the condemnation
commissioners.
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We see no reason to disturb the judge's finding.
III.
Defendant argues that DEP failed to include all interested persons,
specifically individual condominium association members, as parties to the
condemnation complaint. It argues that each condominium owner has access
to the beachfront property and is permitted to use it; thus, the taking will
eliminate each property owner's access to and use of the property by
converting it to a public beach.
N.J.S.A. 46:8B-25 provides:
If all or any part of the common elements shall be
taken, injured or destroyed by eminent domain, each
unit owner shall be entitled to notice of such taking
and to participate through the association in the
proceedings incident thereto. Any damages shall be
for the taking, injury or destruction as a whole and
shall be collected by the association and distributed by
it among the unit owners in proportion to each unit
owner's undivided interest in such common elements,
except to the extent that the association deems it
necessary or appropriate to apply them to the repair or
restoration of any such injury or destruction.
[(Emphasis added).]
"[O]rdinarily a [condemnor] is not required to undertake the burden of
negotiating with each and every interest holder in private property." Town of
Kearny v. Disc. City of Old Bridge, Inc., 205 N.J. 386, 407 (2011) (citing City
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of Atlantic City v. Cynwyd Invs., 148 N.J. 55, 70-71 (1997)). "[W]here a fee
simple is being condemned, negotiations will take place with the fee owner
alone[.]" Ibid. The rights of all other condemnees with a compensable interest
are better protected by allowing them to participate in the commissioners'
hearing, where just compensation is determined. Ibid.
Defendant concedes that the condominium association owns the
beachfront property. But N.J.S.A. 46:8B-25 specifically provides that a
condominium owner should participate in the condemnation proceedings
through its association, and the association should collect and distribute
damages to each individual owner. The judge stated that DEP did not have an
obligation to join the individual property owners because Midway protected
their rights of access. She noted that "th[is] statute itself seems to indicate that
the rights of the individual property owners are presumed to be protected or
. . . that the association itself in a condominium [association] is the proper
party for this matter." Being that the statute supports the judge's finding, we
find no abuse of discretion.
Affirmed.
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