Tuesday, July 9, 2013
The New Jersey Supreme Court issued an important just compensation decision yesterday in Borough of Harvey Cedars v. Karan, No. 070512 (N.J., July 8, 2013).
In this case, the borough condemned part of the Karan's beachfront residential property to construct 22-foot high dunes to serve as a barrier against storm tides. All parties agreed that the Karans' were entitled to just compensation - the case turned on what evidence should be admitted in determining that just compensation.
At trial, the court allowed the Karans' evidence relating to lost value due to the dunes obstructing their "oceanfront vista." The trial court denied, however, the borough's evidence relating to the enhanced value for the Karans' property attributed to the added storm protection afforded by the dunes. In the trial court's view, the storm protection constituted a general benefit. The issue before the court was whether or not the cost incurred by the Karans, the part taken plus damages to the remainder, should be offset to the benefit the Karans might receive from dune project.
The Supreme Court reversed the trial court. The court rejected the 19th century general benefits/special benefits dichotomy to hold that "just compensation should be based on non-conjectural and quantifiable benefits, benefits that are capable of reasonable calculation at the time of the taking." The trial court erred, according to the opinion, but allowing the jury to hear evidence relating to the lost value due to the dunes, but not evidence relating to increased storm protection that would potentially enhance value.
This opinion, issued unanimously, is a lengthy and detailed one and includes some history about just compensation law and the general damages/special damages rule. We cover this issue in my Damages course so I will be incorpating either this case or the concepts this fall semester.