HENRY E. RAAB v. BOROUGH OF AVALON

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4735-07T34735-07T3

HENRY E. RAAB AND CLARA V.

MONTAGNA,

Plaintiffs-Appellants,

v.

BOROUGH OF AVALON,

Defendant/Third-Party

Plaintiff-Respondent,

v.

STATE OF NEW JERSEY, DEPARTMENT

OF ENVIRONMENTAL PROTECTION,

Third-Party Defendant-

Respondent.

________________________________________________________________

 

Argued May 18, 2009 - Decided

Before Judges Lisa and Sapp-Peterson.

On appeal from the Superior Court of New Jersey, Law Division, Cape May County, Docket No. L-257-02.

Frederick W. Schmidt, Jr. argued the cause for appellants.

Michael J. Donohue argued the cause for respondent Borough of Avalon (Gruccio, Pepper, DeSanto & Ruth, P.A., attorneys; Mr. Donohue, of counsel and on the brief).

Lewin J. Weyl, Deputy Attorney General, argued the cause for respondent New Jersey Department of Environmental Protection (Anne Milgram, Attorney General, attorney; Lewis A. Scheindlin, Assistant Attorney General, of counsel; Mr. Weyl, on the brief).

PER CURIAM

In Raab v. Borough of Avalon, 392 N.J. Super. 499, 502-03 (App. Div.), certif. denied, 192 N.J. 475 (2007), a panel of this court affirmed the summary judgment dismissal of plaintiffs' claims against the Borough of Avalon (Borough) which sought compensation for the physical taking of their property and damages under 42 U.S.C.A. 1983. The issue in that case was a determination of "the applicable limitation period within which a private party must commence an action to challenge the taking of private property by a public entity, as an exercise of its police power, where the public entity's actions fail to comply with any of the statutory provisions governing the use of eminent domain." Id. at 502. We held "that the physical taking of real property by a governmental agency, without compliance with the statutory safeguards established by the Legislature for the lawful exercise of the power of eminent domain, constitutes an act of inverse condemnation." Id. at 503. We further held "that a cause of action against a governmental defendant to recover the value of the real property that was taken by inverse condemnation is governed by the provisions of N.J.S.A. 2A:14-1 -2, and must be filed within six years from the date of accrual, which is defined as the date the landowner becomes aware . . . that he or she has been deprived of all reasonably beneficial use of the property." Ibid.

The dispute involved several beachfront lots in the Borough owned by plaintiffs' predecessors. A major storm in March 1962 obliterated the lots. The Borough enacted a series of resolutions in the aftermath of the storm authorizing it to enter upon the beachfront properties from 13th Street to 80th Street, to clear debris, and to immediately construct a protective barrier in the form of sand dunes along the beachfront. Plaintiffs' lots were included within this area. Borough officials and contractors, in compliance with the authorizing resolutions, embarked upon the construction of a protective dune system for the protection of the barrier island on which the Borough is located and for the benefit of the general public and the promotion of the health and welfare of the community.

In November 1962, the Borough instituted a property-exchange program as a means of compensating property owners whose lots had been destroyed by the storm. Plaintiffs' predecessors engaged in negotiations with the Borough under this program, seeking to exchange their destroyed lots for others owned by the Borough. In a letter to the Borough dated April 29, 1965, plaintiffs' predecessors acknowledged that they had visited the lots on April 26, 1965, observed the dune system that had been constructed, were aware that they could not build on the lots, and requested exchange of their lots for property of comparable value owned by the Borough. That letter conclusively established that by April 29, 1965, plaintiffs' predecessors knew that the Borough had seized their property and that they had been deprived of all reasonably beneficial use of the property.

Through their efforts to participate in the property-exchange program, plaintiffs sought compensation for the taking of their property by the Borough. The negotiations proved unsuccessful, and no further efforts were made to resolve the dispute for several decades. During that time, the lots continued to be carried on the Borough tax records as owned by plaintiffs or their predecessors, and two conveyances were made, one from the corporate entity that had owned the lots at the time of the storm to its three principals, and another when one of the principals died to his widow. Thus, there were no innocent third parties involved here. The knowledge of plaintiffs' predecessors was properly imputed to plaintiffs. The consideration for the conveyance to the deceased member's spouse was $70. The taxes were less than $2 per year.

In the first phase of this action, Judge Visalli granted summary judgment to the Borough and third-party defendant New Jersey Department of Environmental Protection on statute of limitations grounds. He held that plaintiffs' claim for compensation arising from inverse condemnation was six years, and for its 1983 claim, it was two years. He concluded that plaintiffs' cause of action accrued no later than April 29, 1965. He therefore found their claims time barred and entered a final judgment granting defendant's motion to dismiss. That judgment was entered on June 6, 2005. On July 18, 2005, the Borough recorded the judgment and accompanying written opinion rendered by Judge Visalli in the Cape May County clerk's office pursuant to N.J.S.A. 46:16-1.1.

Plaintiffs appealed, and in our prior decision we affirmed. Raab, supra, 392 N.J. Super. at 509. We agreed with Judge Visalli's analysis and ultimate conclusion and concluded "that the Borough's actions in physically appropriating plaintiffs' property constituted a 'taking.'" Id. at 510. Further, because the Borough did not follow the procedures required for an eminent domain proceeding, the Borough's action "is viewed as an inverse condemnation, shifting the burden to the aggrieved landowner 'to discover the encroachment and to take affirmative action to recover just compensation.'" Ibid. (quoting United States v. Clarke, 455 U.S. 253, 257, 100 S. Ct. 1127, 1130, 63 L. Ed. 2d 373, 378 (1980)). We further concluded that "the taking was complete when the Borough came upon the property; took exclusive possession of it; and through a series of municipal resolutions, appropriated, transformed, and built upon the property to accomplish its express public purpose: the restoration and protection of the shoreline." Id. at 513.

After the conclusion of the appellate process, plaintiffs filed a motion with the trial court seeking to reopen the case. More particularly, the motion was "to open case, clarify final judgment and order and expunge and vacate recordation of final judgment and opinion in Cape May County Clerk's records." Essentially, plaintiffs contended that the first phase of the action, including the issues decided on appeal, dealt only with the Borough's possession of the property, and not legal title to the property. Plaintiffs argued that the recording statutes protected their title ownership, which was paramount to any claim of title by the Borough.

Judge Visalli rejected the argument and issued a written opinion on April 25, 2008 denying plaintiffs' motion. The judge explained his decision this way:

Plaintiffs contend that the Order on its face grants no affirmative relief to Avalon, but simply dismisses Plaintiffs' Complaint. As to Plaintiffs' Cross-Motion on Avalon's Counterclaims, this Court made no substantive ruling but only stated that "Plaintiffs' Cross-Motion are (sic) therefore denied." The crux of this Motion centers upon Plaintiffs' contention that the Final Judgment and Opinion did not affect title to Plaintiffs' real property.

Plaintiffs dispute that . . . Avalon acquired legal and recordable title to the property in question as a result of the granting of Summary Judgment. Specifically, Plaintiffs contend that this Court's finding that Avalon took physical possession of Plaintiffs' property in 1962 is, was not and cannot be a finding that such physical possession of property was tantamount to Avalon having acquired legal and recordable title to property.

Defendants contend that Plaintiffs are barred from making this application which Defendants contend is in complete disregard for the Judgment of this Court, the Judgment of the Appellate Division, res judicata, collateral estoppel, the law of the case and the strong judicial and public policy interests in the finality of judgments.

As noted by Defendants this matter was brought before the Appellate Division. The Appellate Division specifically states that "this appeal requires us to determine the applicable limitation period within which a private party must commence an action to challenge the taking of private property by a public entity, as an exercise of its police power, where the public entity's actions fail to comply with any of the statutory provisions governing the use of eminent domain." Based upon this focus of the Appellate Division, Plaintiffs take the position that the Appellate Division did not consider the issue of who has legal and recordable title to the disputed property.

However, the decision is not limited to the statutory limitation and does in fact address issues of possession. In the second to last paragraph of the Appellate Division's opinion the Court states "Here, the taking was complete when the Borough came upon the property; took exclusive possession of it; and through a series of municipal resolutions, appropriated, transformed, and built upon the property to accomplish its express public purpose: the restoration and protection of the shore line. All this was accomplished in 1965. Thus, there is no factual support for applying the "continuing wrong" doctrine to rescue plaintiffs from the legal consequences of their deliberate inactions."

This Court also acknowledges that Plaintiffs similarly presented the issues raised in this Motion to the Appellate Division. Specifically, Plaintiffs argued as follows: "Avalon makes much of the fact that Plaintiffs, alleging improperly, have told this Court that Avalon recorded the order at issue on this appeal and treated that order as an order transferring title in the Property from the plaintiffs to Avalon. Avalon claims that informing this Court of what Avalon perceives to be the full legal effect of the ruling below (the transfer of title from an uncompensated owner to a governmental entity) is "wholly improper."

The Appellate Decision in this case was published on April 30, 2007. This motion now almost one year later seeks to open the final judgment to clarify and for other relief. Consistent with Plaintiff's conduct throughout this litigation the delay of one year to seek relief is extraordinary especially when these same issues have been presented in the briefing in the Appellate Court.

The decision of this Court as affirmed by the Appellate Court is that the Plaintiffs are barred from seeking just compensation based on the six year Stat[ut]e of Limitations and the continuous emergency possession of the property by the Borough since 1962. While it is true that the title question was never argued, briefed or decided in the prior proceedings, it is the clear implication of that decision that title vested in the Borough of Avalon in April of 1971 upon the failure of the Plaintiff to seek just compensation.

Most likely the Borough should have brought an action for a Declaratory Judgment to clear title. Given the subsequent decisions of this Court, it is certain that clear title would have vested in the Borough at any time after the Statute of Limitations expired in April of 1971 and this Court now so declares. The Court further determines that the recording of the June 2005 Order and Opinion of this Court is proper to transfer title under the facts of this case.

Based on this holding in the Appellate Division this Court is satisfied that Avalon now owns the property and has title by way of the taking and that Plaintiffs' ownership interests are extinguished. This matter has already been properly adjudicated and, therefore, Plaintiffs' Motion is denied.

On the same date, the judge issued a corresponding order denying plaintiffs' motion in all respects. The judge also appended a handwritten endorsement on the order, adding that "a Declaratory Judgment is granted in favor of the Borough of Avalon for the property in question and the Recordation of the Judgment of June 6, 2005 is found valid & vests title in the Borough of Avalon."

Plaintiffs appeal and make these arguments:

POINT I

PLAINTIFFS' RIGHT TO TITLE IS PROTECTED BY THE LAND TITLE RECORDING SYSTEM FROM THE RECORDATION OF THE TRIAL COURT'S OPINION.

POINT II

AVALON HAS NOT ACQUIRED TITLE TO THE PROPERTY, BECAUSE IT FAILED TO COMPLY WITH STATUTORY PREREQUISITES.

a) The U.S. and New Jersey Constitutions prohibit taking of property without "just compensation."

b) The mandatory procedure for taking property in New Jersey is set forth in the Eminent Domain Act.

c) After the March 1962 storm, the legislature provided authority for shore municipalities to deal with such emergencies.

d) Avalon never advised Plaintiffs that their land had been seized in 1962 or that they had to file an action for compensation within six years and continued taxation of the lots and acceptance of payment and their negotiations with Plaintiffs and their predecessors indicated that Plaintiffs still owned the land.

POINT III

THE "TAKING CONTROL AND POSSESSION" OF PLAINTIFFS' LAND DOES NOT VEST TITLE IN AVALON.

POINT IV

AVALON HAS CONTINUED TO IGNORE THE MANDATE OF N.J.S.A. 20:3- 5 AND 6 TO ACQUIRE LEGAL TITLE TO PLAINTIFFS' LAND PURSUANT TO THE EMINENT DOMAIN ACT AND THEREFORE, VIOLATED PLAINTIFFS' RIGHT TO "DUE PROCESS."

POINT V

AVALON IS TIME BARRED BY N.J.S.A. 2A:14-1 FROM SEEKING LEGAL TITLE TO PLAINTIFFS' PROPERTY BASED ON RESOLUTION #62-102, 103 AND 117 AND AVALON'S TAKING OF "CONTROL AND POSSESSION" OF PLAINTIFFS' PROPERTY IN 1962.

POINT VI

AVALON'S RECORDATION OF THE FINAL JUDGMENT AND OPINION SHOULD BE EXPUNGED AND VACATED AS MATTER OF PUBLIC POLICY CONCERNING THE INTEGRITY OF OUR LAND TITLE RECORDING SYSTEM.

POINT VII

THE CONDUCT OF AVALON CONSTITUTES THEFT BY DECEPTION AND/OR FRAUD AND MISREPRESENTATION THAT JUSTLY REQUIRES THIS COURT TO VACATE AND EXPUNGE AVALON'S RECORDATION.

In our view, plaintiffs' arguments are nothing more than an effort to re-litigate issues already adjudicated. We agree with Judge Visalli's analysis and agree that it follows from the earlier opinion of this court that legal title vested in the Borough as a result of the inverse condemnation that occurred. As the judge stated, it would have been the better practice for the Borough to have filed a timely declaratory judgment action to settle the issue of record. Failure to do so, however, does not change the legal effect of what has transpired in this case and upon which this court has previously ruled.

Therefore, we will not address here the claims based upon payment of taxes over the years, failure of the Borough to have followed the statutory procedures for an eminent domain proceeding, failure of the Borough to have identified specific lots, as opposed to more generally defining the area taken as the beachfront strip between 13th Street to 80th Street, and the like. We have already rejected these arguments in the prior appeal.

We reject plaintiffs' argument that Judge Visalli improperly granted the Borough a declaratory judgment, even though the Borough did not request it. Plaintiffs' motion placed before the court the issue of title and sought a review of the documents recorded by the Borough as proof of their title interest. Having done so, the issue was properly before the court, and plaintiffs should not be permitted to complain that the very issue they raised was decided by the court. There was no prejudice or surprise involved. All parties were well aware that this was the issue being litigated in plaintiffs' post-appeal motion.

Plaintiffs' remaining arguments lack sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We affirm substantially for the reasons stated by Judge Visalli in his written decision of April 25, 2009.

 
Affirmed.

(continued)

(continued)

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A-4735-07T3

July 28, 2009