Karam v. State of New Jersey, Department of Environmental Protection

SYLLABUS
 

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

Edmund T. Karam and Barbara Karam v. State of New Jersey,
Department of Environmental Protection, et al (A-1-98)

 
(NOTE: This Court wrote no full opinion in this case. Rather, the Court's affirmance of the judgment of the Appellate Division is based substantially on the reasons expressed in the opinion below.)

Argued February 1, 1999 -- Decided February 24, 1999

PER CURIAM

This matter involves a regulatory taking. In 1924, Charles and Mary Schweinert purchased from the State the riparian land adjoining their upland property located along the Manasquan River. Under the riparian grant, the use of the property was restricted to the erection of a pier or dock. In addition, common ownership of the upland property and the riparian land was required or the right to the tide-flowed property would become void. The Waterfront Development Act, in effect at the time the riparian grant was issued, required a development permit as a condition for improving the tide-flowed property. The Schweinerts neither applied for a permit nor sought to erect a dock on the land.

Edmund and Barbara Karam purchased both the upland property and the riparian lands in 1993. At the time, the Manasquan River had been designated as a "special restricted area," meaning that it harbored moderate to high densities of uncontaminated and consumable shellfish. Because the river serves as an active shellfish habitat, the erection of a pier or dock in the tide-flowed land is prohibited. The classification by the Department of Environmental Protection (DEP) of the river as a "special restricted area" was a matter of public record at the time of the purchase. Nevertheless, the Karams were unaware of the prohibition against the construction of docks. Relying on their riparian grant and the docks that previously had been erected on neighboring properties, the Karams applied for a development permit. The DEP denied that application.

The Karams filed an inverse condemnation action against the DEP, alleging that the restriction on the riparian land amounted to a taking. The Chancery Division granted the Karams' motion for partial summary judgment, finding that the DEP's denial of a development permit deprived the property owners of any viable economic use of the riparian grant.

The State appealed and the Appellate Division reversed and remanded, finding that the Chancery Division erred in granting partial summary judgment. The Appellate Division noted that pursuant to inverse condemnation law, where government enacts legislation or adopts a regulation that denies an owner substantially all economic use of his or her land, a taking has occurred and the property owner must be compensated. In determining whether there had been a taking, the Appellate Division had to consider whether: 1) the regulation had deprived the owner of virtually all economically viable uses of the property; 2) the property owner had any distinct investment-backed expectations at the time of acquiring the property that were destroyed by the force of the regulation; and 3) the interest claimed to have been taken was vested with the owner, as a matter of state property law, and not within the power of the State to regulate as a common law nuisance. Noting that the DEP did not claim that the proposed use of the riparian land constitutes a common law nuisance, the court focused its inquiry on the first two factors.

The Appellate Division found that classification of the tide-flowed land as a "special restricted area" with the consequent denial of a development permit clearly destroyed the only beneficial use of the Karams' riparian land. Concluding that the two properties were, in both law and fact, inextricably intertwined, the Appellate Division held that the Chancery Division erred when it considered the riparian land as a separate parcel, wholly distinct from the upland parcel. By considering the tide-flowed lands and the upland property as a single property, the consequent denial of the development permit did not effect a taking.

In addressing the issue of the Karams' reasonable expectations, the Appellate Division held that the riparian grant from the State to the Schweinerts did not create an absolute and perpetual right to construct a dock, free from any legislative or regulatory intervention. Rather, the right always was conditioned on obtaining the proper permit. In addition, the prohibition against construction was a matter of public record prior to the purchase of the property by the Karams. They were on constructive notice of the shift in policy from commerce to environmental protection and wildlife conservation that occurred during the 1970's. The Karams could not have reasonable expected to be immune from changes in law that occurred over a seventy-year period.

 
HELD: Judgment of the Appellate Division is affirmed substantially for the reasons expressed in Judge Baime's written opinion. Because the adjoining upland property and the riparian land must be considered as a single property unit, the denial of a permit to construct a dock on riparian land situated in a "special restricted area" did not constitute a taking.

CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK, O'HERN, GARIBALDI, STEIN, and COLEMAN join in this PER CURIAM opinion.

SUPREME COURT OF NEW JERSEY
A- 1 September Term 1998
 

EDMUND T. KARAM and BARBARA KARAM, husband and wife,

Plaintiffs-Appellants,

and

PETER DIBIAGIO and LAURA DIBIAGIO,
husband and wife,

Intervenors-Appellants,

v.

STATE OF NEW JERSEY, DEPARTMENT OF ENVIRONMENTAL PROTECTION, ROBERT C. SHINN, COMMISSIONER OF THE DEPARTMENT OF ENVIRONMENTAL PROTECTION,

Defendants-Respondents,

and

CHICAGO TITLE INSURANCE COMPANY, a Corporation,

Defendant.

Argued February 1, 1999 -- Decided February 24, 1999

On appeal from the Superior Court, Appellate Division, whose opinion is reported at 308 N.J. Super. 225 (1998).

Richard M. Hluchan argued the cause for appellants (Levin & Hluchan, attorneys; Richard S. Morrison, on the briefs).

Alyssa Pearlman Wolfe, Deputy Attorney General, argued the cause for respondents (Peter Verniero, Attorney General of New Jersey, attorney; Mary C. Jacobson, Assistant Attorney General, of counsel).

Michael J. Gross submitted a brief on behalf of amicus curiae, National Association of Home Builders (Giordano, Halleran & Ciesla, attorneys).
 

PER CURIAM
The judgment is affirmed, substantially for the reasons expressed in Judge Baime's opinion of the Appellate Division, reported at 308 N.J. Super. 225 (1998).
CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK, O'HERN, GARIBALDI, STEIN, and COLEMAN join in this opinion.

SUPREME COURT OF NEW JERSEY
 

NO. A-1

SEPTEMBER TERM 1998
ON APPEAL FROM Appellate Division, Superior Court
ON CERTIFICATION TO

EDMUND T. KARAM, et al.,
Plaintiffs-Appellants,

and

PETER DIBIAGIO, et al.,
Intervenors-Appellants,

v.

STATE OF NEW JERSEY, etc., et al.,
Defendants-Respondents,

and

CHICAGO TITLE INSURANCE COMPANY, etc.,
Defendant.

DECIDED

February 24, 1999
Chief Justice Poritz PRESIDING
OPINION BY PER CURIAM
CONCURRING OPINION BY CONCURRING/DISSENTING OPINION BY
CHECKLIST
AFFIRM CHIEF JUSTICE PORITZ X JUSTICE HANDLER X JUSTICE POLLOCK X JUSTICE O'HERN X JUSTICE GARIBALDI X JUSTICE STEIN X JUSTICE COLEMAN X TOTALS
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