NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION OFFICE OF FLOOD HAZARD RISK REDUCTION MEASURES, v. MIDWAY BEACH CONDOMINIUM ASSOCIATION, INC.

 

(NOTE: The status of this decision is Published.)

               NOT FOR PUBLICATION WITHOUT THE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


                                                                      A-2071-17T4
                                       2
      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.



                                                                      A-2071-17T4
                                      3
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.




                                                                         A-2071-17T4
                                        4
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.




                                                                         A-2071-17T4
                                         5
                                        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



                                                                           A-2071-17T4
                                         6
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




                                                                        A-2071-17T4
                                       7
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.

                                                                          A-2071-17T4
                                        8
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



                                                                       A-2071-17T4
                                       9
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.




                                                                           A-2071-17T4
                                        10