The Klumpps bought their property in 1960 and constructed a single-family home, which was destroyed by a Nor’easter in March 1962. Large portions of the surrounding area were also destroyed. Following the destruction of the house, the Klumpps did not rebuild, nor did they visit the property for several years. Although emergency legislation enacted shortly after the storm cleared the way for municipalities to enter property and build necessary protective structures without first paying for the seized land, the legislation did not create a situation in which compensation was wholly unnecessary.
In addition to building the dune, the Borough limited access to the Klumpps’ property by putting up fences, including an fenced-off public access-way, yet the Klumpps pointed out that the property was listed as privately held on the Borough’s official map and their continued receipt and payment of property tax bills. During the years following the construction of the dune on the Klumpps’ property the Borough enacted a number of ordinances impacting the subject parcel. First the Borough determined that the parcel was in an area where redisribution or removal of sand was not permitted. Another ordinance effectively made the parcel landlocked and another ordinance changed the zoning of the parcel to bar construction of residential structures. The Borough also began to charge for beach access.
As late as 1997 the Borough still maintained the position that their actions concerning the Klumpps’ property did not constitute a taking because the property was not fit for the purposes for which the Klumpps wanted to use it. That is, even if the Borough were to permit the Klumpps to build a home on the property, it is unlikely that they would be able to obtain the necessary permits from the New Jersey Department of Environmental Protection. The Klumpps did not agree with this assessment of the situation and decided to seek a use variance. They also sought a permit from the DEP which was denied because, among other reasons, the parcel was landlocked. The borough did not respond to requests by the Klumpps to have access to their property restored.
Litigation to sort out whether a taking had occurred and what remedy the Klumpps were due began in 2004, with their request for a declaratory judgment in favor of their right to access the property, that the Borough was the proper party from which the right of access could be granted and for an order for the Borough to actually convey access. The Borough responded that the Klumpps owned the property, but that the Borough had obtained title to it by adverse possession through actual possession of the parcel beginning in 1962. On these claims, the trial court agreed with the Borough and granted summary judgment in its favor, and dismissed the Klumpps’ with leave to file an inverse condemnation proceeding. The Klumpps appealed. The Appellate Division reversed the dismissal of the plaintiffs’ complaint and remanded the matter to the trial court for further proceedings concerning whether the Borough had fulfilled the requisite continuous possession of the property in order to claim it by adverse possession. Further, the appeals court noted that the record was not adequate to decide whether the Borough had authority to extend access to the Klumpps’ property, despite the Klumpps’ right to such access.
On remand, the Klumpps requested damages for continued trespass and ejectment; the Borough requested a judgment that the property belonged to the Borough via a taking and that the statutory period for the Klumpps to seek remedy had expired. The trial court again found in favor of the Borough. In doing so it determined that there had been a taking in 1962 when the Borough first entered the property to build the dune, then again in 1979 when the property had been re-zoned to exclude residential structures. Further, the trial court found that the Borough was restricted from authorizing access to the subject property due to agreements between it and the Department of Environmental Protection. In addition, because the Klumpps had never sought compensation for the use of their property in the dune protection program despite their knowledge of that use, the trial court determined that the expiration of the statute of limitations for the time for compensation was not an issue warranting further fact-finding.
The appellate court affirmed, agreeing that the Borough owned the property. It reasoned that once the Klumpps became aware that the Borough was in possession of its property, the Klumpps became responsible to seek compensation. Since the Klumpps had not sought compensation, and the Borough had not paid any compensation, an inverse condemnation had occurred. The Klumpps appealed to the Supreme Court of New Jersey.
To determine when the six year statute of limitations should have started to run, the Court had to determine when the Klumpps became aware or “through the exercise of reasonable diligence, should have become aware” of the taking of their property. The court noted that the Borough failed to include the Klumpps in the property exchange program and it failed to provide direct notice to them at the time that the legislation enabling the Borough to enter private property. The only time the Klumpps received direct notice of the taking was in 2005 when, in court documents, the Borough admitted that a taking had occurred. While the physical occupation was considered a significant form of notice, the court found that this should not be the sole type of notice given to private land owners. Further, the court derided the idea that the Borough should benefit from its failure to assume a fixed position on whether or not a taking had occurred until litigation had begun. Therefore, the Supreme Court of New Jersey decided that the Klumpps were not barred by the statute of limitations from bringing an inverse condemnation action and remanded the matter to the Appellate Division for determination of the amount to be paid.
Klumpp v Borough of Avalon, 2010 WL 2483495 (N.J. 6/22/2010)
The opinion can be accessed here
