June 23, 2010

Victory for property rights in New Jersey Supreme Court

By Victory for property rights in New Jersey Supreme Court

Author: Luke A. Wake

Edward and Nancy Klumpp will finally be allowed to pursue an action in court for a taking of their property, that began in 1962.

The Klumpps purchased their property in 1960 and built a home, which was destroyed in a terrible storm in 1962. Following the storm, the Borough of Avalon invaded their property to build sand-dunes, and then passed a series of ordinances restricting what could be done on their property. It was unclear what – if anything – the Klumpps could do with their property for years. In 2004 they sought the necessary permits to rebuild their long-destroyed home; however, those permits were denied because they could not demonstrate that they were even allowed access to the property. Accordingly, the Klumpps sued to compel the Borough to allow access.

Interestingly, the Borough acknowledged that the Klumpps were the owners of the property when answering their complaint, but then changed course during the proceedings and argued that the Borough had taken their property in 1962 when it constructed the sand-dunes. The District Court and the Appellate Court agreed that the Borough took the property "through inverse condemnation," and "without any semblance of due process," but went on to deny them the right to seek just compensation. The Appellate Court concluded that they were now time barred from raising a taking claim.

Today the New Jersey Supreme Court reversed the Appellate Court in a great victory for landowners. The Court ruled that, although normally a six year statute of limitations applies for a takings claim, equity requires that the Klumpps be allowed to seek just compensation for the 1962 taking of their property, because the Borough failed to give the Klumpps notice that it had effected a taking. The Borough effectively tolled the statute of limitations by continuously treating the Klumpps as the true owners of the property until it changed course during this suit to assert that a taking had occurred in 1962. On that point, the Court said: "Government should not be permitted to invoke a legal theory only to abandon it later in favor of another that time-bars an otherwise valid claim."

The Court endorsed PLF's argument that government cannot take property through inverse condemnation. Inverse condemnation is a remedy for aggrieved land owners to sue for just compensation when the government has taken their property; not a tool for effecting a taking. We are pleased with this decision, and we are happy that the Klumpps will now be allowed to pursue their claim for inverse condemnation.

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