N.J. Supreme Court sides with Moorestown couple in Avalon beach case

A Moorestown couple must be compensated for beach property seized by Avalon to build protective dunes after a devastating 1962 nor'easter, the New Jersey Supreme Court ruled Tuesday.

But the amount paid to Edward and Nancy Klumpp, whose oceanfront block of 75th Street was wiped out in the storm, could be a pittance by current Shore standards, experts say.

The struggle between the borough and the Klumpps, which came to a head in 2003, could take several more years to resolve. Attorneys for the both parties declared victory Tuesday.

In a unanimous ruling, the court said that although Avalon was within its rights to take the property, it had "skirted" its obligation to notify the Klumpps so they could seek compensation.

The court sent the case to Cape May Superior Court for authorities to determine the fair market value of the land when the dune-restoration project began soon after the storm. Avalon must pay that amount, plus interest.

"You just feel that they stole your property, and it's not the right thing," Nancy Klumpp, 79, said Tuesday. It "would be nice" to finally be paid by the borough, she said.

The summer cottage that she and her husband, now 84, built was just two years old when it was destroyed. Avalon took their lot, and those belonging to other property owners whose homes were lost, for the beach repair.

In 2003, Edward Klumpp - a successful South Jersey developer whose projects include the Willowbrook Country Club in Moorestown - applied for a construction permit to rebuild on the property, which by then was a part of the 75th Street dunes.

The couple were told they owned the land, listed in tax records as 90 by 100 feet. But they were denied a permit because there was no longer access to the property. The Klumpps sued, and it wasn't until 2005 that the borough said it had taken ownership in 1962.

"They never told us they took over the lot," Nancy Klumpp said.

The Supreme Court noted that Avalon had failed to notify the Klumpps of the seizure until after the deadline to sue for compensation had expired.

Until recently, the Klumpps were listed on municipal tax maps as the land's owners. They paid property taxes to Avalon for more than four decades, but their property was assessed at $100. Most years, the bill was about 35 cents.

In a win for Avalon, the court upheld Superior and Appellate Court decisions that the borough was within its rights to seize private property through "inverse condemnation." The law allows a government to take land without prior compensation in certain circumstances and gives owners six years in which to file a claim.

Avalon converted the former first block of 75th Street into a protective barrier to prevent severe storm damage in the future. Dunes were built, vegetation was planted, and authorities rezoned the land to prohibit construction.

While acknowledging the value of the project, the high court criticized Avalon for its dealings with the Klumpps.

"After finally conceding, in 2005, that a taking occurred forty-three years earlier, the Borough now attempts to hide behind the six-year statute of limitations to claim that plaintiffs have no right" to sue for compensation, said the Supreme Court's decision, written by Justice Jaynee LaVecchia.

Avalon argued that although it could find no documentation from the 1960s to show the Klumpps were notified, the borough had compensated property owners through a highly publicized program. The town gave owners other parcels in exchange for their former ocean-view properties, said Avalon attorney Michael Donohue.

Because there was no flood insurance at the time, Nancy Klumpp said, she and her husband had to pay off their mortgage even after the house was gone.

"We're delighted that the Supreme Court essentially stopped Avalon from stealing this property and enforced the Constitution," said Richard M. Hluchan, the Voorhees attorney who represented the couple. "The Klumpps, in good faith, believed they owned it."

Hluchan said it was premature to estimate how much the Klumpps would seek in compensation.

Based on the court's ruling to pay the 1960s market value, Michael Donohoe, the attorney for the borough, estimated that Avalon would owe the Klumpps about $2,000, plus interest. Hluchan said the Klumpps may seek damages.

By seizing the property and constructing the dune, Avalon ensured "the preservation of the environmentally sensitive dune area," Donohoe said.

It acted in taxpayers' interest by refusing the Klumpps' demand "to build in the dunes or be paid current value of the property," he said.

Jeff Tittel, director of the New Jersey Sierra Club, said Tuesday that Avalon's restoration was in the public interest. He said he hoped the court's decision would not lead the public's needs to become secondary to compensating individual property owners.

Experts say it wouldn't be easy to determine the value of the Klumpps' former property. A buildable waterfront lot costs millions. Once a property is rezoned to prohibit construction, the value plummets, they said.

"Fair market value now could be zero, so you fall back on the value when the taking occurred," said Rich Harris of the Walter Rand Institute for Public Affairs, who also is a public policy professor at Rutgers University-Camden. Even then, he said, it would be hard to determine the value.