Compensation For Loss of Ocean Views Due to Protective Dunes Upheld
Compensation For Loss of Ocean Views Due to Protective Dunes Upheld, Although Protective Benefit of Dunes Must Be Included In Calculation
In Petrozzi v. Ocean City, the Appellate Division remanded claims by eight Ocean City property owners to determine how much they should be paid because they lost ocean views when the City built protective dunes in from of their beach front property. Petrozzi was not a takings case, but the Court found the plaintiffs could recover anyway because they relied on the city's promise to limit the dunes' height. Between 1992 and 1995, plaintiffs granted perpetual easements so the Army Corps of Engineers could construct the dune system. In return, the city agreed the dunes would not rise more than three feet above the average elevation of the bulkhead, generally 12 feet. By 2002, the dunes had naturally grown as much as six feet above that, while intervening changes in the law meant that the Department of Environmental Protection had to grant permission before the height of a dune could be altered. The DEP denied a permit to reduce the dune height and the denial was upheld on appeal in 2008.
The appeals court held Ocean City liable stating that even though the change in the law and DEP's denial of the permit were outside Ocean City's control and not reasonably foreseeable and thus, there was no breach of the agreement, the plaintiffs were entitled to compensation because they relied on the city's promise. "If Ocean City may retain the benefit of this bargain despite its failure to perform its promise...without consequence, the municipality would reap a windfall at plaintiffs' expense" the Court held.
However, on remand any determination of compensation must also include a valuation of the protective benefit of the dune, which could possibly outweigh any impact on the view. This follows the case of Harvey Cedars v. Karan, which was decided four months ago and held that compensation paid to landowners for view-obstructing dunes must reflect the benefit of the protection the dunes provide. Accordingly, it will be interesting to see how the court values the protective benefit of the dunes, especially in light of the fact that the Plaintiffs homes suffered very little damage from Sandy and prior storms.
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