SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-1982-96T2
EDMUND T. KARAM and BARBARA
KARAM, h/w,
Plaintiffs-Respondents,
v.
STATE OF NEW JERSEY, DEPARTMENT
OF ENVIRONMENTAL PROTECTION,
ROBERT C. SHINN, COMMISSIONER OF
THE DEPARTMENT OF ENVIRONMENTAL
PROTECTION,
Defendants-Appellants,
and
CHICAGO TITLE INSURANCE COMPANY,
a Corporation,
Defendant.
_______________________________________
PETER DIBIAGIO and LAURA DIBIAGIO, h/w,
Intervenor-Respondent.
_________________________________________
Argued January 22, 1998 - Decided February 13, 1998
Before Judges Baime, Wefing, and Braithwaite.
On appeal from Superior Court of New
Jersey, Law Division, Monmouth County.
Alyssa Pearlman Wolfe, Deputy Attorney General,
argued the cause for appellants (Peter Verniero,
Attorney General, attorney; Mary C. Jacobson,
Assistant Attorney General, of counsel; Ms. Wolfe,
on the brief).
Richard M. Hluchan argued the cause for respondents
(Levin & Hluchan, attorneys; Mr. Hluchan, of
counsel; Jeffrey S. Beenstock, on the brief).
The opinion of the court was delivered by
BAIME, P.J.A.D.
This is a regulatory taking case. In 1924, Charles and May
Schweinert purchased from the State the riparian land adjoining
their upland property situated along the Manasquan River. Under
the riparian grant, the tide-flowed land could only be used for
construction of a dock or recreational pier. The grant required
common ownership of the upland property and the riparian land.
Although the Waterfront and Harbor Facilities Act of 1914
(N.J.S.A. 12:5-1 to -11), more commonly known as the Waterfront
Development Act, was in effect at the time the riparian grant was
issued and required State approval as a condition for improving
the tide-flowed land, the Schweinerts never applied for a permit
and never sought to erect a dock on their property. Plaintiffs
purchased both the upland and riparian lands in 1993, and
sometime thereafter applied to the Department of Environmental
Protection (DEP) for a permit. By this time, however, the
riparian land was designated a "special restricted area" because
it harbored high densities of shellfish. Following the DEP's
denial of their application for a development permit, plaintiffs
brought this inverse condemnation action. The Chancery Division
granted partial summary judgment in plaintiffs' favor and
certified its order as final. The State appeals. We reverse.
The salient facts are not in dispute. On May 19, 1924, the Board of Commerce and Navigation conveyed to the Schweinerts the
riparian land adjoining their upland property, restricting its
use to the erection of a pier or dock. Although the upland and
riparian parcels have consistently been delineated as separate
lots on the municipal tax map and in the various deeds executed
over the years, the grant required common ownership of the lands
or the right to the tide-flowed property would become void.
Because the Waterfront Development Act was in place at the
time the riparian grant was issued, a development permit was
required as a condition for improving the tide-flowed property.
The history of the regulatory framework promulgated under the Act
is described at length in Last Chance Development Partnership v.
Kean,
232 N.J. Super. 115 (App. Div. 1989), aff'd,
119 N.J. 425
(1990), and need not be recited here. Ironically, the impetus
for the statutory scheme came from the reports of the New Jersey
Harbor Commission, a body appointed by Governor Woodrow Wilson,
that recommended rapid and orderly development of the waterways
to facilitate commerce and navigation. In the early 1970's,
however, governmental focus shifted in favor of wildlife
conservation and environmental protection. In 1973, the
Legislature enacted the Coastal Area Facility Review Act (CAFRA),
see N.J.S.A. 13:19-1 to -21, which, among other things, was
designed to assure that any future development would be
"reasonably consistent and compatible with the natural laws
governing the physical, chemical and biological environment of
the coastal area." N.J.S.A. 13:19-2. The DEP was empowered to
adopt and amend rules and regulations to effectuate the purposes
of the Act. N.J.S.A. 13:19-17. Pursuant to that authority, the
DEP adopted N.J.A.C. 7:7E-3.2(d), which prohibits the
construction of docks in certain classified waters.
In 1987, the Manasquan River was classified as a "special
restricted area," meaning that it harbored moderate to high
densities of shellfish that were uncontaminated and fit for human
consumption. See N.J.A.C. 7:12-1.2 and N.J.A.C. 7:12-3.2. In
1993, the DEP's Bureau of Shellfisheries again surveyed the
Manasquan River and reached the same conclusion. Because the
river serves as an active shellfish habitat, erection of a pier
or dock in the tide-flowed land is prohibited.
Over the years, the Schweinerts subdivided their property
along the river, always selling off the upland land with the
riparian parcel to each purchaser. Before the river was
classified as a "special restricted area," many of these property
owners erected docks. Plaintiffs purchased the upland and
riparian properties in 1993. Although the DEP's classification
of the river as a "special restricted area" was a matter of
public record at the time of the purchase, plaintiffs were
unaware of the prohibition against the construction of docks.
Relying on their riparian grant and the docks that had previously
been erected on neighboring properties, plaintiffs applied for a
development permit. On May 11, 1993, the DEP denied plaintiffs'
application.
Plaintiffs brought this action. During the litigation,
plaintiffs sold the upland and riparian lands for $1,100,000,
conditioned upon their continued pursuit of this inverse
condemnation claim. In a brief oral opinion, the Chancery
Division granted plaintiffs' motion for partial summary judgment,
finding that the DEP's denial of a development permit deprived
the property owners of any viable economic use of the riparian
grant. This appeal followed.
We deal again with the complexities attendant to claims of inverse condemnation. Commonly, constitutional questions involve no more than a value judgment upon a factual complex rather than an evident application of a precise rule of law. Inevitably, resolution of such issues reflect the seasoning and experience of the one who judges, which in turn hinge upon the concerns and problems confronting the court when the issue is presented and decided. This observation is particularly compelling in the context of Fifth and Fourteenth Amendment "taking" jurisprudence, where the courts often engage in "ad hoc, factual inquiries," determining issues on a case-by-case basis. Kaiser Aetna v. United States, 444 U.S. 164, 175, 100 S.Ct. 383, 390, 62 L.Ed.2d 332, 343 (1979); see also Gardner v. New Jersey Pinelands Comm'n, 125 N.J. 193, 205 (1991) (application of takings principles requires "fact-sensitive" examination of the regulatory scheme and the extent to which it interferes with property rights and interests). The result is a welter of seemingly irreconcilable opinions, each seeking to alleviate the tension between the competing values involved. The problem is accentuated because
decisions have been rendered over the meandering course of
history, and societal concerns given priority by one generation
are often considered of less consequence by the next. In
resolving the issue before us, we tread upon uncertain and
constantly shifting terrain.
Prior to Justice Holmes'opinion in Pennsylvania Coal Co. v.
Mahon,
260 U.S. 393,
43 S.Ct. 158,
67 L.Ed. 322 (1922), "it was
generally thought that the Takings Clause reached only a `direct
appropriation' of property, Legal Tender Cases,
12 Wall. 457,
551,
20 L.Ed. 287 (1871), or the functional equivalent of a
`practical ouster of [the owner's] possession,' Transportation
Co. v. Chicago,
99 U.S. 635, 642,
25 L.Ed. 336 (1879)." Lucas v.
South Carolina Coastal Council,
505 U.S. 1003, 1014,
112 S.Ct. 2886, 2892,
120 L.Ed.2d 798, 812 (1992). Justice Holmes
recognized in Mahon that if private property were subject to
unbridled, uncompensated intrusion under the police power, "the
natural tendency of human nature [would be] to extend the
qualification more and more until at last private property
disappear[ed]." 260 U.S. at 415, 43 S.Ct. at 160, 67 L.Ed. at
326. The principle was thus adopted that "while property may be
regulated to a certain extent, if regulation goes too far it will
be recognized as a taking." Ibid. But land use law teems with
activity which every day touches the lives of millions, and there
is no clear line of demarcation separating overly intrusive
regulation that requires just compensation, and mild burdens
adjusting the benefits of economic life that do not.
The question of what constitutes a "taking" for purposes of
the Fifth Amendment "has proved to be a problem of considerable
difficulty." Penn Central Transp. Co. v. City of New York,
438 U.S. 104, 123,
98 S.Ct. 2646, 2659,
57 L.Ed.2d 631, 648 (1978).
The Supreme Court "has been unable to develop any `set formula'
for determining when `justice and fairness' require that economic
injuries caused by public action be compensated by the government
. . . ." Ibid. (citing Goldblatt v. Town of Hempstead,
369 U.S. 590, 594,
82 S.Ct. 987, 990,
8 L.Ed.2d 130, 133-34 (1962)).
In determining an appropriate analytical framework, we look
first to the intendment of the "takings" clause. The purpose of
this clause is "not to limit the governmental interference with
property rights per se, but rather to secure compensation in the
event of otherwise proper interference amounting to a taking."
First English Evangelical Lutheran Church of Glendale v. County
of Los Angeles,
482 U.S. 304, 315,
107 S.Ct. 2378, 2385-86,
96 L.Ed.2d 250, 264 (1987). Government action that works a taking
implicates a "constitutional obligation to pay just compensation"
to the property's owner. Armstrong v. United States,
364 U.S. 40, 49,
80 S.Ct. 1563, 1569,
4 L.Ed.2d 1554, 1561 (1960).
Government may not compel a property owner alone to bear public
burdens which, in all fairness and justice, should be borne by
the public as a whole. Ibid. But much, if not all, land use
regulation adjusts the benefits and burdens of property
ownership. Penn Central Transp. Co. v. City of New York, 438
U.S. at 124, 98 S.Ct. at 2659, 57 L.Ed.
2d at 648. "Government
hardly could go on if, to some extent, values incident to property could not be diminished without paying for every such change in the general law." Pennsylvania Coal Co. v. Mahon, 260 U.S. at 413, 43 S.Ct. at 160, 67 L.Ed. at 325. Even in cases where the land use regulation causes some diminution in the value of an owner's property, the legislation "secures an `average reciprocity of advantage' to everyone concerned," and government is under no obligation to pay compensation for the resulting reduction. Lucas v. South Carolina Coastal Council, 505 U.S. at 1018, 112 S.Ct. at 2894, 120 L.Ed. 2d at 814 (quoting Pennsylvania Coal Co. v. Mahon, 260 U.S. at 415, 43 S.Ct. at 160, 67 L.Ed. at 326); see Agins v. City of Tiburon, 447 U.S. 255, 262, 100 S.Ct. 2138, 2142, 65 L.Ed.2d 106, 113 (1980). However, the functional basis for permitting government, by regulation, to affect property values without compensation "does not apply to the relatively rare situations where [the state] has deprived a landowner of all economically beneficial uses." Lucas v. South Carolina Coastal Council, 505 U.S. at 1018, 112 S.Ct. at 2894, 120 L.Ed. 2d at 814. In such cases, the effect of the regulation may be likened to a direct invasion of the property or the practical ouster of the owner's possession. Thus, where government enacts legislation or adopts a regulation that denies an owner substantially all economic use of his or her land, a taking has occurred and the property owner must be compensated. Id. at 1028-29, 112 S.Ct. at 2900, 120 L.Ed. 2d at 820-21; see also Hodel v. Virginia Surface Mining & Reclamation Ass'n, Inc.,
452 U.S. 264, 297 n.40,
101 S.Ct. 2352, 2371 n.40,
69 L.Ed.2d 1,
29 n.40 (1981); Agins v. City of Tiburon, 447 U.S. at 262, 100
S.Ct. at 2142, 65 L.Ed.
2d at 113.
In order to determine what was "taken" by the force of a
statute or regulation, one must know what the property owner had
originally. Stated differently, the antecedent inquiry into the
nature of the owner's estate accords with our "takings"
jurisprudence "which has traditionally been guided by the
understandings of our citizens regarding the content of . . . the
`bundle of rights' that they acquire when they obtain title to
property." Lucas v. South Carolina Coastal Council, 505 U.S. at
1027, 112 S.Ct. at 2899, 120 L.Ed.
2d at 820. This inquiry raises
the issue that cases and legal commentators have described as the
problem of defining the "denominator." In Keystone Bituminous
Coal Ass'n v. DeBenedictis,
480 U.S. 470, 497,
107 S.Ct. 1232,
1248,
94 L.Ed.2d 472, 496 (1987), the Supreme Court explained
that "[b]ecause our test for regulatory taking requires
[comparison of] the value that has been taken from the property
with the value that remains in the property, one of the critical
questions is determining how to define the unit of property
`whose value is to furnish the denominator of the fraction.'"
(quoting Frank I. Michelman, Property, Utility, and Fairness:
Comments on the Ethical Foundations of "Just Compensation" Law,
80 Harv. L. Rev. 1165, 1192 (1967)). We will return to this
subject later in our opinion. But here, we are concerned with
the broader concept of property ownership - the sticks that make
up the "bundle of rights" acquired by the owner when property is
conveyed to him. In determining the effect of a statute or
regulation on an owner's property rights, we look to whether the
regulatory action interferes with the owner's "distinct
investment-backed expectations" and to what extent such
expectations were reasonable. Penn Central Transp. Co. v. City
of New York, 438 U.S. at 124, 125, 98 S.Ct. at 2659, 57 L.Ed.
2d
at 648. We also look to whether the economic "right" allegedly
destroyed by the regulation was vested in the owner or within the
power of the State to regulate under the common law nuisance
doctrine. See Lucas v. South Carolina Coastal Council, 505 U.S.
at 1029, 112 S.Ct. at 2900, 120 L.Ed.
2d at 821.
To recapitulate, in determining whether an owner's property
has been "taken," we are to consider: (1) whether the regulation
has deprived the owner of virtually all economically viable uses
of the property, (2) whether the property owner had any distinct
investment-backed expectations at the time of acquiring the
property that were destroyed by the force of the regulation, and
(3) whether the interest claimed to have been "taken" was vested
with the owner, as a matter of state property law, and not within
the power of the State to regulate under common law nuisance.
Here, the DEP does not claim that the proposed use of the
riparian land, erection of a dock, constitutes a common law
nuisance that may be proscribed by the State. Thus, our inquiry
focuses on the first two factors.
We first consider the economic impact of the denial of the development permit. As stated above, the mere diminution of land value itself does not constitute a taking. Gardner v. New Jersey Pinelands Comm'n, 125 N.J. at 210. Likewise, impairment of the marketability of land alone does not effect a taking. Ibid. Also, restrictions on uses do not necessarily result in takings even though they reduce income or profits. Ibid.; see also Southern Burlington County NAACP v. Township of Mount Laurel, 92 N.J. 158, 273 and n.34 (1983). A regulatory scheme will be upheld against a claim of inverse condemnation "unless it denies `all practical use' of property, or `substantially destroys the beneficial use of private property,' or does not allow an `adequate' or `just and reasonable' return on investment." Gardner v. New Jersey Pinelands Comm'n, 125 N.J. at 211 (citations omitted). "[O]ur courts have applied the standard that focuses on the beneficial or economic uses allowed to a property in the context of particularized restraints designed to preserve the special status of distinctive property and sensitive environmental regions." Ibid. (citing In re Egg Harbor Assocs., 94 N.J. 358 (1983); Spiegle v. Borough of Beach Haven, 46 N.J. 479, cert. denied, 385 U.S. 831, 87 S.Ct. 63, 17 L.Ed.2d 64 (1966); Orleans Builders & Developers v. Byrne, 186 N.J. Super. 432 (App. Div. 1982); In re Loveladies Harbor, Inc., 176 N.J. Super. 69 (App. Div. 1980), certif. denied, 85 N.J. 501 (1981); New Jersey Builders Ass'n v. Department of Envtl. Protection, 169 N.J. Super. 76 (App. Div.), certif. denied, 81 N.J. 402 (1979);
Toms River Assocs. v. Department of Envtl. Protection,
140 N.J.
Super. 135 (App. Div.), certif. denied,
71 N.J. 345 (1976); Sands
Point Harbor, Inc. v. Sullivan,
136 N.J. Super. 436 (App. Div.
1975)).
Classification of the tide-flowed land as a "special
restricted area" with the consequent denial of a development
permit clearly destroys the only beneficial use of plaintiffs'
riparian land. The terms of the riparian grant are clear
"[the] land . . . is not to be used for any purpose whatsoever
except the erection of a pier . . . ." The effect of the
regulatory scheme, therefore, is to sacrifice all economically
beneficial uses in the riparian grant in the name of the common
good. Were we to consider the riparian grant alone as the
property interest against which the loss of value is to be
measured, we would be obliged to sustain plaintiffs' claim of
inverse condemnation because the effect of the regulation is to
compel the property owners to leave the tide-flowed land entirely
idle. Conversely, were we to consider the upland and riparian
parcels as a single unit of property against which the loss of
value is to be measured, we would be required to reject
plaintiffs' claim of inverse condemnation because the effect of
the regulation is merely to destroy a somewhat minor "strand" or
"stick" in plaintiffs' overall bundle of rights. See Andrus v.
Allard,
444 U.S. 51, 65-66,
100 S.Ct. 318, 327,
62 L.Ed.2d 210,
222-23 (1979). We are thus faced with the "denominator" problem
to which we alluded earlier. More specifically, the critical
question is "how to define the unit of property `whose value is
to furnish the denominator of the fraction.'" Keystone
Bituminous Coal Ass'n v. DeBenedictis, 480 U.S. at 497, 107 S.Ct.
at 1248, 94 L.Ed.
2d at 496.
The question has received somewhat uneven treatment in our
reported opinions. In Morris County Land Improvement Co. v.
Township of Parsippany-Troy Hills,
40 N.J. 539, 542 (1963), the
plaintiff owned a large tract of land. The undeveloped wetlands
portion was located in Parsippany-Troy Hills, and the adjoining
developed land was located in neighboring Hanover. Ibid. The
portion of the plaintiff's property in Parsippany-Troy Hills was
subject to a zoning classification which precluded any viable use
of the wetlands property. Id. at 543-44. The Court held that
this zoning scheme, if unmodified, would constitute a taking of
private property requiring fair compensation. Id. at 554-57. In
reaching this conclusion, the Court clearly assumed that the
property unit against which the loss was to be measured was only
the undeveloped land situated in Parsippany-Troy Hills. The
Court neither considered nor discussed the larger adjoining
property located in Hanover. Subsequent decisions have
questioned whether Morris County Land Improvement Co. remains
good law in all respects. See Gardner v. New Jersey Pinelands
Comm'n, 125 N.J. at 213-14; AMG Assocs. v. Township of
Springfield,
65 N.J. 101, 112 n.4 (1974).
Without alluding to the "denominator" problem in American
Dredging Co. v. Department of Environmental Protection, 169 N.J.
Super. 18 (App. Div. 1979), and In re Loveladies Harbor, Inc.,
176 N.J. Super. 69, we assumed, without discussion of the
question, that the fractional denominator should include all of
the contiguous acreage under a single ownership. We last
discussed this issue in East Cape May Associates v. Department of
Environmental Protection,
300 N.J. Super. 325 (App. Div. 1997).
Writing for the court, Judge Brochin analyzed the relatively few
decisions that have considered the subject, characterizing the
present law as largely "unsettled." Id. at 353. Because the
record was inadequate, we reached no conclusions, but instead
remanded the matter for further development of the facts. Ibid.
In the course of our opinion, we posed a lengthy list of
questions noting that the answers might be helpful in "the
formulation of [a] rule" to determine the property unit against
which the owner's loss could be measured. Id. at 354. Most of
these questions were fact-specific to East Cape May's claim of
inverse condemnation. Suffice it to say that the information we
sought pertained to the history of the ownership and development
of the property.
This was in accord with the decisions of other jurisdictions
which have generally considered the composition of the
denominator of the taking fraction as consisting of all of the
claimant's contiguous acreage in the same ownership. See, e.g.,
Jentgen v. United States,
657 F.2d 1210 (Ct. Cl. 1981), cert.
denied,
455 U.S. 1017,
102 S.Ct. 1711,
72 L.Ed.2d 134 (1982);
Deltona Corp. v. United States,
657 F.2d 1184 (Ct. Cl. 1981),
cert. denied,
455 U.S. 1017,
102 S.Ct. 1712,
72 L.Ed.2d 135
(1982); Zealy v. City of Waukesha,
201 Wis.2d 365,
548 N.W.2d 528
(1996). This is not the universal rule. Several decisions have
held that the denominator of the taking fraction is the portion
of the property subject to the confiscating regulation. See,
e.g., Loveladies Harbor, Inc. v. United States,
28 F.3d 1171
(Fed. Cir. 1994); Florida Rock Indus., Inc. v. United States,
18 F.3d 1560 (Fed. Cir. 1994), cert. denied,
513 U.S. 1109,
115 S.Ct. 898,
130 L.Ed.2d 783 (1995); K & K Constr., Inc. v.
Department of Natural Resources,
217 Mich. App. 56,
551 N.W.2d 413 (Mich. Ct. App. 1996), appeal granted, ___ Mich. ___,
562 N.W.2d 788 (1997); Volkema v. Department of Natural Resources,
214 Mich. App. 66,
542 N.W.2d 282 (Mich. Ct. App. 1995), appeal
held in abeyance, ___ Mich. ___,
562 N.W.2d 789 (1997). However,
these cases involved large tracts of acreage that had been
segmented into smaller parcels for development at different
times, and either because of the configuration of the property or
its history, the divided parcels had been considered as separate
and distinct entities or units. Applying a "flexible approach,
designed to account for such factual nuances," Loveladies Harbor,
Inc. v. United States, 28 F.
3d at 1181, the respective courts
found it logical to treat each parcel separately for determining
whether the particular regulation affected a "taking" requiring
just compensation. See Quirk v. Town of Boston,
140 N.H. 124,
130-31,
663 A.2d 1328, 1332-33 (1995).
Recognizing the fact-sensitive question before us, we are
convinced that the adjoining upland and riparian lands must be
considered a single property unit. As we noted earlier, the
riparian grant requires that the uplands and tide-flowed property
be commonly owned. Indeed, the riparian grant was contingent
upon common ownership and was to be "voided" or forfeited if the
contingency was not satisfied. Moreover, the right permitted
under the riparian grant, the erection of a dock, was a mere
incident to use of the upland property. So too, as the
Schweinert tract was subdivided over the years, the upland and
riparian properties were always bought and sold as a single unit.
Plaintiffs purchased both properties in a single contract of
sale, and sold the land to the present owners as a single unit.
Finally, the properties are assessed for tax purposes as a single
lot. In both law and fact, the properties are inextricably
intertwined. We, thus, conclude that the Chancery Division erred
when it considered the riparian land as a separate parcel, wholly
distinct from the uplands portion.
Viewing the uplands and tide-flowed lands as a single
property, it is apparent that denial of the development permit
did not effect a taking. While plaintiffs contend that the
riparian grant should be considered separate and distinct, they
concede that no taking occurred, if the upland and tide-flowed
lands are considered the "property unit" upon which the effect of
the regulation is to be measured
For the sake of completeness, we next consider whether
plaintiffs had a reasonable investment-backed expectation that
was destroyed by the denial of the development permit. Whether
or not the property owner's expectations are reasonable "depend
to a significant extent on whether [he] had notice in advance of
[his] investment decision that the governmental regulations . . .
had been or would be enacted." East Cape May Assocs. v.
Department of Envtl. Protection, 300 N.J. Super. at 337.
We first consider the nature of the property that was the
subject of the riparian grant. Under the public trust doctrine,
"ownership of and dominion and sovereignty over lands covered by
tide waters . . . belong to the respective states within which
they are found . . . ." Illinois Central R.R. Co. v. Illinois,
146 U.S. 387, 435,
13 S.Ct. 110, 111,
36 L.Ed. 1018, 1036 (1892).
Although the states have the inherent authority to convey
riparian grants to private persons, see Borough of Neptune City
v. Borough of Avon-by-the-Sea,
61 N.J. 296, 303-05 (1972), the
sovereign never waives its right to regulate the use of public
trust property. Illinois Central R.R. Co. v. Illinois, 146 U.S.
at 453, 13 S.Ct. at 118, 36 L.Ed. at 1042; see also Contributors
to Pennsylvania Hosp. v. City of Philadelphia,
245 U.S. 20,
38 S.Ct. 35,
62 L.Ed. 124 (1917).
It is thus plain that the 1924 riparian grant from the State
to the Schweinerts did not create an absolute and perpetual right
to construct a dock, free from all legislative and regulatory
intervention. Indeed, as we pointed out earlier, the Waterfront
Development Act was in place at the time the Schweinerts acquired
the riparian grant. Although the focus of the regulatory scheme
adopted under the Act shifted from development to preservation,
the State plainly had "reserve powers" to alter or change the
law, even after making the covenant with the Schweinerts. See
A.P. Smith Mfg. Co. v. Barlow,
26 N.J. Super. 106, 123-24 (Ch.
Div.), aff'd,
13 N.J. 145 (1953). And clearly, the State's
emerging policy with respect to shellfish protection fell within
its police powers under the public trust doctrine. See In re
Loveladies Harbor, Inc., 176 N.J. Super. at 77.
We stress that the prohibition against the erection of docks
along the Manasquan River was a matter of public record long
before plaintiffs purchased the property. The prohibition was
expressly set forth in a published regulation. Specifically,
N.J.A.C. 7:12-2.1(a)(5) and N.J.A.C. 7:12-3.2(a) denominate the
area in which plaintiffs' property is situated as a "special
restricted area." N.J.A.C. 7:7E-3.2(d) proscribes the
construction of a dock in waters so classified.
Beyond this, the DEP's regulations provide a pre-application
review process under which parties can obtain an initial
determination even before applying for a development permit. See
N.J.A.C. 7:7-3. Plaintiffs never availed themselves of this
right.
The crucial fact is that since the early 1970's the
regulatory jurisdiction of the DEP has substantially expanded and
the substantive criteria necessary for granting a development
permit has significantly stiffened. The decision to shift public
policy from commerce to environmental protection and wildlife
preservation was not made by a faceless bureaucrat somewhere
within the administrative labyrinth of a nameless office building
in Trenton. Instead, it was articulated by our Legislature in
carefully crafted enactments and heralded by the Governor with
great fanfare. Plaintiffs must be held to have had constructive
notice of these developments.
We recognize that rights in property pass from one owner to
the next. Thus, the right of a property owner to fair
compensation when his property is zoned into inutility by changes
in the zoning law passes to the next owner despite the latter's
knowledge of the impediment to development. See Urban v.
Planning Board of Manasquan,
124 N.J. 651 (1991); Moroney v.
Mayor and Council of Old Tappan,
268 N.J. Super. 458 (App. Div.
1993), certif. denied,
136 N.J. 295 (1994). But plaintiffs'
predecessors in title, the Schweinerts, never had the absolute
right to construct a dock; it was always conditioned on the
requirement of obtaining a development permit. While the
conditions for obtaining a development permit have undoubtedly
become more onerous in the seventy-odd years that have passed
since the riparian grant was issued, plaintiffs could not have
reasonably expected that they would be immune from all changes in
the law during that period.
We are thus convinced that the Chancery Division erred by
granting partial summary judgment. We thus reverse the judgment
and remand the matter to the Chancery Division.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-1982-96T2
EDMUND T. KARAM and BARBARA
KARAM, h/w,
Plaintiffs-Respondents,
v.
STATE OF NEW JERSEY, DEPARTMENT
OF ENVIRONMENTAL PROTECTION,
ROBERT C. SHINN, COMMISSIONER OF
THE DEPARTMENT OF ENVIRONMENTAL
PROTECTION,
Defendants-Appellants,
and
CHICAGO, TITLE INSURANCE COMPANY,
a Corporation,
Defendant.
________________________________________
PETER DIBIAGIO and LAURA DIBIAGIO, h/w,
Intervenor-Respondents.
_________________________________________
WEFING, J.A.D., concurring.
I concur in the result reached by my colleagues and fully subscribe to their view that "the adjoining upland and riparian lands must be considered a single property unit" and that "[i]n both law and fact, the properties are inextricably intertwined." (Slip op. at 15-16). At the oral argument of this matter, both parties agreed that our resolution of that single issue would be dispositive. I share that assessment and thus find it
unnecessary to consider the additional question of whether plaintiffs had a reasonable investment-backed expectation that was destroyed by the refusal of the DEP to issue a permit for the construction of a dock or pier.