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Harvey Cedars Dune Litigation Settled for One Dollar

In a decision that’s reverberating all along the superstorm-strewn shoreline, the Harvey Cedars couple originally given $375,000 for compensation related to a protective dune on their beachfront property has settled with the state for one dollar.

Information from acting New Jersey Attorney General John Hoffman says the agreement stems from policies that emerged in the aftermath of Hurricane Sandy, and “should guide all future disputes and settlements.”

Harvey Cedars officials agreed to pay $24,260 in out-of-pocket litigation costs paid by counsel.

Harvey and Phyllis Karan was originally awarded the six-figure sum by the jury that heard the case against the borough. Harvey Cedars officials used eminent domain after failing to obtain an access easement for the portion of the 22-foot-tall dune on their property.

Litigation centered around fair compensation. The state Department of Environmental Protection, source point of the access-easement requirements and policy, was drawn into the case.

The Karans had argued that the dune’s benefit to the community at large overrode any consideration of storm protection that enhanced their property’s value. The view was upheld on appeal.

The award was overturned this past July by the New Jersey Supreme Court. Justices ruled that homeowners ceding property in the interest of public projects “are not entitled to a windfall.” The Court’s opinion held that storm protection must be a factor in fair compensation.

Justices applied a concept of “straightforward market value,” dismissing the general-benefits guidelines in the appellate ruling, which Hoffman says significantly changed the law governing partial property retention and led to the agreement.

“This settlement represents an important outcome for the citizens of New Jersey, for our precious natural resources along the coast, and for the rebuilding of our Jersey Shore communities,” said Hoffman in a prepared statement. “It is to the Karans’ credit that they were willing to put a halt to this protracted legal dispute following the Supreme Court’s decision,” said Acting Attorney General Hoffman.

He added that litigation cost reimbursement in this instance is justified because the original complaint predates the Supreme Court’s revision of the law, and that no post-Sandy cases will be treated similarly.

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