Borough of Harvey Cedars v. Karan
214 N.J. 384
N.J.2013Background
- Harvey Cedars used eminent domain to acquire a perpetual easement over 3,381 sq ft (≈1/4 of lot) of Harvey and Phyllis Karan’s beachfront parcel to construct a 22-foot dune as part of a federally/state-funded Long Beach Island storm-protection project.
- The Karans claimed the dune obstructed their panoramic ocean view and rejected the Borough’s $300 offer; jury trial followed after commissioners’ award was rejected.
- At trial the court allowed evidence of diminution (loss of view) but excluded Borough evidence that the dune conferred storm‑protection benefits that increased the remainder’s value, treating those as "general benefits."
- Jury awarded the Karans $375,000; the Appellate Division affirmed on the ground that benefits shared with the community cannot offset severance damages.
- The Supreme Court granted certification to decide how to compute "just compensation" in a partial taking when the public project may both decrease and increase the remainder’s value.
Issues
| Issue | Plaintiff's Argument (Karans) | Defendant's Argument (Harvey Cedars) | Held |
|---|---|---|---|
| Proper measure of "just compensation" in a partial taking | Keep common-law special/general distinction; exclude "general" benefits from offset | Use fair-market "before-and-after" rule; permit offset for any non‑speculative, reasonably calculable benefits | Court adopts fair‑market before-and-after rule; allow offset for non-speculative, reasonably calculable benefits regardless of being shared |
| Admissibility of storm‑protection evidence | Exclude storm-protection as a "general benefit" shared by community | Admit expert proof of storm-protection benefits as relevant to fair market value after taking | Trial court erred in excluding such evidence; Borough may present quantifiable storm‑protection evidence |
| Role of labels "general" vs "special" benefits | Maintain rigid distinction; benefits shared in common are not deductible | Labels should not bar admissible evidence; focus on whether benefit is quantifiable and non-conjectural | Labels are unhelpful; courts should exclude only speculative/conjectural benefits; quantifiable benefits admissible |
| Preclusive gatekeeping and jury factfinding | Court can decide as a matter of law that benefits are general and inadmissible | Court should gatekeep speculation but leave weight and valuation to the jury when evidence is reliable | Gatekeeping remains for speculation, but admissible non‑speculative evidence goes to jury for valuation; new trial required |
Key Cases Cited
- State v. Gorga, 26 N.J. 113 (discusses court gatekeeping on speculative valuation evidence)
- State v. Caoili, 135 N.J. 252 (explains limits on speculative evidence for highest-and-best-use and valuation)
- Sullivan v. North Hudson County Railroad Co., 51 N.J.L. 518 (E. & A. 1889) (early formulation of general vs. special benefits)
- Mangles v. Hudson Cnty. Bd. of Chosen Freeholders, 55 N.J.L. 88 (discusses deducting non-speculative benefits in partial takings)
- Bauman v. Ross, 167 U.S. 548 (adopts standard allowing offset for direct, calculable benefits)
- McCoy v. Union Elevated Railroad Co., 247 U.S. 354 (permits consideration of actual benefits enhancing market value)
- State v. Silver, 92 N.J. 507 (fair-market valuation standard for takings)
- Continental Dev. Corp. v. Los Angeles Cnty. Metro. Transp. Auth., 16 Cal.4th 694 (adopted fair-market approach rejecting special/general labels)