Opinion
Docket No. 011882-2014
04-29-2015
Re: Seth and Rose Fenton v. City of Jersey City
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE TAX COURT COMMITTEE ON OPINIONS
Mr. Seth Fenton
Ms. Rose Fenton
437 Constitution Way
Jersey City, New Jersey 07305
Levi J. Kool, Esq.
O'Donnell McCord, P.C.
15 Mount Kemble Avenue
Morristown, New Jersey 07960
Dear Mr. Fenton, Ms. Fenton and Mr. Kool:
This letter constitutes the court's opinion with respect to the municipality's motion to dismiss the Complaint in the above-referenced matter for want of jurisdiction. For the reasons explained more fully below, the motion is granted.
I. Procedural History and Findings of Fact
Pursuant to R. 1:7-4, the court makes the following findings of fact based on the submissions of the parties and the pleadings.
Seth and Rose Fenton ("plaintiffs") are the owners of the single-family condominium unit located at 437 Constitution Way, in the City of Jersey City, County of Hudson and State of New Jersey. The property is identified on the tax map of the City of Jersey City ("defendant") as Block 27503, Lot 20, Qualifier C037F (the "subject property"). The subject property is situate in the New Liberty Residential Phase of the Porte Liberte development.
On February 22, 2013, defendant's tax collector forwarded a letter to the condominium unit owners in the New Liberty Residential Phase (the "February 2013 notice"). The February 2013 notice advised owners that under the Payment in Lieu of Taxes agreement, they are "required to pay a service charge that is based on the greater of either (1) the higher of the sales price or the initial assessment of your unit or (2) the phased in percentage of taxes otherwise due based on the existing assessment." The February 2013 notice further provided that "[b]ecause phased in taxes are based on the initial assessment, it may be beneficial for you to file a tax appeal for the year 2013." The February 2013 notice continued, if after careful review of the Notice of Property Tax Assessment "you believe the assessment is too high; you should file an appeal with the County Board of Taxation." Finally, the February 2013 notice provided that "your appeal must be filed on or before April 1 of the current tax year." Information was also provided to the unit owners on how to obtain the forms necessary for filing a property tax appeal.
In or about March 2013, plaintiffs telephoned defendant's assessor to inquire "whether a tax appeal to the Hudson County Board of Taxation should be filed" for the 2013 tax year and were allegedly advised that "filing a tax appeal would not change the taxes that were due."
Plaintiffs did not submit an affidavit or certification as to this allegation as required under R. 1:6-6, however defendant has not disputed that a discussion between plaintiffs and defendant's tax assessor occurred.
On March 31, 2014, plaintiffs, self-represented parties, filed a petition of appeal with the Hudson County Board of Taxation (the "Board"), seeking review of plaintiffs' 2013 property tax assessment. A hearing was conducted before the Board and judgment was entered on May 1, 2014 dismissing plaintiffs' petition of appeal under Judgment Code "5E" - "Appeal not timely filed (N.J.S.A. 54:3-21)." The Memorandum of Judgment was mailed to plaintiffs and defendant on June 11, 2014.
On March 31, 2014 plaintiffs also filed a petition of appeal with the Hudson County Board of Taxation seeking review of the subject property's 2014 tax year assessment.
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On July 24, 2014, plaintiffs filed a Complaint with the Tax Court contesting the Board's determination alleging that "the 2013 tax assessment appeal was not filed earlier because of reliance on a misrepresentation by Jersey City tax assessor's office." Plaintiffs' admit they filed the instant action after discovering that "homeowners of an adjacent property had successfully appealed their 2013 tax assessment." Moreover, plaintiffs' Case Information Statement indicates that they are challenging the 2013 tax year assessment on the subject property.
On March 10, 2015, defendant moved to dismiss plaintiffs' Complaint for want of jurisdiction, as a result of plaintiffs' failure to timely file an appeal under N.J.S.A. 54:3-21. In support of the motion, defendant asserts plaintiffs failure to timely file an appeal of their 2013 tax year assessment is a fatal defect depriving the court of jurisdiction in this matter.
Plaintiffs argue their delay in filing an appeal contesting the 2013 tax year assessment resulted from their reliance on an oral statement made by defendant's tax assessor that a "tax appeal would not change the taxes that were due." In opposition to defendant's motion, plaintiffs raise seven arguments: (1) the delay in filing an appeal of the 2013 tax year assessment resulted from plaintiffs reliance on defendant's assessor's misstatement; (2) the delay in filing an appeal resulted from erroneous advice; (3) F.M.C. Stores Co., infra, does not support dismissal of plaintiffs' Complaint; (4) application of the square corners doctrine permits relief to be afforded plaintiffs; (5) the equitable doctrine of substantial compliance permits relief to be afforded plaintiffs; (6) application of the doctrine of equitable estoppel is an exception to N.J.S.A. 54:3-21; and (7) N.J.S.A. 54:51A-7 constitutes an exception to N.J.S.A. 54:3-21.
II. Conclusions of Law
The Tax Court is a "court of limited jurisdiction." McMahon v. City of Newark, 195 N.J. 526, 542-543 (2008). The court's "jurisdiction is constrained by the language of its enabling statutes." Prime Accounting Dept. v. Township of Carney's Point, 212 N.J. 493, 505 (2013). The statutory jurisdiction conferred on the court is expressed, in part, as the authority "to review actions or regulations with respect to a tax matter of...[a] county board of taxation..." N.J.S.A. 2B:13-2. However, strict compliance with filing deadlines is a condition precedent to conferring jurisdiction on the court to review county board of taxation judgments. As our Supreme Court has expressed, the "failure to file a timely appeal is a fatal jurisdictional defect." F.M.C. Stores Co. v. Borough of Morris Plains, 100 N.J. 418, 424-25 (1985). Taxpayers are required to "file timely...appeals and that they are barred from relief if they fail to do so." Hackensack City v. Bergen County, 24 N.J. Tax 390, 401 (App. Div. 2009) (quoting Horrobin v. Director, Division of Taxation, 1 N.J. Tax 213, 216 (Tax 1979)). See also Mayfair Holding Corp. v. North Bergen Township, 4 N.J. Tax 38, 41 (Tax 1982); Kyoon Shin v. Borough of Norwood, No. 2012 WL 2618519, 2012 N.J. Super. Unpub. LEXIS 1622 (App. Div.). A "strict adherence to statutory time limitations is essential in tax matters, borne of the exigencies of taxation and the administration of local government." F.M.C. Stores Co., supra, 100 N.J. at 424-25 (citing Princeton Univ. Press v. Borough of Princeton, 35 N.J. 209, 214 (1961). This is true even in circumstances when there is an absence of harm to the taxing district. Lawrenceville Garden Apt. v. Township of Lawrence, 14 N.J. Tax 285 (App. Div. 1994). Hence, a petition of appeal filed after the statutory deadline will result in dismissal of the appeal.
N.J.S.A. 54:3-21 prescribes the procedure for a taxpayer or taxing district that believes it is "aggrieved by the assessed valuation of property, or discriminated against by the assessed valuation of other property." F.M.C. Stores Co., supra, 100 N.J. at 423. N.J.S.A. 54:3-21, provides, in relevant part, that:
a taxpayer feeling aggrieved by the assessed valuation of the taxpayer's property, or feeling discriminated against by the assessed valuation of other property in the county...may on or before April 1, or 45 days from the date the bulk mailing of notification of assessment is completed in the taxing district, whichever is later, appeal to the county board of taxation by filing with it a petition of appeal; provided however, that any such taxpayer or taxing district may on or before April 1, or 45 days from the date the bulk mailing of notification of assessment is completed in the taxing district, whichever is later, file a complaint directly with the Tax Court, if the assessed valuation of the property subject to the appeal exceeds $1,000,000.
Thus, a predicate to challenging the assessed value of property requires the aggrieved party to file a petition of appeal with the county board of taxation, or a direct appeal with the Tax Court if the assessed value of the property exceeds $1,000,000, the later of April 1, or 45 days from the mailing of the notice of assessment. However, the "timeliness of a tax appeal is critical." Prime Accounting Dept., supra, 212 N.J. at 507. The "[f]ailure to file a timely appeal pursuant to N.J.S.A. 54:3-21[] . . . is a fatal jurisdictional defect requiring dismissal of the complaint." Regent Care Ctr. v. City of Hackensack, 18 N.J. Tax 320, 324 (Tax 1999). The court's strict adherence to procedural requirements is fashioned to serve the underlying policy goals of accurate municipal budgeting. In the area of taxation "statutes of limitation and limitation periods play a vital role. Legislative policy has consistently followed the salutary principle that proceedings concerning tax assessments and governmental fiscal matters be brought expeditiously within established time periods." L.S. Village, Inc. v. Lawrence Township, 8 N.J. Tax 287 (Law Div. 1985), aff'd, 8 N.J. Tax 327 (App. Div. 1986). "By incorporating a strict deadline in N.J.S.A. 54:3-21, the Legislature intended to ensure that municipalities receive timely notice that a particular property's valuation is subject to challenge." Prime Accounting Dept., supra, 212 N.J. at 508. Thus, the statutorily defined "deadlines are 'substantive' or 'jurisdictional'... and the courts are without authority to extend such deadlines established by the Legislature." Hackensack City, supra, 24 N.J. Tax at 401.
Here, plaintiffs filed a petition of appeal with the Board contesting the subject property's 2013 tax year assessment on March 31, 2014, approximately three hundred and sixty-five days after the time period prescribed under N.J.S.A. 54:3-21 had expired.
Plaintiffs argue their failure to timely file a tax appeal was the result of the alleged "misrepresentation" of defendant's assessor. However, plaintiffs' acknowledge receipt of the February 2013 notice from defendant's tax collector advising "it may be beneficial for you to file a tax appeal for the year 2013."
Moreover, the 2013 Notice of Property Tax Assessment received by plaintiffs provides that "[i]f you disagree with the assessed value shown, you may file an appeal with the County Board of Taxation. Forms, Instructions, and "A Guide to Tax Appeal Hearings" may be obtained at http://www.state.nj.us/treasury/taxation/pdf/other_forms/lpt/petappl.pdf or by contacting the County Board of Taxation printed on the face of this notice." The notice further states that "[a]ssessment appeals must be filed on or before April 1 of the current tax year or 45 days from the date mailed, as it appears on the front of this notice, whichever date is later."
Additionally, instructions to the Petition of Appeal, Form A-1, promulgated by the Director of the Division of Taxation, notifies taxpayers that an "appeal must be received (not merely postmarked) by the county board of taxation on or before April 1 of the tax year, or 45 days from the date the bulk mailing of Notification of Assessment is completed in the taxing district, whichever is later." Those instructions further caution taxpayers that "[a]n appeal received after the close of business...will result in dismissal of the appeal."
Plaintiffs contend that defendant's reliance upon F.M.C. Stores Co., supra, is misplaced, because the Supreme Court's ruling "applied the 'square corners' doctrine to New Jersey local property tax matters", which plaintiffs argue "supports the plaintiff's case." The court disagrees. In F.M.C. Stores Co., supra, the Supreme Court was unpersuaded by the municipality's argument that the taxpayer would be afforded a litigational advantage if the municipality was barred from filing an appeal after expiration of the statutory deadline. In denying the municipality's claim for relief, the Supreme Court recognized that N.J.S.A. 54:3-21 "prescribes a carefully structured procedural framework for resolving tax disputes and requires strict adherence to the statutory plan." Id. at 429. Observance of the policy of "applying strict time limitations to tax matters is based upon the very nature of our administrative tax structure." Id. at 425 (quoting Galloway Township v. Petkevis, 2 N.J. Tax 85 (Tax 1980)). This policy ensures that municipalities can adopt responsible and accurate budgets based upon their taxable ratables. Ibid. Hence, the statutory deadline imposed under N.J.S.A. 54:3-21 is a "nonmodifiable jurisdictional requirement", and the plaintiffs' failure to strictly adhere to the statutory requirements deprives the court of jurisdiction in this matter. Id. at 423-24.
Plaintiff's first, second, fifth and sixth arguments are founded upon principles of equity and fair dealing. Although the Tax Court is a court of limited jurisdiction, it is vested with the authority to "grant legal and equitable relief so that all matters in controversy between the parties may be completely determined." N.J.S.A. 2B:13-3.
However, the equitable doctrines of estoppel and substantial compliance are "not lightly invoked against government, especially in tax matters, where the public interest is so vitally affected." Mayfair Holding Corp. v. Township of North Bergen, 4 N.J. Tax 38, 41 (Tax 1982) (citing Airwork Service Div. v. Division of Taxation, 2 N.J. Tax 329 (Tax 1981)). In order to invoke these equitable doctrines against a governmental agency "the circumstances must be extreme." Id. at 41 (citing Pennyton Homes, Inc. v. Stanhope Planning Bd., 78 N.J. Super. 588 (App. Div. 1963)). Application of the equitable doctrine of substantial compliance is appropriate to "avoid technical defeats of valid claims." Zamel v. Port of New York Authority, 56 N.J. 1, 6 (1970)). However, in order for relief to be afforded under the doctrine of substantial compliance, the requesting party must demonstrate:
(1) The lack of prejudice to the defending party; (2) a series of steps taken to comply with the statute involved; (3) a general compliance with the purpose of the statute; (4) a reasonable notice of petitioner's claim, and (5) a reasonable explanation why there was not a strict compliance with the statute.
[Galik v. Clara Maass Medical Center, 167 N.J. 341, 353 (2001) (quoting Bernstein v. Board of Trustees, 51 N.J. Super. 71, 76-77 (App. Div. 1977)]
In applying the foregoing factors, "the court is required to assess the facts against the clearly defined elements to determine whether technical non-conformity is excusable." Galik, supra, 167 N.J. at 354.
Plaintiffs argue that a lack of prejudice exists to the municipality because it has "ample ability to contest his appeal on its merits" and the "appeal was filed by the next available filing deadline" and the subject property's "taxes were paid." However, plaintiffs misconstrue the prejudice which will be suffered by the defendant municipality. The Legislature's intended imposition of "a strict deadline in N.J.S.A. 54:3-21...[was] to ensure that municipalities receive timely notice that a particular property's valuation is subject to challenge." Prime Accounting Dept., supra, 212 N.J. at 508. That intent stems from the view that local government cannot be efficiently and effectively managed in the absence of prudent fiscal policies. In order to adopt budgets that are fiscally responsible and accurate, municipalities must rely upon their estimated taxable ratables. Thus, a strict adherence to statutory deadlines ensures that a municipality will receive timely notice of deviations in overall revenues and can budget accordingly. Thus, the defendant municipality would be prejudiced by being compelled to defend against a property tax appeal instituted after the statutory deadline.
The second and third elements of the doctrine of substantial compliance, i.e., that plaintiffs engaged in a "series of steps" to comply with the statute and its intended purpose, have not been met. Plaintiffs' argument is founded upon the premise that, but for the alleged misrepresentations of defendant's tax assessor, they would have complied with the statutory requirements. However, the purpose of the doctrine of substantial compliance is to "avoid the harsh consequences that flow from technically inadequate actions that nonetheless meet a statute's underlying purpose." Galik, supra, 167 N.J. at 352 (citing Anske v. Borough of Palisades Park, 139 N.J. Super. 342, 347 (App. Div. 1976)). Here, plaintiffs did not engage in any action to attempt to comply with the statutory filing requirements, or to satisfy the statute's intended purpose. The only initiative taken by plaintiffs was to engage in a telephone call with the tax assessor to ascertain "whether a tax appeal to the Hudson County Board of Taxation should be filed." Nothing in plaintiffs conduct or actions gave notice to defendant that plaintiffs were contesting their 2013 tax year property assessment.
The fourth element requires plaintiffs to demonstrate that defendant had reasonable notice of plaintiffs' claim. Plaintiffs March 2013 telephone call to the municipal assessor provided no notice to defendant that plaintiffs were contesting their 2013 tax year assessment. Admittedly, the telephone inquiry lodged by plaintiffs concerned "whether a tax appeal to the Hudson County Board of Taxation should be filed." It would be unreasonable to presume that a municipal defendant is placed on notice of a claim upon receipt of a telephone call inquiring about the prospect of filing a tax appeal.
Finally, plaintiffs' explanation for failing to strictly comply with the statute is not reasonable. Plaintiffs argue defendant's assessor's "misrepresentations" caused plaintiff not to file an appeal before the statutory deadline. However, under N.J.S.A. 54:4-64, "every taxpayer is put on notice to ascertain from the proper official of the taxing district the amount which may be due for taxes or assessments against him or his property." Moreover, "an individual is chargeable with knowledge of the law" and is expected to exercise a reasonable degree of prudence to ensure compliance with statutory deadlines and court rules. Mayfair Holding Corp. v. Township of North Bergen, 4 N.J. Tax 38, 41 (Tax 1982)(citing Gilbralter Factors Corp. v. Slapo, 41 N.J. Super. 381 (App. Div. 1956), aff'd 23 N.J. 459 (1957)). Although here plaintiffs allege that they were advised by the assessor that filing a tax appeal "would not change the taxes that were due," plaintiffs did not independently evaluate the merits of a tax appeal or seek advice from qualified legal counsel. Moreover, a taxing district is not bound by the unauthorized acts or statements of its tax assessor. St. Michael's Passionist Monastery v. Union City, 5 N.J. Tax 415, 418 (Tax 1983). "A taxing authority is not bound or estopped by the unauthorized acts of its officers." Appeal of Monroe Twp. from determination of Local Finance Board, 15 N.J. Tax 661, 669 (Tax 1995). See also Bayonne v. Murphy & Perrett Co., 7 N.J. 298, 311 (1951)(concluding that the "[c]ollection of taxes is a governmental function in the performance of which a city may not be bound or estopped by unauthorized acts of its officers."). Thus, it was incumbent upon plaintiffs to not only seek out their tax assessments, but to gauge the reasonableness of their property assessment and to timely file an appeal under N.J.S.A. 54:3-21. Plaintiffs' alleged reliance on the statements of defendant's assessor was misplaced. Hence, plaintiffs' failure to evaluate their 2013 tax year assessment and file an appeal before the filing deadline must be considered a result of their own inaction.
The court concludes plaintiffs' arguments, which seek application of equitable remedies under the guise that the delay in filing a timely petition of appeal was the result of a "misstatement by a taxing authority employee" are unpersuasive. Therefore, missing the filing date under these circumstances does not justify application of the equitable doctrines of substantial compliance or estoppel.
Plaintiff's fourth legal argument is that defendant has not turned "square corners." One of the central principles underlying the policy that government action is presumed valid, is the public expectation that a municipal assessor will act scrupulously, correctly, efficiently and honestly in complying with statutory provisions and adhering to standards of fairness when making assessments. Lowe's Home Ctr., Inc. v. City of Millville, 25 N.J. Tax 591, 604 (Tax 2010). Our Supreme Court has demanded that "government officials act solely in the public interest. In dealing with the public, government must 'turn square corners'...[i]t may not conduct itself so as to achieve or preserve any kind of bargaining or litigational advantage over the property owner. Its primary obligation is to comport itself with compunction and integrity..." F.M.C. Stores Co., supra, 100 N.J. at 426-427. Moreover, the "[p]roper administration of our tax laws and the successful implementation of statutes [are] designed to...demand consistency and fairness from municipal officers in their dealings with property owners." CBS Outdoor, Inc. v. Borough of Lebanon Planning Bd., 414 N.J. Super. 563, 606 (App. Div. 2010); Gastime, Inc. v. Director, Division of Taxation, 20 N.J. Tax 158, 163 (Tax 2002); Lowe's Home Ctr., Inc., supra, 25 N.J. Tax at 591. Thus, the court may exercise equitable relief under the "square corners" doctrine when the municipality falls short of the standards of fairness and fair dealing that taxpayers have the right to expect from public officials. Lowe's Home Ctr., Inc., supra, 25 N.J. Tax at 602-603. However, the court lacks discretion to relax statutorily defined jurisdictional deadlines imposed by the Legislature under N.J.S.A. 54:3-21 through application of the square corners doctrine. F.M.C. Stores Co., supra, 100 N.J. at 423-424. The April 1 "statutory deadline was a nonmodifiable jurisdictional requirement" that cannot be relaxed or overcome by application of the "square corners" doctrine. Therefore, the court concludes that application of the "square corners" doctrine is not appropriate.
Plaintiffs' last argument alleges a correctable error exists under the Correction of Errors statute, N.J.S.A. 54:51A-7. That statute provides, in part, that:
The tax court may, upon the filing of a complaint at any time during the tax year or within the next 3 tax years thereafter. enter judgment to correct typographical errors, errors in transposing, and mistakes in tax assessments...The tax court shall not consider under this section any complaint relating to matters of valuation involving an assessor's opinion or judgment.The Correction of Errors statute is "an exception to the standard tax-appeal process authorized by N.J.S.A. 54:3-21. The statute provides an extended period of relief after the deadline for appeal to the county board or to the Tax Court has passed." Hovbilt, Inc. v. Township of Howell, 138 N.J. 598, 604 (1994).
[N.J.S.A. 54:51A-7.]
In light of this exception, our courts have strictly construed the statutory language. Our Supreme Court has interpreted N.J.S.A. 54:51A-7 as limiting the phrase "mistakes in assessments" to errors that "are indisputable, and cannot plausibly be explained on the basis of an exercise of judgment or discretion by the assessor or his or her staff, are within the category of mistakes that can be corrected under the statute." Hovbilt, Inc., supra, 138 N.J. 598, 618 (1994). The Supreme Court recognized that "the Legislature's only express qualification of the judiciary's power to correct mistakes in tax assessments was to exclude matters of valuation involving an assessor's opinion or judgment." Id. at 617-618. Thus, matters of valuation that are subject to debate or involve an assessor's opinion or judgment are expressly excluded from review under the Correction of Errors statute.
Here plaintiffs' argue the assessor's alleged statement that "filing a tax appeal would not change the taxes that were due" and alleged typographical errors in the February 2013 notice were "errors the Tax court [sic] may correct." However, plaintiffs' reliance on the Correction of Errors statute is misplaced. Relief is not afforded under the Correction of Errors statute for matters involving an assessor's opinion or judgment. Thus, even if the statements attributed to defendant's assessor are accurate, the statement was an expression of the assessor's opinion and therefore, is not subject to relief under the Correction of Errors statute. Moreover, the alleged typographical errors in the February 2013 do not give rise to relief under the Correction of Errors statute. The February 2013 notice explained that it may be beneficial for "condominium owners at New Liberty Residential Phase I" to "file a tax appeal for the year 2013." Although plaintiffs contend the subject property is located in the New Liberty Residential Phase II, the February 2013 notice was similarly an opinion expressed by defendant's tax collector that filing an appeal for the 2013 tax year may be beneficial. Additionally, the February 2013 notice did not contain plaintiffs' name, property address, or identify the proposed 2013 tax year assessment for the subject property. N.J.S.A. 54:51A-7 only provides a mechanism for relief from typographical errors, errors in transposing or mistakes in tax assessment. Since the February 2013 notice contained no 2013 tax year assessment information for the subject property, a claim for relief cannot be granted under the Correction of Errors statute. Thus, plaintiffs' are not entitled to relief under N.J.S.A. 54:51A-7.
III. Conclusion
For the above stated reasons, defendant's motion to dismiss plaintiffs' Complaint for want of jurisdiction under N.J.S.A. 54:3-21 is granted. The court will enter a Final Order dismissing plaintiffs' Complaint.
Very truly yours,
/s/
Hon. Joshua D. Novin, J.T.C.