Opinion
Docket No. 003119-2012 Docket No. 003122-2012
04-25-2014
Re: Frank Investments, Inc. v. City of Ocean City ASF Properties, c/o Frank Mgmt v. City of Ocean City
NOT FOR PUBLICATION WITHOUT APPROVAL OF
THE TAX COURT COMMITTEE ON OPINIONS
Patrick DeAlmeida
Presiding Judge
Steven R. Irwin, Esq.
The Irwin Law Firm, P.A.
80 Main Street, Suite 410
West Orange, New Jersey 07052
Thomas G. Smith, Esq.
The Law Offices of Thomas G. Smith, P.C.
2106 New Route, Suite E-8
Linwood, New Jersey 08221
Thu N. Lam
Deputy Attorney General
Division of Law
R.J. Hughes Justice Complex
P.O. Box 106
25 Market Street
Trenton, New Jersey 08625-0106
Dear Counsel:
This letter constitutes the court's opinion with respect to: (1) defendant's motions to limit the scope of plaintiffs' appeals in the above-referenced matters because of plaintiffs' failure to respond to the tax assessor's requests for income and expense information pursuant to N.J.S.A. 54:4-34, commonly known as Chapter 91 (L. 1979, c. 91); and (2) plaintiffs' cross-motions to declare the appeal-limitation provision of N.J.S.A. 54:4-34 unconstitutional as permitting a warrantless search and seizure of plaintiffs' business records in violation of the United States and New Jersey Constitutions. For the reasons explained more fully below, defendant's motions are granted and plaintiffs' cross-motions are denied. Plaintiffs' appeals will be limited to reasonableness hearings pursuant to Ocean Pines, Ltd., v. Borough of Point Pleasant, 112 N.J. 1, 11 (1988).
I. Findings of Fact and Procedural History
This letter opinion sets forth the court's findings of fact and conclusions of law based on the parties' motion papers.
Plaintiff Frank Investments, Inc. is the owner of six parcels in defendant Ocean City. The parcels are part of a single 24,000-square-foot mixed use building at 816-20 Boardwalk, which was rebuilt in 2004. At the time that it was rebuilt, the building was divided into nine separate units - four retail units, four second-floor residential units, and one movie theater. Three of the units were sold. The remaining six parcels, which are the subjects of this matter, are designated in the records of the municipality as follows:
| Block 800 | Lot 12.01 | Qualifier C1C |
| Block 800 | Lot 12.01 | Qualifier C2C |
| Block 800 | Lot 12.01 | Qualifier C3C |
| Block 800 | Lot 12.01 | Qualifier C4C |
| Block 800 | Lot 12.01 | Qualifier C5C |
| Block 800 | Lot 12.01 | Qualifier C9R |
The assessments on the parcels range from $700,000 to $1,552,300.
On October 6, 2011, the municipal tax assessor, pursuant to N.J.S.A. 54:4-34, mailed to Frank Investments, Inc. a separate request for income and expense information for five of the parcels. The requests were for the purpose of gathering information to assist in setting the tax year 2012 assessments on the properties. A request was not sent with respect to the parcel identified as Qualifier C9R. That property is not the subject of this motion. The requests are signed by the tax assessor on township letterhead, clearly identify the parcels by block, lot and commonly known address, and contain the assessor's telephone number.
The requests seek disclosure of "the appropriate income and expense data requested on the enclosed form for the period from October 1, 2010 to October 1, 2011" for the properties. The enclosed form, entitled "Annual Statement of Income and Expenses for Boardwalk Properties," requests a variety of information associated with the properties' production of rental income. The form requests identification of the number and type of rental units on the property, lease terms, lease amounts, frontage on boardwalk of rental units, renewal information, and actual income from all rental units. The form also requests actual expenses for advertising, utilities, insurance, payroll, repairs and maintenance, trash removal, licenses, special improvement district charges, real estate taxes and miscellaneous expenses. The form asks whether the property has been appraised in the past three years, whether stores have been added to the property by the current owner, and the identity of the party responsible for payment of real estate taxes (tenant, owner or shared) on each parcel. The form requires the signature and verification of the person providing a response.
The assessor's requests explain that "N.J.S.A. 54:4-34 provides a municipal assessor with the authority to request, on an annual basis, that owners of income producing properties submit relevant income and expense information for the purpose of determining fair market value." The requests continue:
The requested information must be submitted to this office within forty five days from the date the letter is received. In the event that you do not comply with this request, the law provides that you will be precluded from the appeal process regarding the assessment of your property. Failure to comply with this request may result in a dismissal of a tax appeal.
The requests include the complete text of N.J.S.A. 54:4-34 with slight modifications, the significance of which will be addressed in greater detail below.
The motion record establishes that Frank Investments, Inc. received the assessor's information requests. Frank Investments, Inc. did not respond to the assessor's inquiries.
The assessor thereafter set the 2012 assessments on Frank Investments, Inc.'s properties without the benefit of information from the property owner.
On March 12, 2012, Frank Investments, Inc. filed a Complaint in this court challenging the tax year 2012 assessments on its six parcels.
Plaintiff ASF Properties is also the owner of real property in Ocean City. The property, designated in the records of the municipality as Block 901, Lot 12, is commonly known as 816 Ninth Street.
On October 6, 2011, the municipal tax assessor, pursuant to N.J.S.A. 54:4-34, mailed to ASF Properties a request for income and expense information with respect to ASF Properties' parcel for the purpose of setting the tax year 2012 assessment. The assessor's information request was identical to the requests sent to Frank Investments, Inc., except for the parcel identified in the request.
The motion record establishes that ASF Properties received the information request. It did not, however, provide a response to the assessor. The assessor thereafter set the 2012 assessment on the parcel without the benefit of a response from ASF Properties.
On March 12, 2012, ASF Properties filed a Complaint in this court challenging the 2012 assessment on its property.
On April 9, 2012, the municipality moved, pursuant to N.J.S.A. 54:4-34, in both the Frank Investments, Inc. matter and the ASF Properties matter to limit the plaintiffs' appeal rights with respect to the parcels addressed in the assessor's requests for income and expense information. The motions are based on the taxpayers' failure to respond to the assessor's information requests. The municipality seeks an Order limiting the taxpayers to reasonableness hearings pursuant to Ocean Pines, supra.
On February 1, 2013, the municipality moved to dismiss the Complaint with respect to Frank Investments, Inc.'s parcel identified with Qualifier C9R for failure to exhaust administrative remedies before the Cape May County Board of Taxation. That motion, which is opposed by the taxpayer, will be addressed in a separate opinion.
On May 7, 2012, plaintiffs cross-moved for an Order declaring N.J.S.A. 54:4-34 unconstitutional under the provisions of the United States and New Jersey Constitutions safeguarding against unreasonable searches and seizures without a warrant.
On August 9, 2013, the court granted the Attorney General's motion to intervene in order to defend the constitutionality of N.J.S.A. 54:4-34.
On November 26, 2013, plaintiffs submitted a supplemental letter brief advancing an independent argument for denial of the municipality's motion. The taxpayers argue that the recitation of N.J.S.A. 54:4-34 in the assessor's information requests was not an exact duplicate of the statute as enacted by the Legislature. Relying on a recent opinion of this court, Fairfield Dev. v. Borough of Totowa, 27 N.J. Tax 306 (Tax 2013), the taxpayers argue that relief under N.J.S.A. 54:4-34 is appropriate only if the assessor includes an exact copy of N.J.S.A. 54:4-34 in the information request sent to a taxpayer.
On December 20, 2013, the court heard oral argument from counsel.
At the direction of the court, the parties submitted supplemental letter briefs. The final supplemental submission was filed by the Attorney General on March 7, 2014.
The court consolidates the motions for the purpose of this opinion.
II. Conclusions of Law
A. Plaintiffs' Constitutional Claims.
As a threshold matter, plaintiffs face the difficult task of overcoming the presumptive validity that attaches to all acts of the Legislature. Our Supreme Court has recognized "the strong presumption in favor of constitutionality, and the traditional judicial reluctance to declare a statute void, a power to be delicately exercised . . . ." Paul Kimball Hosp. v. Brick Twp. Hosp., 86 N.J. 429, 447 (1981)(citation omitted). "[C]ourts do not act as a super-legislature." Newark Superior Officers Ass'n v. City of Newark, 98 N.J. 212, 222 (1985)(citing Burton v. Sills, 53 N.J. 86, 95 (1968), app. dis., 394 US. 812, 89 S. Ct. 1486, 22 L. Ed. 2d 748 (1969)). Out of respect for the democratic process and in recognition of the Legislature's status as a coequal branch, statutes under attack are "entitled to great weight by the courts." New Jersey Sports & Exposition Auth. v. McCrane, 119 N.J. Super. 457, 474 (Law Div. 1971), aff'd, 61 N.J. 1 (1972)(quoting Roe v. Kervick, 42 N.J. 191, 229-30 (1964)).
Every possible presumption in favor of the constitutionality of legislative action must be extended by this court. See Holster v. Board of Trustees, 59 N.J. 60, 66 (1971). Hence, any party who attacks a statute must demonstrate that "there is no reasonable basis for sustaining it." McCrane, supra, 119 N.J. Super. at 476. Only those legislative acts that are "clearly repugnant to the Constitution" should be invalidated. Newark Superior Officers, supra, 98 N.J. at 222; accord State v. Muhammad, 145 N.J. 23, 41 (1996). Where a statute's constitutionality is "fairly debatable, courts will uphold" the law. Newark Superior Officers, supra, 98 N.J. at 227. If "alternative interpretations of a statute are equally plausible, the view sustaining the statute's constitutionality is favored." City of Jersey City v. Farmer, 329 N.J. Super. 27, 38 (App. Div.)(quotations omitted), certif. denied, 165 N.J. 135 (2000).
"[O]rdinarily legislative enactments are presumed to be valid and the burden to prove invalidity is a heavy one." Bell v. Township of Stafford, 110 N.J. 384, 394 (1988). But, "when legislation impinges on a constitutionally protected right," our Supreme Court has "looked more closely at the State's purported justification" for the statute. Planned Parenthood v. Farmer, 165 N.J. 609, 619-20 (2000). This more scrutinizing standard, however, must be tempered by the "caution [that] is required when we extend the protections of our State Constitution beyond the limits set by the United States Supreme Court for parallel provisions in the Federal Constitution." Id. at 620.
N.J.S.A. 54:4-34 provides
Every owner of real property of the taxing district shall, on written request of the assessor, made by certified mail, render a full and true account of his name and real property and the income therefrom, in the case of income-producing property, and produce his title papers, and he may be examined on oath by the assessor, and if he shall fail or refuse to respond to the written request of the assessor within 45 days of such request, or to testify on oath when required, or shall render a false or fraudulent account, the assessor shall value his property at such amount as he may, from any information in his possession or available to him, reasonably determine to be the full and fair value thereof. No appeal shall be heard from the assessor's valuation and assessment with respect to income-producing property where the owner has failed or refused to respond to such written request for information within 45 days of such
request or to testify on oath when required, or shall have rendered a false or fraudulent account. The county board of taxation may impose such terms and conditions for furnishing the requested information where it appears that the owner, for good cause shown, could not furnish the information within the required period of time. In making such written request for information pursuant to this section the assessor shall enclose therewith a copy of this section.
The constitutionality of the statute was first examined by the Supreme Court in Ocean Pines, supra. There, an owner of income-producing property failed to respond to the assessor's written request for income and expense information. After expiration of the 45-day response time, the assessor determined the tax year 1985 assessment for the property without the benefit of the property owner's response. The taxpayer's subsequent attempt to appeal the assessment was rejected both by the county board of taxation and this court, both of which dismissed the taxpayer's appeal. 112 N.J. at 4-5. The Appellate Division reversed and remanded the matter to this court. Although the appellate court agreed that the taxpayer's failure to respond to the assessor's inquiry precluded a full appeal, the court remanded the matter for a hearing on the reasonableness of the assessment placed on the property in the absence of the taxpayer's response. Id. at 5-6. A reasonableness hearing is sharply circumscribed in both its substantive and procedural aspects and is limited to: "(1) the reasonableness of the underlying data used by the assessor, and (2) the reasonableness of the methodology used by the assessor in arriving at the valuation." Id. at 11.
The Supreme Court agreed with the Appellate Division. The court held that N.J.S.A. 54:4-34 provides that a taxpayer who fails to respond to an assessor's information request may challenge the reasonableness of the underlying assessment, even though a full hearing on the assessment - one which determines the true market value of the subject property - is precluded by the statute. Ibid. The Court recognized that the purpose of the statute is "'to assist the assessor in the first instance, to make the assessment and thereby . . . to avoid unnecessary expense, time and effort in litigation.'" Id. at 7 (quoting Terrace View Gardens v. Township of Dover, 5 N.J. Tax 469, 474-75 (Tax 1982), affd o.b., 5 N.J. Tax 475 (App. Div.), certif. denied, 94 N.J. 559 (1983)); see also SKG Realty Corp. v. Township of Wall, 8 N.J. Tax 209, 211 (App. Div. 1985)(holding that purpose of the statute "is to afford the assessor access to fiscal information that can aid in valuing the property."). According to the court, this purpose is fulfilled only if taxpayers are encouraged through the appeal-limitation provision to respond to the information requests of municipal assessors in a timely fashion. Id. at 7-8.
The Court rejected the claim that strict enforcement of the statute would violate the taxpayer's procedural due process rights. In applying the three-part test set forth in Mathews v. Eldridge, 424 U.S. 319, 335, 96 S. Ct. 893, 903, 47 L. Ed. 2d 18, 33 (1976), the Court concluded that the private interest involved was not the income and expense data sought by the assessor, but "that the true interest at issue is the amount of the property-tax assessment." Id. at 9. The Court explained that "[d]epending on which party prevails on appeal, the taxpayer's assessment will be affected, and the private interest involved is the actual tax bill to the taxpayer." Ibid. The Court noted that where the taxpayer responds to the request it will be permitted to pursue an appeal to the county board of taxation and the courts. Ibid. Where a taxpayer elects not to respond to the assessor's inquiry, "the statute still provided for a 'reasonableness' appeal from the assessor's valuation of the property." Ibid. The Court concluded "[i]n light of those protections, the risk of an erroneous deprivation of the taxpayer's money is minimal, as is the probable value of any additional protections that might possibly be afforded." Id. at 9-10.
With respect to the taxpayer's substantive due process claims the Court held that
with the exception of those cases in which a fundamental right is involved - and no such right is implicated here - "a state statute does not violate substantive due process if the statute reasonably relates to a legitimate legislative purpose and is not arbitrary or discriminatory. Briefly stated, if a statute is supported by a conceivable rational basis, it will withstand a substantive due process attack."Applying that precedent, the Court upheld the validity of N.J.S.A. 54:4-34:
[Id. at 10 (quoting Greenberg v. Kimmelman, 99 N.J. 552, 563-64 (1985)(citations omitted)).]
As noted, the municipality has a significant interest in the timely receipt of economic data for income-producing property. The legislature rationally could conclude that the appeal-dismissal sanction of N.J.S.A. 54:4-34 creates a reasonable incentive in the owner of such property to produce the requested data. Under this analysis, we reject plaintiff's claim that its substantive due-process rights have been violated.
[Id. at 10.]
An Eighth Amendment challenge to N.J.S.A. 54:4-34 was rejected by the Supreme Court in 1717 Realty Assocs. v. Borough of Fair Lawn, 201 N.J. 275 (2010). In that case, the owner of income-producing property failed to respond to an assessor's written request for income and expense information pursuant to N.J.S.A. 54:4-34. Id. at 276. The assessor set the assessment on the relevant property without the benefit of the owner's economic information. Ibid. The property owner's subsequent appeal of the assessment was limited by order of this court to an Ocean Pines reasonableness hearing. Id. at 276-77. At the hearing, the property owner failed to establish that the assessment was not reasonable. Id. at 277-78. As a result, this court dismissed the property owner's Complaint and affirmed the assessment. Id. at 278.
On appeal, the property owner argued that "the difference between the taxes that would have been due on a valuation of $20,180,000 [the amount that the property owner's appraiser opined to be the true market value of the property] and the Borough's valuation of $29,665,700 constitutes a 'fine' for failing to provide the information requested pursuant to N.J.S.A. 54:4-34." Ibid. According to this rationale, the property owner argued that "[a]pplying the tax rate for 2007, this difference amounts to $192,559.71, which plaintiff contends is an 'excessive fine' prohibited by the Eighth Amendment of the United States Constitution and Article I, §1, ¶12 of the New Jersey Constitution." Ibid.
The Appellate Division expressly rejected this argument. The court held that "the actual tax bill to plaintiff is not a punishment." Ibid. It explained that "[t]he tax bill is not a forfeiture or even a civil sanction. It is the amount reached by applying the municipal tax rate to the valuation made, in compliance with statute, based upon the information available to the tax assessor." Id. at 278-79. The Appellate Division concluded that "[t]he process and the data relied upon were both found to be reasonable by the Tax Court[,]" and that "[p]laintiff was not assessed any penalty or additional tax for its failure to comply with the Chapter 91 request." Id. at 279. As a result, the appellate court concluded that "the statute as applied does not result in the imposition of an 'excessive fine' prohibited by the United States and New Jersey Constitutions." Ibid.
The property owner raised the same arguments on appeal to the Supreme Court. The Court summarily affirmed the Appellate Division. Id. at 280. On the same day, the Supreme Court rejected identical arguments raised by another property owner. See Davanne Realty v. Township of Edison, 408 N.J. Super. 16 (App. Div. 2009), affd o.b., 201 N.J. 280 (2010).
Here, the property owners argue that N.J.S.A. 54:4-34 authorizes the assessor to conduct a search and seizure of the property owners' financial records without a warrant in violation of the Fourth Amendment to the United States Constitution and Article I, Paragraph 7 of the New Jersey Constitution. Those provisions provide as follows:
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
[U.S. Const. amend. IV.]
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated; and no warrant shall issue except upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched and the papers and things to be seized.
[N.J. Const. art. 1, par. 7.]
These provisions "provide vigilant protection against unreasonable searches of a person's dwelling because a nonconsensual, warrantless search of a person's residence is the 'chief evil against which the wording of the Fourth Amendment is directed.'" Department of Envtl. Prot. v. Huber, 213 N.J. 338, 358 (2013)(quoting State v. Johnson, 193 N.J. 528, 544 (2008)); see also Florida v. Jardines, 569 U.S. ___, 133 S. Ct. 1409, 1414, 185 L. Ed. 2d 495, 501 (2013)("[W]hen it comes to the Fourth Amendment, the home is first among equals."). Fourth Amendment protections also apply to commercial premises subject to inspection for administrative purposes. Camara v. Municipal Court of San Francisco, 387 U.S. 523, 87 S. Ct. 1727, 18 L. Ed. 2d 930 (1967); State v. Heine, 424 N.J. Super. 48 (App. Div. 2012)(warrant requirement applicable to search of rooming house by housing and fire officials investigating code violations), app. dis., 213 N.J. 384 (2013). These protections have also been extended to motor vehicles, State v. Carty, 170 N.J. 632 (2002), hotel rooms, State v. Mollica, 114 N.J. 329 (1989), and storage facilities, State v. Earls, 420 N.J. Super. 583 (App. Div. 2011), rev'd on other grounds, 214 N.J. 564 (2013).
Where Fourth Amendment protections apply, warrantless searches are "per se unreasonable." Katz v. United States, 389 U.S. 347, 357, 88 S. Ct. 507, 514, 19 L. Ed. 2d 576, 585 (1967); accord Johnson, supra, 193 N.J. at 552. However, several "well-delineated exceptions" permit warrantless searches under limited circumstances. City of Ontario v. Quon, 560 U.S. 746-60, 130 S. Ct. 2619, 2630, 177 L. Ed. 2d 216, 228 (2010). "[T]he burden of establishing an exception to the general warrant requirement falls to the government in order to sustain the reasonableness of a warrantless search." Huber, supra, 213 N.J. at 359 (citing Welsh v. Wisconsin, 466 U.S. 740, 750, 104 S. Ct. 2091, 2098, 80 L. Ed. 2d 732, 743 (1984)).
In the present matter, defendant and the Attorney General argue that the warrant requirement of the Federal and State Constitutions does not apply because an assessor's request for income and expense information pursuant to N.J.S.A. 54:4-34 does not constitute a search or seizure of the taxpayers' property or financial records. The court agrees. The municipal tax assessor did not enter plaintiffs' properties. Nor did the assessor inspect plaintiffs' business records. The assessor's written inquiries to plaintiffs were merely requests from a government official for information to assist in the assessing process. The assessor's requests were not for the purpose of investigating violations of the criminal law or enforcement of administrative regulations. Under plaintiffs' theory, every request for information from a government official in furtherance of his or her official duties would constitute an unreasonable search or seizure for which a warrant would be necessary. This interpretation of the Fourth Amendment and Article 1, paragraph 7 of the State Constitution is entirely unsupported by legal precedent. Plaintiffs cite no published opinion in which either Federal or State Constitutional protections against unreasonable searches and seizures are applied to a government request for information, not associated with a physical intrusion into the property or personal effects of a person and unrelated to the enforcement of criminal laws or administrative regulations. See Dome Realty, Inc. v. City of Paterson, 83 N.J. 212, 240-41 (1980)(holding that inspection of property that has no connection with criminal investigation and no punitive consequences is not subject to the Fourth Amendment warrant requirement).
In addition, plaintiffs' attempt to subject an assessor's request for information to the warrant requirement is illogical. Presumably, if plaintiffs' view of the Constitutions' search and seizure provisions was correct, it would be necessary for a municipal tax assessor to obtain a warrant based on probable cause before making a request for information pursuant to N.J.S.A. 54:4-34. Even a cursory consideration of this proposition raises the question: "Probable cause of what?" There is no rational answer to this question because the probable cause standards in the Federal and State Constitutions correctly link search and seizure protections to the enforcement of criminal laws or administrative regulations - circumstances in which a government official must demonstrate probable cause of a violation of those laws to justify an intrusion into a person's property or records. Because N.J.S.A. 54:4-34 is a tool to assist a government official to perform his or her duties, and not an investigative device for the enforcement of criminal laws or administrative regulations, the probable cause standard is inapposite.
Finally, the court finds unavailing plaintiffs' claim that their interest in maintaining the privacy of their financial records justifies application of the Fourth Amendment and Article I, paragraph 7 to Chapter 91 requests. The court has no doubt that owners of income-producing property may wish to protect from disclosure income and expense information associated with the property. Lease terms, tenant rolls, expense details, income statements, and other information may well be sensitive in a competitive rental market. A property owner who wishes to dispute the assessment on its property, however, would be required to disclose this information to the municipality during discovery. This court's standard interrogatories for income-producing properties require the disclosure of this information. See R. 8:6-1(a)(5); http://www.judiciary.state.nj.us/taxcourt/10966_ard_interr_taxpayers_eng.pdf . The same is true for matters concerning income-producing properties assigned to the small claims track. R. 8:6-1(a)(4). This information would be subject to public disclosure were it admitted into evidence at trial or included in appraisal reports filed with the court. R. 1:38-1, et seq.
A property owner wishing to keep its financial information from being disclosed to the municipal tax assessor may simply disregard the assessor's Chapter 91 request for information and not thereafter file an appeal challenging the subsequently imposed assessment on the property. Taxpayers such as plaintiffs, who elect to challenge the assessments on their property, cannot avoid disclosure of the very information addressed in a Chapter 91 request. Thus, for a taxpayer seeking to challenge an assessment, the municipal tax assessor's inquiry poses no greater intrusion into privacy than would be the case if the inquiry was never made and an appeal subsequently filed. N.J.S.A. 54:4-34 merely requires disclosure of the information to the assessor earlier in the assessment process, at a time when it will be most useful in determining the appropriate assessment for the property. B. Plaintiffs' Statutory Claims.
Plaintiffs argue that responses to Chapter 91 requests are routinely shared by assessors with appraisers and revaluation companies for the purpose of reaching opinions of value on properties other than those of the property owner responding to the requests. A Deputy Director of the Division of Taxation submitted a Certification stating that although the Division does not have a written policy or directive with respect to the dissemination of responses to Chapter 91 inquiries, "it is Taxation's position that there is a paramount need to protect the confidentiality of Chapter 91 income and expense information provided by owners of income-producing properties to municipal tax assessors." According to the Certification, "Taxation's informal oral guidance to municipal tax assessors has been that Chapter 91 responses from income-producing property owners are generally confidential and privileged information and should not be disclosed." In addition, a response to a Chapter 91 request used by an assessor to set the assessment on properties other than those of the property owner responding to the request might be subject to disclosure in discovery related to a reasonableness hearing. Such disclosures would be subject to the court's authority to issue a protective order limiting dissemination. Plaintiffs raises these issues in an apparent attempt to argue that the rationale for the Supreme Court's rejection of challenges to N.J.S.A. 54:4-34 on procedural and substantive due process grounds in Ocean Pines, supra, has been undercut by subsequent events. Of course, this court is bound by the holding in Ocean Pines, which disposes of plaintiffs' due process arguments. The court notes, however, that those arguments rest largely on anecdotal accounts of assessor practices, an unpublished opinion of another Judge of this court, and a discovery order in a matter in which plaintiffs' counsel serves as counsel for an amicus curiae. There is no credible record before this court of systemic violations of the procedural or substantive due process rights of plaintiffs or any property owners.
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Plaintiffs argue that the assessor's information requests failed to comply with N.J.S.A. 54:4-34 because the version of the statute included in the requests was not an exact rendition of Chapter 91. The text of the requests departs from the statute in three minor respects: the assessor deleted a hyphen between the words "income" and "producing" on two occasions and presented the statute as two paragraphs instead of one. The Appellate Division's opinion in Waterside Villas Holdings, LLC v. Township of Monroe, 434 N.J. Super. 275 (App. Div. 2014), certif. pending, effectively disposes of plaintiffs' argument on this point.
In Waterside Villas, the tax assessor sent to the property owner a Chapter 91 request for income and expense information. Id. at 280. The request included a recitation of N.J.S.A. 54:4-34 from which the word "may" was omitted in the provision of the statute providing that the property owner "may be examined on oath by the assessor . . . ." Id. at 281-82. The property owner, relying on the then-recent Tax Court opinion in Fairfield Dev., supra, argued that the error rendered the assessor's request invalid and negated application of the appeal-limitation provision of the statute. Id. at 285. The Appellate Division disagreed. The court concluded that an assessor's information request that included "a copy of the statute that omits critical and substantive statutory provisions" violates "principals of fair dealing [that] preclude the assessor from seeking relief under the statute." Id. at 287 (quotations omitted). The court continued: "However, where, as here, the omission is minor and inadvertent, does not alter the substance of the statute, and does not prejudice the property owner, the municipality is still entitled to dismissal pursuant to N.J.S.A. 54:4-34." Ibid.
Here, as was the case in Waterside Villas, the "minor alteration in the statute seized upon by plaintiff did not obscure or omit any substantive provision in the statute, and did not prejudice plaintiff any respect. Consequently, plaintiff was not entitled to any equitable relief from the requirements of N.J.S.A. 54:4-34." Id. at 288.
Plaintiffs do not in any other respect challenge the validity of the assessor's information requests or dispute their failure to respond to those requests. They will, therefore, be limited to an Ocean Pines reasonableness hearing for the five Frank Investments, Inc. parcels and one ASF Properties parcel that were the subject of the assessor's information requests.
The court will issue Orders: (1) granting defendant's motions for relief pursuant to N.J.S.A. 54:4-34; (2) establishing discovery deadlines and hearing dates for plaintiffs' Ocean Pines reasonableness hearings; and (3) denying plaintiffs' cross-motions.
Very truly yours,
Patrick DeAlmeida, P.J.T.C.