Opinion
Docket No. 008543-2010 Docket No. 007005-2011
07-19-2012
Chai Center for Living Judaism v. Township of Millburn
Via Electronic Mail Robert D. Blau Blau & Blau Anthony Marchese, Esq. Nowell Amoroso Klein Bierman, P.A.
NOT FOR PUBLICATION WITHOUT APPROVAL OF
THE TAX COURT COMMITTEE ON OPINIONS
Mala Narayanan
JUDGE
Via Electronic Mail
Robert D. Blau
Blau & Blau
Anthony Marchese, Esq.
Nowell Amoroso Klein Bierman, P.A.
Dear Counsel:
This letter constitutes the court's opinion in the above-referenced matters. Plaintiff Chai Center for Living Judaism ("Chai Center") moved for summary judgment arguing that the residence located at 1 Jefferson Avenue, Short Hills, New Jersey, designated as Block 2306, Lot 10 ("Subject") is tax-exempt for tax years 2010 and 2011 under N.J.S.A. 54:4-3.6. Defendant ("Millburn") opposed the motion claiming there are material facts in dispute as evidenced in the zoning litigation concerning the Subject. The court finds that Chai Center is eligible for religious use exemption for both tax years because it is undisputed that the Subject was actually used for the conduct of religious services. Chai Center is eligible for exemption under N.J.S.A. 54:4-3.6 regardless of the fact that it had claimed exemption as a parsonage in its Initial Statement filed with Millburn's assessor, and despite the fact that in collateral zoning proceedings regarding the Subject, Chai Center's employee, Rabbi Bogomilsky, was not certain as to the actual number of attending congregants. Therefore, Chai Center's motion for summary judgment is granted. UNDISPUTED FACTS
Chai Center is a non-profit New Jersey corporation organized exclusively for religious purposes. Per its Restated Articles of Incorporation, Chai Center's activities are community outreach, "dedicated to the conduct of Orthodox Jewish religious services . . . cultural activities connected with Jewish holidays throughout the year, and the conduct of [free] classes . . . in various subjects in Jewish ritual and philosophy."
Chai Center owns the Subject which consists of a single family 3-story residence with an attached garage. Previously owned by Rabbi Bogomilsky, a full-time employee of Chai Center, the Subject was transferred to Chai Center in September of 2009. For each tax year 2010 and 2011, the Subject was assessed as follows:
Land $ 779,100
Improvements $1,238,600
Total $2,017,700
Rabbi Bogomilsky is an ordained Rabbi of over twenty years. He lives with his family at 437 Millburn Avenue, which he purchased on April 5, 2009 but transferred to Chai Center on July 27, 2009. He certified that this is his primary residence.
Since 2007 Chai Center has operated a Shul (synagogue) at the Subject. Rabbi Bogomilsky is primarily responsible for officiating religious services at the Shul. Religious services are held on Mondays and Thursdays at 7:00 a.m., Fridays at 6:00 p.m., Saturdays at 9:00 a.m., and Sundays at 9:00 a.m. Chai Center also offers "a full range of programs, including an adult education program, a Hebrew school and family holiday celebrations" at the Subject.
Unlike many other religious congregations, the Shul does not require formal/firm memberships. Thus, it does not maintain any membership records. Nor is there any written record indicating the actual total number of congregants associated with the Shul. The Rabbi certified that on an average, ten to thirty congregants attend the weekly religious services, while about 150 congregants attend and participate in the services on major Jewish holy days.
The Subject has habitable living quarters. Since transportation by automobile is prohibited by Jewish law on Sabbaths, and because of the considerable distance from the Rabbi's primary residence to the Subject, the Rabbi resides at the Subject from Friday afternoon until Saturday night. He also resides in the Subject on each of the major Jewish holidays. Zoning Proceedings
The Subject has been the focus of ongoing zoning ordinance proceedings and litigation. In February 2009, prior to the Subject being transferred to Chai Center (i.e., when owned by the Rabbi), Millburn had sued the Rabbi, Chai Center and the Shul. Millburn alleged that these parties violated certain sections of its zoning ordinance by using the Subject, the then-primary residence of the Rabbi, as a house of worship. Millburn's complaint explicated that the Shul is the "synagogue component of the Chai Center, conducting [weekly] religious services at the [Subject]" and contained certifications that the Subject was the Rabbi's residence, that religious services were being held, and that several congregants were attendees.
The litigation was settled in July 2009 whereby the parties dismissed their claims without prejudice. Among other stipulations, the Rabbi agreed to file a zoning application, and further, to abstain from materially increasing the frequency and scope of the prayer meetings pending finalization of such application.
Subsequent to the transfer of the Subject from the Rabbi to Chai Center, Millburn filed another complaint in the Superior Court in 2011, claiming breach of contract, good faith and fraud in connection with the 2009 litigation settlement. The factual basis was that the settlement was predicated upon the Rabbi continuing to reside at the Subject (which in turn, was the basis for the Rabbi having a constitutional right to "home prayer and home ritual" with the attendees), and that once the Rabbi and his family moved out, the settlement was void and the zoning laws had to be complied with. This litigation is pending. Tax Exemption For Tax Year 2010
On October 30, 2009, Chai Center filed an Initial Statement seeking tax exemption for the Subject with Millburn's tax assessor. The Statement noted that the Subject was used "entirely" for Chai Center's organizational purposes of "religious prayer and educational programming" and that the actual use of the improvements was for "parsonage."
By letter of December 2, 2009 Millburn's assessor denied the exemption request. The assessor stated that she consulted with Millburn's tax counsel regarding Chai Center's application but did not elucidate any reason for denying the exemption.
Chai Center filed a timely complaint in Tax Court against the tax assessment of $2,017,000. Millburn filed a counterclaim. Tax Exemption For Tax Year 2011
In its 2011 Initial Statement for tax exemption, Chai Center indicated that the Subject was used "entirely" for Chai Center's organizational purposes, i.e., "religious purposes." It also stated that the actual use of the Subject's improvements was for "parsonage and prayer services."
The assessor denied the exemption indicating that she had consulted with Millburn's tax counsel regarding the application but did not provide any reason for denying the exemption.Chai Center filed a timely direct appeal to the Tax Court challenging the 2011 assessment of $2,017,700. Millburn did not file any counterclaim. FINDINGS
The Initial Statement described the improvements as a "3 story house and garage" comprising 6,000 square feet whereas the 2010 application listed the same as a 3-story house and 3-car garage with 3,387 square feet. These distinctions are not an issue here. Although the assessor's letter denying the exemption referenced the Subject and the Rabbi's primary residence at 437 Millburn Avenue, only the former is the subject of the instant litigation.
N.J.S.A. 54:4-3.6 permits an exemption from local property tax if the property is actually used for religious purposes. The statute, as relevant here, exempts,
all buildings actually used in the work of associations and corporations organized exclusively for religious purposes, including religious worship, or charitable purposes, provided that if any portion of a building . . . is otherwise used for purposes which are not themselves exempt from taxation, that portion shall be subject to taxation and the remaining portion shall be exempt from taxation, and provided further that if any portion of a building is used for a different exempt use by an exempt entity, that portion shall also be exempt from taxation . . .Plainly, the statute requires that the property must be actually used in the work of an entity organized exclusively for religious purposes. Township of Teaneck v. Lutheran Bible Inst., 20 N.J. 86, 88 (1955). The claimant has the burden of proving entitlement to a tax exemption. Friends of Ahi Ezer Congregation, Inc. v. City of Long Branch, 16 N.J. Tax 591, 596 (Tax 1997). The rationale lies in the fact that statutes granting exemption from taxation represent a departure and consequently are strictly construed against those claiming the exemption. City of Long Branch v. Monmouth Med. Ctr., 138 N.J. Super. 524, 531 (App. Div. 1976).
It is undisputed that Chai Center is a non-profit corporation organized for religious purposes. It is the owner of the Subject, and was the owner as of the relevant assessment dates, i.e., October 1, 2009 and October 1, 2010. It is undisputed that the Subject is used to operate a Shul, and related religious, educational and cultural activities. The evidence before the court shows that the Subject is actually used for religious services several times a week and on Jewish high holy days.
Millburn contends that in the zoning proceedings concerning the Subject, the Rabbi had stated that he was unsure as to the actual number of congregants attending or visiting the Subject. Additionally, in litigation concerning the zoning issue, the Rabbi had stated that the Subject was only partially used for religious services, and then only for small amounts of time. These facts, Millburn states, raise credibility issues as to Rabbi Bogomilsky's certification in this matter, which would preclude summary judgment relief.
However, the amount of time or number of days that are spent conducting services, or the number of attendees that comprise a congregation are not bases for deciding the eligibility for a religious use tax exemption. Constitutional guarantees of religious freedom restrict courts in their inquiry into what constitutes a congregation of a religious body. Mesivta Ohr Torah of Lakewood v. Township of Lakewood, 24 N.J. Tax 314, 330 (Tax 2008). If an "institution . . . conducts religious services several times a week in one location and trains people in its religious tenets . . . [it] must be considered a religious congregation . . . ." Goodwill Home and Missions, Inc. v. Garwood Borough, 281 N.J. Super. 596, 602 (App. Div. 1995), appeal dism. 143 N.J. 317 (1995). While a congregation must include "more than merely the pastor and his family," courts do not "assign any weight to the size of the congregation beyond the pastor and his family." Roman Catholic Archdiocese of Newark v. City of East Orange City, 17 N.J. Tax 298, 311 (Tax 1998). See also Mesivta Ohr Torah of Lakewood, supra, 24 N.J. Tax at 332 (rejecting the township's argument that unless it is provided with the actual number and identity of the congregants it cannot verify a claim for exemption because "[a]ttempts to contact individual members of the congregation and question the sincerity of their allegiance to Sharei Slomo might well run afoul of the Appellate Division's cautionary directive in Goodwill Home and Missions, supra, to refrain from too intrusive an inquiry into the operations and structures of a religious organization seeking a parsonage exemption"). Thus, the Rabbi's representations in this regard, at and during the zoning proceedings, are of no moment here, especially because those representations were made prior to the first assessment date of October 1, 2009, and before Chai Center became owner of the Subject.
The Appellate Division has ruled that non-compliance with a township's zoning regulations cannot and should not stand in the way of a grant of statutory tax exemption, whether for religious purposes or otherwise. See Society of Holy Jesus v. City of Summit, 418 N.J. Super. 365, 386 (App. Div. 2011) (N.J.S.A. 54:4-3.6 "does not require the property be a lawful use under the municipality's zoning ordinance in order to qualify for tax exemption").
Millburn argues that there are materially disputed facts because in response to its interrogatories in this litigation, Chai Center stated that the Rabbi used the Subject as his living quarters. However, the Rabbi certified that his primary residence was at 437 Millburn Avenue. Millburn did not challenge or offer evidence to refute this assertion. Indeed, it relied upon its Municipal Clerk's certification provided in the 2011 Superior Court litigation that the Rabbi's primary residence was 437 Millburn Avenue because "as of the October 20, 2010" voter registration list, the Rabbi was a registered voter at this address, whereas there were no registered voters affiliated with the Subject's address.
Millburn alleged that the Rabbi had purchased another home (439 Millburn Avenue) in 1997. However, this fact is of no moment since no exemption is being claimed for that property, and further, that property is rented out by the Rabbi.
In any event, the fact that the Rabbi uses the Subject during Friday into Saturday nights is not fatal to the claim for exemption. First, the statute does not condition the exemption on exclusivity of use. See Mesivta Ohr Torah, supra, 24 N.J. Tax at 331 ("[t]here is no requirement in N.J.S.A. 54:4-3.6 that a house of worship occupy the entire building in which it is located").
Second, courts have recognized that a religious use exemption can be granted to an otherwise non-exempt residence if the same is "exclusively devoted to other religious purposes of the owner." Greater Emmanuel Apostolic Faith Tabernacles v. Township of Montclair, 4 N.J. Tax 618, 623 (Tax 1982). Thus, in City of Long Branch v. Ohel Yaacob Congregation, 20 N.J. Tax 511, 520 (Tax), aff'd, 21 N.J. Tax 268 (App. Div. 2003), the Tax Court used the "broader" exemption in N.J.S.A. 54:4-3.6 for religious uses even after it had rejected the claimant's claim for exemption of a residence as a parsonage because the use and occupation of the residence was a reasonable necessity for the charitable purposes or operations of the claimant. See Ohel Yaacob Congregation, supra, 20 N.J. Tax at 524-25 (subject property that housed visiting clergy was "necessary for the proper and efficient operation of the Congregation during the summer months, and is not a mere convenience for the visiting clergy or for the Congregation" who served the needs of the congregation).
The court, however, cautioned that "although a residential property not amounting to a parsonage may be exempt as used for religious purposes, a residence principally used as a parsonage is not eligible for the same exemption and is limited to the express provisions for parsonages." Ohel Yaacob Congregation, supra, 20 N.J. Tax at 527.
Here, Rabbi Bogomilsky uses the Subject from Friday afternoon until Saturday night and on the Jewish high holy days for sleeping accommodations because his primary residence is not within walking distance of the Subject, and automobile transportation is prohibited by Jewish law on certain days. However, there is no dispute that he conducts religious services at the Subject on Fridays at 6:00 p.m., Saturdays at 9:00 a.m., and Sundays at 9:00 a.m. and on all the major Jewish holy days. As such, his use of the Subject is not just for his mere convenience. Rather, it enables him to fully carry out his duties and functions as a Rabbi, and is consistent with and in furtherance of Chai Center's religious objectives and operations. Therefore, the limited use of the Subject for the Rabbi's convenience is reasonably necessary for the Subject's religious use.
Millburn's final argument is that Chai Center's Initial Statement for exemption for both tax years stated "parsonage" as the basis for exemption, but the plaintiff's summary judgment motion had insufficient facts in support of the same. Therefore, there are materially disputed facts. Chai Center disagrees by pointing out that if the absence of an Initial Statement cannot bar the exemption, then an unstated alternative basis for exemption is also not a bar.
Millburn also maintained that Chai Center's motion should be stricken for failure to include a statement of undisputed material facts pursuant to R. 4:46-2(a). Here, however, the Rabbi's certification was incorporated into the motion as the materially undisputed facts. The brief in support of the motion cited to and referenced these certified assertions as the factual bases for the relief sought. Therefore, the court treats the certification submitted by and attached to Chai Center's motion as its statement of undisputed material facts. This conclusion in no way undermines the importance of complying with the court rules. If in this case a certification by someone with personal knowledge of the facts was absent, a dismissal without prejudice may very well have been granted.
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The court finds that the applications' stated bases for exemption as "parsonage" and "parsonage/prayer services" do not raise materially disputed facts. Plaintiff conceded that it does not have sufficient facts in support of a grant of summary judgment in its favor on the basis of use of the Subject as a parsonage, and therefore, is not seeking exemption for the Subject on this ground. Further, there was no reason provided by the assessor for either tax year for her denial of the exemption claimed on the applications, which would have enabled this court to discern the factual basis for a dispute.
Nor does the claim for parsonage exemption on the Initial Statement estop Chai Center from claiming exemption on the basis of actual religious use of the Subject. In Emanuel Missionary Baptist Church v. City of Newark, 1 N.J. Tax 264 (Tax 1980), this court held that the statutory requirement of filing an Initial Statement claiming exemption is a procedural device which cannot be the substantive basis for the grant or denial of a tax exemption. The court stated as follows:
the assessor's failure to obtain the statement does not vitiate the exemption otherwise allowable . . . . The language of N.J.S.A. 54:4-4.4 does not permit the construction that the statement thereby contemplated is a condition precedent to the allowance of an exemption under N.J.S.A. 54:4-3.6. While exemptionSee also Township of West Orange v. Joseph Kushner Hebrew Academy, 13 N.J. Tax 48, 54 (Tax 1993) ("[f]iling of the [triennial] statement required by N.J.S.A. 54:4-4.4 is not a condition precedent to exemption under N.J.S.A. 54:4-3.6"). Indeed, a taxpayer cannot rely upon or use the Initial Statement as a basis or justification for failing to file timely appeals from tax assessments for subsequent tax years. See Boys' Club of Clifton, Inc. v. Township of Jefferson, 72 N.J. 389, 405 (1977) ("[t]he duty of the municipal assessor to obtain a statement from the owner concerning the exempt status of the property every three years, N.J.S.A. 54:4-4.4, does not excuse the owner from filing an appeal, even though a judgment of exemption had been entered for the prior year").
statutes are strictly construed against the exemption claimants . . . the principle of strict construction must never be allowed to defeat the evident legislative design . . . . The evident legislative design is set forth with great particularity in N.J.S.A. 54:4-3.6, while N.J.S.A. 54:4-4.4 merely provides for the monitoring and verification of exemption claims by the assessor, with the triennial statement serving as the basic audit document.
[Ibid. at 267-68]
There is simply no authority for the proposition that a statement made on the Initial Statement under N.J.S.A. 54:4-4.4 forecloses a property owner from presenting facts to establish entitlement to exemption as of October 1 of the pre-tax year, under an alternate statutory basis. The pertinent substantive inquiry for property tax exemption in New Jersey is, and always has been, whether the property is entitled to exemption according to the facts as they existed on October 1 of the pre-tax year. Atlantic County New School, Inc. v. City of Pleasantville, 2 N.J. Tax 192, 197 (Tax 1981). Consequently, the basis of an exemption listed on the Initial or triennial statement under N.J.S.A. 54:4-4.4 should not foreclose the claimant from seeking exemption on any statutorily permissible grounds. A holding to the contrary would subvert the language, intent and purpose of N.J.S.A. 54:4-3.6 because it would prevent an otherwise eligible claimant from receiving statutorily permitted property tax exemption. CONCLUSION
A motion for summary judgment should be granted in the absence of genuine issues of material facts. R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 528-29 (1995) (summary judgment will be granted "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law"). All favorable inferences must be made in favor of the non-moving party. Brill, supra, 142 N.J. at 540. If the determination of material facts depends primarily on credibility evaluations, then summary judgment must be denied. Pressler & Verniero, comment. 2.3.2 to R. 4:46-2(b) (GANN 2012) (citing Parks v. Rogers, 176 N.J. 491, 502 (2003)).
The court here finds that there are no materially disputed facts of legal significance which would require a trial and determination of the issue by a fact finder. Millburn merely raises a debatable question as to "how much" of the Subject is used for religious purposes by positing the uncertainty as to the number of congregants. However, the quantum of use or membership is not relevant to the court's inquiry of whether the Subject is actually used for religious purposes, therefore a dispute over such fact is not material or legally significant. Similarly, as expounded above, the other issues raised by Millburn are undisputed and legally insufficient to deny summary judgment relief. See Merchants Express Money Order Co. v. Sun Nat'l Bank, 374 N.J. Super. 556, 563 (App. Div. 2005) (holding that disputes over irrelevant facts will not bar summary judgment).
Based upon the undisputed facts that the Subject was owned by Chai Center, a non-profit entity organized exclusively for religious purposes, on the relevant assessment dates, and based upon the record before the court that the Subject was actually used for such religious purposes as of those dates, the court finds that the Subject was entitled to exemption from property tax for tax years 2010 and 2011.
Chai Center's motion for summary judgment is granted. An Order will be entered by this court in accordance with this opinion.
Very truly yours,
____________________________
Mala Narayanan, J.T.C.