Opinion
DOCKET NO: 000007-2012
04-23-2012
CITY OF EAST ORANGE et al. Plaintiffs, v. TOWNSHIP OF LIVINGSTON et al. Defendants
Block 6100: Lots 3,4,7-10,14-16,18,19,21, 24,25,
Block 6101: Lot 31
Block 6103: Lots 2,3
Block 6200: Lot 2
Block 6300: Lots 11,13,18,20-22,25-27
Block 6800: Lots 1,3,4,6-9,42
Block 6900: Lot 25
Block 6901: Lots 2,5
Block 700: Lots 1,2
CASE MANAGEMENT ORDER
THE ABOVE MATTER having been transferred to this court by the New Jersey Superior Court, Chancery Division, General Equity Part (bearing docket number ESX-C-000277-10) by its Order dated December 13, 2011 (hereinafter "Transfer Order"), following the reasons placed on the record by that court on November 29, 2011; and the matter having thereafter been docketed with the Tax Court under the above-captioned docket number; and the parties subsequently having appeared before this court for an in- person conference by and through their respective counsel, Schwartz Simon Edelstein & Celso, L.L.C., for and on behalf of plaintiffs (Aaron Mizrahi, Esq. appearing) and Nowell, Amoroso, Klein, Bierman, P.C., for and on behalf of defendants (Anthony Marchese, Esq. appearing); and each party disagreeing with the interpretation of the issues to be decided by the Tax Court pursuant to the language of the Transfer Order, specifically, whether the Tax Court may decide whether it has subject matter jurisdiction; and both parties having presented their respective positions in this regard in writing; and for the reasons set forth in the attached Opinion; and for good cause shown:
IT IS ON THIS 20th day of April 2012, ORDERED as follows:
1. Parties shall file any dispositive motions regarding this court's subject matter jurisdiction made returnable May 25, 2012.This Case Management Order has been mailed electronically by the court to counsel for Plaintiff and Defendant.
2. Parties shall comply with the court rules regarding the time for and the manner of filing such dispositive motions.
3. The legal contentions provided to this court by the parties in their respective submissions for purpose of construing the Chancery Division's Transfer Order will be considered by this court in connection with the parties' dispositive motions and need not be repeated in their moving papers provided the parties notify the court of their desire to incorporate those legal contentions by reference in their dispositive motions. Parties are however free to supplement, amplify or modify any of those legal contentions in their dispositive motions.
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Hon. Mala Narayanan, J.T.C.
OPINION
PROCEDURAL HISORY AND FINDINGS OF FACTS:
Plaintiffs City of East Orange and the Board of Water Commissioners (hereinafter "East Orange") own the properties located in defendant township (hereinafter "Livingston") and identified in the caption (hereinafter "Subject"), which are used and known as the East Orange Water Reserve. For tax year 2008, the local property assessment on the Subject was $2,013,500 with a consequent tax of about $297,403.
Effective for tax year 2009, Livingston implemented a municipal-wide revaluation. As a result, the local property assessment on the Subject increased to $58,604,900. The consequent tax was about $1,156,860. For tax year 2010, Livingston reduced the assessment to $35,919,800 and the resultant tax was about $739,590.
For tax years 2009 and 2010, East Orange did not file local property tax appeals challenging the assessments. However, according to its moving papers before the Chancery Division, it paid $987,636.43 as taxes for tax years 2009 and 2010 based on the pre-2009 assessments.
But see infra, n.3.
On September 28, 2010, Livingston issued a tax sale notice for Block 6300, Lot 18, a 95.66-acre parcel of the Subject due to delinquent property taxes for the fourth quarter 2009 in an amount of $415,960.02 (inclusive of costs and interest). The scheduled tax sale date was October 29, 2010.
East Orange filed a complaint in the federal court for the district of New Jersey challenging the tax sale certificate and the proposed sale of the same, but subsequently withdrew the complaint. It then filed a complaint and an Order to Show Cause in the Chancery Division for temporary restraints and injunctive relief enjoining Livingston from conducting the tax sale on December 2, 2010. The complaint stated three separate counts for relief: (i) that Livingston's assessments were premised upon a discriminatory valuation of the Subject; (ii) that the proposed tax certificate sale violated the New Jersey Green Acres Land Acquisition and Recreation Opportunities Act, N.J.S.A. 13:8A-35 et seq. ("Green Acres Act"); and (iii) that portions of the Subject were statutorily tax-exempt as being used for "public purposes." It also alleged that of the forty (40) notices of assessment for tax year 2009 prepared by Appraisal Systems, Inc., the appraisal company engaged by Livingston to perform its revaluation, thirty-two (32) were addressed to "East Orange, City Of" and mailed to "City Hall, East Orange, NJ 07109" but did not include the street address of "44 City Hall Plaza," and the remaining eight (8) reflected the correct street address (99 S. Grove Street), but contained the incorrect zip code. East Orange stated that because of these errors, neither it nor the Reservoir received any of the forty mailed notices, and therefore, neither entity was aware of the increased assessments for 2009 until the tax bill arrived, which occurred after the deadline for appealing the assessments.
In its answer to the verified complaint, Livingston admitted that the notices were sent to the addresses as alleged by East Orange, but denied knowledge of their alleged incorrectness, or of the lack of receipt by East Orange. Livingston also opposed the Order to Show Cause on grounds that East Orange never appealed the local property tax assessments pursuant to the tax statutes, nor had it fully paid the assessed taxes (upon which the tax sale certificate was based), therefore, it could not attack the validity of the tax assessments in the Chancery Division.
On December 13, 2010, after hearing oral arguments, the Chancery Division temporarily restrained and enjoined Livingston from conducting a sale of its tax sale certificate, and scheduled a hearing as to the issuance of a preliminary restraint and injunction in this regard. Subsequently, and in connection with the oral arguments, East Orange addressed the Chancery Division's concerns on the jurisdictional issues by its letter of January 21, 2011, and suggested that given the Chancery Division's expertise, it should retain jurisdiction over the second and third counts of the complaint, and pursuant to N.J.S.A. 2B:13-2, transfer the first count of the complaint to the Tax Court with instructions "that the Tax Court proceeding then be stayed pending the disposition" of the other two counts by the Chancery Division.
By its letter of January 26, 2011, Livingston opposed East Orange's suggested bifurcation and requested transfer of the entire matter to the Tax Court if the Chancery Division determined that East Orange's complaint was a tax appeal. Alternatively, if the Chancery Division determined that its forum was proper since the complaint sought relief of temporary restraints, then the complaint should not be transferred at all. It maintained that there should "be one forum and one forum only where the issues raised are determined."
On February 14, 2011, the Chancery Division enjoined Livingston from selling tax sale certificates for any portion of the subject property or acting upon the tax assessments.
In September 2011, both parties filed dispositive motions. Livingston moved before the Chancery Division for a summary judgment in its favor on grounds that East Orange's complaint was nothing more than a challenge to the tax assessments for tax years 2009 and 2010, which it failed to raise in a timely manner before the Tax Court of New Jersey; and further because East Orange had failed to pay the taxes pending its complaint against the assessments giving rise to the taxes. Livingston maintained that as of September 22, 2011, the total taxes due from East Orange for tax years 2009, 2010, and 2011, after credit for taxes paid, was $1,805,558.27.
East Orange moved for partial summary judgment on grounds that the proposed tax sale certificate violated the Green Acres Act, and further that portions of the subject property were statutorily tax-exempt. In its moving papers and during oral argument, East Orange admitted that it did not file property tax appeals in the Tax Court for tax years 2009 and 2010. It also admitted that it paid the amount of property taxes which were assessed by Livingston upon the subject property prior to the 2009 revaluation, and thus, for tax years 2009 and 2010 paid taxes in an amount of $987,636.43 which was less than the assessed amounts.
East Orange timely filed a local property tax appeal for tax year 2011 in the Essex County Board of Taxation, which Board affirmed the assessments, and from which affirmance East Orange filed a timely complaint in the Tax Court. That appeal is docketed as 019309-2011 and is assigned to and pending with the undersigned judge of the Tax Court but is not a part of this Opinion and Case Management Order.
In its position paper to this court, East Orange stated that it has been paying about $327,142.77 "in yearly property taxes on the" Subject Property, "which is 110% of the 2008 assessment."
On November 29, 2011, the Chancery Division heard oral arguments of the parties and placed its reasons for its decision to issue the Transfer Order on the record. The Chancery Division noted that the "real issue" posited to it in the parties' dispositive motions was "whether or not there is jurisdiction in [the Chancery Division] to adjudicate all of the issues" in the complaint. T33-23 to 25. The court stated that it was at the point where it had "to start dealing with expert issues about valuation, about the assessment procedure, about tax rates, about possibly, . . . formulas and deviations," which were the "meat and potatoes . . . of deciding whether something has been over assessed of whether or not it is confiscatory, violative of due process . . . ." T34-1 to 9.
The court adopts the rules applicable to the Appellate Division, R. 2:6-8, for referencing trial transcripts in its abbreviated form. Thus, T33-23 to 25 indicates the transcript at page 33, lines 23 to 25.
The Chancery Division analyzed the tax cases presented by East Orange and Livingston in support of their respective positions on whether the validity of the tax assessments could be decided by the Chancery Division, and found the cases inapplicable either procedurally (for instance, cases were initially brought before the Tax Court) or substantively (federal versus state jurisdiction in connection with analysis of irreparable injury), T35 to T39; T40-1 to 3, and stated that the cases did not "support chancery jurisdiction" or that "jurisdiction in" the Chancery Division was not "furthered" by those cases or that the cases did not support "plaintiffs' claim of jurisdiction." T37-7 to 10; T39-1 to 3. The court also observed that challenges to tax assessments whether or not based on constitutional grounds, "don't just go to chancery division" because "tax courts have entertained constitutional claims." T34-22 to 25; T35-1.
The Chancery Division also analyzed tax cases addressing the failure to pay taxes as a bar to hearing the complaint vis-a-vis relaxation of such payment in the interest of justice, but noted that those cases were initiated in the Tax Court, and required proof, whereas East Orange's case was not even at the "stage" of such proofs since the Chancery Division had yet to decide whether it even had jurisdiction to consider the issue. T40-5 to 25; T46-1 to 23.
The court noted that it was also "not appropriate for [the Chancery Division] to . . . reach" the "merits" of counts two and three of the complaint because that court did "not have any more jurisdiction over those issues than [it had] over count one . . ." because those issues "interface[ed] with the tax law scheme," T44-23, and because exemption issues "[are] what" the Tax Court does "all the time." T45-10 to 12. The Chancery Division found that from a "strictly . . . jurisdictional" point of view, it "should not touch the merits" of the issues, which are "better addressed to the competence of the tax court and from there . . . to the Appellate Division." T45-14 to 19.
The Chancery Division however found that it had jurisdiction to grant restraints, and "that [is] all this Court feels it should do." T46-21 to 23. Therefore, it continued the status quo of a permanent injunction "until such time as the issues are determined." T46- 20 to 23; T47-9 to 12.
The court then ruled that as to "the failure to timely file" tax appeals, the same "is mitigated and arguably even excused by the facts brought before this [c]ourt which show that Livingston was at least complicit in that by the deficiencies in the giving of notice," which is why East Orange "came" to the Chancery Division, namely, "because the[y] were too late." T43-5 to 10. The court stated that this fact "required some apportionment of fault . . . and in a court of equity" constituted "some grounds for relief in the interest of justice." T43-11 to 13.
With respect to East Orange's failure to pay the full amount of the assessed taxes (which Livingston argued was a basis for dismissal under the tax statutes), the Chancery Division ruled that "East Orange did pay almost a million dollars, paid that was due before the situation, and their world changed with their reval." T43-15 to 17. After taking "some judicial notice" of the fact that East Orange was a town which had "fallen on hard times," T43-20 to 24, and accounting for the fact that the "litigants are governmental bodies" whose "controversy impacts the public" the Chancery Division ruled that a lifting of the injunction and dismissal of the complaint was improvident especially "if the special expertise of an administrative body is not brought to bear on all of the[] issues." T44-4 to 14.
The Chancery Division concluded by holding that under "the totality of the circumstances" and "in the interest of justice" it was transferring the case to the Tax Court "for determination of the issues and with a direction of them to hear the matter notwithstanding the failure to pay the full tax and failure to file timely, for the reasons that [the court] stated on the record." T47-13 to 17. It ruled that its "dismissal [of the] matter here" was without prejudice, which is "really what it is . . . a dismissal of the matter here and transferring it to the tax court." T47-24 to 25; T48-1. The court noted that East Orange would not be precluded from returning to the Chancery Division should the Tax Court decide not to "determine the Green Acres issue" because the Chancery Division's dismissal was "not a dismissal on the merits." T48-2 to 9. However, what the Chancery Division "anticipat[ed]" was that the "tax court will take hold of everything and render a determination, and it goes up from there to the Appellate Division." T48-10 to 13.
In response to East Orange's proposed form of the Transfer Order, Livingston, by its letter of December 6, 2011, requested the Chancery Division to strike out portions of paragraph 2, specifically, strike out "and mitigating factors" and "notwithstanding the following defects alleged by Defendants: (i) Plaintiffs' failure to file timely property tax appeals for the 2009 and 2010, as set forth in N.J.S.A. 54:3-21; and (ii) Plaintiffs' failure to pay the disputed property tax assessments in full pending appeal pursuant to the requirements set forth under N.J.S.A. 64:3-27 . . . ."
The Chancery Division issued its Transfer Order on December 13, 2011, striking out "and mitigating factors" and "the following defects alleged by Defendants: (i)" but retained the remainder of paragraph 2 so that the paragraph read:
2. For the reasons placed upon the Record by this Court in its Opinion of November 29, 2011, the Tax Court of New Jersey is hereby directed to hear this matter on the merits, notwithstanding Plaintiffs' failure to file timely property tax appeals for 2009 and 2010, as set forth in N.J.S.A. 54:3- 21; Plaintiffs failure to pay the disputed property tax assessments in full pending appeal pursuant to the requirements set forth in N.J.S.A. 54:3-27.
After the transfer, the matters were docketed with the Tax Court. At the parties' request, this court held a status conference, and requested the parties to formalize their respective positions in writing. East Orange maintained that this court should proceed to hear the merits of East Orange's complaints, namely, whether or not the tax assessments were valid (because they were allegedly unconstitutionally confiscatory and illegal, or because East Orange was partially tax-exempt), and whether the Green Acres law was violated. It stated that the Chancery Division has transferred the matter to be heard regardless of any issues of timely filing of appeals or failure to pay all taxes, therefore, all that is left for this court to do is to exercise its expertise and decide the substantive merits of the assessments. This conclusion, East Orange argued, is derived from the explicit language in the Transfer Order, and is evident from a reading of the Chancery Division's bench opinion. According to East Orange, if this court were to decide its (ie., the Tax Court's) subject-matter jurisdiction, it would not only "obviate the purpose" of the Chancery Division's injunction, but also "improperly subject the parties to inconsistent determinations." It also argued that Livingston is collaterally estopped from raising any jurisdictional issues since the same were already (and finally) decided by the Chancery Division, as to which Livingston failed to file a motion for reconsideration or an appeal. East Orange thus requested this court to set dates for proceeding with the case (discovery deadlines and the like).
East Orange also pointed out that even if this court were to analyze its subject-matter jurisdiction in the context of the Transfer Order, this court has sufficient authority to waive or relax the statutory jurisdictional pre-requisites based on (a) the lack of notice of the 2009 assessment; and (b) case law permitting waivers in the "interests of justice," and (c) case law deeming a statute inapplicable where a complaint, like here, raises constitutional claims.
Livingston maintained that this court should first decide whether it has jurisdiction to hear the merits because East Orange had failed to appeal the 2009 and 2010 assessments. It noted that the Transfer Order specifically stated that the matter was not to be construed "as a determination on the merits of any ultimate issue," thus, all the Transfer Order did was to maintain the status quo (restraints and injunction) while this court decided the merits, which would include a threshold determination of whether East Orange's failure to file appeals precluded it from obtaining any relief. Livingston notes that the Chancery Division's statement that it was "anticipating . . . that the tax court will take hold of everything and render a determination" which would be appealed to the Appellate Division, was evidence that the Tax Court had to "determine all issues." It maintains that this conclusion is logical because the Chancery Division did not make any findings of fact or conclusions of law as required by the court rules, and the court's colloquy on the disputed notice issues (T43-5 to 13), which did not distinguish between tax years 2009 or 2010, was not based upon any factual evidence in this regard. CONCLUSIONS
It is undisputed that East Orange did not file property tax appeals for tax years 2009 and 2010. The issue in dispute is whether the Tax Court must first find that it has subject matter jurisdiction to determine the matter transferred to it, or whether this analysis is obviated by the Transfer Order which required this court to decide the merits of the case regardless of East Orange's failure to file timely appeals for both tax years.
Rule 4:3-4(a) provides that "[t]he erior court in which an action is pending may order it transferred to the Tax Court provided that the principal issue or issues raised therein are cognizable in that court." The rules governing the Tax Court, specifically, R. 8:2(a), also provide similarly by stating that the Tax Court has "jurisdiction over any action cognizable in the Superior Court that raises any issue as to which expertise in taxation is desirable and that has been transferred to the Tax Court pursuant to R. 4:3- 4(a)." And the statute creating and governing Tax Courts also provides that this court has jurisdiction "over actions cognizable in the Superior Court which raise issues as to which expertise in matters involving taxation is desirable, and which have been transferred to the Tax Court pursuant to the Rules of the Supreme Court." N.J.S.A. 2B:13-2(b).
The Superior court includes the "the Law Division, and the Chancery Division" and is a "court of original general jurisdiction through the State in all causes." Alid, Inc. v. Township of North Bergen, 180 N.J. Super. 592, 601 (App. Div.1981) (quoting N.J. Const., Art. VI, §3, ¶¶2, 3), appeal dismissed, 89 NJ. 388 (1981).
A review of East Orange's complaint makes it plain that it is attacking the quantum and methodology of Livingston's assessments for tax years 2009 and 2010. In paragraph 38 of the complaint, it states that East Orange "commenced a detailed review of the true value of the [Subject Property] and the methods of valuation and assessment used by Livingston . . . ." In paragraphs 39-42 of the complaint, it alleged that it examined comparable sales used by Livingston and that they were unusable for purposes of setting the assessments. In its First Count (titled "Discriminatory Valuation and Assessment"), paragraph 49 of the complaint, it claimed that the use of the "outdated, obsolete and substantially dissimilar comparable properties, the methods of assessment used for the [Subject] were inapt and improper and their use necessarily involved an unjust and inaccurate result." It also claimed that the assessment was "grossly excessive and virtually confiscatory" because Livingston failed to use or apply the "values of other properties substantially similar" to the reservoir. See Complaint, First Count, paragraph 50. Consequently it sought an invalidation of the assessment. In its Third Count, East Orange claimed a portion of the Subject was exempt under N.J.S.A. 54:4-3.3 (paragraphs 64-67), and sought a declaration that those portions be deemed statutorily tax-exempt.
As such, East Orange's complaint requires this court to examine the merits of Livingston's valuation and valuation methodologies, and whether the property is tax-exempt. These challenges are cognizable in the Tax Court. See N.J.S.A. 54:51A-1 (Tax Court can decide challenges to the "judgment, action or determination of the county board of taxation"); N.J.S.A. 54:51A-2 and N.J.S.A. 54:3-21 (Tax Court can determine challenges to "the assessed valuation of the taxpayer's property" or against discrimination by the assessed valuation of other property in the county, provided the assessed valuation exceeds $1 million). See also Hernandez v. West New York, 18 N.J. Tax 438, 441 (Tax 1999) ("[t]he primary purpose of the Tax Court is to hear tax appeals and other tax related matters from both state agencies and county boards of taxation"). In this connection, the Tax Court can also decide any constitutional issues raised by any party. Weisbrod v. Township of Springfield, 1 N.J. Tax 583, 590 (Tax 1980) ("it is clear that the Tax Court has the judicial power to pass upon the constitutionality of a statute where that statute is properly within the sphere of the Tax Court's subject matter jurisdiction").
Generally, challenges to valuation (quantum and/or methodology) must be timely filed for the Tax Court to have subject matter jurisdiction. McMahon v. City of Newark, 195 N.J. 526, 543-44 (2008) (if a complaint addresses "the quantum or methodology applied in respect of' the assessments "issued by the City's tax assessor" then it is "squarely within the band of cases subject to the established tax appeal process" and if not timely appealed "[is] time-barred and the Tax Court . . . lack[s] jurisdiction to hear the cause"). "[B]oth appealing taxpayers and taxing districts must adhere strictly to the deadlines prescribed by statute. Failure to file a timely appeal is a fatal jurisdictional defect." F.M.C. Stores Co. v. Borough of Morris Plains, 100 NJ. 418, 425 (1985).
The time limits specified by the statute are strictly construed. Thus, "constitutional implications, of themselves [do not] justify waiving, or more candidly, ignoring the" requirement that timely filed property tax appeals lie with the county boards of taxation, and the general rule that administrative remedies must be first exhausted. Macleod v. City of Hoboken, 330 N.J. Super. 502, 508 (App. Div. 2000). Even "challenges to allegedly discriminatory assessments" are not an exception to the well-established rule that "court will not preempt the jurisdiction of the county boards . . . ." Ibid.
Once the court lacks subject matter jurisdiction (due to lapse of statute of limitations), then "consideration of the cause is wholly and immediately foreclosed." Greenberg v. O'Gorman, 200 N.J. Super. 454, 458 (Law Div. 1984) (internal quotations omitted).
Here, if East Orange's complaint was initially filed with the Tax Court, the court would be required to examine whether it had subject matter jurisdiction. Depending on the facts adduced in defense of untimely filing (i.e., lack of notice for tax year 2009 as alleged in the complaint), this court would decide whether the complaint had to be dismissed or remained viable.
However, the complaint was filed initially with the Chancery Division to challenge and forestall Livingston's proposed sale of the tax sale certificate. Although the court found jurisdiction to grant East Orange the equitable relief of continuing injunction and restraints, it decided it lacked jurisdiction to reach the merits of the complaint and noted that it "should not touch the merits" of the issues because they are "better addressed to the competence of the tax court and from there . . . to the Appellate Division." T45-14 to 19. Consequently, it dismissed both parties' summary judgment motions without prejudice.
A dismissal without prejudice is not an adjudication on the merits, and does not preclude a reinstitution of the same claim in a later action. Malhame v. Borough of Demarest, 174 N.J. Super. 28, 30-31 (App. Div. 1980) (quoting Christiansen v. Christiansen, 46 N.J. Super. 101, 109 (App. Div. 1957), certif. denied, 25 NJ. 56 (1957)). See also R. 4:37-2(d) "any dismissal not specifically provided for by R. 4:37, other than a dismissal for lack of jurisdiction, operates as an adjudication on the merits."
Additionally, a summary judgment motion "on the pleadings" is an "an adjudication as to whether an issue requiring trial has been created." Seire v. Police & Fire Pension Comm'n of Orange, 4 N.J. Super. 230, 235 (App. Div. 1949). While such a motion "serves to expeditiously and justly dispose of those matters in which there is no genuine factual issue" a denial of the motion is a "determination that there is an undisposed . . . issue, not a disposition of the issue itself." Ibid. Thus, "the denial of summary judgment preserves rather than resolves issues and therefore does not preclude later reconsideration of matters implicated in the motion." A & P Sheet Metal Co. v. Edward Hansen, Inc., 140 N.J. Super. 566, 573 (Law Div. 1976).
The above principles juxtaposed with the denial of the parties' summary judgment motions, and the language in the Transfer Order that the transfer was not to be "construed as a determination on the merits of any ultimate issue in this matter" means that the entire case, except for the equitable remedies of restraints and injunction upon the enforcement of the tax sale certificate, has been sent to this court for consideration. This in turn means that Livingston is not precluded from raising the issue of untimely filing, and East Orange is not precluded from requiring this court to determine the issues in its complaint.
True, there is some ambiguity whether the Chancery Division made findings on the issue of East Orange's untimely filing, and if it did, whether that is the "law of the case" which this court cannot disturb. The "law of the case" doctrine requires "a legal decision made in a particular matter . . . be respected by all other lower or equal courts during the pendency of that case." Lombardi v. Masso, 207 NJ. 517, 538 (2011) (internal citations and quotations omitted). It is "grounded in the policy that once an issue is litigated and decided in a suit, relitigation of that issue should be avoided . . . unless there is substantially different evidence at a subsequent trial, new controlling authority, or the prior decision was clearly erroneous." Sisler v. Gannett Co., 222 N.J. Super. 153, 159-160 (App. Div. 1987), certif. denied, 110 NJ. 304 (1988). "It is only triggered when one court is faced with a ruling on the merits by a different and co-equal court on an identical issue." Lombardi, supra, 207 N.J. at 539.
The doctrine is a "discretionary rule." State v. Munoz, 340 N.J. Super. 204, 219 (App. Div. 2001), certif. denied sub nom., State v. Pantoja, 169 NJ. 610 (2001). "[A] court is never irrevocably bound before it renders a final decision. The doctrine is to be applied flexibly in the interest of justice, even if it requires relitigation of an earlier ruling prior to final judgment." Munoz, supra, 340 N.J. Super. at 219-20.
Here, the Chancery Division's bench opinion states that the lack of notice issue was raised during the injunction proceedings but its grant of that equitable remedy was not a finding that "there was jurisdiction in this court for purposes of hearing the merits." See T13-20 to 25; T14-1; T15-12 to 25; T16-1 to 10, 19 to 23. Then it recites that "in a court of equity" and on grounds of "interests of justice," East Orange's failure to timely file property tax appeals was "mitigated and arguably even excused by the facts brought before this court" which facts showed that "Livingston was at least complicit in that by the deficiencies of giving notice." T43-6 to 9. T43-6 to 9.
However, the transcript of the summary judgment proceedings makes no mention of which tax year was being addressed by the Chancery Division. Neither did it reveal any facts justifying the untimely filing for 2010, and whether those facts were considered and decided by the Chancery Division. The parties' summary judgment motions also do not indicate that lack of notice of the assessment or any other reason was listed as a material fact in dispute for either 2009 or 2010.
Moreover, while the bench opinion and Transfer Order stated that the Tax Court should hear the matter "notwithstanding the failure . . . to file timely", T47-13 to 25; T48-1, both documents also indicated that Livingston's summary judgment motion was denied without prejudice.
Thus, the logical and reasonable construction of these ambiguities is that the Chancery Division's findings as to East Orange's failure to file timely appeals were predicated upon that court's equitable jurisdiction of "interests of justice" and formed the basis for continuing the restraints and injunction vis-a-vis enforcement of the tax sale certificate. While this Tax Court will not revisit the equitable remedies granted by the Chancery Division, the caveat in the Transfer Order as to lack of timely appeals is not considered or construed by this court as a bar to consider its subject matter jurisdiction. See Gonzalez v. Ideal Tile Importing Co., Inc., 371 N.J. Super. 349, 356 (App. Div. 2004) ("the law of the case doctrine does not obligate a judge to slavishly follow an erroneous or uncertain interlocutory ruling"), aff'd, 184 N.J. 415 (2005), cert. denied 546 U.S. 1092 (2006). This court's ability to examine its own jurisdiction is also required because of the well-established principles that (i) the Tax Court is a statutory court of limited jurisdiction, McMahon, supra, 195 N.J. at 542; (ii) statutes of limitations are non-relaxable and strictly construed, Bass River Township v. Driscoll, 3 N.J. Tax 177, 182 (Tax 1981); and (iii) taxes are the "lifeblood" of the government therefore a municipality is entitled to rely upon revenues from assessments that are fixed and final due to lapse of the statute of limitations, Galloway Township v. Petkevis, 2 N.J. Tax 85, 92 (Tax 1980) ("it is clear that our Legislature has attempted to set out a well organized time-table for the purpose of enabling a municipality to ascertain the amount of taxable ratables within its jurisdiction in order that it might adopt a responsible and fairly accurate budget.")
The Superior Court has jurisdiction to determine the validity of a tax sale certificate. The Tax Sale Law specifies that suits with respect to a tax sale certificate, whether to foreclose the right of redemption, attack the validity of the tax lien, or cancel the tax sale certificate, lies with the Superior Court. N.J.S.A. 54:5-86; 5-87; 5-100; 5-105. Thus, the Chancery Division may set aside a tax sale certificate issued on property that is exempt from tax as being void ab initio. See e.g., Nordell v. Township of Mantua, 45 N.J. Super. 253 (Ch. Div. 1957) (voiding duplicate assessments on same lot where tax had actually been paid by one of the listed owners); Hudson County Park Comm. v. Town of Kearney, 132 N.J.L. 287 (Sup. Ct. 1944) (voiding assessment upon exempt public property used for public purposes). This authority may underlie the Chancery Division's order here that East Orange could return to the Chancery Division to litigate the issue of whether Livingston's proposed sale of the tax sale certificate violates the Green Acres law.
While this court also construes the Chancery Division's rulings on the relaxation of East Orange's failure to pay the full taxes as being made in the context of its equitable jurisdiction as a basis for continuing the restraints and injunction vis-a-vis enforcement of the tax sale certificate, this court need not consider whether the same is binding under the law of the case doctrine. First, the payment of taxes is not a pre-requisite to an appeal "where a statutory qualification is the subject of an appeal." N.J.S.A. 54:51 A-3. Second, failure to pay the entire portion of the taxes as required by N.J.S.A. 54:51A-1(b) does not render the Tax Court without subject matter jurisdiction, but if proven prevents the Tax Court from exercising that jurisdiction. "It is a jurisdictional deficiency of a procedural nature" as opposed to subject matter jurisdiction, which is "a threshold determination as to whether the court is legally authorized to decide the question presented." Farrell v. City of Atlantic City, 10 N.J. Tax 336, 344-45 (Tax 1989) (internal citations omitted).
For the aforementioned reasons, this court will permit parties the opportunity to make relevant motions as to this court's subject matter jurisdiction for each of the tax years 2009 and 2010, so that it has the factual record before it in order to make the relevant findings. Accordingly, the accompanying Case Management Order is being simultaneously entered by this court.
The parties legal contentions provided to this court in their respective submissions for purpose of construing the Chancery Division's Transfer Order will be considered by this court in connection with the parties' dispositive motions and need not be repeated in their moving papers if parties desire the same be incorporated by reference in their motions.
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Hon. Mala Narayanan, J.T.C.