Opinion
DOCKET NO. A-4083-12T1
06-26-2014
FABER BROTHERS, INC., Plaintiff-Respondent, v. BOROUGH OF PARAMUS, a Municipal Corporation of the State of New Jersey, Defendant-Appellant.
Marc A. Razo argued the cause for appellant (Marc A. Razo, L.L.C., attorney; Mr. Razo, of counsel and on the brief; Kevin A. McDonald, on the brief). Antigo A. DelVecchio argued the cause for respondent (Beattie Padovano, L.L.C., attorneys; Mr. DelVecchio, of counsel and on the brief; Daniel L. Steinhagen, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Espinosa, Kibitz and O'Connor.
On appeal from the Tax Court of New Jersey, Docket Nos. 2581-2009, 1662-2010, 4258-1011 and 1071-2012.
Marc A. Razo argued the cause for appellant (Marc A. Razo, L.L.C., attorney; Mr. Razo, of counsel and on the brief; Kevin A. McDonald, on the brief).
Antigo A. DelVecchio argued the cause for respondent (Beattie Padovano, L.L.C., attorneys; Mr. DelVecchio, of counsel and on the brief; Daniel L. Steinhagen, on the brief). PER CURIAM
Plaintiff Faber Brothers, Inc., the owner of commercial property in defendant Borough of Paramus, challenged defendant's assessment of its real property. The parties agreed plaintiff was entitled to a partial refund of property tax payments. Thereafter, a dispute arose whether the terms of the parties' agreement compelled defendant to pay statutory interest, see N.J.S.A. 54:3-27.2, on the refund. The Tax Court found in plaintiff's favor and ordered defendant to pay $85,257.21 in interest. Defendant appeals and plaintiff cross-appeals, contending the interest owed is $93,607.71. We affirm.
I
Plaintiff filed a tax appeal for tax years 2009 through 2012. In November 2011, the parties agreed defendant would reduce its assessment of plaintiff's property for tax years 2009, 2010 and 2011, and give plaintiff a refund of $571,645.12 in property tax overpayments. The parties were unable to settle what both acknowledge were two controversial points: when plaintiff would get the refund and whether defendant would pay statutory interest. In July 2012, the parties finally resolved these two remaining issues, memorializing the entire agreement in a Stipulation of Settlement (agreement), which was fully executed on October 1, 2012. The agreement states in pertinent part:
Defendant consented to reducing the assessed value for tax year 2009 from $86,313,600 to $60,000,000, and from $70,000,000 to $65,000,000 for tax years 2010 and 2011. The parties agreed the assessed value of $70,000,000 for 2012 would remain the same.
The refund due the plaintiff/taxpayer, as a result of this Stipulation of Settlement, for the 2009, 2010, 2011 and 2012 tax years shall be in the form of a monetary refund. Statutory interest, pursuant to N.J.S.A. 54:3-27.2, having been waived by taxpayer, shall not be paid provided the tax refund is paid by December 31, 2012.
[Emphasis supplied].
Pursuant to Rule 8:9-5(a), the agreement was forwarded to the Tax Court for an entry of four judgments to reflect the agreed upon assessed value for each tax year in question. Although the Tax Court received the agreement on October 5, 2012, the judgments setting forth the adjusted assessments for tax years 2009, 2010 and 2011 were not entered until December 7, 2012, and the judgment pertaining to tax year 2012 was not entered until December 14, 2012. Meanwhile, as December 31, 2012 loomed, plaintiff sent a letter to defendant on December 4, 2012 reminding it that "the refund due as a result of the settlement is due by December 31, 2012 if interest is going to be waived." Defendant did not respond to the letter.
When plaintiff finally received copies of the judgments from the court, it forwarded the copies to defendant by overnight mail on December 20, 2012. Although plaintiff mistakenly sent copies of the judgments to a former employee of defendant rather than to its tax collector, defense counsel was copied on the cover letter to the former employee and was aware the judgments had not reached the appropriate person.
Defendant emphasizes that, even if the judgments had been addressed to the appropriate municipal official, the tax collector had left for vacation on December 18, 2012 and did not return until January 9, 2013. Defendant claims it needed the tax collector to process the judgments for payment. However, according to defendant, the only steps the tax collector would have taken upon receiving the judgments would have been to compare the "settlement information" in the judgments to the "tax duplicate" provided by the County. If the judgments were accurate, he then would have prepared a memorandum to the Borough clerk, copying the accounts payable department, setting forth the amount of the refund and to whom the check was to be paid.
Defendant also argued it could not make a payment to plaintiff until defendant's governing body, the mayor and council (council) authorized the refund. The council conducted its last regularly scheduled meeting for the year on December 18, 2012. Thus, defendant asserts it was thwarted from issuing the refund before December 31, 2012.
On January 22, 2013, the council was able to authorize payment of the refund at its first meeting of the year. Notwithstanding, defendant did not forward the refund check to plaintiff at that time. Defendant contends plaintiff refused to accept the check, but such claim is not borne out by the evidence. Defendant did not issue the refund until ordered to do so by the Tax Court on March 22, 2013.
When plaintiff did not get its refund by December 31, 2012, it advised defendant that, consistent with their agreement, it expected to receive statutory interest. Defendant countered with the claim the agreement did not require the payment of interest in the event the refund was not issued by December 31, 2012. Plaintiff then filed and prevailed on its motion to compel defendant to pay both the refund and interest on the refund.
On appeal, defendant argues the "clear intent" of the parties was that it "be provided with more than sixty (60) days from the date of the entry of the Tax Court judgments to render payment." Defendant does not cite to any evidence in the record that, in stark contrast to the plain language in the agreement, substantiates its claim the parties agreed defendant had, in essence, an unlimited amount of time to pay the refund.
The principles of contract interpretation are well established. The terms of an agreement are to be given their plain and ordinary meaning. M.J. Paquet v. N.J. DOT, 171 N.J. 378, 396 (2002) (citing Nester v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997)). The court is to give "juristic effect" to the intention of the parties as expressed in the contract. George M. Brewster & Son, Inc. v. Catalytic Constr. Co., 17 N.J. 20, 27-28 (1954) (citing Corn Exch. Nat'l Bank & Trust Co. v. Taubel, 113 N.J.L. 605 (E. & A. 1934)). If a contract is unambiguous, generally it must be enforced as written. Schenck v. HJI Assocs., 295 N.J. Super. 445, 450 (App. Div. 1996) (citing U.S. Pipe & Foundry Co. v. Am. Arbitration Ass'n, 67 N.J. Super. 384, 393 (App. Div. 1961)), certif. denied, 149 N.J. 35 (1997). "'Whether a term is clear or ambiguous is . . . a question of law.'" Nester, supra, 301 N.J. Super. at 210 (citing Kaufman v. Provident Life and Cas. Ins. Co., 828 F. Supp. 275, 282 (D.N.J. 1992), aff'd, 993 F.2d 877 (3d Cir. 1993)). An ambiguity exists if the terms of the contract are susceptible to at least two reasonable alternative interpretations. Ibid.
We are satisfied the language in the agreement is unambiguous and permits only one interpretation: plaintiff waived its right to statutory interest unless defendant failed to pay the refund by December 31, 2012, in which event defendant had to pay interest in accordance with N.J.S.A. 54:3-27.2. Defendant urges we consider extrinsic evidence on the issue of the parties' intent, citing Conway v. 287 Corporate Ctr. Assocs., 187 N.J. 259 (2006), for the premise extrinsic evidence may be used even if a contract is unambiguous.
First, while resorting to extrinsic evidence is permissible to "achieve the ultimate goal of discovering the intent of the parties[,]" such as uncovering "the true meaning of contractual terms[,]" extrinsic evidence is not admissible to "vary the terms of the contract[.]" Id. at 270. Second, and more important, defendant does not refer to any evidence that demonstrates or suggests it was the parties' intent that defendant had more than sixty days from the time the judgments were entered to issue the refund. In fact, there is no evidence payment of the refund was tied in any way to the judgments.
Defendant mentions that when it typically settles an appeal of a real property assessment, consistent with N.J.S.A. 54:3-27.2, it inserts language into the agreement stating defendant has sixty days from the entry of the judgment to issue a refund. Defendant argues the fact such language is absent from the agreement is proof the parties intended to give defendant more than sixty days from the entry of the judgments to render payment.
N.J.S.A. 54:3-27.2 provides that when a taxpayer has successfully appealed a real property assessment, the taxing district is to refund any excess taxes paid within sixty days of the date of final judgment.
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We need not dwell on the flaws in defendant's argument. The plain, clear terms of the agreement, the meaning of which is not contradicted or challenged by any evidence cited by defendant, directs the outcome here. The parties unequivocally agreed that defendant did not have to pay interest unless defendant issued the refund after December 31, 2012.
Defendant also argues it should not have to pay interest because it did not receive copies of the judgments until December 21, 2012, and by then its tax collector was gone for the remainder of the year and the council had held its last public meeting in 2012. There is no merit to this argument.
Defendant was well aware of the time constraints when it executed the agreement. Nonetheless, it promised to pay the refund by December 31, 2012, or face the consequence of paying interest. It behooved defendant to do that which was necessary to honor the agreement. Certainly, none of the events that unfolded were unforeseen. All of the complained of obstacles were or should have been anticipated. More to the point, all of the alleged obstacles were surmountable. As the Tax Court pointed out, defendant did not request an expedited issuance of the entry of the judgments. Defendant did not enlist the aid of other employees to process the judgment when the tax collector went on vacation, or hold a special meeting, see N.J.S.A. 10:4-9(b), before the end of 2012 to enable the council to authorize the refund.
Finally, even if we were persuaded the agreement gave defendant more than sixty days from the entry of the judgments to issue the refund, defendant did not send the refund to plaintiff until after it was ordered to do so on March 22, 2013, more than three months after entry of the judgments and two months after the council authorized the refund. There was no reason for defendant to have withheld the refund for as long as it did.
As defendant did not issue the refund to plaintiff by December 31, 2012, we affirm the Tax Court's order compelling it to pay statutory interest under N.J.S.A. 54:3-27.2.
II
On April 11, 2013, the Tax Court ordered defendant to pay $85,257.21 in interest. Plaintiff argues the trial court did not calculate interest in accordance with N.J.S.A. 54:3-27.2, contending it is entitled to a total of $93,607.71.
N.J.S.A. 54:3-27.2 states in relevant part:
in the event that a taxpayer is successful in an appeal from an assessment on real property, the respective taxing district shall refund any excess taxes paid, together with interest thereon from the date of payment at a rate of 5% per annum, less any amount of taxes, interest, or both, which may be applied against delinquencies pursuant to section 2 of P.L.1983, c.137 (C.54:4-134), within 60 days of the date of final judgment.
[Emphasis supplied.]
The controversy between the parties is when the "date of payment" actually occurs. Plaintiff contends the date of payment refers to every payment a taxpayer makes toward property taxes over the course of a year. Plaintiff's argument is that, as taxes are required to be paid quarterly, see N.J.S.A. 54:4-66(a), interest should be paid on any portion of a quarterly tax payment that exceeded the amount of tax that should have been paid for that particular quarter. Thus, the taxpayer is entitled to get interest from the date a quarterly payment was made.
By way of example, in 2009 plaintiff's annual property tax was $1,333,545.12. In 2009, it paid $319,791.89 by February 1; $319,791.89 by May 1; $346,117.54 by August 1; and $347,843.80 by November 1. As a result of plaintiff's tax appeal and defendant's reassessment, defendant determined plaintiff should have paid only $927,000 in property taxes in 2009, or $231,750 per quarter. Therefore, plaintiff argues, it should get interest on the difference between what it in fact paid each quarter in 2009 and $231,750. The parties agree that if such methodology is used, plaintiff is entitled to receive a total of $93,607.71 in interest.
Defendant contends the "date of payment" referred to in N.J.S.A. 54:3-27.2 refers to those payments made after the taxpayer has paid the total amount of tax due for the entire year. Defendant argues it would be unfair to pay interest on payments a taxpayer made before all of the taxes owed -- as recalculated under a property valuation reassessment -- for the entire year have been paid. A taxpayer becomes entitled to interest only after the tax liability for the entire year has been satisfied. Here, plaintiff did not actually overpay its annual assessment of $927,000 until August 1, 2009, when it paid $346,117.54 for the third quarter. Just before making the third quarter payment, plaintiff had paid only $639,583.62 in taxes, short of the $92 7,0 00 owed for the entire year. Upon paying the $346,117.54 for third quarter taxes, plaintiff paid more than the $927,000 owed in annual taxes.
Our research has not revealed any reported decision that addresses the issue raised by the parties. Resorting to principles of statutory interpretation, which directs that we "ascribe to the statutory words their ordinary meaning and significance," Mt. Hill, L.L.C. v. Zoning Bd. of Adjustment of Tp. of Middletown, 403 N.J. Super. 210, 235 (App. Div. 2008) (citing Lane v. Holderman, 23 N.J. 304, 313 (1957)), certif. denied, 197 N.J. 475 (2009), the language in N.J.S.A. 54:3-27.2 allows a refund only on any excess tax paid "together with interest thereon from the date of payment[.]" It stands to reason that a taxpayer does not pay any excess tax until the actual amount due for a given year (as determined on reassessment) has been paid. Interest on any tax overpayment runs therefore from the point at which tax payments exceed a taxpayer's total liability for the year. While a taxpayer may pay more per quarter in any year its property has been over-assessed, nevertheless a taxpayer cannot overpay any property tax until the tax liability for the year has been satisfied. Accordingly, the interest due plaintiff is $85,257.21.
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION