Opinion
Block 31, Lot 35.09 Docket No. 014519-2011 Docket No. 008318-2011
04-22-2013
Re: Township of South Brunswick v. Princeton Orchards Assocs. L.L.C., Princeton Orchards Assocs. L.L.C. v. Township of South Brunswick
BY ELECTRONIC MAIL David A. Schneider, Esq. Archer & Greiner, P.C. Fredrick L. Rubenstein, Esq. James P. Nolan & Associates, L.L.C.
NOT FOR PUBLICATION WITHOUT APPROVAL OF
THE TAX COURT COMMITTEE ON OPINIONS
Mala Sundar
JUDGE
BY ELECTRONIC MAIL
David A. Schneider, Esq.
Archer & Greiner, P.C.
Fredrick L. Rubenstein, Esq.
James P. Nolan & Associates, L.L.C.
Dear Counsel:
This matter concerns dual property tax appeals filed by the parties in different forums for the same tax year challenging the same assessment which is over $1 million. Presently before this court is a motion for reconsideration by plaintiff Princeton Orchards Assocs. L.L.C. ("Princeton Orchards") of this court's final order of December 21, 2012 reinstating the complaint of plaintiff, Township of South Brunswick ("Township") which had been previously dismissed with prejudice by this court on November 16, 2012. Princeton Orchards contends that December 21, 2012 was the return date for its motion to dismiss the Township's untimely counterclaim filed in Docket No. 008318-11. However, on that date, the court sua sponte reversed its earlier dismissal of the Township's complaint, reinstated the same, and denied Princeton Orchards' request for more time to brief the issue. Princeton Orchards asks for reconsideration of this Order because it was entered without adequate notice and opportunity to be heard, and, was erroneous as a matter of law. The Township concedes there were due process issues, however, objects to reconsideration relief because Princeton Orchards has not provided any new facts or controlling case law that the court neglected to consider in its sua sponte reinstatement Order.
The court finds that the sua sponte ruling does raise concerns of essential due process. Therefore, although Princeton Orchards has not provided any new evidence or law in support of its reconsideration motion, the court will examine Princeton Orchards' arguments presented in its reconsideration motion.
However, after having carefully considered the merits of Princeton Orchards' arguments, the court finds that its December 21, 2012 opinion and Order was proper. Although N.J.S.A. 54:3-21 provides that "[a]n appeal to the Tax Court by one party in a case in which the Tax Court has jurisdiction shall establish jurisdiction over the entire matter in the Tax Court," it must be harmonized with the statute's overall intent to provide each party, the taxpayer and the taxing district, with a separate and independent right to appeal an assessment, each of which is an independent cause of action. Therefore, the court rejects Princeton Orchards' isolated reading of the quoted portion of the statute to mean that a party which filed a timely petition in the county board of taxation in the same matter is thereafter barred from litigating the matter as a plaintiff in the Tax Court unless it filed a timely counterclaim in the Tax Court against the direct appeal filed by the other party. PROCEDURAL HISTORY AND FACTS
On or about February 23, 2011, the Township filed a timely petition of appeal before the Middlesex County Board of Taxation ("County Board") appealing the $5 million local property assessment imposed for tax year 2011 upon property located at Block 31, Lot 35.09 ("Subject"). The Subject is a multi-unit complex called Fresh Ponds Village Apartment Complex.
On March 31, 2011, Princeton Orchards filed a complaint with the Tax Court challenging the same 2011 local property tax assessment. The matter was docketed as 008318-2011. On May 5, 2011, the Township filed a counterclaim in Tax Court in connection with this complaint.
Because of the dual filing against the same assessment for the same tax year 2011, one by the Township in the County Board, and one by Princeton Orchards in the Tax Court, the Township's assessor requested the County Board issue a judgment without deciding the merits, i.e., issue a judgment indicating "Affirm Without Prejudice." Princeton Orchards immediately objected. It stated that because the Tax Court had sole jurisdiction over the matter once Princeton Orchards had filed its complaint, the County Board lacked authority to enter any judgments, and therefore it had to dismiss the Township's petition "with prejudice."
A month thereafter, Princeton Orchards filed a motion on short notice in the Tax Court. It sought an Order establishing the Tax Court with exclusive subject-matter jurisdiction over the matter under N.J.S.A. 54:3-21, and that the County Board was required to dismiss, with prejudice, the Township's County Board appeal.
On June 27, 2011, the court issued a bench decision establishing exclusive jurisdiction in the Tax Court. The court found that it had no jurisdiction over the County Board, and therefore, could not require it to dismiss the Township's appeal with prejudice. However, since it was undisputed that the court had jurisdiction over the parties, the court required the Township to withdraw the pending County Board petition. The court signed Princeton Orchards' form of order on the same day, June 27, 2011 that: (i) the Tax Court has exclusive jurisdiction "over all real estate assessment appeals challenging the assessment for" the Subject under N.J.S.A. 54:3-21 for tax year 2011; and (ii) "the Township shall withdraw its assessment appeal . . . filed in the" County Board. The order did not require the withdrawal to be "with prejudice."
The court struck the language from Princeton Orchards' proposed form order which stated that the County Board "shall dismiss with prejudice the assessment related to the [Subject] appeal filed in the" County Board. The Order indicated it was "Amended" to include a missing docket number.
The County Board then issued a Memorandum of Judgment dated June 28, 2011. The judgment indicated the same amount as the original assessment and the judgment amount, i.e., $5 million. The judgment code "7" was used, which meant "Withdrawn." The judgment had a mailing date of July 7, 2011.
On August 12, 2011, the Township appealed the County Board judgment by filing a timely complaint with the Tax Court. The matter was docketed as 014519-2011.
By letter of November 23, 2011, the Township objected to Princeton Orchards' request to the County Board that it should issue a written judgment to include the words "with prejudice." The Township stated that in compliance with the court's June 27, 2011 Order, it had withdrawn its petition before the County Board. It noted that since the court had struck out language requiring the County Board to dismiss the Township's petition with prejudice, Princeton Orchards' request should be denied.
Several months later, the Township filed a motion to dismiss Princeton Orchards' complaint for failure to provide discovery. By Order dated August 24, 2012, the court granted the motion, and dismissed the complaint without prejudice.
On October 10, 2012, Princeton Orchards moved to dismiss the Township's complaint with prejudice because it was filed beyond the April 1 deadline set forth in N.J.S.A. 54:3-21. It argued that the Township failed to "turn square corners" when it filed an untimely "responsive appeal" to Princeton Orchards' timely direct appeal. Conceding that the Tax Court had ordered the Township to withdraw its County Board petition, Princeton Orchards argued that the Township's complaint from the County Board's judgment of withdrawal was nonetheless done to obtain a "tactical advantage."
On November 2, 2012, the Township moved to dismiss Princeton Orchards' complaint with prejudice for failure to provide discovery. Two weeks later Princeton Orchards cross-moved to reinstate its complaint pursuant to R. 4:23-5(a).
By its Order of November 16, 2012, the court dismissed, with prejudice, the Township's complaint under N.J.S.A. 54:51A-1(c). The court opined from the bench that the statute deprived the court of jurisdiction to hear a complaint where, as here, a plaintiff had withdrawn its County Board petition and then filed an appeal from the County Board judgment of withdrawal. The court indicated that the Township's rights to be heard was not prejudiced because it could have (and did, albeit untimely) file a counterclaim in response to Princeton Orchards' complaint.
A week later, on November 21, 2012, Princeton Orchards moved to dismiss, with prejudice, South Brunswick's counterclaim (in Docket No. 008318-2011) for being untimely.
On December 21, 2012, the court heard three motions: (i) the Township's motion to dismiss Princeton Orchards' complaint with prejudice for failure to provide discovery; (ii) Princeton Orchards' cross-motion to reinstate its complaint under R. 4:23-5(a); and (iii) Princeton Orchards' motion to dismiss the Township's counterclaim as untimely. At this time, and in the context of dealing with the dismissal of the Township's counterclaim, the court indicated that it had erred in ordering the Township to withdraw its County Board petition in June of 2011. The court stated:
I should not have directed South Brunswick to withdraw the complaint. I should have directed the parties to have the County Board enter a judgment of dismissal without prejudice. There's nothing in the case law that required a withdrawal with prejudice, at the County Board. It should have been merely a dismissal without prejudice, which would have permitted the Township, which had timely filed the petition, to appeal that complaint timely to the Tax Court and it wouldn't have been barred. It would just have been a dismissal without prejudice.However, the court agreed that the Township's counterclaim was untimely, thus, essentially there would be "two complaints and no counterclaim." The court acknowledged that it "didn't give [counsel] a chance to argue, but it seemed . . . pointless in view of [its] determination, that [it] had been mistaken back in June of 2011." The court denied Princeton Orchards' request for "a further hearing on whether or not the County Board withdrawal was with or without prejudice" at that time but noted that Princeton Orchards was reserving its right to raise this issue in the future.
So I have to, at this point, I think, I really have to modify that order of June 27th, 2011 . . . . It can't be undone with the County Board. The County Board has lost jurisdiction over this matter once it issued its judgment, but in effect, treating the County Tax Board's judgment as a dismissal without prejudice.
And, accordingly, the [Township's] appeal of that order of the County Board, [is] a timely appeal of a . . . judgment of the County Board. So I'm reversing the order of November 16th 2012, which dismissed that complaint. I am treating the County Board's judgment as a dismissal without prejudice as it properly should have been . . .
Thus, on December 21, 2012, the court entered two Orders. The first Order dismissed with prejudice, the Township's counterclaim for Docket No. 008318-2011. The second Order: (a) modified the court's June 27, 2011 order (in Docket No. 008318-11) by deleting "the requirement that the Township withdraw with prejudice its petition then pending before the" County Board and substituting such language with "a direction to both parties requiring them to obtain a judgment from the [County] Board dismissing the petition without prejudice;" (b) "deemed" the judgment of the County Board "dismissing the Township's petition as withdrawn and dismissed with prejudice" as if it were "a judgment dismissing the Township's petition without prejudice;" and (c) vacated the court's November 16, 2012 Order which had dismissed the Township's complaint docketed as 014159-2011.
The court was mistaken in this regard because its June 27, 2011 Order did not require the Township's withdrawal of its County Board petition to be "with prejudice." Indeed, the court struck the "with prejudice" language from the proposed form of Order submitted by Princeton Orchards.
Since the Township conceded that it had interrogatory responses from Princeton Orchards, the court also denied the Township's motion to dismiss Princeton Orchards' complaint under R. 4:23-5 and entered a separate Order in this regard. That Order is not at issue here.
On January 10, 2013, Princeton Orchards filed the instant Motion for Reconsideration to Vacate, Alter, or Amend the court's December 21, 2012 Order reinstating the Township's complaint. The Township opposed the motion. Neither party sought disturbance of the portion of the December 21, 2012 Order dismissing, with prejudice, the Township's counterclaim. FINDINGS
The reconsideration motion was assigned to and heard by the undersigned Tax Court judge due to retirement of the judge who rendered the December 21, 2012 bench opinion and Order.
A motion for rehearing or reconsideration is governed by R. 4:49-2. See also R. 8:10 (R. 4:49-2 applies to the Tax Court matters). The rule requires that a motion be served not later than 20 days after service of the judgment or order, and "state with specificity the basis on which it is made, including a statement of the matters or controlling decisions which counsel believes the court has overlooked or as to which it has erred." Ibid. Here, Princeton Orchards' motion is timely since it was filed exactly 20 days after the December 21, 2012 Order.
A motion for rehearing or reconsideration will be granted "only for those cases which fall into that narrow corridor in which either, 1) the Court has expressed its decision based upon a palpably incorrect or irrational basis, or 2) it is obvious that the Court either did not consider, or failed to appreciate the significance of probative, competent evidence . . . ." D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990). Despite this restrictive scope, a court may, "in the interest of justice" consider any "evidence" that the litigant claims is "new or additional . . . which it could not have provided" during the initial hearing. Ibid. The movant must "initially" show that the trial court "acted in an arbitrary, capricious, or unreasonable manner, before the Court should engage in the actual reconsideration process." Ibid.
A. Reconsideration on Grounds of Due Process Violation
Princeton Orchards argues that the court's sua sponte reinstatement of the Township's complaint, without providing counsel with notice or a chance to argue, violated its due process rights as it "w[as] prevented from advising this Court of controlling statues [sic] and case law."
It is "critical" for a court to provide parties with "a fair opportunity to be heard" if it revisits or reconsiders its prior opinion, so that the parties can "argue against reconsideration and advance claims of prejudice." Lombardi v. Masso, 207 N.J. 517, 537 (2011). Additionally, the court "must apply the proper legal standard to the facts and explain [its] reasons" for reconsideration. Ibid.
Here, the court did not notify the parties prior to the motion return date that it intended to revisit its prior Order dismissing the Township's complaint. Nor did it grant Princeton Orchards' request for an adjournment so it could argue that issue, although the court recognized that Princeton Orchards' was reserving its right in this connection. Therefore, reconsideration on grounds of violation of due process is proper. Thus, the court will examine the merits of Princeton Orchards' substantive contentions.
B. Reconsideration on the Merits
(1) Could the Court Reconsider its Prior Order Dismissing the Township's Complaint?
Our courts are granted wide discretion and have "the inherent power" to reconsider their prior orders or judgments. Johnson v. Cyklop Strapping Corp., 220 N.J. Super. 250, 257 (App. Div. 1987). This authority is predominantly afforded for interlocutory orders. Id. at 264; Lombardi, supra, 207 N.J. at 536. However, a court is not prohibited from amending a final order or judgment provided it has sufficiently "explained the errors causing the previously entered erroneous result." Ducey v. Ducey, 424 N.J. Super. 68, 77 (App. Div. 2012) (finding that where a trial judge's stated reasons in an amended judgment of divorce diverged significantly from those in the original judgment of divorce, and no explanation was given, the trial judge's actions did not "fall within her reasoned discretion" as required by Lombardi, supra). See also Vicari v, Township of Bethlehem, 8 N.J. Tax 513, 518 (Tax 1986) (a court "has the power at any time to correct an erroneous judgment caused by mistake"); R. 1:7-5 (a court can, sua sponte, take cognizance of any error at any time, before, during or after trial, if the error is "clearly capable of producing an unjust result").
Here, the court explained at length the error made (dismissing the Township's complaint); the reason that the court considered such dismissal to be in error (there was "nothing in case law that required a withdrawal with prejudice, at the County Board," therefore the court's earlier June 2011 Order requiring the Township to withdraw its County Board appeal provided an unjust result); and the court's correction of that error (by treating the County Tax Board's judgment "as a dismissal without prejudice" so that the unjust result could be rectified). A trial court should strive to achieve the "interests of justice" in issuing orders, and if a prior ruling conflicts with this essential principle the court should not "sit idly by and permit injustice to prevail." Lombardi, supra, 207 N.J. at 537.
For the above reasons, the court's re-examination of its prior Order of November 16, 2012, dismissing the Township's complaint is not invalid.
(2) Was the Court's Decision Irrational or Palpably Incorrect?
Princeton Orchards argues that the court's decision to amend and vacate its prior Order dismissing the Township's complaint was erroneous as a matter of law. It argues that under N.J.S.A. 54:3-21 and interpretive case law, only one forum has subject-matter jurisdiction, which here, is the Tax Court. Thus, the County Board has simply no jurisdiction, and thus, no authority to enter any judgment, whether the same is worded "with prejudice" or "without prejudice." Thus, any county board judgment in this regard is a nullity. This, in turn, means that there can never be an appeal from a county board judgment dismissing a petition due to an existing direct appeal, and the only recourse for the Township in cases of dual filing is to file a timely counterclaim in the direct appeal which was not done here. Consequently, the Tax Court erred when it deemed the County Board judgment as a dismissal without prejudice (as opposed to "withdrawn"). Further, since this error was the basis for vacating the court's November 2012 Order, the court's decision reinstating the Township's complaint was irrational and palpably erroneous, meriting reconsideration.
The Township contends that Princeton Orchards made this identical argument and relied upon identical law in support thereof during its motion to dismiss the Township's complaint. Nothing new is now being provided, either factually or legally, that this court ignored when it rendered its December 21, 2012 opinion and Order reinstating the Township's previously dismissed complaint. Additionally, the Township argues, the County Board did have jurisdiction when the Township timely filed its petition of appeal in that forum, and that a change in the forum due to N.J.S.A. 54:3-21 does not and should not render its initial timely filing an ineffectual and invalid endeavor. Else, parties can play the "forum game" to deny an innocent party, which had complied with the initial filing deadlines, the right to challenge an assessment.
The Township correctly notes that Princeton Orchards has not provided any new or controlling law that the Tax Court ignored or overlooked. Nonetheless, the court will address the merits of Princeton Orchards' contentions in compliance with due process requirements.
The cases used by Princeton Orchards in support of its current reconsideration motion are the same ones used in its April 2011 motion to have the Tax Court establish exclusive jurisdiction, and based upon which the Tax Court entered its June 2011 Order directing the Township to withdraw its County Board petition.
(i) Law on Dual Filing in Two Forums
N.J.S.A. 54:3-21(a)(1) provides the statutory deadlines for filing an appeal by either a taxpayer or a "taxing district" in the county board or, if the assessment exceeds $1 million, to the Tax Court. Prior to the 1999 amendment, N.J.S.A. 54:3-21, the statute pertaining to direct appeals to the Tax Court, read as follows:
A taxpayer feeling aggrieved by the assessed valuation of his property . . . or a taxing district . . . may, on or before August 15, appeal to the county board of taxation by filing with it a petition of appeal; provided, however, that any such taxpayer or taxing district, may, on or before August 15, file a complaint directly with the tax court, if the assessed valuation of the property subject to the appeal exceeds $ 750,000.00, and any party to an appeal pending on July 1, 1979 before a county board of taxation in which the assessed valuation of the property involved exceeds $ 750,000.00 shall be entitled, upon application to the county board, to have the appeal transferred to the tax court by the county board. All appeals to the tax court hereunder shall be in accordance with the provisions of the State Tax Uniform Procedure Law, R.S. 54:48-1 et seq.The above statute was interpreted in Union City Assocs. v. Union City, 8 N.J. Tax 583, 590, 593 (Tax 1986), aff'd, 115 N.J. 17 (1989). The Tax Court ruled that for purposes of a Freeze Act application, a taxpayer must choose the forum for filing the appeal, and cannot transfer its pending petition in the county board to the Tax Court since "a timely Tax Court complaint deprives a county board from subsequently obtaining subject matter jurisdiction over a disputed assessment" hence, any "county board judgment" is "a nullity." 8 N.J. Tax at 593 (emphasis added). The Tax Court noted that the language on transfers of pending county board petitions meant that "if a taxpayer filed an appeal with the county board after July 1, 1979," it "had no right to transfer it to the Tax Court, even though the assessment exceeded $750,000." Id. at 591. Once having opted for the county board, the taxpayer "could only go to the Tax Court by appealing the county board judgment." Ibid.
The Supreme Court affirmed, stating that the "statutory language, scheme, and legislative history of N.J.S.A. 54:3-21" evidences that the "forum in which the taxpayer initially elects to file his appeal" retained "exclusive jurisdiction over the matter." Union City, supra, 115 N.J. at 24. The Court's ruling was limited to dual filings by the "same taxpayer" although it recognized there could be two separate filings in the two forums, one by each party. Id. at 25, n.4 (referencing a pending recommendation of the Supreme Court Committee of the Tax Court to "correct the 'procedural deficiency' that may arise where one party appeals to the Tax Court and the other party appeals to the county tax board").
Dual filing by each party was at issue in Shav Assocs. v. Township of Middletown, 11 N.J. Tax 569 (Tax 1991), where the municipality filed a county board appeal on the same day that the taxpayer filed a Tax Court appeal for the same property, and the taxpayer argued for discrimination relief from the assessment. The county board judgment reduced the original assessment. Id. at 571. Relying upon Union City, supra, the court held that "filing in the Tax Court in compliance with N.J.S.A. 54:3-21 vests the Tax Court with the jurisdiction to decide the matter" and "[i]f there is a timely and proper filing of a complaint in the Tax Court, then the county board of taxation has no jurisdiction over the matter." 11 N.J. Tax at 576. The court noted the "concern" about, and "possible confusion" due to, the presumptive correctness of both the "the original assessment, on the direct appeal, and the county board judgment, on appeal to the Tax Court . . . [which] is disposed of by following the unconditional wording of the statute and requiring the parties to proceed in the Tax Court if a direct appeal is filed with the Court." Id. at 576-77.
The reduced assessment was identical to the assessment the parties had settled for the prior tax year after the filing of a Tax Court complaint. Shav Assocs., supra, 11 N.J. Tax at 572-73. The judgment stated its "basis" was the municipality's "request is granted based on 1988 Tax Court judgment." Id. at 574.
The above precedent was examined and explained in Atlantic City v. Greate Bay Hotel & Casino, 16 N.J. Tax 486 (Tax), aff'd 304 N.J. Super. 457 (App. Div. 1997), also involving two independent filings by each party, with the taxpayer filing petitions at the county board and the municipality filing appeals in the Tax Court, both litigations involving the same four properties. Denying the taxpayer's motion to have the direct appeals transferred to the county board, the court found that the plain language of the proviso in N.J.S.A. 54:3-21 allowing a direct appeal if the assessment exceeded $750,000, "makes clear, on its face, that even where one party has already filed in the county board . . . the opposing party can [timely] file in the Tax Court . . . removing the controversy to that forum." 16 N.J. Tax at 493. The court noted that the language in N.J.S.A. 54:3-21 allowing for a transfer of pending county board petitions to the Tax Court evidenced legislative intent "that either party to a tax appeal before a county board in which the assessment exceeded $750,000 could have the matter transferred to the Tax Court. Obviously, under such circumstances, the jurisdiction of the Tax Court did not depend on who filed first." Id. at 494. The court analogized the direct appeal language in N.J.S.A. 54:3-21 "to the system for removal jurisdiction in the federal courts" by "provid[ing] for jurisdiction in the Tax Court when the assessment threshold is met, in effect removing the petition of appeal from the county board of taxation." Ibid. Because "the express language of N.J.S.A. 54:3-21 removes jurisdiction from the administrative agency to the Tax Court" where there is dual filing, the court "directed" the taxpayer to "dismiss" its county board petitions. Atlantic City, supra, 16 N.J. Tax at 498, 503.
Subsequent to the above precedent, and in 1999, the Legislature amended N.J.S.A. 54:3-21 to include the following sentence: "[a]n appeal to the Tax Court by one party in a case in which the Tax Court has jurisdiction shall establish jurisdiction over the entire matter in the Tax Court." L. 1999, c. 208. The legislative history does not explicate any specific reason for the addition. See Statement to Senate No. 673 (Feb. 23, 1998) ("The bill would add language to N.J.S.A. 54:3-21 providing that an appeal to the Tax Court by one party establishes jurisdiction over the entire matter in the Tax Court."); Press Release, Office of the Governor (Sep. 17, 1999) (Senate No. 673 "[i]mplements a series of recommendations made by the Supreme Court Committee on the Tax Court to amend the laws dealing with property tax appeals and certain Tax Court matters. The amendments are primarily procedural in nature and are designed to increase uniformity, efficiency and flexibility in key areas of the administration of property tax appeals, such as filing deadlines, the Freeze Act and tax payment requirement"). It is possible that the above precedent on dual filings in dual forums formed the basis for the amendment.
In this connection, the regulations governing practice in the county boards states that "[i]f the assessed value of the property subject to the appeal exceeds $750,000, a taxpayer or taxing district has the choice to file a petition of appeal with the county board of taxation or a complaint with the Tax Court in accordance with Tax Court rules." N.J.A.C. 18:12A-1.6(c). See also R. 8:2(a) ("[t]he Tax Court shall have initial jurisdiction to review those local property tax assessments when review is sought pursuant to N.J.S.A. 54:51A-2 (direct review in the Tax Court of certain appeals))."
The language was added "to conform to amendments to N.J.S.A. 54:3-21, explicitly reiterating the statutory prerequisites for the filing of a tax petition with the county board of taxation or complaint with the Tax Court after an assessment of real property has been made." 35 N.J. Reg. 4850(a) (Oct. 2003).
N.J.S.A. 54:51-2 states that "[w]here any taxpayer or taxing district shall file a direct appeal to the Tax Court pursuant to N.J.S.A. 54:3-21, a copy of the complaint shall also be filed with the assessor and clerk of the taxing district . . . ."
(ii) Application of Law on Dual Filings in Dual Forums
The statute and case law leave no doubt that when there is a direct appeal, only the Tax Court can decide the merits of the challenge to the assessment, whether such appeal is filed by the taxpayer or the municipality and whether it was filed before or after the other party filed a county board petition. The corollary to this exclusivity is that once a direct appeal is filed with the Tax Court, the county board thenceforth has no jurisdiction. The issue here is whether the timely filed county board petition is a nullity because a county board judgment entered subsequent to a direct appeal to the Tax Court is deemed a nullity by precedent.
The proviso in the first sentence of N.J.S.A. 54:3-21 dealing with direct appeal acts to remove a timely filed county board petition to the Tax Court so that duplicative and wasteful proceedings, conflicting judgments, and confusing standards of review of presumptive correctness, is avoided. Whereas the first sentence of N.J.S.A. 54:3-21 permits either a taxpayer or a "taxing district" to challenge the validity of an assessment, thus, "clearly and unequivocally accords both the taxpayer and the taxing district an independent right to appeal from a property tax assessment." F.M.C. Stores v. Borough of Morris Plains, 195 N.J. Super. 373, 380 (App. Div.), aff'd, 100 N.J. 418, 425 (1985). "The right of appeal of the taxpayer and the right of appeal of the taxing district are separate and independent causes of action, even though they involve the same subject matter," consequently, "the right of each party to pursue an appeal within the statutory time period is wholly independent of and unaffected by the course of action decided upon by the other." F.M.C. Stores, supra, 195 N.J. Super. at 382. Indeed, "the choice of forum as between the county board of taxation and the Tax Court should not affect the substantial rights of the parties." Id. at 383.
A harmonious interpretation of the two sentences in the same statute means that the initial county board petition (or the initial cause of action in the county board), when filed within the statutory time limits is not nullified or negated after the county board loses jurisdiction pursuant to a later filed Tax Court complaint such that it cannot be thereafter prosecuted in the Tax Court. While a direct appeal deprives the county board from continuing to retain subject matter jurisdiction and thereafter deciding the case on its merits, it does not retroactively nullify a timely filed cause of action in the county board to preclude its litigation in another forum.
Princeton Orchards' isolated reading of the proviso in N.J.S.A. 54:3-21, without attention or context to the first sentence of the same statute defeats a harmonious construction of the entire statute. A statute should be read as a whole without undue emphasis on any particular word or sentence so that the entire statute can be read sensibly to effectuate the Legislature's intent. Cumberland Arms Assocs. v. Township of Burlington, 10 N.J. Tax 255, 268 (Tax 1988) ("[i]t is well settled that in construing a statute the court is not to be guided by a single sentence or the words of a sentence but must look to the provisions of the whole law, and to its object and policy"). See also New Capitol Bar & Grill Corp. v. Div. of Employment Sec., 25 N.J. 155, 160 (1957) (when "a literal application of the language used would lead to results incompatible with the legislative design" the court's "proper function" and "obligation . . . [is] to give effect to the obvious purpose of the Legislature, and to that end 'words used may be expanded or limited according to the manifest reason and obvious purpose of the law.'").
Further, the term "nullity" used in the precedent involving dual filing of a local property tax appeal, addresses a county board judgment which is entered after a hearing of the merits of the case. The reason such a county board judgment is deemed a nullity is to avoid conflicting judgments pertaining to one (challenged) assessment and conflicting presumptions of correctness (assessment versus county board judgment). See also Greate Bay Hotel & Casino v. City of Atlantic City, 21 N.J. Tax 122, 126 (App. Div. 2003) (stating that the holding in Atlantic City supra, was "that the Tax Court filing by the municipality effectively mooted the county board's jurisdiction").
In this connection, a county board judgment dismissing a county board petition without prejudice, or, affirming an assessment without prejudice, is generally deemed as one entered without an adjudication of the merits of the case. Id. at 124-25, n.1 (an affirmance of an assessment without prejudice by a county board is the same as a dismissal of a petition without prejudice by a county board, both such judgments being "tantamount to a transfer of the appeal to the Tax Court"). Indeed, the common practice for the county boards to exercise discretion and enter such judgments where local property tax appeals for the same property are pending for prior tax year/s in the Tax Court is appropriate. Id. at 128 (the county board can "dismiss without prejudice as a technique for deferring the evidentiary evaluation hearing to the Tax Court"). See also Handbook for County Boards of Taxation, § 1105.15, p.331-32 (July 2005) (a county board can issue "[a] dismissal without prejudice" if "[t]he property under appeal has an appeal pending before the tax court, or a higher court, for one or more prior years," and the "effect of" such dismissal, "sometimes referred to as "affirmed without prejudice" i[s] that the matter proceeds to the tax court without the presumption of correctness, which usually attaches to judgments of the county board"). Cf. Woodward-Clyde Consultants v. Chem. & Pollution Scis., Inc., 105 N.J. 464, 472 (1987) ("[a] dismissal without prejudice is not an adjudication on the merits and does not bar reinstitution of the same claim in a later action"); Feinsod v. Noon, 261 N.J. Super. 82, 84 (App. Div. 1992) ("[a] dismissal with prejudice constitutes "an adjudication on the merits as fully and completely as if the order had been entered after a trial"); 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") (emphasis added).
It is true that Greate Bay, supra, was not dealing with a dual filing in the two forums, thus, the removal or transfer of the cause of action was discretionary rather than mandatory. Nonetheless, its holding fully applies here because "many of the same significant policy considerations obtain when appeals of prior year assessments are already pending in the Tax Court, namely, considerations of appropriateness of forum, avoidance of unnecessary waste of resources, and the economy of consolidation available in the Tax Court." 21 N.J. Tax at 128.
R. 4:37-2 applies to the Tax Court pursuant to R. 8:7(a) which states that "[u]nless otherwise provided in Part VIII of these Rules motions in the Tax Court shall be governed by the applicable rules in Part I and Part IV." Note that the "rules of the Tax Court, insofar as they may be applicable" applies to county board proceedings "[i]n the absence of a rule covering any matter at issue." N.J.A.C. 18:12A-1.15 (a). The parties did not provide, nor did the court find any county board "rules" addressing the method of dealing with county board petitions due to a pending direct appeal, thus, R. 4:37-2(d) is of guidance.
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In light of the above analysis, the Tax Court's direction to the taxpayer in Atlantic City, supra, 16 N.J. Tax at 503, to get its county board petitions dismissed, is eminently logical and reasonable. See also Handbook for County Boards of Taxation, supra, Appendix at p. 117. This is an excerpt of a September 21, 1987 "DAG Letter" notifying county boards that pursuant to the Tax Court's decision in Union City, supra, "[i]n the event of . . . dual filing, the County Board has lost jurisdiction over the appeal and should dismiss such appeal 'without prejudice.'" The letter goes on to state that the county board judgment "should reflect that the appeal was dismissed because the Board has lost jurisdiction resulting from the separate filing of the complaint with the Tax Court regarding the same property for the same tax year." Thus, in its December 21, 2012 opinion re-visiting its prior Orders, this court also observed that although the June 28, 2011 judgment of the County Board recited the assessment amount in the column titled "Judgment," it was not "really" an affirmance of the assessment, but "just kind of shows that the assessment is remaining the same in light of the [Township's] withdrawal" of its pending County Board petition. Thus, this court thus properly recognized that its prior Order was erroneous, and corrected the same by deeming the withdrawal as a dismissal without prejudice.
It should also be noted that N.J.S.A. 54:3-26 requires a county board to "keep a record of its judgments thereon" (i.e., from all appeals) "in a permanent form, and shall transmit a written memorandum of judgments to the assessor . . . and to the taxpayer, setting forth the reasons on which such judgment was based . . . ." Under Princeton Orchards' argument, since a county board's judgment is a nullity when there is a direct appeal, this statute is either inapplicable or negated. The court will not indulge in legislative activity by carving out an exception to N.J.S.A. 54:3-26 for direct appeals particularly when there is no conflict between the intent and purpose of N.J.S.A. 54:3-21 and N.J.S.A. 54:3-26. The former provides alternative forums of appeal for assessment over $1 million and if the appeal is filed in Tax Court, for the Tax Court's exclusive jurisdiction. The latter establishes the county board's responsibility to issue judgments on appeals filed before whether or not those appeals should/could be transferred to the Tax Court.
The court also rejects Princeton Orchards' argument that in cases of dual filing the only remedy for the county board filer is to file a timely counterclaim to protect its cause of action in the Tax Court. First, in this matter, the court erroneously directed the Township to withdraw its pending County Board petition, thus, creating an unintended consequence of dismissal of its appeal from the County Board judgment of withdrawal. See N.J.S.A. 54:51A-1(c) (Tax Court cannot hear a matter if it "determine[s] that the appeal to the county board of taxation has been . . . withdrawn at the hearing, or previously thereto in writing"). Application of this statute in a vacuum would conflict with the harmonious interpretation of N.J.S.A. 54:3-21 in the context of dual filing of appeals in two forums for the same tax year.
Second, N.J.S.A. 54:3-21 was amended to provide a time limit to file a cross-petition or counterclaim in the county board or the Tax Court to challenge assessments over $1 million in response to the holding in F.M.C. Stores, supra. That case did not involve dual filings in two different forums. Rather, it involved the validity of the Tax Court's grant of a late filed counterclaim to a timely direct appeal. 100 N.J. at 422. The Court held that a municipality is equally obligated to comply with appeal filing deadlines when it sought to challenge its own assessment. Id. at 425. It cannot simply "rely upon the filing of a pleading of an adversary." 195 N.J. Super. at 383. Here, there is no question that the Township affirmatively took steps to challenge its own assessment by filing a timely petition to the County Board pursuant to N.J.S.A. 54:3-21, much before Princeton Orchards filed its direct appeal.
Third, this court has interpreted the two sentences in N.J.S.A. 54:3-21 to achieve a harmonious reading of the statute and preserve each party's right to file an independent cause of action. Under these circumstances, the court finds unpersuasive Princeton Orchards' argument that the Township's failure to file a timely counterclaim is fatal to its ability to challenge its own assessment, despite its timely petition at the County Board.
In sum, where one party timely files a petition in the county board and the other timely files a direct appeal to the Tax Court, each challenging the same local property tax assessment of over $1 million, only the Tax Court can decide the merits of the matter. The procedural mechanism to achieve the harmony between the right to file an appeal in either forum and the mandate that only the Tax Court decide the merits of the matter if a direct appeal is filed, both provisions being set forth in N.J.S.A. 54:3-21, is to have the county board issue a judgment under N.J.S.A. 54:3-26 dismissing the petition without prejudice due to the existence of the direct appeal, and to allow a timely appeal from that judgment to the Tax Court. Under these circumstances, the county board judgment cannot be considered a judgment based on the merits of the case because it recognizes the county board's inability to continue to retain jurisdiction. This harmonious interpretation, (a) protects each party's right to file an independent cause of action, (b) recognizes the county board's inability to retain continuing jurisdiction over, and thus, decide the merits of the case, (c) avoids dual standards of review, and (d) prevents inconsistent conclusions of the property's fair market value or assessment by two forums. CONCLUSION
For the aforementioned reasons, the court finds no reason to alter, amend or vacate a portion of its Order of December 21, 2012. To this extent, Princeton Orchards' motion for reconsideration is denied. An Order reflecting the denial will be simultaneously entered by this court.
Very truly yours,
Mala Sundar, J.T.C.