28 N.J. Tax 607
N.J. Tax Ct.2015Background
- Subject property: 10.542 vacant riverfront acres in Penns Grove (Block 57, Lot 1) with a completed bulkhead and public walkway as of Nov. 1, 2007.
- Fenwick built the improvements; Seaboard purchased the parcel and development rights during construction and owned it when improvements were completed.
- Added assessments for the improvements were issued (prorated two-month 2007 assessment and full-year 2008 assessment). Seaboard litigated those omitted-added assessments and later challenged 2011–2013 assessments.
- Trial (June 15, 2015) produced competing appraisals; court found municipal expert credible and entered July 24, 2015 judgments reducing assessments for 2007 (prorated), 2008 (omitted-added), 2011 and 2012. Those judgments became final.
- Seaboard then moved under the Freeze Act (N.J.S.A. 54:51A-8) seeking to apply the 2008 judgment to freeze 2009–2010 assessments and to apply the 2012 judgment to freeze 2013. Municipality opposed, asserting statutory revaluation and procedural bars for some years.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Freeze Act relief can apply to tax years 2009–2010 despite a districtwide 2009 revaluation | Freeze Act should apply because municipal revaluation produced assessments >100% of value; square corners and Uniformity Clause require relief | Freeze Act expressly terminates freeze effect the year before a districtwide revaluation; statute bars relief for 2009–2010 | Denied — plain statutory language bars Freeze Act relief for 2009–2010; square corners and Uniformity Clause do not override statute |
| Whether square corners doctrine prevents municipality from opposing relief given it possessed appraisal evidence showing over-assessment | Municipality’s earlier possession of a favorable appraisal and its trial conduct create unfair litigational advantage; doctrine requires relief | Municipality fulfilled square-corners obligations (did not move to dismiss, presented expert; no bad faith) | Denied — court finds municipality acted properly; statutory bar controls outcome |
| Whether refusal to grant relief would violate Uniformity Clause | Denial creates unconstitutional inequality because property remains grossly over-assessed in revaluation years | Revaluation is the primary means to achieve uniformity; taxpayer had procedural opportunities to challenge 2009–2010 but did not; Uniformity Clause does not compel judicial revaluation where statutory process not followed | Denied — Uniformity Clause does not require rewriting Freeze Act or excusing procedural defaults |
| Whether Freeze Act relief is available for tax year 2013 after dismissal of Seaboard’s 2013 Complaint for failure to pay taxes | Freeze Act relief should apply because 2012 judgment is final and statute contains no limitation for dismissals under N.J.S.A. 54:51A-1(b) | Dismissal for failure to pay taxes precludes relief | Granted for 2013 — no statutory bar in Freeze Act for a year in which a complaint was dismissed for nonpayment; 2012 judgment freezes 2013 assessment |
Key Cases Cited
- F.M.C. Stores Co. v. Borough of Morris Plains, 100 N.J. 418 (1985) (square corners doctrine requires government to act fairly toward property owners)
- Pantasote Co. v. City of Passaic, 100 N.J. 408 (1985) (presumption of validity attaches to assessments; burden on taxpayer in case-in-chief)
- City of Newark v. Fischer, 8 N.J. 191 (1951) (purpose of Freeze Act: protect taxpayers from repeated unwarranted increases)
- Grandal Entrps., Inc. v. Borough of Keansburg, 292 N.J. Super. 529 (App. Div. 1996) (Freeze Act is mandatory and self-executing once a freezing judgment is final)
- Clearview Gardens Assocs. v. Township of Parsippany-Troy Hills, 196 N.J. Super. 323 (App. Div. 1984) (taxpayer may invoke Freeze Act relief by motion to Tax Court under the base-year judgment)