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NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE TAX COURT COMMITTEE ON OPINIONS
TAX COURT OF NEW JERSEY
DOCKET NO. 13-23-08598-92D
GRANDAL ENTERPRISES, INC. :
:
Plaintiff(s), :
:
v. :
:
KEANSBURG BOROUGH, :
:
Defendant(s). :
:
Decided: June 16, 1995
Lawrence J. Freundlich, for plaintiff
(Freundlich & Reisen attorneys).
Joseph Foster, for defendant
(Ansell, Zaro, Bennett & Grimm, attorneys).
HAMILL, J.T.C.
The following opinion is submitted pursuant to R. 2:5-1(b) and sets forth my findings and conclusions with respect to
plaintiff Grandal Enterprises' application for Freeze Act relief.
Plaintiff appeals my order of February 14, 1995 denying
as moot its Freeze Act application for Block 184, Lot 4 for the
1993 and 1994 tax years. (I did not receive a copy of plaintiff's
notice of appeal until April 25, 1995.) After hearing argument on
January 20, 1995 and February 10, 1995, I denied the application
because the assessor had in fact entered the 1993 and 1994
assessments on Lot 4 at $2,993,000, the same figure that is
reflected in a judgment of the Tax Court for the 1992 tax year. In
my view, plaintiff has thus obtained the benefit of the Freeze Act,
and there is nothing more that can be accomplished by way of a
Freeze Act judgment.
A summary of the undisputed facts set forth in the
parties' respective certifications and by counsel during oral
argument follows. I have accepted as true counsels' factual
assertions to the extent they appear to be based on personal
knowledge and are not disputed.
In 1973 plaintiff purchased a 16.22 acre parcel in
Keansburg Borough. In so doing it succeeded to a lease between the
prior owner as landlord and the borough for 9.5 of the 16.22 acres.
The rent for the 9.5 acres was stated to be $1 per year and payment
of the taxes. Rather than pay itself taxes, the borough maintains
that it created a separate lot 4X on the tax duplicate covering the
9.5 acres and marked the lot exempt.See footnote 1 The borough did not advise
plaintiff that an exempt lot 4X had been created. Plaintiff
apparently was unaware of the terms of the lease and believed it
was paying taxes on the entire 16.22 acre parcel despite the fact
that the tax bills it received indicated that lot 4 contained only
6.72 acres.
In April 1993 the borough advised plaintiff that the
lease on the 9.5 acres would not be renewed. The borough further
advised plaintiff that "[t]he property will be returned to the tax
rolls and you will be receiving a pro-rated tax bill for the
remainder of 1993 based on the current assessment of the property."
Consistent with its letter, the borough returned the "exempt" lot
4X to the tax rolls by issuing an omitted added assessment for 6
months of the 1993 tax year and an added assessment for the full 12
months of 1994. N.J.S.A. 54:4-63.26 to -63.29; 18 Washington Place
Assocs. v. Newark,
8 N.J. Tax 608 (Tax 1986). The additional
assessment attributable to lot 4X amounted to $190,000 for the full
tax year. Plaintiff did not appeal these assessments, and, by the
time plaintiff's Freeze Act application was filed, the time to
appeal the added assessments had expired. N.J.S.A. 54:4-63.11.See footnote 2
Meanwhile, plaintiff had appealed the 1992 assessment on
lot 4, and on June 22, 1992, the Tax Court entered a judgment
pursuant to settlement reducing the assessment on lot 4 to
$2,993,000.See footnote 3
On December 20, 1994, plaintiff sought application of the
Freeze Act, N.J.S.A. 54:51A-8, to the 1992 settlement judgment.
Plaintiff maintained that the 1992 tax appeal covered the entire
16.22 acres, that there is no separate lot 4X or, if there is, it
was improperly created by the borough, and that the added
assessments for lot 4X are therefore improper.
The difficulty with all these arguments is that they
could and should have been made in the context of an appeal of the
added assessments and cannot be made as part of a Freeze Act
application. A Freeze Act judgment pursuant to N.J.S.A. 54:51A-8
simply freezes the base year assessed value of the property for the
two successive tax years; it is not a determination of true value
for the two successive years. Riverview Gardens v. North Arlington
Borough,
9 N.J. 167, 173 (1952). The facts that trigger an
application for Freeze Act relief differ from those that trigger a
valuation appeal. Clearview Gardens Assocs. v. Parsippany-Troy
Hills Tp.,
196 N.J. Super. 323, 330 (App. Div. 1984). The Freeze
Act is potentially triggered when a judgment determining assessed
value for the base year is entered by the Tax Court. N.J.S.A.
54:51A-8. When thus triggered, "application of the Freeze Act is
mandatory and self-executing." Clearview Gardens v. Parsippany-Troy Hills Tp., supra, 196 N.J. Super. at 328. There is no place
in this "self-executing" procedure for determining the scope of the
base year judgment, e.g., in this case, whether the 1992 judgment
encompassed 16.22 or 6.72 acres and the existence of a separate tax
lot. All "the Freeze Act dictates [is a] two year respite from
valuation litigation." Id. at 330. See also Newark v. Fischer,
8 N.J. 191, 199-200 (1951).
In this case the borough complied with the dictates and
underlying purpose of the Freeze Act. It entered the 1993 and 1994
assessments on lot 4 at the amount reflected in the 1992 judgment,
and it has not sought to initiate "valuation litigation" with
respect to lot 4 for the 1993 and 1994 tax years. Instead, it has
raised an entirely different issue -- the existence of a separate
lot 4X that it insists was not covered by the 1992 judgment. The
borough notified plaintiff of its position by way of its April 1993
letter, an omitted added assessment for 1993, and an added
assessment for 1994. If plaintiff believed there was no lot 4X or
that the borough's creation of lot 4X was improper, it had the
opportunity to appeal the added assessments. N.J.S.A. 54:4-63.29;
N.J.S.A. 54:4-63.11. During oral argument plaintiff stated that
the time to appeal the added assessments had expired and that in
any event an appeal of those assessments would have been
inconsistent with its position in its action for rent in the Law
Division.
None of the above is meant to suggest any view as to
whether there was, or was not, a separate lot 4X or, if there was,
whether it was properly created by the borough.See footnote 4 The point is
simply that plaintiff failed to follow the statutory procedure for
challenging the existence of the additional lot and the borough's
method of creating it. Plaintiff's failure to timely appeal the
added assessments deprives this court of jurisdiction to review
them even if the assessments were completely improper. Royal
Bradley Assocs. v. Bradley Beach Bor.,
252 N.J. Super. 401 (App.
Div. 1991) (Tax Court lacked jurisdiction to review allegedly void
added assessments where plaintiffs' appeals to county tax board
were not timely filed). The borough's actions cannot be challenged
by way of an application for Freeze Act relief because the borough
complied with the Freeze Act by entering the 1993 and 1994
assessments on lot 4, the lot that was the subject of the 1992 tax
appeal, at the amount reflected in the 1992 Tax Court judgment.
Plaintiff argued that a refusal to grant it Freeze Act
relief, and more particularly Freeze Act relief to the effect that
there never was a separate lot 4X, would be inconsistent with the
views of the Appellate Division that the 1992 Tax Court judgment
covered the entire parcel. See Grandal Enterprises, Inc. v.
Borough of Keansburg, Docket No. A-1517-93T5, slip op. at 3 (App.
Div. Jan. 9, 1995).
The Appellate Division there stated that the Tax Court
settlement for the 1992 tax year did not refer to exempt property
and settled the value of the entire parcel such that the parties no
longer had a justiciable issue in the Tax Court.
I believe that the Appellate Division's statement is
dictum and thus not binding. The statement goes to whether the Law
Division was correct in concluding that the issue of what
transpired in the assessment of lot 4 could be decided in the Tax
Court and simply points out that there is no pending action in the
Tax Court in which the issue can be decided. The Appellate
Division's primary concern was to achieve an adequate development
of the facts in order to determine whether the borough had complied
with the terms of the lease. If, as plaintiff suggests, the court
had held conclusively that there was only one tax lot, there would
have been no need to remand the case to the Law Division to
determine how the borough had gone about assessing the property.
Moreover, the evidence before the court was conflicting as to
whether there was a single lot 4 or both a lot 4 and a lot 4X. In
light of the Appellate Division's uncertainty as to what the
borough had done in assessing the lot(s), it cannot have intended
to bind the Tax Court to a conclusion that only one lot was
involved. As the Appellate Division's statement appears to be
dictum, I believe that I am not obliged to follow it. Serkin v.
Ocean Tp.,
201 N.J. Super. 392 (Law Div. 1983), aff'd o.b.,
201 N.J. Super. 409 (App. Div.), certif. denied,
101 N.J. 308 (1985).
Nor can the Appellate Division's statement be viewed as
the "law of the case" because this action for Freeze Act relief is
a different case than plaintiff's rent action in the Law Division.
Slowinski v. Valley Nat'l Bank,
264 N.J. Super. 172, 180-81 (App.
Div. 1993) ("law of the case" doctrine "is restricted to preventing
relitigation of the same issue in the same suit.") Moreover, the
doctrine applies only where "the issue has been actually contested
and decided." Id. at 181-82. The issue of whether the 1992 Tax
Court judgment covered the entire 16.22 acres could not have been
contested in the Tax Court litigation because plaintiff did not
realize at the time that the assessment on lot 4, in the borough's
view, included only 6.72 acres. As previously stated, the
Appellate Division's statement appears to have been dictum, made
for the purpose of indicating that the issue of how lot 4X was
assessed could not be decided in the Tax Court.
Finally, on the assumption that the Appellate Division's
opinion is unpublished and is not the "law of the case," it is not
binding on this court. R. 1:36-3.
Whether the 1992 Tax Court judgment settled the value of
the entire parcel was sharply disputed in the action before me,
and, as previously stated, I did not resolve that issue. All I
concluded was that plaintiff failed to challenge the borough's
determination that there were two tax lots by appealing the added
assessments and that plaintiff could not obtain the relief it
sought by way of a Freeze Act judgment because it had already
obtained the benefit of the Freeze Act as to lot 4, the lot that
was the subject of the 1992 Tax Court judgment.
Footnote: 1Additional details concerning the lease may be found in an
opinion of the Appellate Division captioned Grandal Enterprises,
Inc. v. Borough of Keansburg, Docket No. A-1517-93T5, decided
January 9, 1995. The opinion was issued in plaintiff's action
for rent against the borough. Plaintiff there claims that the
borough owes it rent in the amount of the taxes plaintiff
allegedly paid on the 9.5 acres. The borough maintains that it
honored the lease by marking the 9.5 acres exempt. Pointing out
that the borough's motion for summary judgment was not based upon
competent evidence and that the borough had failed to answer
Grandal's interrogatories, the Appellate Division reversed and
remanded the matter to the Law Division for discovery as to how
the 9.5 acres had been assessed.
Footnote: 2There may be some dispute as to when the assessments were
issued and received by plaintiff, but the dispute is not material
because plaintiff concedes that the assessments were ultimately
received and were not timely appealed.
Footnote: 3The judgment covered other contiguous lots as well, and
prior tax years appear to have been settled at the same time.
Footnote: 4As the Appellate Division pointed out, the facts concerning
lot 4X have not been fully developed. The tax map apparently
shows only lot 4, and on the return dates of the Freeze Act
motion defendant did not know what the property record cards
contained. On the other hand, the tax duplicate plainly includes
a lot 4 and a lot 4X, and the tax bills that plaintiff received
for lot 4 indicated that the lot contained only 6.72 acres.
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