Passaic Street Realty Assoc., Inc. v. Garfield
Case Date: 02/08/1994
Docket No: none
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TAX COURT OF NEW JERSEY
DOCKET NO. 02-21-02895-91
:
Plaintiff, :
v. :
GARFIELD CITY, :
Defendant. :
Decided: August 2, 1993
Daniel G. Keough, for plaintiff
Lawrence Jaskot, for defendant
SMALL, J.T.C.
Plaintiff taxpayer, has asked the court to rule that the
court's determination of the proper tax assessment of the
properties whose tax assessment is being appealed is limited to the
original assessment placed on these properties by the tax assessor.
The municipality's position is that my determination of the proper
tax assessment is the fair market value of the subject property
without regard to the original assessment. My determination is
based on an analysis of N.J.S.A. 54:51A-6 (L. 1973 c. 123, "chapter
123") and the availability of discrimination relief in tax appeal
cases where discrimination is not pled and the municipality has not
filed a timely counterclaim. I conclude that whether pled or not
in a nonrevaluation year, the court may increase an assessment
above the original assessment placed on the property by the
municipal assessor. FMC Stores v. Borough of Morris Plains,
100 N.J. 418 (1985).
For both 1991 and 1992, the tax years in question, the chapter
123 ratio for Garfield was in excess of 100%. For both years plaintiff filed complaints alleging both overvaluation and discrimination under chapter 123 of the laws of
1973. At trial, plaintiff amended each of its complaints to
delete the count of the complaints alleging discrimination. The
apparent reasons for striking those two counts of the complaints
were: (1) since the chapter 123 ratio exceeded 100%, there could be
no advantage to the taxpayer of applying the chapter 123 ratio to
the ultimately determined fair market value of the properties in
question and (2) the ability of the court to increase an assessment
above the assessor's initial value and/or above the value
established by the county board of taxation is based on the
language of chapter 123. N.J.S.A. 54:51A-6. By removing that count
of the complaint, plaintiff asserts that this court has no
authority - absent a timely counterclaim filed by the municipality
to increase the original assessment or the county board judgment.
After striking the discrimination counts from its complaint,
plaintiff moved to have this court declare that its ultimate
determination of value in these cases could not exceed the original
assessments.
In an appeal brought before the Tax Court, the task of the
court is first to find the fair market value of the property. Then
the proper tax assessment of the property is determined after the
application of that portion of chapter 123 which is now codified at
N.J.S.A. 54:51A-6. In all years the appropriate assessment is what
is in issue before the court and the filing of the complaint opens
that issue to the court. In a revaluation year the court will not
increase the assessment above the assessor's or county board's
determination, absent the filing of a counterclaim or a petition by
the municipality. FMC Stores, supra. In years other than
revaluation years, the assessment can be increased even without the
filing of a counterclaim or complaint by the taxing district. See
generally, Newton v. Newton Medical Building, 13 N.J. Tax ____ (Tax
1993), (slip op. at 2-4). However, it should be noted that if
plaintiff withdraws its complaint prior to the close of proofs and
the taxing district has not filed a complaint or counterclaim, the
court is deprived of jurisdiction over the case and obviously
cannot increase the assessment. R. 8:3-9.
My analysis is based on a careful reading of the statutory
language. N.J.S.A. 54:51A-6.See footnote 1 Four different fact patterns are
described. For each situation, the application of a particular
ratio to the fair market value of the property to determine the
assessment is prescribed.
1. In a revaluation year the provisions of chapter 123
do not apply. N.J.S.A. 54:51A-6(d). See Ennis v.
Alexandria Tp., 13 N.J. Tax ______(Tax 1993).
2. If the chapter 123 ratio is greater than 100" and
the original assessment exceeds the court determined fair
market value, then the assessment will be the fair market
value. N.J.S.A. 54:51A-6(c).
3. If the chapter 123 ratio is less than 100" and the
assessment exceeds the court determined fair market
value, then the assessment will be the fair market value
of the property multiplied by the chapter 123 ratio.
N.J.S.A. 54:51A-6(b).
4. If the ratio of the assessed value to the fair
market value is greater than 115" or less than 85" of the
chapter 123 ratio, then the assessment will be the fair
market value of the property multiplied by the chapter
123 ratio. N.J.S.A. 54:51A-6(a)
The following table details the application of chapter 123 to
those four situations specifically described in the statute as well
as those fact patterns not specifically described.
Assess-
Ratio of In those situations in which plaintiff taxpayer does not plead discrimination or, if after having pled discrimination, taxpayer amends his complaint to remove the discrimination count, is the court free to increase the assessment if that is where the facts lead it? Prior to the enactment of chapter 123, Matawan v. Tree Haven Apartments, Inc. 108 N.J. Super. 111 (App. Div. 1969) held that absent a cross-appeal the court could not increase the assessment. After the enactment of chapter 123 Judge Matthews of the Appellate Division in two cases, Rabstein v. Princeton Township, 187 N.J. Super. 18 (App. Div. 1982) and Weyerhaeuser Co. v. Closter, 190 N.J. Super. 528 (App. Div. 1983) held that chapter 123 was automatically in the case "since Chapter 123 must be noticed by the Tax Court judge." Weyerhaeuser, supra, 190 N.J. Super. at 543. Further, Judge Matthews indicated at page 542 that "Chapter 123 must be interpreted to mandate that the Tax Court be guided by the proofs in each appeal, not the form of the appeal," Id. at 542 and "when the party who alleged discrimination discovers after the proper time for appeal that he would be hurt by discrimination relief he should not be allowed to withdraw his claim if to do so would defeat his opponent's right to discrimination relief." Id. at 542. Finally, the Appellate Division held that "once discrimination has been made an issue in a tax appeal, if one party withdraws its claim the other party must, in fairness, be allowed to amend its complaint to include
that claim." Id. at 543. Reading these cases together with
Hackensack Water v. Woodcliff Lake,
9 N.J. Tax 545 (Tax 1988) and
Abe Schrader v. Secaucus,
8 N.J. Tax 390 (Tax 1986) as well as FMC
Stores v. Borough of Morris Plains,
100 N.J. 418 (1985) leads to
the following conclusions:
1. Except in a revaluation year, chapter 123, N.J.S.A.
54:51A-6, is automatically in an appeal. Whether pled or not pled
by either party it cannot be removed from the case by either party.
Weyerhaeuser Co. v. Closter,
190 N.J. Super. 528 (App. Div. 1983).
2. In all years except the revaluation year, assessments may
be increased above the initial assessment of the assessor or the
finding of the county board of taxation whether the municipality
has filed a counterclaim. FMC Stores v. Borough of Morris Plains,
supra.
3. Except in a revaluation year, there is no need for the
municipality to file a pleading in order to have an assessment
increased. N.J.S.A. 54:51A-6.
4. The municipality cannot be assured of having the
assessment increased unless it files a counterclaim, because the
plaintiff is always free to withdraw its complaint and thus end the
court's jurisdiction over the case. R. 8:3-9.
Given the facts in this case and after having considered the
briefs and arguments of the parties, I concluded that even though
the taxpayer had withdrawn its discrimination claim, this court is
free to increase the assessment of the subject property above the
assessor's and the county board's determinations.
After I gave an opinion from the bench in a less structured
form than the within written opinion, the plaintiff withdrew his
complaints. R. 8:3-9.
Footnote: 1 Note in reading the statute:
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