MATRIC ENTERPRISES, INC. and HAPPY LAND COMPANY, INC v. TOWNSHIP OF BERKELEY

(NOTE: The status of this decision is .)
 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1284-08T11284-08T1

MATRIC ENTERPRISES, INC. and

HAPPY LAND COMPANY, INC.,

Plaintiffs-Appellants,

v.

TOWNSHIP OF BERKELEY;

TOWNSHIP OF BERKELEY BUILDING

DEPARTMENT; TOWNSHIP OF

BERKELEY TAX ASSESSOR; and

OCEAN COUNTY BOARD OF TAXATION,

Defendants-Respondents.

________________________________________________________________

 

Argued May 28, 2009 - Decided

Before Judges Cuff, Fisher and Baxter.

On appeal from the Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-3310-08.

Emily J. Springer argued the cause for appellants (Rinaldo and Rinaldo, attorneys; Ms. Springer, on the brief).

Patrick Sheehan argued the cause for respondents (Law Office of Patrick Sheehan, attorneys; Mr. Sheehan and Mathew B. Thompson, on the brief).

PER CURIAM

Plaintiffs Matric Enterprises, Inc. and Happy Land Company, Inc. appeal from a September 29, 2008 Law Division order that dismissed their challenge to a demolition lien imposed by defendant Berkeley Township (Township), and denied their request to enjoin the resulting tax sale. The structures on plaintiffs' property were condemned by the Township and demolished according to an agreement between the parties. Plaintiffs contest the costs associated with the demolition and removal and argue that their due process rights were violated. The record supports the Law Division's finding that plaintiffs' complaint was properly dismissed because plaintiffs voluntarily entered into the demolition agreement, failed to timely take an available appeal and received adequate notice of the lien. We affirm.

I.

After inspections and hearings, the Township's Building Department concluded on May 4, 2007 that three buildings on plaintiffs' property were unsafe structures constituting a danger to public health and welfare. The Township ordered plaintiffs to demolish them. On June 7, 2007, the Ocean County Construction Board of Appeals affirmed the demolition order.

Plaintiffs filed a complaint on July 20, 2007, seeking to vacate the Township's demolition order and to enjoin any further steps toward demolition. Following a hearing, the judge denied plaintiffs' application for preliminary restraints. That same day, plaintiffs agreed to allow the Township to perform the demolition and agreed to pay the resulting costs. On July 24, 2007, demolition of the structures began.

Plaintiffs were advised of the demolition costs in August 2007. On September 12, 2007, the Township solicitor sent plaintiffs a letter confirming that the total demolition cost was $47,857.04, and itemizing each component of that total. The letter also advised plaintiffs that a $47,857.04 tax lien would be imposed on their property if the amount remained unpaid. The Township adopted a resolution on September 25, 2007 imposing the lien, and forwarded a copy of the resolution to plaintiffs.

On November 2, 2007, plaintiffs sought an order declaring the tax lien invalid because the demolition costs charged by the Township were exorbitant and not agreed to by plaintiffs or the court. On December 7, 2007, the judge refused to entertain plaintiffs' motion because plaintiffs had not filed a complaint challenging the lien amount.

Not until September 25, 2008, approximately one year after the resolution imposing the lien was adopted, did plaintiffs file the complaint and order to show cause that are the subject of this appeal, in which they sought to halt the tax sale of their property, which was scheduled for October 1, 2008. Plaintiffs asserted that they relied to their detriment on the Township performing the work at a lower price than a private contractor. They again maintained that the costs were exorbitant and not agreed upon, and asserted that the demolition costs were double those that would have been charged by three separate private companies from whom plaintiffs had obtained estimates.

Plaintiffs also argued that: the tax lien was the result of an ultra vires effort by the Township to convert the landfill and demolition costs into municipal taxes; and they were never provided with individual notice of the impending tax sale, and had only learned of it when a colleague saw a notice in the local newspaper. As a result, plaintiffs sought removal of the lien, a full and complete accounting of all taxes paid by plaintiffs since 1971, attorneys' fees, and a cancellation of the October 1, 2008 tax sale of their property.

On the September 29, 2008 return date of the order to show cause, Judge Wellerson denied all of plaintiffs' claims. In particular, the judge rejected plaintiffs' argument that the demolition costs were wrongly construed as a "tax lien." The judge observed that N.J.S.A. 40:48-2.5(f)(2) authorizes a municipality to impose a lien when demolition costs remain unpaid. The judge held that the Township advised plaintiffs of the demolition cost, but plaintiffs failed to "exercise [their] right of appeal until [they] filed a complaint fully one year after the adoption of the resolution and did so only because . . . the tax sale certificates were being prepared and the tax sale was scheduled for October 1, 2008." Thus, finding that plaintiffs had agreed to permit the Township to demolish the buildings and had agreed to pay the resulting costs, Judge Wellerson held that plaintiffs had "more than ample opportunity to appeal the amount" of the demolition and "failed to take any action to protect [their] interests." The judge consequently denied plaintiffs' motion to enjoin the October 1, 2008 tax sale.

On appeal, plaintiffs maintain that their substantive and procedural due process rights were violated. In particular, they allege defendants "did nothing to notify" plaintiffs of the costs associated with the demolition until it had become a "fait accompli"; failed to advertise and seek competitive bids for the project, as required by N.J.S.A. 40:48-2.5(e); denied plaintiffs the opportunity to examine the demolition proposals received by the Township to assess their reasonableness; and failed to properly notify plaintiffs of the tax sale.

II.

A state statute does not violate federal or state substantive due process guarantees if the statute "reasonably relates to a legitimate legislative purpose and is not arbitrary or discriminatory." Greenberg v. Kimmelman, 99 N.J. 552, 563 (1985). The statute need only serve a conceivable rational basis to pass constitutional muster. Ibid. When presented with a substantive due process challenge to a statute's terms, we apply a balancing test that evaluates the "'nature of the affected right, the extent to which the governmental restriction intrudes upon it, and the public need for the restriction.'" Caviglia v. Royal Tours of Am., 178 N.J. 460, 473 (2004) (quoting Greenberg, supra, 99 N.J. at 567).

A procedural due process claim requires a different analysis. We evaluate whether the governmental body afforded the citizen adequate advance notice of the contemplated governmental action and an opportunity to be heard. Jamgochian v. N.J. State Parole Bd., 196 N.J. 222, 239-40 (2008).

Plaintiffs argue that defendants unjustifiably excluded them from the selection of the demolition contractor and failed to advertise and seek competitive bids. Plaintiffs' argument overlooks two significant points. First, plaintiffs agreed in a proceeding before Judge O'Brien in July 2007 to allow defendants to perform the demolition and removal; they expressly recognized they had the right to demolish the property at their own expense but instead chose to allow the Township to proceed. Second, plaintiffs conceded during the September 29, 2008 proceeding before Judge Wellerson that their complaint focused solely on the costs charged to them. Thus, we reject their effort to raise on appeal claims that were abandoned before the Law Division.

Moreover, plaintiffs were provided with an itemized breakdown of the $47,857 in demolition costs by the Township solicitor as early as September 12, 2007. In his letter, the solicitor expressly notified plaintiffs that he had asked the Township Tax Collector to impose a tax lien on the properties because the amount in question "has been delinquent for some time." N.J.S.A. 40:48-2.5(f)(2) affords property owners the right to file an action challenging the amount of a tax lien. The statute provides that "[a]ny owner or party in interest may, within 30 days from the date of the filing of the lien certificate, proceed in a summary manner in the Superior Court to contest the reasonableness of the amount or the accuracy of the costs set forth in the municipal lien certificate." Indeed, on December 7, 2007, Judge O'Brien specifically told plaintiffs that a separate complaint was required to challenge the reasonableness of the September 25, 2007 Township resolution that imposed the tax lien.

Yet, rather than immediately file their complaint, plaintiffs waited until September 25, 2008 to file a complaint challenging the amount of the September 25, 2007 tax lien. Thus, N.J.S.A. 40:48-2.5(f)(2) afforded plaintiffs a full, fair and adequate mechanism by which to challenge the amount of the demolition costs and the resulting lien. Adequate process was always available to plaintiffs; they simply failed to avail themselves of that procedure within the thirty-day statutory time limit imposed by that statute. Accordingly, Judge Wellerson properly concluded that by waiting a year to file their challenge to the amount of the lien, plaintiffs forfeited their right to do so. We thus affirm Judge Wellerson's rejection of plaintiffs' substantive due process claims.

Plaintiffs' argument that they were denied procedural due process because they were not afforded a personal notice of the tax sale must also fail. N.J.S.A. 54:5-26 specifies that in the event of a tax sale, notice must be placed in

five of the most public places in the municipality, and a copy of the notice shall be published in a newspaper circulating in the municipality, once in each of the four calendar weeks preceding the calendar week containing the day appointed for the sale. In lieu of any two publications, notice to the property owner and to any person or entity entitled to notice of foreclosure . . . may be given by regular or certified mail . . . .

. . . .

Failure of the property owner to receive a notice of a tax sale properly mailed by the tax collector shall not constitute grounds to void the subsequent tax sale.

Furthermore, with regard to notice to the owner, N.J.S.A. 54:5-27 states:

When the owner's name appears in the list and his post-office address is known, the collector shall mail to him at that address, postage prepaid, a copy of the notice. Failure to mail the notice shall not invalidate any proceeding hereunder.

Plaintiffs admit they knew of the lien on the property and its amount in September 2007. Furthermore, they acknowledged before Judge Wellerson they had not paid taxes on the properties for approximately two years. The record supports Judge Wellerson's conclusion that plaintiffs -- who had the burden of proof -- failed to prove a violation of the statutory notice requirements of publication in a local newspaper of the pending sale. Furthermore, as N.J.S.A. 54:5-26 makes clear, failure of the property owner to receive notice of an impending tax sale that is properly mailed is not grounds to enjoin such sale although here, again, plaintiffs never presented any proofs rebutting the Township's assertion that the tax collector took the additional step of directly mailing the tax sale notice to plaintiffs.

III.

Plaintiffs' remaining argument that the costs of demolition were not a tax that could have been challenged by using the tax appeal procedure of N.J.S.A. 54:3-21 lacks sufficient merit to warrant discussion. R. 2:11-3(e)(1)(A) and (E). Suffice it to say, plaintiffs had a remedy available to them under N.J.S.A. 40:48-2.5(f)(2). They chose not to avail themselves of it within the statute's thirty-day limit, instead waiting a year to file their challenge.

Affirmed.

 

Of the $47,857.04 fee, $33,091.01 was attributed to landfill costs, $6,367.84 to labor, $904.12 to police protection, and the balance covered equipment rental and the filling of the land.

The record does not establish how many times the Township published the notice; however, because plaintiffs do not challenge the Township's claim that it published the notice properly, we do not address that issue.

The following colloquy occurred:

THE COURT: The only dispute we have here is the amount --

[PLAINTIFFS' COUNSEL]: Yes.

THE COURT: -- because you have voluntarily consented to everything else.

[PLAINTIFFS' COUNSEL]: Yes.

THE COURT: So, it's really just -- it's a how much.

[PLAINTIFFS' COUNSEL]: It is.

N.J.S.A. 54:3-21 authorizes appeals to the county board of taxation in instances where a taxpayer asserts that the assessed valuation was incorrect.

(continued)

(continued)

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A-1284-08T1

June 18, 2009