EDWARD R. MCMAHON, et al. v. CITY OF NEWARK, CITY OF NEWARK DEPARTMENT OF FINANCE, OFFICE OF ASSESSMENT et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1703-05T51703-05T5

EDWARD R. MCMAHON, Court-

Appointed Receiver for ONE

WASHINGTON PARK URBAN RENEWAL

ASSOCIATION and WGL ASSOCIATES,

Plaintiff-Appellant,

v.

CITY OF NEWARK, CITY OF NEWARK

DEPARTMENT OF FINANCE, OFFICE OF

ASSESSMENT and EVELYN E.

LACCITIELLO, Tax Assessor,

Defendants-Respondents.

_______________________________________

 

Argued telephonically May 2, 2007 - Decided May 24, 2007

Before Judges Parker, Yannotti and Messano.

On appeal from the Tax Court of New Jersey, Docket No. 000150-99.

Dennis J. Drasco argued the cause for appellants (Lum, Danzis, Drasco & Positan, attorneys; Mr. Drasco and Kevin J. O'Connor, on the brief).

John R. Lloyd argued the cause for respondents (Nowell Amoroso Klein Bierman, attorneys; Richard K. Silberberg, on the brief).

PER CURIAM

Plaintiff Edward R. McMahon, receiver for One Washington Park Urban Renewal Association (OWP) and WGL Associates (WGL), appeals from an order entered by the Tax Court on October 21, 2005, granting summary judgment in favor of defendants City of Newark (City); the City's Department of Finance/Office of Assessment; and Evelyn E. Laccitiello, the City's Tax Assessor. For the reasons that follow, we affirm.

OWP was the owner of certain real property in Newark, upon which it constructed a seventeen-story office building. In March 1981, OWP and the City entered into a Financial Agreement pursuant to the Urban Renewal Corporation and Association Law of 1961 (URL), N.J.S.A. 40:55C-40 to -76. Under the terms of that agreement, improvements made to the subject property would be exempt from real property taxes for a period of up to twenty years, in consideration of the construction and operation of the building, and the payment to the City of certain annual service charges. However, paragraph sixteen of the Financial Agreement provides:

In the event the [OWP] sells its project, the subject of this Agreement, the tax abatement granted hereunder shall terminate unless the City consents in writing to the sale, but such consent shall not be unreasonably withheld; provided, however, a transfer of the property to a limited partnership to be formed, retaining the same general partners as [OWP] shall not be deemed a refinancing, sale or other disposition for purposes of this paragraph.

In 1991, OWP filed for reorganization under the federal bankruptcy laws, and by order dated July 11, 1996, the bankruptcy court ordered the refinancing of the first mortgage on the property. The lender on the refinancing required that title to the property be transferred from OWP to One Washington Park Trust (Trust). The bankruptcy court entered an order on August 2, 1996, which authorized the transfer of title. On August 6, 1996, OWP transferred title to the Trust for one dollar.

On July 1, 1997, the City's Tax Assessor advised the City's Corporation Counsel that she was placing the property on the list of added/omitted assessments for 1997, as a result of the transfer of title from OWP to the Trust. In accordance with that determination, in October 1997, the City sent tax bills to the Trust for the added/omitted assessments. The tax bills, which called for the payment of about $1.5 million in taxes, stated in pertinent part:

4. APPEALS. If you feel aggrieved at the assessed valuation, you may file an appeal with the Essex County Tax Board, 110 So. Grove Street, East Orange, New Jersey, 3rd Floor, on or before December 1.

By letter dated October 23, 1997, the Trust forwarded the tax bills to plaintiff, who had been appointed receiver of OWP and WGL in other litigation. Plaintiff did not file any appeals challenging the tax assessments by the December 1 deadline.

On December 9, 1998, plaintiff filed this action in the Law Division, Morris County, alleging that defendants had violated the agreement by canceling the tax abatement. Plaintiff sought a declaratory judgment that the City's action was wrongful; and injunctive relief directing defendants to reinstate the tax abatement, rescind the tax bills issued subsequent to the cancellation of the tax abatement, cease the accrual of interest on any amounts allegedly due, and issue restated tax bills with credits for payments made.

On December 15, 1998, at plaintiff's request, the judge issued an order to show cause, requiring defendants to show cause why the relief sought in the complaint should not be granted. Defendants thereafter filed an answer and moved to dismiss the complaint because plaintiff had not filed timely appeals from the assessments, and the court lacked jurisdiction to hear the matter. The judge did not rule on the parties' respective application, but entered an order on January 18, 1999, transferring the matter to the Tax Court.

The parties subsequently attempted to reach agreement on the amount of the taxes allegedly due on the property, taking into account the annual service charges that OWP had paid to the City pursuant to the Financial Agreement. On February 1, 1999, the parties filed a stipulation which stated that all taxes were current for 1996 and 1997, and there was a credit due of $53,048.64 after reconciliation of the payments previously made.

The parties further stipulated that, according to the City's records, $1,073,807.71 was due on the property for 1998 taxes, and upon payment of that sum, all of the taxes on the property "will be totally current." Plaintiff agreed to remit payment to toll the assessment of interest and penalties, but such payment would be without prejudice to his rights in the litigation. Plaintiff thereafter transmitted a check in the amount of $1,073,807.71 to the City. Even so, the City issued additional bills for the taxes allegedly due on the property for 1998. Plaintiff paid these bills under protest but never filed a motion to enforce the stipulation.

In April 1999, defendants filed a motion to dismiss the complaint. It seems that the motion was never decided. Plaintiff asserts that the parties endeavored to resolve the matter, but those efforts were unsuccessful. The case remained inactive until 2005 when, at the direction of the judge, defendants filed a motion for summary judgment, arguing that plaintiff had not filed timely challenges to the tax assessments. Plaintiff opposed the motion, and argued that the statutes governing the filing of tax appeals do not apply to this case, which plaintiff claimed was a contractual dispute between the parties, and not a tax appeal.

The judge issued a written opinion in which he concluded that plaintiff's claims were time-barred because plaintiff had not challenged the City's tax assessments by filing appeals to the county board within the time required by law. The judge entered an order on October 21, 2005, granting defendants' motion for summary judgment, and this appeal followed.

Plaintiff argues: 1) the City should be equitably estopped from arguing that its consent was required for the conveyance of the property from OWP to the Trust, as permitted by the order of the bankruptcy court; 2) the City's cancellation of the tax abatement violated the parties' agreement and the order of the bankruptcy court; 3) absent statutory authority, the City's "purported cancellation" of the tax abatement was void ab initio; 4) the statutory scheme governing appeals from tax assessments is inapplicable to the parties agreement under the URL; 5) the Tax Court's grant of summary judgment was procedurally improper; and 6) the court should exercise original jurisdiction and enter judgment for plaintiff on liability and transfer the matter to the Law Division to determine the amount of plaintiff's damages. Having reviewed the record in light of the contentions advanced by appeal, we are convinced that the judgment dismissing the complaint must be affirmed.

The local property tax law provides in pertinent part that all real property "shall be assessed to the person owning the same on October 1 in each year." N.J.S.A. 54:4-23. Added assessments may be made when improvements are made to real property after the assessment date. N.J.S.A. 54:4-63.2; N.J.S.A. 54:4-63.3. Assessments also may be made of any taxable property that was omitted from the assessments for a particular tax year. N.J.S.A. 54:4-63.12. Furthermore, "[w]henever any real property is by law exempt from taxation and the right to such exemption ceases by reason of a change in use or ownership of such property, the same shall be assessable as omitted property . . . ." N.J.S.A. 54:4-63.26.

The procedures to be followed for added and omitted assessments are essentially the same. N.J.S.A. 54:4-63.29. Pursuant to N.J.S.A. 54:4-63.7, tax bills for added assessments must be delivered to the property owners at least one week before November 1st. N.J.S.A. 54:4-63.7. Similarly, tax bills for omitted assessments must be mailed or otherwise delivered to the property owners at least one week before November 1st. N.J.S.A. 54:4-63.36.

The time for appealing added and omitted assessments is December 1 of the year of the levy. N.J.S.A. 54:4-63.11 states:

Appeals from added assessments may be made to the county board of taxation on or before December 1 of the year of levy, or 30 days from the date the collector of the taxing district completes the bulk mailing of tax bills for added assessments, whichever is later, and the county board of taxation shall hear and determine all such appeals within one month after the last day for filing such appeals; provided, however, that appeals from added assessments may be made directly to the Tax Court on or before December 1 of the year of levy, or 30 days from the date the collector of the taxing district completes the bulk mailing of tax bills for added assessments, whichever is later, if the aggregate assessed valuation of the property exceeds $750,000.00. Within ten days of the completion of the bulk mailing of tax bills for added assessments, the collector of the taxing district shall file with the county board of taxation a certification setting forth the date on which the bulk mailing was completed. Appeals to the Tax Court from the judgment of the county board of taxation shall be made within 45 days from the date fixed for final decisions by the county board of taxation on appeals from added assessments. In all other respects such appeals shall be governed by the laws concerning appeals from real property assessments.

Essentially the same procedures and deadlines apply to appeals of omitted assessments. See N.J.S.A. 54:4-63.39.

The right of appeal in tax matters is governed by statute and "all statutory requirements must be strictly complied with to invest the reviewing tribunal with subject matter jurisdiction." Royal Bradley Assocs. v. Bradley Beach Borough, 252 N.J. Super. 401, 403-04 (App. Div. 1991) (quoting 18 Washington Place Assocs. v. City of Newark, 8 N.J. Tax 608, 614 (Tax. 1986)). The failure to file a timely appeal is "a fatal jurisdictional defect." State v. Eatontown Borough, 366 N.J. Super. 626, 633 (App. Div. 2004) (quoting F.M.C. Stores Co. v. Borough of Morris Plains, 100 N.J. 418, 425 (1985)). "The policy behind strict time limitations in tax appeals manifests the Legislature's objective to set out a well-organized time table which will allow municipalities to determine the value of their tax ratables and enable them to adopt a responsible and reasonably accurate budget." Macleod v. City of Hoboken, 330 N.J. Super. 502, 506 (App. Div. 2000).

Here, the City complied with the requirements of the local property tax law by forwarding in October 1997 its tax bills to the Trust, which was the owner of record of the property. The bills made clear that any appeal challenging the assessments had to be filed before December 1. The record shows that Trust forwarded the bills to plaintiff on or about October 23, 1997, which afforded plaintiff ample time to investigate the relevant facts and file appeals challenging the assessments before the statutory deadline. However, the complaint in this matter was not filed until December 9, 1998, more than a year past the deadline for contesting the 1997 assessments.

We reject plaintiff's contention that defendants should be equitably estopped from demanding payment of the added/omitted assessments, or from seeking dismissal of the complaint based on plaintiff's failure to file timely appeals from the tax bills. Estoppel may be applied when there is a misrepresentation or concealment of material facts. Carlsen v. Masters, Mates & Pilots Pension Plan Trust, 80 N.J. 334, 339 (1979). There was no misrepresentation or concealment of material facts in this matter. The taxpayer was placed on notice of the need to contest the added/omitted assessments by filing appeals within the statutory time frame. Moreover, in the absence of unusual circumstances, estoppel may not be applied when the collection of taxes is involved. N.J. Tpk. Auth. v. Twp. of Washington, 137 N.J. Super. 543, 552 (App. Div. 1975), aff'd o.b., 73 N.J. 180 (1977). Unusual circumstances do not exist in this matter.

Plaintiff also argues that he was not required to comply with the statutory deadlines for appealing the assessments because in his complaint he asserted claims based on breach of contract, waiver, and estoppel. However, because plaintiff was challenging the tax assessments, and seeking to have the assessments set aside, his complaint is subject to the statutory time deadlines imposed by N.J.S.A. 54:4-63.11 and N.J.S.A. 54:4-63.39. Those deadlines cannot be avoided by the pleading of an alternative cause of action or an alternative legal theory. Eatontown, supra, 366 N.J. Super. at 634-35 (holding that where taxpayer claims that assessments are ultra vires, the deadline for property tax appeals may not be avoided by filing for declaratory judgment); Macleod, supra, 330 N.J. Super. at 506-07 (concluding that plaintiff could not bypass the statutory tax appeal period by challenging an added assessment as void ab initio).

Plaintiff also argues that the statutory deadlines for local property tax appeals are preempted by the URL, the parties' Financial Agreement, and the City's resolution approving the agreement. Again, we disagree. The URL does not expressly preempt the applicable provisions of the local property tax law, nor can such preemption be implied. In addition, the Financial Agreement does not by its terms relieve plaintiff of his obligation to comply with the statutory time deadlines for filing tax appeals. The agreement states that in the event of a breach of the agreement or a dispute as to its terms and provisions, the parties may apply to the Superior Court to settle and resolve the dispute. However, that provision must be read to apply to disputes other than those involving a challenge to a tax assessment, which is a matter governed by statute.

Indeed, any interpretation of the Financial Agreement which precludes application of the local property tax law would be inconsistent with the fundamental principle that a provision in a contract may not be enforced if it contravenes a statute or is otherwise inconsistent with the public policy of this State. Vasquez v. Glassboro Serv. Ass'n, Inc., 83 N.J. 86, 98-99 (!980); Sacks Realty Co., Inc. v. Shore, 317 N.J. Super. 258, 269 (App. Div. 1998).

We have considered the other arguments raised by plaintiff and are convinced that they are without sufficient merit to warrant discussion in this opinion. R. 2:11-3(e)(1)(E).

Affirmed.

 

The URL was repealed effective April 17, 1992, by L. 1991, c. 431, 20, and replaced by the Long Term Tax Exemption Law, N.J.S.A. 40A:20-1 to -20. See Town of Secaucus v. City of Jersey City, 20 N.J. Tax 384, 392 (Tax 2002).

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A-1703-05T5

 

May 24, 2007