DT HOLDINGS 6201, LLC v. TOWNSHIP OF HOWELL

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

DT HOLDINGS 6201, LLC,

Plaintiff-Appellant,

v.

TOWNSHIP OF HOWELL,

Defendant-Respondent.

_________________________________

August 5, 2014

Argued April 2, 2014 - Decided

Before Judges Sapp-Peterson and Maven.

On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-1872-12.

Leah Lederberger argued the cause for appellant (Law Offices of Samuel Z. Brown, attorneys; Ms. Lederberger on the brief).

Lani M. Lombardi argued the cause for respondent (Cleary Giacobbe Alfieri Jacobs, LLC, attorneys; Ms. Lombardi, on the brief).

PER CURIAM

Plaintiff DT Holdings 6201, LLC appeals the trial court's order: (1) granting defendant Howell Township's ("Township") cross-motion for summary judgment; (2) denying plaintiff's motion for summary judgment; and (3) dismissing plaintiff's complaint with prejudice. We reverse.

On October 1, 2009, Howell Township's Tax Assessor ("Tax Assessor") fixed the 2010 total assessment of the land and improvements on property owned by plaintiff, located at Block 25, Lot 24.01, at $1,423,300. On March 26, 2010, plaintiff filed a Petition of Appeal with the County Tax Board ("Board") seeking reduction of its real property tax assessment for the 2010 tax year. On August 31, 2010, the Board entered a judgment affirming the 2010 assessment at $1,423,300. On October 22, 2010, plaintiff filed an appeal of the 2010 Board judgment with the Tax Court.

On October 1, 2010, the Tax Assessor fixed the 2011 total assessment of the property at $1,423,300. The Tax Assessor submitted the Township's real property tax assessment list, commonly referred to as the "tax book," to the Board on January 10, 2011. This action, in effect, "closed" the Township's book from any further adjustments to the October 1, 2010 pre-tax year assessments for 2011.

On January 28, 2011, after the Tax Assessor submitted his tax book to the Board as "closed" for the 2011 tax year, the Tax Assessor arrived at a settlement with plaintiff wherein, in exchange for plaintiff not pursuing a trial in the pending 2010 tax assessment matter, he agreed to propose reduction of the real property tax assessments for the 2010 through 2012 years as follows:

2010 tax year - $950,000.00

2011 tax year - $700,000.00

2012 tax year - $700,000.00

The stipulation provided "that either party shall have the right to file an appeal for the tax year in question to obtain a judgment to enforce this settlement."

On May 6, 2011, the Tax Court entered its judgment enforcing the 2010 real property tax assessment amount of $950,000.00 agreed to by the parties in the settlement. However, no judgment was ever rendered by the Tax Court as to the 2011 tax year.

Nine months after the issuance of the 2010 judgment, by correspondence dated February 24, 2012, plaintiff filed an application with the Tax Court under the Freeze Act, N.J.S.A. 54:51A-8, seeking to have the Tax Court enter judgment reducing the real property tax assessment for the subject property to the $700,000 amount proposed in the settlement for years 2011 and 2012. The Tax Court denied plaintiff's application, citing lack of jurisdiction.

On April 2, 2012, the Township initiated a Petition of Appeal with the Board to seek enforcement of the $700,000 proposed tax assessment for the 2012 tax year. On August 31, 2012, the Board entered judgment reducing plaintiff's 2012 real property tax assessment to $700,000.

On April 26, 2012, plaintiff filed a complaint for breach of the settlement agreement between itself and defendant in the Law Division. The complaint stated that the parties entered into an agreement resolving plaintiff's then-pending tax appeal for the year 2010 and established assessment amounts for years 2011 and 2012. The complaint alleged defendant breached the agreement by assessing plaintiff's property at $723,000 more than the agreed upon assessment for the 2011 property tax year. Plaintiff sought a declaratory judgment to enforce the 2011 tax assessment settlement price of $700,000. Defendant responded by way of answer, admitting the parties reached a settlement agreement for the property's tax assessment for years 2010, 2011, and 2012, but asserting separate defenses, which included its contention the trial court lacked subject matter jurisdiction because plaintiff failed to exhaust administrative remedies and plaintiff's claims were cognizable before the Tax Court.

In March 2013, plaintiff moved for summary judgment seeking a determination that defendant breached the terms of the settlement agreement for tax year 2011 by not reducing plaintiff's 2011 real property tax assessment to $700,000. Plaintiff argued the trial court had subject matter jurisdiction. Plaintiff contended the tax-related content of the agreement was irrelevant, as the court was not being asked to address the underlying tax appeal.

Defendant opposed plaintiff's motion and cross-moved for summary judgment, arguing plaintiff's complaint failed to set forth a claim upon which relief could be granted by the trial court, and also contending that plaintiff cannot enforce the agreement, subject matter jurisdiction was exclusively in the Tax Court, and the Tax Court's statutory timeframe for enforcement had long since expired.

Following oral argument, the trial court found this matter fell "within its jurisdiction" and the only issue presented to the court was "whether the agreement should be enforced." The court found the settlement agreement was "freely entered into by both parties" and both parties were seeking to have the "agreement enforced as it is currently written." The court turned to the "unambiguous language of the settlement agreement" which contained a "clause specifically addressing how the parties can seek enforcement." "Pursuant to that clause either party has the right to file a tax appeal to obtain judgment to enforce the agreement." The court further found that "an aggrieved party must file a tax appeal by April 1 of the year in which the part[y] appealing the tax assessment or forever be barred from challenging the assessment at issue." Because plaintiff failed to file a tax appeal by April 1, 2011, the court found plaintiff was "barred from challenging the 2011 tax assessment." Accordingly, the court denied plaintiff's motion for summary judgment and granted defendant's cross-motion for summary judgment. The order dismissed plaintiff's complaint with prejudice. The present appeal followed.

On appeal, plaintiff contends the court erred in construing the forum selection clause as the exclusive forum through which the parties could seek enforcement of the agreement. Plaintiff also urges the court mischaracterized defendant's cross-motion and, therefore, improperly dismissed plaintiff's complaint, sua sponte, without prior notice to plaintiff. Finally, plaintiff contends the trial court "failed to recognize that defendant had irrevocably waived any rights under the agreement's forum selection clause," when it filed an answer and motion in Superior Court.

"'The right to appeal a real property assessment is statutory, and the appellant is required to comply with all applicable statutory requirements.'" Macleod v. City of Hoboken, 330 N.J. Super. 502, 505 (App. Div. 2000) (quoting F.M.C. Stores Co. v. Borough of Morris Plains, 195 N.J. Super. 373, 381 (App. Div. 1984), aff'd, 100 N.J. 418 (1985)).

N.J.S.A. 54:3-21(a)(1) provides:

[A] taxpayer feeling aggrieved by the assessed valuation of the taxpayer's property, or feeling discriminated against by the assessed valuation of other property in the county, or a taxing district which may feel discriminated against by the assessed valuation of property in the taxing district, or by the assessed valuation of property in another taxing district in the county, may on or before April 1, or 45 days from the date the bulk mailing of notification of assessment is completed in the taxing district, whichever is later, appeal to the county board of taxation by filing with it a petition of appeal; provided, however, that any such taxpayer or taxing district may on or before April 1, or 45 days from the date the bulk mailing of notification of assessment is completed in the taxing district, whichever is later, file a complaint directly with the Tax Court, if the assessed valuation of the property subject to the appeal exceeds $ 1,000,000.

[N.J.S.A. 54:3-21(a)(1) (emphasis added).]

Irrespective of the desired wishes of parties to a dispute, a court may not resolve a dispute where it lacks subject matter jurisdiction. Peper v. Princeton Univ. Bd. of Trs., 77 N.J. 55, 65 (1978). "[U]nlike jurisdiction over the person, jurisdiction over the subject matter cannot be conferred by agreement." Jackson v. Marsyll of B.B., 3 N.J. Tax 386, 391 (Tax Ct. 1981). An agreement "cannot serve to relieve a taxpayer of the necessity of filing an appeal." Ibid.

In Jackson, a taxpayer filed a motion before the Tax Court to enforce a settlement agreement with the township for the tax year 1980, or in the alternative, for leave to file a tax appeal out of time for 1980. Id. at 388. The parties had agreed in 1979 that the decision would be binding for 1978, 1979, 1980 and thereafter. Id. at 389. The court found the agreement was beyond the scope of the municipal authority, noting that "each annual assessment of property for tax purposes is separate and distinct from the assessment for any other year." Ibid. The court explained that on a year-to-year basis, a tax assessor may face differing factual circumstances which may affect a property's tax assessment. Ibid. Consequently, the court found "the correct assessment is not determined until October 1 of the pretax year[.]" Ibid. Therefore, the court held "no enforceable agreement could have been entered into in February 1979, fixing the assessment for the tax year 1980." Id. at 390.

The court also held that "a municipal corporation cannot be bound by an engagement it had no power to make. . . . Such an ultra vires act may not even be ratified." Ibid. (internal quotations and citations omitted). The court additionally held the plaintiff's appeal of the assessment was untimely and that timelines for an aggrieved taxpayer to seek relief before the tax court are strictly enforced. Ibid.

The import of Jackson, cited by defendant in opposition to this appeal, is that a tax "court cannot grant [a taxpayer's] request for equitable relief by tolling the time limitations contained in the [tax] statute dealing with appeals[,]" and a municipality is without authority to enter into an agreement binding it to "an engagement it had no power to make." Id. at 390. Jackson does not stand for the proposition that a municipality is precluded from entering into settlement agreements by which it was intended to be bound where it had the authority to enter into such an agreement or that the Tax Court is the exclusive forum through which an aggrieved property tax payer may seek enforcement of a settlement agreement.

N.J.S.A. 54:3-21, governing tax appeals, does not state that an appeal to the Tax Court is the sole and exclusive means by which an aggrieved taxpayer may seek property tax assessment relief. Rather, the language of the statute is couched in permissive terms. To the extent a taxpayer seeks relief in that forum, the taxpayer is bound by the statutory time restraints. Ibid.

Likewise, the language of the settlement agreement did not mandate enforcement of the judgment before the tax court. Rather, it merely establishes the right to seek relief in the tax court. Thus, we agree, as the trial court found, it had subject matter jurisdiction to consider plaintiff's action. Where we disagree is with the court's conclusion plaintiff was mandated to file a tax appeal before the Tax Court for the reasons we have previously explained. Having exercised its jurisdiction, the court should have proceeded to consider the merits of enforcement of the settlement agreement applying contract principles.

Public policy in New Jersey favors the settlement of litigation, and a settlement agreement is a contract that should be enforced by the courts like other types of contracts. Pascarella v. Bruck, 190 N.J. Super. 118, 124-25 (App. Div.), certif. denied, 94 N.J. 600 (1983). Since the "[s]ettlement of litigation ranks high in our public policy," Jannarone v. W.T. Co., 65 N.J. Super. 472, 476 (App. Div.), certif. denied, 35 N.J 61 (1961), settlement agreements resolving litigation will be enforced "absent a demonstration of 'fraud or other compelling circumstances[.]'" Pascarella, supra, 190 N.J. Super. at 125 (citations omitted). Moreover, where the terms and conditions of a settlement agreement are clear and unambiguous, the non-breaching party is entitled to enforcement. Schor v. FMS Financial Corp., 357 N.J. Super. 185, 191-92 (App. Div. 2002). Finally, the interpretation and construction of a contract is a matter of law for the court subject to de novo review. Kaur v. Assured Lending Corp., 405 N.J. Super. 468, 474 (App. Div. 2009) (reviewing the enforcement of a settlement agreement de novo); see also Sealed Air v. Corp. Royal Indem. Co., 404 N.J. Super. 363, 375 (App. Div.) (interpreting a pollution exclusion in an insurance contract under the de novo standard of review), certif. denied, 196 N.J. 601 (2008); Lobiondo v. O'Callaghan, 357 N.J. Super. 488, 494-95 (App. Div.), certif. denied, 177 N.J. 224 (2003) (applying a de novo standard of review in deciding whether to enforce an oral contract).

Summary judgment must be granted if "the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c). Thus, "when the evidence is so one-sided that one party must prevail as a matter of law[,] . . . the trial court should not hesitate to grant summary judgment." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995) (citations and internal quotation marks omitted).

Here, the parties do not dispute they entered into the settlement agreement; nor do they dispute their intent to be bound by the terms of the agreement. Consequently, the motion judge erred when it declined to enforce the settlement agreement based upon its conclusion plaintiff failed to file a timely appeal in the Tax Court.

Reversed.