612 Paramus, LLC v. Borough of Paramus

NOT FOR PUBLICATION WITHOUT APPROVAL OF

THE TAX COURT COMMITTEE ON OPINIONS

TAX COURT OF NEW JERSEY

Kathi F. Fiamingo 153 Halsey Street

Judge Gibraltar Building 8thFloor

Newark, New Jersey 07101

(973) 648-2921 Fax: (973) 648-2098

January 2, 2015

Robert M. Jacobs, Esq.

Winne Banta Hetherington Basralian & Kahn, P.C.

Court Plaza South East Wing

21 Man Street, Suite 101

P.O. Box 647

Hackensack, New Jersey 07607-0647

Brian Giblin, Esq.

Giblin & Giblin

2 Forest Avenue #200

Oradell, New Jersey 07649

Re: 612 Paramus, LLC v. Borough of Paramus

Docket No. 005699-2014

Dear Counsel

This letter constitute the court s opinion in the above matter with respect to the defendant s motion to dismiss the complaint because of a failure to respond to a request for income and expense information pursuant to N.J.S.A. 54:4-34. For the reasons more fully explained below, the defendant s motion is granted, subject to plaintiff s right to a reasonableness hearing pursuant to Ocean Pines, Ltd. v. Borough of Point Pleasant, 112 N.J. 1 (1988).

Findings of Fact and Procedural History

The following findings of fact are based on the certifications and exhibits submitted by the parties on the motion. R. 1:6-2(d).

On or about October 1, 2013, defendant Borough mailed by certified mail, return receipt requested and regular mail, a request for income and expense information pursuant to N.J.S.A. 54:4-34, commonly known as a Chapter 91 request, to the then owner of record of the Property, PMG New Jersey, LLC, at its address of record, 1260 Darby Brook Court, Woodbridge, VA 22192. The request included a copy of the referenced statute and a form to be completed requesting income and expense information for the period October 1, 2012 through September 30, 2013.

The certified mail receipt was subsequently received by the Assessor indicating that the request had been delivered and signed for. While the receipt does not contain the date of delivery, the receipt was stamped Received October 4, 2013 by the Assessor s office. It was therefore delivered and signed for some time after October 1, 2013 when it was mailed and October 4, 2013 when the delivery receipt was returned to the Assessor s office. No response to the Chapter 91 request was provided to the Assessor.

Taxpayer timely filed a complaint on March 19, 2014, contesting the 2014 real property tax assessment on the subject property, to which it acquired title on or about February 25, 2014.

On or about September 11, 2014, the Borough filed the instant motion to dismiss plaintiff s complaint as a result of the failure of the plaintiff s predecessor in title to furnish the income and expense information requested by the Assessor.

Conclusions of Law

R. 8:7(e) provides that

Except in the case of a false or fraudulent account, all motions to dismiss for refusal or failure to comply with N.J.S.A. 54:4-34 shall be filed no later than the earlier of (1) 180 days after the filing of the complaint, or (2) 30 days before the trial date.

No trial date has been set in this matter, therefore, the applicable deadline for the filing of the Chapter 91 motion was 180 days after the filing of the complaint - September 15, 2014. Thus, defendant s motion was timely filed.

The statute in question, N.J.S.A. 54:4-34, provides

Every owner of real property of the taxing district shall, on written request of the assessor, made by certified mail, render a full and true account of his name and real property and the income therefrom, in the case of income-producing property . . . and if he shall fail or refuse to respond to the written request of the assessor within 45 days of such request . . . the assessor shall value his property at such amount as he may, from any information in his possession or available to him, reasonably determine to be the full and fair value thereof. No appeal shall be heard from the assessor's valuation and assessment with respect to income-producing property where the owner has failed or refused to respond to such written request for information within 45 days of such request . . . . In making such written request for information pursuant to this section the assessor shall enclose therewith a copy of this section.

The financial information sought by the Assessor pursuant to the Chapter 91 request is designed to assist the assessor in the first instance, to make the assessment and thereby . . . to avoid unnecessary expense, time and effort in litigation. Ocean Pines, supra, 112 N.J. at 7, quoting Terrace View Gardens v. Township of Dover, 5 N.J. Tax 469, 474-75 (Tax 1982), aff d, 5 N.J. Tax 475 (App. Div.), certif. denied, 94 N.J. 559 (1983).

As noted in the statute, no appeal of an assessment will be had in the event a taxpayer fails to respond to the assessor s demand for information within the time provided. In order that the property owner be adequately notified of its statutory obligations and the penalty for failure to respond the municipality is required to strictly comply with the statutory requirements. Great Adventure, Inc. v. Township of Jackson, 10 N.J. Tax 230 (App. Div. 1988). The assessor is charged with three strict obligations under the statute: (1) the letter must include a copy of the text of the statute; (2) it must be sent by certified mail to the owner of the property; and (3) it must spell out the consequences of failure to comply with the assessor s demand, namely a bar to the taxpayer s taking of an appeal from its assessment. Southland Corp. v. Township of Dover, 21 N.J. Tax 573, 578 (Tax 2004).

In the matter before me, it is unquestioned that the assessor s demand included a complete copy of the statute, and that both the statute and the assessor s cover letter clearly informed the taxpayer that an appeal would be denied in the event the taxpayer failed to respond to the request within the time provided. It is also unquestionable that the notice was sent by certified mail to the then owner of the property.

Taxpayer does not dispute that the Chapter 91 request was mailed to the then owner of the property, PMG New Jersey, LLC. Taxpayer argues, however, that it would be inequitable to allow dismissal of the complaint under the circumstances of this matter. In support of that argument, taxpayer certifies that at the time the Chapter 91 request was made, its affiliate, Paramus North, LLC, was the tenant at the property and by virtue of an agreement between the tenant and the then owner, Paramus North was responsible for the payment of all real property taxes and that it did in fact pay such taxes. Further, taxpayer maintains that Paramus North had the right to file all tax appeals and that it did in fact file a tax appeal for the 2013 tax year.

Taxpayer acknowledges that despite the obligations of Paramus North with respect to the taxes, the owner of the property did not transmit the Chapter 91 request to Paramus North, nor did it bring it to the attention of Paramus North.

As noted, taxpayer does not contest the validity of the Assessor s Chapter 91 request or its apparent delivery to the owner of the property at the time the request was mailed. Furthermore, while plaintiff alleges the tenant was responsible for the payment of the taxes and had the right to contest the tax assessment, plaintiff does not allege that the assessor was on notice that the tenant was to receive the Chapter 91 request or that the Borough was ever provided with Paramus North s address for any purpose.

The assessor satisfied the obligations imposed upon the municipality by N.J.S.A. 54:4-34. To require the assessor to inquire further as to circumstances of contractual arrangements between property owners and their tenants extends the intention of the statute well beyond any reasonable interpretation. See, Noam (et al.), Yeshivat v. Paramus, 26 N.J. Tax 335 (Tax 2012) (Assessor has no obligation to re-send Ch. 91 request to subsequent property owner.)

Notably, taxpayer does not contend that it had any rights or obligations relative to the property at the time of the Chapter 91 request. While affiliated in some manner, Paramus North and taxpayer are separate entities. Taxpayer did not acquire title to the property until February 25, 2014, long after the Chapter 91 request was made and the response thereto was due to be returned. In fact, taxpayer did not acquire title to the property until more than a month after the January 10 deadline for assessors to submit their book of assessments for the tax year required by N.J.S.A. 54:4-34.

It is well settled that a Chapter 91 notice to a prior owner is notice to a subsequent owner and that such notice satisfies due process. ADP of New Jersey v. Parsippany-Troy Hills, TP, 14 N.J. Tax 372 (1994); See also Carriage Four Assocs v Teaneck Tp, 13 N.J. Tax 172 (1993) (Receiver is barred by Chapter 91 from contesting an assessment where the prior owner failed to comply with Chapter 91). The Chapter 91 defect runs with the land, it is not personal to any given owner. Id. at 180.

Under those precedents, the taxpayer, 612 Paramus, LLC, stands in the shoes of PMG New Jersey, LLC, from whom it obtained title to the subject property. The notice was properly sent. It was received and ignored by the then owner of the property.

The taxpayer is therefore barred from contesting the assessment, except in a reasonableness hearing to be provided under Ocean Pines. Therefore, defendant s motion is granted, subject to plaintiff s right to request an Ocean Pines reasonableness hearing and an order will be entered accordingly.