Civil action in lieu of prerogative writs.
[110 NJSuper Page 96] This matter is before the court on complaint in lieu of prerogative writs filed by the City of Newark on March 5, 1970 against the Essex County Board of Taxation and all other 21 municipalities of the County of Essex. It deals with the claim of the City of Newark for allowance of credits in 1970 pursuant to N.J.S.A. 54:4-49 for county taxes paid during the years 1960 to 1969, inclusive, with respect to properties owned by the city and leased to the Port of New York Authority at Port Newark Terminal. After a hearing on March 26, 1970 this court filed a written opinion, holding that the matter was appropriate for summary proceeding pursuant to R. 4:67-2(b), but further ruling that there was nothing before it which was ripe for review since the county Board of taxation, the administrative body with the right and duty to first determine whether the city was entitled to such credits, had not rendered its final decision in the matter and had until April 10, 1970, under N.J.S.A. 54:4-52, to render such decision. Rather than dismissing the city's complaint
as premature, the court, in view of the obvious matters of public interest involved, continued the hearing until April 7, 1970 with the advice to the parties that if the county board had not yet rendered its final decision by that date, it would dismiss the complaint, and if the Board had rendered a decision, it would then determine whether it would grant relief on the complaint or require an exhaustion of administrative remedies by the normal course of appeal to the Division of Tax Appeals, as provided in N.J.S.A. 54:2-35.
On April 4, 1970 the court was advised that the board had rendered a final decision to the effect that the city is not entitled to any credits for county taxes paid for the years 1960 to 1966, but that it is entitled in 1970 to credits for such taxes paid for the years 1967, 1968 and 1969.
A short history of the prior litigation bearing upon the city's claim is appropriate. During the period from 1960 to 1965 there was litigation relating to the exempt status of said properties for those years and also with respect to the rights of the city and of the Port of New York Authority under the leases relating to said properties and with respect to compliance by the Port Authority with its obligations thereunder. The parties to the tax phase of this litigation were the City of Newark, the Port of New York Authority, the Essex County Board of Taxation and the City of East Orange, representing itself and the other municipalities of Essex County. The matters eventually reached the Supreme Court on appeal. Because of procedural snarls, the Supreme Court in Port of New York Authority v. Essex County Board of Taxation , 46 N.J. 51 (1965), remanded all matters to the Law Division with directions to hear de novo the entire controversy as to all years involved. In so doing the Supreme Court noted, "we are always reluctant to by-pass the administrative process
in the area of taxation, but under these unusual circumstances, the public interest will be advanced by this disposition." (46 N.J. , at 53).
Upon such remand a pretrial conference was duly held in the Law Division in accordance with the Supreme Court's mandate, and on January 28, 1966 a pretrial order was entered in the consolidated cause. Among the issues specifically listed for resolution was whether the properties leased by the city to the Port Authority were subject to land taxation beginning with the year 1960. The City of Newark contended that the properties were subject to taxation and that, under the terms of the leases, said taxes were payable by the Port Authority. The contentions attached to the pretrial order of the City of East Orange, as an "intervening defendant which has intervened on behalf of itself and on behalf of other municipalities of Essex County," clearly indicate that said municipalities were concerned that credits would be granted to the City of Newark for county taxes paid in the event that the properties were held to be exempt. Said contentions stated as follows:
The City of East Orange is an intervening Defendant which has intervened on behalf of itself and on behalf of other municipalities in Essex County, since the determination of the taxability of the properties involved or their exemption will affect the share of County tax burden that the Essex County municipalities will have to bear. This party asserts that the properties which are subject of this proceeding are not exempt from taxation and that a tax thereon should be paid by either the City of Newark or The Port of New York Authority. Insofar as the City of Newark asserts the claim that these properties are not exempt, we will rely upon the factual contentions of the City of Newark.
In October, 1966, while said litigation was still pending, a ninth supplemental lease agreement was entered into between the City of Newark and the Port Authority. By said agreement the parties expressly agreed that all pending litigation between them, including that related to the exempt status of the properties for the years 1960 to 1966, should be dismissed and that thereafter the properties
should be listed by the City of Newark as exempt. On December 12, 1966 a formal order, consented to in writing by the City of Newark, the Port Authority, the county board of taxation and the City of East Orange, was entered in the consolidated cause dismissing the same. The order is explicit in its terms and provided as follows:
This matter having been opened to the Court by THE CITY OF NEWARK (Norman N. Schiff, Esq. appearing) in the presence of THE PORT OF NEW YORK AUTHORITY (Francis A. Mulhern, Esq. appearing) and of THE CITY OF EAST ORANGE (William L. Brach, Esq. appearing) and it being represented to the Court by counsel for THE CITY OF NEWARK AND THE PORT OF NEW YORK AUTHORITY that an amicable adjustment of all the matters in dispute between them has been reached and that by reason thereof THE CITY OF NEWARK has consented to a dismissal with prejudice of its claims herein, and it further appearing that, since all County taxes resulting from the real estate assessments, heretofore made by THE CITY OF NEWARK, have been paid by THE CITY OF NEWARK and since THE CITY OF NEWARK has and hereby does stipulate that it will make no attempt to recover such payments, intervenor, THE CITY OF EAST ORANGE, has consented to this dismissal, with prejudice and it further appearing that THE ESSEX COUNTY BOARD OF TAXATION, has, by reason of the settlement by the other parties to the proceeding, concluded that a judicial determination of the questions of the taxability of the respective interests in the properties in question is unnecessary, and that it has no further interest herein and, therefore, has consented to a dismissal of these proceedings, with prejudice, but does not thereby waive any right or power to raise or assert such issues with respect to any future proceedings as may be required by law; and good cause otherwise appearing,
It is on this 12th day of December 1966, ORDERED that these actions be and they hereby are dismissed with prejudice but without costs to any party.
This ended all litigation as to the 1960 to 1966 taxes, and all appeals and challenges to the taxable status of the properties were voluntarily abandoned and terminated. As a consequence, the listing of the properties for those years as taxable rather than exempt remained unchanged and the question of exemption was never decided on the merits.
In January 1967, pursuant to the agreement between the City of Newark and the Port Authority in the ninth supplemental
lease, the Newark assessor listed all the properties leased to the Port Authority at Port Newark Terminal as exempt for 1967. On January 25, 1967 the Essex County Board of Taxation ruled that the properties were not exempt and directed the assessor to restore them to the list as taxable. The City of Newark and the Port Authority then joined in a complaint in lieu of prerogative writs in the Law Division against the county tax board seeking a declaration that the properties were exempt.*fn1 The other 21 municipalities in the county were permitted to intervene and they participated directly in the litigation. In an opinion delivered on June 26, 1968 in Newark v. Essex County Board of Taxation , 103 N.J. Super. 41, the Law Division held that said properties were partly exempt and partly taxable and a judgment was entered to that effect, modifying the holding of the county board of taxation. The Port Authority appealed and the county board of taxation filed a cross-appeal. In Newark v. Essex County Board of Taxation , 54 N.J. 171, the Supreme Court held that all of said properties were exempt. Its opinion, modifying the judgment entered by the Law Division, was rendered on June 25, 1969. A petition for certiorari to the United States Supreme Court, seeking review of the decision of the New Jersey Supreme Court, was denied on December 15, 1969. Newark v. Port of New York Authority , 396 U.S. 987, 90 S. Ct. 483, 24 L. Ed. 2d 452 (1969).
It is clear that this litigation specifically related only to the exempt status of the properties so far as 1967 taxes were concerned, but it was being prosecuted during the years 1967 through 1969. Although the City of Newark originally joined the Port Authority in filing the 1967 complaint
in the Law Division for a declaratory judgment as to the exempt status of the properties and took a "neutral" position at the time of the pretrial conference in that cause in December 1967, it is apparent that as the litigation progressed it took the position, similar to that of the county board and the municipalities, that the properties were not entirely exempt. Nevertheless, during the years 1968 and 1969 while the litigation was in progress, the properties were listed each year, in accordance with the supplemental lease, as exempt by the Newark assessor, but the county board, in accordance with its decision with respect to the 1967 taxes that was being appealed, directed each year that the properties be listed as taxable. The city complied with these directions and paid the county taxes thereon for each of said years.
In January 1970, following the final decision of the New Jersey Supreme Court, the Newark assessor listed the properties as exempt for 1970, and at the same time the city made application for credits for county taxes paid on said properties for the entire period from 1960 through 1969. Although the county tax board rendered a tentative decision in February 1970 that the credits for the years 1960 to 1966 would be denied, it indicated that it was disposed to grant the credits for the 1967, 1968 and 1969 taxes in the apportionment valuations contained in the 1970 table of aggregates. It advised Newark by letter dated February 2, 1970 that such was the "tentative holding" even though no formal appeals had been taken by the city or the Port Authority with respect to the 1968 and 1969 taxes. On February 13, 1970 the city requested the county board to enter a "judgment" in accordance with the decision expressed in the letter of February 2, 1970. In a letter dated February 24, 1970 the board advised the city that the judgment form submitted by the city was "not applicable to the present case" and that there was no matter pending before it upon which a judgment could be issued.
The city thereupon filed its complaint in this cause. It prayed that its application for credits and the county board's responses by letter be deemed the equivalent of a formal judgment for purposes of review or, in the alternative, that the court fix a short day for the rendering of such formal judgment by the board. It also requested the declaratory judgment that the city was entitled to the claimed credits for county taxes for the years 1960 through 1969. The parties cooperated in arrangements for a speedy hearing before the court on March 26, 1970 and, as indicated above, the court ruled at that time that the board was not required to pass upon the claims for credits until it issued the table of aggregates with apportionment valuations on April 10, 1970 in accordance with N.J.S.A. 54:4-52, and that in the absence of a final decision by the board as to the granting or denial of credits, there was nothing before it that was appropriate for review. However, in view of the matters of public interest involved, the hearing was adjourned until April 7, 1970, four days before the date the county tax board was required to issue the table of aggregates.
On April 4, 1970 the court was advised that the board had rendered a final decision denying the credits for the years 1960 to 1966 and granting the credits for the years 1967, 1968 and 1969. A copy of the board's resolution to that effect, dated March 31, 1970, which directed that the secretary of the board reflect the allowed credits in the table of aggregates for the year 1970, and copy of Commissioner Glavin's written opinion on behalf of the board, were delivered to the court and to the parties. The 21 municipalities opposing the granting of credits thereupon filed a motion for summary judgment returnable on April 7, 1970, the continued date for the hearing before the court, seeking, among other things, the entry of an order reversing and setting aside the decision of the county tax board granting credits for the years 1967 to 1969 or, in the alternative, reversing and setting aside the decision of the board granting credits for 1968 and 1969.
At the hearing held on April 7, 1970 none of the parties offered any evidence. As is apparent for the above recitation, the court, with the consent of the parties, has taken judicial notice of the records of the prior litigation in this court and in the Supreme Court, pursuant to Evidence Rule 9. None of the parties offered any evidence before the county board or before this court that there has in fact been any use of the involved properties by the Port Authority since 1967 which would render the properties not entitled to the tax exemption which the Supreme Court held that the properties enjoyed for 1967. This court has not been advised whether a statement of exemption with respect to the 1970 exempt status of the properties was taken from the Port Authority or the City of Newark pursuant to N.J.S.A. 54:4-4.4 by the city tax assessor, but it is clear that the properties have been listed by the assessor as exempt for 1970 and that the county board has approved such exempt listing.
It is apparent that no formal appeals were taken, during the period when the litigation with respect to the exempt status for 1967 taxes was in progress, with respect to the action of the county board in requiring the properties to be listed as taxable for 1968 and 1969. Commissioner Glavin stated to the court at the hearing that he knew of no such appeals for 1968 and 1969, and that he knew of no formal understanding by the parties which, in so many words, constituted a formal agreement of the parties that the ultimate resolution of the litigation with respect to the 1967 taxes should govern the tax status of the properties for 1968 and 1969. However, in January 1970, a judgment was entered by the Division of Tax Appeals in the matter of Port of New York Authority v. Essex County Board of Taxation, Docket L-2002-67, which was the appeal to the Division with respect to the 1967 taxes referred to above and which provided:
This matter being opened to the Division by Petitioner, THE PORT OF NEW YORK AUTHORITY (Francis A. Mulhern appearing) and Respondent, THE ESSEX COUNTY BOARD OF TAXATION (Charles H. Landesman, Deputy Attorney General appearing), and it being recalled to the Division that, in its Order of December 5, 1967 Staying Further Proceedings, it is recited that the issues in this appeal were among the issues to be adjudicated in the Civil Action then pending in the Superior Court, Law Division, Essex County, under Docket No. L-33980-66 P.W., entitled City of Newark, et al. vs. Essex County Board of Taxation in which Petitioner and Respondent here were parties, and it appearing that the decision of the Superior Court in that proceeding was certified by the Supreme Court, and that that Court determined in its decision of June 25, 1969 (54 N.J. 171) that each of the properties which are the subject of the Petition herein were and are wholly exempt from taxation, and the Supreme Court of the United States having denied the Petition of the City of Newark for a Writ of Certiorari to the Supreme Court of New Jersey to review the said decision of that Court ([396 U.S. 987, 90 S. Ct. 483, 24 L. Ed. 2d 452] 38 U.S.L.W. 3222, Dec. 15, 1969).
It is on this day of January, 1970
Ordered, that the Petition herein be and it hereby is granted; that the Judgments of Respondent, Essex County Board of Taxation to which the Petition is directed are reversed and that each of the properties listed on Exhibit 1 attached to the Petition herein are determined to be wholly exempt from taxation.
At the hearing before the court on April 7, 1970 each of the parties abandoned any claim that the administration remedy of appeal to the Division of Tax Appeals pursuant to N.J.S.A. 54:2-35 should be required and joined in the request that the court act upon the prayers in the city's complaint and upon the municipalities' motion for summary judgment.*fn2 It was conceded by the said municipalities
in open court that for the purposes of their motion there was no change factually in the use of the properties by the Port Authority during the years 1967, 1968 or 1969 that would disentitle said properties to the exempt status ...