On certification to the Superior Court, Appellate Division.
For affirmance in South Plainfield and reversal and reinstatement in Somerville Industrial Park -- Chief Justice Wilentz and Justices Clifford, Schreiber, Handler, Pollock, O'Hern and Garibaldi. Opposed -- None. The opinion of the Court was delivered by Pollock, J.
[92 NJ Page 484] These appeals require us to determine the applicability of N.J.S.A. 54:2-43, the Freeze Act, to a consent judgment entered by the Tax Court pursuant to a settlement. For the assessment year and the two succeeding years, the Act "freezes" municipal property assessments in disputed cases resolved by a final judgment of the Tax Court. In South Plainfield Borough v. Kentile Floors, Inc., one part of the Appellate Division affirmed a judgment of the Tax Court applying the Freeze Act to a consent judgment. In Somerville Industrial Park v. Borough of South Plainfield, however, another part of the Appellate Division ruled
that the Freeze Act did not automatically apply to a consent judgment at the request of the taxpayer alone and remanded the matter to the Tax Court. We hold that the Act applies at the option of the taxpayer when final judgment is entered as the result of a settlement. Therefore, we affirm the judgment of the Appellate Division in South Plainfield Borough v. Kentile Floors, Inc. and reverse that court's judgment in Somerville Industrial Park v. Borough of South Plainfield.
Defendant Kentile Floors, Inc. (Kentile) owns property in the Borough of South Plainfield. As a result of a municipal-wide revaluation of property, the assessment of Kentile's property was increased in 1977 to $10,597,800, allocated $1,475,000 for land and $9,122,800 to improvements. Similar assessments were made for tax years 1978 and 1979, and Kentile filed appeals requesting a reduction for all three years. Because of a backlog of cases in the former Division of Tax Appeals, however, all three appeals were still pending in the Tax Court in 1980. The cases were consolidated for trial, and on March 24, 1980, the parties negotiated a settlement for all three years, which reduced the property assessment to $8,850,000, allocated $1,475,000 to land and $7,375,000 to improvements. The stipulation of settlement, signed by attorneys for both parties on a Tax Court form, represented that the parties "are satisfied that said settlement and disposition adjusts the assessment of the property to the fair assessable value of the property as of the assessing date." Although the terms of the settlement were placed on the record, the court did not take testimony or receive affidavits of value from any expert or from the tax assessor. On June 25, 1980, the Tax Court entered judgment pursuant to the settlement. Neither the stipulation nor the judgment referred to the Freeze Act.
Notwithstanding the settlement, in 1980 the Borough again assessed the taxpayer's property at $10,597,800, once more allocating
$1,475,000 to land and $9,122,800 to improvements. On appeal, the Middlesex County Board of Taxation, applying the Freeze Act to the Tax Court's judgment, reduced the assessment to the 1977, 1978 and 1979 settlement figure of $8,850,000.
The Borough challenged this application of the Freeze Act in its appeal to the Tax Court. The Tax Court granted Kentile's motion for summary judgment and affirmed the Board's decision. 183 N.J. Super. 359, 4 N.J. Tax. 1 (1981). The Appellate Division affirmed. 186 N.J. Super. 399 (1982). That court held that a judgment entered pursuant to a settlement agreement is a final judgment within the meaning of the Freeze Act and that the Tax Court was not obliged under R. 8:9-5 to enter judgment only after receiving affidavits containing expert proofs attesting to the accuracy of the settled value. We granted certification, 91 N.J. 182 (1982), and now affirm.
The Freeze Act, N.J.S.A. ...