On appeal from the Tax Court whose opinion is reported at 7 N.J. Tax 346.
Morton I. Greenberg, R. S. Cohen and Gruccio. The opinion of the court was delivered by Morton I. Greenberg, P.J.A.D.
[214 NJSuper Page 569] This appeal involves a claim for exemption from real estate taxes by Essex County for three years, 1982, 1983 and 1984, for a property it owns at 15 South Munn Avenue in the City of East Orange. The extraordinary procedural history of this case must be set forth at length for an understanding of the issues
raised. The County contends that the property, a single structure leased in part to private nongovernmental tenants, was used for public purposes and thus it sought an exemption from taxation under N.J.S.A. 54:4-3.3. The City rejected this claim. Ultimately, the Tax Court ruled that the property should be apportioned between its public and private uses and taxed to the extent that it is privately used. The parties were able to stipulate to an apportionment without prejudice to the fundamental position of the County that the entire property should be exempt and of the City that there should be no exemption. These cross-appeals followed.
The original complaint was filed by the County in the Tax Court on August 12, 1982. On September 16, 1982 the City filed a motion to dismiss the complaint under N.J.S.A. 54:2-39*fn1 as the County had not paid any taxes for 1982. N.J.S.A. 54:2-39 provides that when a complaint is filed in the Tax Court all taxes for the year for which review is sought must have been paid. As the 1982 taxes had not been paid, Judge Hopkins granted this motion and on October 14, 1982 signed an order dismissing the complaint.
On November 1, 1982 the County filed a complaint in lieu of prerogative writs in the Superior Court seeking a judgment requiring the City to classify the property as exempt public property, thus cancelling the assessment against it. This action was assigned to Judge Hopkins for disposition. Subsequently, as the basic facts were not in dispute that the County used part of the building itself and rented part to Fidelity Union Bancorporation and part to the Turrell Fund, a charitable organization, the parties moved for summary judgment. Thereafter, on June 17, 1983 in the face of the City's threat to foreclose, the County paid the delinquent taxes.
In a written, but unreported, opinion of March 19, 1984 Judge Hopkins held that the Superior Court did not have jurisdiction as the County's complaint sought relief available only in the Tax Court. Rather than dismiss the case, however, he transferred it to the Tax Court and ordered that it be treated as a request for a reconsideration of the prior dismissal by that court. He explained his decision as follows:
While the subject complaint can be dismissed as it was brought in the wrong forum, the matter can also be transferred to the Tax Court pursuant to R. 1:13-4. However, it has previously been the subject of a complaint in that court and that body dismissed the matter as the taxes were not paid at the time the complaint was filed. In so acting, the Tax Court was then applying N.J.S.A. 54:2-39 to direct appeals to the Tax Court. Since then, the case of Powder Mill Mill I Associates v. Hamilton Tp., 190 N.J. Super. 63 (App.Div.1983) has held that N.J.S.A. 54:3-27 should apply to direct appeals. The subject complaint was filed one week prior to the entry of the Tax Court judgment. Accordingly, it will be treated as a motion for reconsideration of the Tax Court judgment and pursuant to R. 1:13-4, transferred to the Tax Court for its consideration.
The judge referred to our Powder Mill decision as we there held that the failure to pay taxes before a direct appeal to the Tax Court would not deprive that court of jurisdiction to entertain a tax appeal. Further, while the taxpayer was obliged to pay taxes as provided in N.J.S.A. 54:3-27, if the municipality moved to dismiss the appeal because the taxes were not paid the taxpayer could then pay them, thus curing its default.
Following the transfer to the Tax Court, Judge Hopkins on May 7, 1984 set aside the October 14, 1982 order dismissing the complaint and then denied the City's original motion to dismiss the complaint. Subsequently, the County filed a motion seeking a determination of the scope of the transferred action or seeking to amend or supplement its complaint to include a claim for exemption for 1983 as it had not filed a separate tax appeal for that year. On June 29, 1984 Judge Hopkins in a written, but unreported, opinion ruled that the County's complaint would encompass both the 1982 and the 1983 tax assessments. He reasoned that:
Since the complaint in lieu of prerogative writs was transferred to this court to be treated by this court as a motion for reconsideration of the judgment dismissing the Tax Court action and, since the order transferring it to this court was signed subsequent to the time within which the County could file a complaint alleging error with respect to the 1983 tax year, and, further, since the County properly assumed that such issue was being presented to the Superior Court in view of its request for declaratory judgment, it is consistent ...