On appeal from the Tax Court of New Jersey.
Furman, Long and Scalera. The opinion of this court was delivered by Long, J.A.D.
The issue on this appeal is whether plaintiff, Union City Associates (taxpayer), may invoke the protection of the Freeze Act (N.J.S.A. 54:3-26) to defeat a 1985 increase in its tax assessment by defendant, City of Union City (taxing district).
The taxpayer is the present owner of property located at block 22, lot 1 on Central Avenue in Union City, Hudson County. In 1983, the taxing district assessed the property at $2,700,000 -- $604,000 for the land and $2,096,000 for improvements. In that year, the property was owned by Washington Park Urban Renewal which sold it to West Park Washington Corporation. Both buyer and seller filed complaints with the Tax Court challenging the assessment in accordance with N.J.S.A. 54:3-21, which permits a direct appeal to the Tax Court if the assessed valuation of the property exceeds $750,000. The seller filed its complaint on August 11, 1983, and the buyer on August 15, 1983. Notice was served upon the clerk and the assessor of the taxing district. On August 26, 1983, the buyer filed a petition with the Hudson County Board of Taxation (county tax board) challenging the same assessment which the board ultimately affirmed. A judgment which recited that the appeal had been "heard and considered" was entered on November 14,
1983, by the county tax board. A judgment code number at the bottom of the judgment was designated "zero." An attached list of reasons for judgment showed that the "zero" code is used when there is "no change in assessment", presumably reflecting a judgment of affirmance on the merits. The list of reasons included designations for petitions which are withdrawn (1), have a Tax Court appeal pending (38), have a Tax Court judgment (40D), are dismissed as a duplicate appeal (40S), or are dismissed for lack of jurisdiction (40X). The only reason given for the November 14, 1983 judgment was that there was "no change in the assessment." Neither party filed an appeal to the Tax Court from the county tax board judgment.
On October 13, 1983, the attorneys for the seller sent a letter to the clerk of the Tax Court withdrawing the complaint appealing the 1983 assessment. A judgment of dismissal based on this withdrawal was entered by the Tax Court on November 17, 1983. By letter dated November 15, 1984, the buyer advised the clerk of the Tax Court that its complaint was to be withdrawn as well. The Tax Court judgment dismissing that complaint was entered December 7, 1984.
In 1985 the premises was assessed at $3,700,000, representing $604,000 for the land and $3,096,000 for improvements. Plaintiff, the current owner of the property (as a result of a conveyance from West Park Washington Corporation), relying on the county tax board judgment entered November 14, 1983, challenged the 1985 assessment because it did not afford Freeze Act protection under N.J.S.A. 54:3-26 which provides that:
Where no request for review is taken to the Tax Court to review the action or determination of the county board involving real property the judgment of the county board shall be conclusive and binding upon the municipal assessor and the taxing district for the assessment year, and for the 2 assessment years succeeding the assessment year, covered by the judgment, except as to changes in value of the property occurring after the assessment date. Where such changes are alleged the petition of appeal shall specifically set forth the nature of the changes relied upon as the basis for such appeal. However, the conclusive and binding effect of such judgment shall terminate with the tax
year immediately preceding the year in which a program for a complete revaluation of all real property within the district has been put into effect.
The taxing district, which had not filed a complaint in opposition, contended that the Freeze Act was inapplicable to these proceedings.
At a hearing before the Tax Court, David Mandelbaum, attorney for the buyer during the proceedings in 1983, testified that his firm filed the complaint with the Tax Court because income and expense information for the property was not available by August 15, 1983, and the Tax Court did not require this documentation to be filed with the pleadings. (The county tax board would not accept the petition for filing without the income and expense sheet attached). According to Mandelbaum, that year, the time for filing an appeal to the county tax board was extended to September 14, 1983, in accordance with N.J.S.A. 54:3-21.4 and N.J.A.C. 18:12-5.1, which permit such an extension when the taxing district fails to mail or deliver tax bills before July 15. Therefore, on August 26, 1983, when ...