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Union City Associates v. City of Union City

Decided: April 4, 1991.

UNION CITY ASSOCIATES, PLAINTIFF-APPELLANT,
v.
CITY OF UNION CITY, DEFENDANT-RESPONDENT



On appeal from the Tax Court of New Jersey whose opinion is reported at 10 N.J. Tax 581.

King, R.s. Cohen and Stern. The opinion of the court was delivered by Stern, J.A.D.

Stern

Plaintiff challenges the dismissal of its complaint seeking reduction of its 1985 assessment. It claims that the assessment was precluded by the Freeze Act, N.J.S.A. 54:51A-8, and, in any event, constituted an illegal "spot assessment" in violation of N.J. Const. (1947) Art. VIII, ยง 1, par. 1(a). The Tax Court, in a published opinion, dismissed the complaint, ruling that (1) the "spot assessment" claim was precluded by the taxpayer's failure to pursue it in a prior action, and (2) the prior Tax Court judgment based on the unilateral withdrawal of a challenge to a prior assessment did not give rise to Freeze Act protection. The facts and procedural history are detailed in the Tax Court opinion, 10 N.J. Tax. 581 (1989), and need not be repeated herein.

On appeal from the prior Tax Court proceedings, the Supreme Court held that plaintiff was not entitled to Freeze Act protection for the 1985 assessment under N.J.S.A. 54:3-26 by virtue of a 1983 judgment of the Hudson County Board of Taxation because the previous filing of a complaint in the Tax Court preempted the County Board's jurisdiction. Union City Associates v. Union City, 8 N.J. Tax. 583 (Tax Ct.1986), rev'd 223 N.J. Super. 316, 538 A.2d 836 (App.Div.1988), rev'd 115 N.J. 17, 556 A.2d 769 (1989). The Tax Court in this case ruled that the plaintiffs were not entitled to Freeze Act protection under N.J.S.A. 54:51A-8 stemming from its judgment on the appeal from the 1983 assessment because that judgment was entered as a result of plaintiff's "unilateral withdrawal." Judge Crabtree concluded that Tax Court judgments are entitled to Freeze

Act protection after adjudication or settlement, but not "unilateral withdrawal." See 10 N.J. Tax. at 587-588. As he stated, "[a] Tax Court judgment of withdrawal has none of the attributes of an adjudication on the merits, nor does it reflect the good-faith accommodation of the parties embodied in a settlement stipulation." 10 N.J. Tax. at 588. We agree and conclude that the unilateral withdrawal of a complaint, which could occur without the taxing district's opportunity to be heard on the merits or to state its view as to the propriety of an assessment or settlement, cannot be deemed an adjudication or resolution warranting Freeze Act protection. Cf. South Plainfield v. Kentile Floors, Inc., 92 N.J. 483, 486-89, 457 A.2d 450 (1983) (application of N.J.S.A. 54:2-43 Freeze Act protection to settlement); Newark v. Fischer, 8 N.J. 191, 199-200, 84 A.2d 547 (1951) (noting purpose of Freeze Act).

Plaintiff's reliance on Judge Lasser's subsequent opinion in 2nd Roc -- Jersey Associates v. Morristown Town, 11 N.J. Tax. 45 (Tax Ct.1990), a Freeze Act case involving multiple parcels, does not require a different result. There, "the withdrawal was a part of a settlement of the complaints." 11 N.J. Tax. at 54. As Judge Lasser noted in 2nd Roc, "it is well accepted that the Freeze Act will apply to a settlement," 11 N.J. Tax. at 55, which is a negotiated disposition involving the taxing authority,*fn1 and "[o]rdinarily a withdrawal will not entitle a taxpayer to an application of the Freeze Act." 11 N.J. Tax. at 54. See also Purex Corp. v. Paterson, 8 N.J. Tax. 121 (Tax Ct.1986), where the taxpayer unsuccessfully sought to withdraw a complaint. While the withdrawal in Purex was denied, the taxpayer there also sought to maintain its appeal with respect to a related parcel, and the two properties had been treated by the taxpayer as "really one." 8 N.J. Tax. at 125. Purex, therefore, does not control the ability to unilaterally withdraw an entire controversy. R. 8:3-9 requires leave of court for withdrawal of a

complaint only after "the close of proofs" and can even occur over defendant's objection, Cherry Hill Tp. v. U.S. Life Ins. Co. of New York, 176 N.J. Super. 254, 261-262, 1 N.J. Tax. 236, 422 A.2d 810 (Tax Ct.1980). Compare, Clinton Tp. Citizens Committee v. Clinton Tp., 185 N.J. Super. 343, 448 A.2d 526 (Law Div.1982). Thus, the unilateral withdrawal cannot have any preclusive or Freeze Act affect in these circumstances.

Judge Crabtree further concluded that the "spot assessment" claim was precluded by the "entire controversy" doctrine as well as the doctrine of res judicata. We need only address the former and therefore decline to pass on the latter.

It is true, as the taxpayer suggests, that R. 8:1 does not expressly or specifically incorporate rules embodied in Part IV of our Rules. Nevertheless, as Judge Pressler has stated

[t]he basic scheme of Part VIII is to conform the practice and procedure of the Tax Court as nearly as possible to that applicable to all other trial courts in the State and yet to retain insofar as possible a high degree of expedition in the initiation, progress and determination of the matters constituting the business of the Court. These rules also are designed to prescribe with particularity the practice of the Tax Court in respect of these procedural considerations unique to it. Thus, to a large extent the rules of Part IV have been incorporated by reference where appropriate. [PRESSLER, Current N.J. Court Rules, Comment R. 8:1 (1991 ed. at 1393)].

Significantly, R. 4:1 provides that "[t]he rules in Part IV, insofar as applicable, govern the practice and procedure of civil actions in the . . . Tax Court except ...


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