The opinion of the court was delivered by: Hamill
Before the court is plaintiff's motion to apply the Freeze Act for the 1995 tax year based on a county tax board judgment for the 1993 tax year.
The property at issue is Block 86, Lot 12 in Freehold Township. On June 23, 1993, the Monmouth County Board of Taxation issued a judgment that "sustained without prejudice" the 1993 assessment on the property at $7,900,000. Plaintiff appealed the judgment of the county board to the Tax Court but on September 20, 1995 withdrew the appeal.
For 1995, the property was again assessed at $7,900,000. Plaintiff filed a direct appeal with the Tax Court, and the township filed a counterclaim seeking to increase the assessment. On September 19, 1995, plaintiff advised that it was withdrawing its 1995 complaint as to valuation, and on October 20, 1995, the Tax Court entered a judgment dismissing the complaint. Defendant has not withdrawn the counterclaim, and the matter has been scheduled for trial.
In urging application of the Freeze Act to the 1993 county tax board judgment, plaintiff argues that the county board judgment is conclusive and binding upon the assessor. Plaintiff concedes that there was no valuation hearing at the county board. Rather, plaintiff's counsel, with the consent of the assessor, wrote to the county board asking that the assessment be affirmed without prejudice so that plaintiff could take its appeal to the Tax Court without the necessity of appearing and presenting evidence at the county board. Plaintiff further concedes that the county board judgment affirming without prejudice was not part of a larger settlement of various lots. Plaintiff did not appear at the county board, and the board, as requested, sustained the assessment without prejudice.
In response, defendant asserts that plaintiff is not entitled to the protection of the Freeze Act because the county board judgment sustaining the assessment without prejudice was not a judgment on the merits. Defendant points out that no evidence of value was presented at the hearing. Defendant additionally argues that, if a taxpayer could obtain the benefit of the Freeze Act on the basis of an affirmance without prejudice by the county board, astute taxpayers will file appeals with the county boards, have them sustained without prejudice, and will not file in the Tax Court since the freeze will apply to the county board judgments. Finally, defendant asserts that a judgment "without prejudice" means a judgment that does not prejudice either party. This will not be the case if a taxpayer can use such a judgment as the basis for freezing an assessment for the two subsequent years.
In reply, plaintiff asserts that no "decision has ever held that the County Tax Board determination must be based upon a judgment on the merits in order for a taxpayer to be entitled to Freeze Act protection."
The county tax board Freeze Act was enacted in 1946 by way of an amendment to N.J.S.A. 54:3-26. L. 1946, c. 161, p. 730, § 18. The amendment was prompted by actions of assessors who, year after year, would restore assessments to their original levels despite yearly taxpayer appeals and yearly reductions by the county tax boards and the courts. Report to the Honorable Charles Edison, Governor of New Jersey, Hudson County Board of Taxation 16 (Jan. 15, 1943).
As stated in Newark v. Fischer, 8 N.J. 191 (1951), the Freeze Act
was intended to govern the frequency of appeals as to disputed amounts of assessments and not the tax exempt status of real property.
The evil which the "freeze" statute sought to remedy was repeated yearly increases in the assessed value of property, not related to or justified by any changes increasing its market value, and resulting in harassment of the taxpayer, subjecting him to the trouble and expense of annual appeals to the county tax board.
Having concluded that the Freeze Act applied to appeals involving the valuation of real property, not its taxable status, the Court held that Newark was not barred from treating the property as taxable for 1948 and 1949 by reason of a county tax board judgment canceling the assessment for 1947. Id. at 198-200.
The Court expressed the idea even more clearly in another tax exemption case, stating that the Freeze Act applies to a "judgment with respect to valuation," not one respecting tax exempt status. Boys' Club of ...