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BTD-1996, NPC 1 L.L.C. v. 350 WARREN L.P.

August 03, 2000


Before Judges Stern, Kestin and Steinberg.

The opinion of the court was delivered by: Stern, P.J.A.D.


Argued May 24, 2000

On appeal from the Superior Court of New Jersey, Chancery Division, Hudson County.

The Hudson County Sheriff appeals from a judgment entered on April 19, 1999, declaring that "N.J.S.A. 22A:4-8 as applied to the commissions sought by the Hudson County Sheriff from plaintiff in this case is unconstitutional," and denying the Sheriff's requested order to show cause seeking payment of his statutory fee. The Sheriff argues that he is entitled to the statutory commission or fee provided in N.J.S.A. 22A:4-8 when a judicially ordered sale does not go forward by virtue of a settlement; that the settlement resulted from the conduct of the Sheriff in preparing for the sale; and that plaintiff is not entitled to the exemption from such payment awarded to federal agencies or departments, as prescribed in Resolution Trust Corp. v. Lanzaro, 140 N.J. 244 (1995).

N.J.S.A. 22A:4-8, entitled "Fees and mileage of sheriffs and other officers," in Title 22A "fees and costs," provides in part regarding "execution sales" that:

When the execution is settled without actual sale and such settlement is made manifest to the officer, the officer shall receive ½ of the amount of percentage allowed herein in case of sale.

Based on the statute, the Sheriff seeks a commission of $30,408.64, and seeks to distinguish the Resolution Trust case. The plaintiff, which obtained a judgment for $3,830,913.23 and a Writ of Execution, contends that the commission is a "tax" to support the general operations of the Sheriff's Department or county government, and, as such, is unconstitutional. The parties stipulated that the value of the services actually performed and expenditures actually involved (independent of indirect costs of personnel and equipment utilized, which would be normal expenses) amounted to $971.14. *fn1 There is no dispute that these actual expenses that were incurred by the Sheriff are payable to the Sheriff. In fact, they were paid out of plaintiff's $1,000 deposit.

Defendant, 350 Warren, L.P., paid plaintiff $2,400,000 (in settlement of the $3,830,913.23 judgment plaintiff obtained against defendant), and the parties to this appeal agree that the commission would be $30,408.64 if the statutory fee is enforceable. *fn2 Plaintiff would not pay the disputed statutory fee and the Sheriff sought an order to show cause. The Attorney General, after receiving notice required by R. 4:28-4, elected not to participate in the proceedings.

The trial judge held the statute to be unconstitutional as applied, concluding:

that N.J.S.A. 22A:4-8 is unconstitutional as applied to the plaintiff in this case, where the disproportion between the charge and the cost of the service is excessive, the charge imposed is intended primarily to raise revenue, and not to compensate the governmental entity for the cost of providing the service. As a result, the charge is essentially the equivalent of a tax, measured by the sale price of the foreclosed property, it is apparent in this case that the charge is grossly disproportionate to the cost of the services rendered under any measure, and is premised solely on the statutory authorization appearing in 22A:4-8, which permits the Sheriff to receive one-half of the amount of the percentage allowed in the event a sale is made. [citation omitted.]

The judge also determined:

that the tax violates Article 4, Section 7, Paragraph 4 of the New Jersey Constitution for, among other reasons, the reason that the statute 22A:4-8 has the following title: Fees and Mileage of Sheriffs and other Officers, that's the title to the statute. . . . And so, the court concludes that 22A:4-8 violates the New Jersey Constitution, since it gives no notice or indication of the purpose of the statute, which purpose is to permit or impose taxation. *fn3

We conclude, as did the trial judge, that the issue before us is controlled by Resolution Trust, supra, 140 N.J. 244, and that the fee in this case constituted a tax. While we reject the trial judge's constitutional analysis, we conclude that the "fee" is unenforceable because of its lack of proportionality to ...

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