On appeal from Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-7627-00.
Before Judges Conley, Carchman and Parrillo.
The opinion of the court was delivered by: Carchman, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
The narrow issue that we address on this appeal is whether a property owner-condemnee is responsible for roll back taxes when the use of such property is changed as a result of a condemnation. We answer that question in the negative and conclude that the condemning authority is responsible for such roll-back taxes. We further conclude that the cessation of farming operations in reasonable anticipation of the ensuing condemnation does not comprise a change of use warranting imposition of the roll-back taxes on the condemnee.
We reach this result in the context of the following undisputed factual circumstances. Defendants Ruth Cody Eckert, Janis Lee Eckert, Seymour Lifschutz and Cody Ann Eckert (the partners) owned 23.723 acres of land in South Brunswick Township at the intersection of 50 Deans Rhode Hall Road (the property). From 1982 through 2000, the partners leased the property to tenant farmers who grew grain crops on the land.
Pursuant to the Farmland Assessment Act (the Act), N.J.S.A. 54:4-23.1 to -23.34, defendants applied for and were granted farmland tax assessment for the property. In July 1999, Jeffrey Scott, Assistant Superintendent for Business and Board Secretary to plaintiff Board of Education of the Township of South Brunswick, contacted defendant Ruth Cody Eckert to inform her that the Board desired to purchase the property to be used for the construction of a new elementary school. Scott informed Eckert that the Board had determined that defendants' site was the"most appropriate of all the sites examined."
After this initial telephone conversation, the Board moved quickly and decisively to acquire the property. In August 1999, Scott received formal approval from the Board to acquire the property, and on October 5, 1999, the voters of South Brunswick approved a referendum authorizing the expenditure of funds to purchase the property. Immediately thereafter, the South Brunswick Township Committee adopted an ordinance changing the zoning to permit school use on the property.
After all of the necessary governmental requirements were in place, the Board then entered the property. In November 1999, after the tenant-farmer Allen Habiak harvested his crops from the Spring planting, the Board took soil samples from the property. While the parties disagree as to the extent of soil excavation, backhoes were used to dig the test borings, which Habiak described as"craters" that were"eight feet" in length.*fn1
Habiak's lease arrangement with defendants was"basically indefinite," and although he had only farmed the land for two seasons, his predecessor had farmed the property for approximately eighteen years. Except for the Board's intervention, defendants evidenced no intention of selling the property, and planned to continue leasing it for farm operations. In fact, defendants sought farmland assessment for 2001, in the event the Board decided not to pursue the school construction.
In 2000, Habiak was confronted with a dilemma. He had "prepared the lands to plant crops," expecting to farm the property, but Scott informed him that the Board planned to begin construction in early September 2000. According to Habiak, the commencement of construction in September would effectively preclude him from harvesting his soybean crop in November. Although it ultimately was Habiak's decision not to plant, he explained that he did not want to expend the money or time to plant a crop that he could not harvest. As he cogently explained:"I had nothing in writing. I didn't pursue that. I basically felt, well they are coming in September, so don't be stupid." He also rejected as not"economically feasible" any attempt to plant another crop that might be harvested in August. Defendants did not seek another tenant farmer for the 2000 growing season.
Negotiations on the purchase price for the property ultimately failed, and on September 14, 2000, the Board filed a Verified Complaint and Declaration of Taking to obtain the property through its power of eminent domain. A week later, the Board deposited $2,014,500 with the court, representing its appraisal of just compensation for the property.
In December 2000, the Middlesex County Tax Assessor filed a complaint seeking roll-back taxes on the property. The complaint described the nature of the change in use prompting the imposition of roll-back taxes as"[c]essation of farming site work for construction of school." The assessor sought roll-back taxes for the years 2000, 1999, and 1998, totaling $142,791.18. In his certification, the assessor claimed that he did not impose the roll-back taxes solely due to the construction of the school, but also because of the cessation of farming. He later explained:
I based my complaint for roll-back taxes on two independent grounds: (1) there was evidence that farming had ceased being carried out on the property during 2000, irrespective of whether construction had started; and (2) that, even if it had been farmed, the exemption was lost because construction was an independent factual ground for invoking roll-back taxes. There was a factual basis for each reason, and either one, standing alone, would have required the imposition of roll-back taxes. I indicated my dual and independent reasons for ...