On appeal from the Superior Court of New Jersey, Law Division, Atlantic County, L-1292-01.
Before Judges King, Lintner and Lisa.
The opinion of the court was delivered by: Lisa, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Defendant, Little Egg Harbor Township, appeals from a summary judgment awarding damages of $23,323.63 plus interest to plaintiff, Betty Simon and third-party plaintiff, Chicago Title Insurance Company. The judgment is for a refund of the amount paid by Simon for the purchase of a tax title lien covering Block 44, Lot 3, issued by Little Egg Harbor, and the payment of subsequent taxes on the property, where the tax title lien was later found to be invalid. We affirm.
The State of New Jersey acquired title to Block 44, Lot 3 in 1969 from Vernon and Theresa Stompler. The property was thereafter carried on the tax exempt list. N.J.S.A. 54:4-3.3. In 1994, the assessor received a letter dated July 22, 1994 from the New Jersey Attorney General's office, stating in its entirety:
Please be advised that Block 44, Lot 3 and Block 46, Lot 13 were not conveyed to the State of New Jersey from Citibank. As our investigation indicated there was a one-half interest in a William A. Inman and one-half interest in a Nina Rutler, Helen Banard and Marjorie Methot.
Neither party is able to inform us what generated this apparent response to the assessor. What is clear, however, from a careful reading of the letter is that it does not say that the State does not own the property or that the named private individuals do own it. It is undisputed that the State has indeed continued to own the property throughout the years in question. The assessor apparently interpreted the letter to indicate current ownership by the individuals mentioned and assessed the property to them as taxable property in 1995 and 1996. Specifically, the property was assessed to"Inman, William A., et al, unknown address." This was a mistake. Predictably, the taxes were not paid.
Because of the unpaid taxes, the Township offered for sale a tax title lien, which Simon purchased on September 12, 1996. After holding the certificate and paying all accruing taxes for more than two years, Simon initiated an in personam taX foreclosure action. She eventually obtained a judgment by default on May 8, 2000. Simon thereafter learned that her title was no good because of the State's ongoing ownership of the property. Simon initiated this action against her title insurer, Chicago Title, which brought a third-party complaint against the Township. Chicago Title settled with Simon and continued the action against the Township.
The parties filed cross-motions for summary judgment. Judge Higbee found from the undisputed facts that the taxes assessed against the property were erroneously assessed due to the assessor's mistake, the sale of the tax title lien to Simon was void, and Simon and Chicago Title were entitled to a refund. We agree.
The Township argues that plaintiffs' claim for reimbursement is time-barred by N.J.S.A. 54:3-21. A taxpayer"feeling aggrieved by the assessed valuation of the taxpayer's property" must appeal the assessment by April 1 of the tax year. Ibid. In essence, therefore, the Township contends it was incumbent on the aggrieved party to timely file an appeal to contest the classification of the property as taxable rather than exempt. West Milford Township v. Garfield Recreation Comm., 194 N.J. Super. 148, 157 (Law Div. 1983). The aggrieved party, according to the Township, is the State of New Jersey, which it claims should have timely appealed to restore the property's status to tax exempt.
In support of its position, the Township relies on the Supreme Court's holding in New Jersey Transit Corp. v. Borough of Somerville, 139 N.J. 582 (1995), that State agencies are taxpayers within the meaning of N.J.S.A. 54:3-21 and must meet the April 1 deadline to assert a claim that their property is exempt from local taxation. Id. at 588, 592. There the state agency (Transit) acquired property in 1978. However, because of confusion over ownership of various parcels, Somerville continued to classify the property as taxable and continued to assess it as such to its prior owner, Conrail. In 1990, Somerville attempted to collect back taxes from Transit for the years 1981 to 1990. Transit then contested the assessments, contending the property should have been tax exempt during those years. The Court rejected Transit's assertion that as a public entity it was not bound by the deadline requirement of N.J.S.A. 54:3-21. The Court explained that the issue would not often arise because the State and its agencies will not"often be called upon to pay tax bills, provided they file their exemptions and appeals in a timely fashion." Somerville, supra, 139 N.J. at 591.
We find the Township's reliance on Somerville unpersuasive. In that case the state agency was the owner of the property and engaged in contacts with the local assessor between 1979 and 1990 regarding its ownership status. In 1990, when the municipality determined that Transit indeed owned the property, it sought to collect back taxes from Transit, which owned the property during the years of delinquency. During those years, the property had been assessed as taxable. In view of the confusion regarding the ownership of the parcel, Transit failed to make certain that this parcel was included on the municipality's exempt tax list for the years in question.
Therefore, Transit was held accountable for its inaction regarding property it knew or should ...