On appeal from the Tax Court of New Jersey, Docket No. 1731-2005.
The opinion of the court was delivered by: Sapp-peterson, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Reisner, Sapp-Peterson and Alvarez.
By leave granted, defendant Township of Berkeley Heights (Township) appeals from a judgment of the Tax Court denying its motion to dismiss the 2005 tax appeal of plaintiff Lucent Technologies, Inc. (Lucent). The court interpreted Rule 8:7(e), governing motions in the Tax Court, as permitting the court to place limits on the time period in which a municipality may seek dismissal of a tax appeal based upon a false or fraudulent response pursuant to N.J.S.A. 54:4-34, commonly known as Chapter 91. The court concluded that the Township's delay in filing its dismissal motion was unreasonable. We reverse.
The property which is the subject of this appeal is located at 600 Mountain Avenue and is designated on the Township's tax map as Block 3701, Lot 1. Township records also identify LTI NJ Finance LLC (LTI) as the property owner. On June 29, 2001, Lucent transferred title to the property to LTI. On that same date, Lucent entered into a twenty-year lease agreement with LTI. The agreement is characterized as a net lease covering the entire premises, except for 741.44 square feet that had been leased to Summit Bank four months earlier as an irrevocable license agreement. The language in the lease agreement between Lucent and LTI provided:
Landlord and Tenant each acknowledge that each shall treat this transaction as a true lease for state law purposes and shall report this transaction as a lease for Federal income tax purposes. For Federal income tax purposes each shall report this Lease as a true lease with Landlord as the owner of the Leased Premises and Equipment and Tenant as the lessee of such Leased Premises and Equipment[.]
On November 16, 2001, Lucent entered into a five-year sublease agreement with OFS Fitel, LLC, for approximately 48,266 square feet of the property. The following month, it entered into a four-year sublease agreement for a 7,285-square-foot area of the property with Sychip, Inc. Finally, on January 8, 2003, Lucent entered into a two-year revocable license agreement with Affinity Credit Union for 1,254 square feet. The total subleased area for all of the agreements represented less than three percent of the total building area of the property.
In June 2003, the Township's tax assessor mailed to Lucent a Chapter 91 request for income and expense information related to the property. Subsequent letters requesting the same information were sent in June of 2004, 2005 and 2006. Steven Stockert, Lucent's Tax Manager, submitted the written responses for the 2003, 2004 and 2005 requests, while Garnette R. Smith, Lucent's Property Manager, submitted the written response for the 2006 request. Each response, however, contained the same language:
I am in receipt of your request for income and expense information on Lucent Technologies property in Berkeley Heights Township. Please be advised that this property is owner occupied with the exception of less then [sic] 5% being occupied by OFS (Optical Fiber Solutions). OFS was sold to a third party and Lucent agreed to allow OFS personal [sic] to stay in the Murray Hill facility for three years after the sale.
As for expenses, please note that the figure could be misleading if supplied. Due to the nature of the business, certain research is conducted on a 24 hour basis. Heating and cooling for various areas are maintained on a continual basis. If you still desire the expense data, please let me know.*fn1
On November 8, 2004, Stockert wrote to the Township requesting that the Township "[p]lease change the mailing address for . . . Block [3701,] Lot  . . . of the owned property for Lucent Technologies. All tax correspondence[,] i.e.[,] tax bills, assessment notices and etc. should be sent to: Lucent Technologies[,] Inc.[,] Room 2B-224[,] Attn: Steven Stockert[,] 600-700 Mountain Ave.[,] Murray Hill, New Jersey 07974."
On March 10, 2005, Lucent filed a tax appeal for the year 2005. On March 16, 2005, the Township propounded interrogatories upon Lucent, and answers were provided on July 18, 2005. The answers listed LTI as the property owner, whose address was the same as that of Lucent. The answers also described the sale and leaseback transaction between Lucent and LTI. Additionally, all of ...