May 18, 2009
BEACH CREEK MARINA, PLAINTIFF-APPELLANT,
CITY OF NORTH WILDWOOD, DEFENDANT-RESPONDENT.
On appeal from the Tax Court of New Jersey, Docket No. 0081-2007.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued February 23, 2009
Before Judges Carchman and R. B. Coleman.
Plaintiff Beach Creek Marina, LLC, (Beach Creek) appeals from an order entered March 5, 2008, dismissing Beach Creek's complaint against the City of North Wildwood. The complaint was filed to contest North Wildwood's 2006 real estate assessment of certain property owned by Beach Creek. For substantially similar reasons set forth in the letter opinion by Joseph C. Small, Presiding Judge Tax Court, dated March 5, 2008, we affirm the order dismissing plaintiff's claim.
The property belonging to Beach Creek, which is the subject of this complaint, consists of approximately three acres and is part of the inter-coastal waterway located in North Wildwood. Paul Cocoziello is the sole officer and shareholder of plaintiff Beach Creek.
In addition to marina related structures, the property also contains a mixed-use building comprising approximately 4,500 square feet of commercial space and 142 rental apartments. The commercial portion of the tower is known as Marina Bay Towers and it, too, is owned by Beach Creek. The residential portion of the tower is owned by Marina Bay Towers Urban Renewal II, L.P., which in turn leases the residential units to Marina Bay Towers Condominium Association, Inc.
The residential owner, Marina Bay Towers Urban Renewal II, pays its taxes pursuant to a Payment in Lieu of Taxes (PILOT) agreement under the Long Term Tax Exception Law, N.J.S.A. 40A:20-1 to -22. The real estate tax associated with the commercial units includes improvements only; there is no "land" component to that tax assessment. Beach Creek pays local real estate tax on the marina and the entire three-acre parcel of land. Thus, each year Beach Creek receives two tax bills; one for the improvements associated with the commercial space and another for the marina, which includes the parcel of land. The latter tax bill forms the basis of this appeal.
According to North Wildwood's tax assessor, 2006 was a "reevaluation year" for North Wildwood. Therefore, North Wildwood employed the services of CLT/Tyler technologies to inspect and assess properties within the municipality. The tax assessor would then review and prepare his own assessments to be mailed to taxpayers.
For 2006, Beach Creek's property was assessed at $14,612,900,*fn1 which represented a substantial increase from the 2005 assessment of $1,526,200. The manifest increase in assessed value raised Beach Creek's property tax bill from approximately $39,000 in 2005 to approximately $103,000 in 2006. North Wildwood also reconfigured the tax map so that the three-acre parcel, formerly designated as Block 152, Lot 400, was reclassified as Block 152, Lot 1. In addition to the reclassification, the Tax Assessor's Office inexplicably changed the mailing address of record for Beach Creek from 608-610 New York Avenue, North Wildwood, to 391 Lakeside Avenue, Orange; an address that is not directly associated with the subject property or the owner.
In February 2006, North Wildwood sent out Notices of Assessment to property owners within the municipality. An assessment for the commercial space located in the tower, and owned by Beach Creek, was allegedly mailed to 622 Eagle Rock Avenue, West Orange, New Jersey. Although that mailing address was proper, the notice mistakenly combined the tax assessments for improvements on the commercial space with the three-acre parcel of land associated with the marina. Beach Creek did not contact North Wildwood regarding the error in the notice.
Under separate cover, an assessment for the marina which also included the three-acre parcel of land was sent to 391 Lakeside Avenue, Orange, the address for Marina Bay Towers Urban Renewal II, L.P., an entity in which Cocoziello maintains no ownership interest.
On July 24, 2006, North Wildwood sent out its Third Quarter Tax Bill for the marina and its associated property. Again, the bill was mistakenly sent to Marina Bay Towers Urban Renewal II, L.P., at the 391 Lakeside Avenue address.
On December 1, 2006, First Community Development Corporation, the general partner of Marina Bay Towers Urban Renewal II which owns the residential units on the property, forwarded to Cocoziello the assessments erroneously mailed to 391 Lakeside Avenue, along with a letter which communicated:
Please find enclosed a Delinquent Notice received from the City of North Wildwood claiming $105,924.00 to be due. Also enclosed are notices received from the City of North Wildwood indicating that any delinquencies not paid by December 11, 2006 will be advertised for two weeks in the Cape May County Herald starting on December 13, 2006, and the tax sale will be held on December 27, 2006. It is our understanding that you are taking the necessary steps to resolve the tax issues.
Thereafter, in December 2006, Cocoziello contacted North Wildwood's Tax Collector in an attempt to clarify the irregularities. It is undisputed that Cocoziello and the Tax Collector did not speak until at least the middle of December. After speaking with the Tax Collector, Cocoziello then contacted the Chief Financial Officer (CFO) of North Wildwood. Following that conversation, Cocoziello sent a letter to the CFO, which purported to clarify the ownership and tax liability of each entity and which contained copies of the tax bills that Cocoziello had actually received.
On January 18, 2007, Beach Creek filed a complaint, challenging the 2006 assessment of the marina and the three-acre parcel of property. Thereafter, North Wildwood filed an answer, followed by a motion to dismiss filed on May 30, 2007.
During the motion hearing, North Wildwood acknowledged that the mailings intended for Beach Creek were sent to an address that was neither the physical address of the property, nor the address of record for the property owner. North Wildwood further acknowledged that it was in contact with Cocoziello throughout the month of December 2006.
Cocoziello testified that he did not receive notice that the property was subject to a re-evaluation and that, in the past, he customarily received tax notices for Beach Creek at 622 Eagle Rock Avenue. As to the correspondence from First Community Development Corporation dated December 1, 2006, Cocoziello acknowledged that he was in receipt of the letter the "first week" of December 2006.
Based upon these facts, the Tax Court judge determined that it was proper to grant North Wildwood's motion to dismiss. In his written decision, the judge stated "[m]y conclusions to a large extent are based on the credibility of the witnesses." He added, "I conclude that [Cocoziello] and [First Community Development Corporation] had communicated no later than December 1, 2006, about the subject's tax delinquency." The judge also noted that the notice of delinquency, which was sent to 391 Lakeside Avenue in November 2006, was received, but curiously, the earlier assessment of February 2006 was not.
The court determined that "assuming [Cocoziello] first learned of the tax assessment on December 1st, [his complaint] was due at the latest, on January 16, 2007,*fn2 two days before the actual complaint was filed . . . ." In dismissing the complaint, the judge explained "[t]o decide otherwise would amount to this court's voiding of the statutory deadline for filing a tax appeal when a sophisticated taxpayer had actual notice of its tax assessment long before it filed its tax appeal . . . ."
On appeal from a tax court decision, the Appellate Division must determine whether the judge's findings were supported by substantial credible evidence. Yilmaz, Inc. v. Director, Div. of Taxation, 390 N.J. Super. 435, 443 (App. Div. 2007) (citing 125 Monitor St. v. Jersey City, 23 N.J. Tax 9, 13 (App. Div. 2005). Moreover, like the deference given to credibility findings of a judge in a non-jury civil trial, due regard should be given to the Tax Court's ability to judge credibility. First Republic Corp. of Am. v. Borough of E. Newark, 17 N.J. Tax 531, 536-37 (App. Div. 1998), certif. denied, 157 N.J. 647 (1999).
The threshold issue before the Tax Court was determining when Beach Creek had actual notice of its 2006 real estate assessment and whether its appeal of that assessment was timely filed. Taxpayer appeals are governed by N.J.S.A. 54:3-21(a) which provides:
Except as provided in subsection b. of this section a taxpayer feeling aggrieved by the assessed valuation of the taxpayer's property, or feeling discriminated against by the assessed valuation of other property in the county, or a taxing district which may feel discriminated against by the assessed valuation of property in the taxing district, or by the assessed valuation of property in another taxing district in the county, may on or before April 1, or 45 days from the date the bulk mailing of notification of assessment is completed in the taxing district, whichever is later, appeal to the county board of taxation by filing with it a petition of appeal; provided, however, that any such taxpayer or taxing district may on or before April 1, or 45 days from the date the bulk mailing of notification of assessment is completed in the taxing district, whichever is later, file a complaint directly with the Tax Court, if the assessed valuation of the property subject to the appeal exceeds $750,000. In a taxing district where a municipal-wide revaluation or municipal-wide reassessment has been implemented, a taxpayer or a taxing district may appeal before or on May 1 to the county board of taxation by filing with it a petition of appeal or, if the assessed valuation of the property subject to the appeal exceeds $750,000, by filing a complaint directly with the State Tax Court.*fn3
This provision should be read with an understanding that "[s]trict adherence to statutory time limitations is essential in tax matters," because those timeframes are "borne of the exigencies of taxation and the administration of local government." F.M.C. Stores Co. v. Borough of Morris Plains, 100 N.J. 418, 424 (1985); see also McCullough Transp. Co. v. Div. of Motor Vehicles, 113 N.J. Super. 353, 360 (App. Div. 1971) ("Limitation periods for claims for refund are common administrative provisions found in tax legislation and justified by the need for predictability of revenues by public agencies.").
On appeal, petitioner Beach Creek raises the following claims:
POINT I: BEACH CREEK'S DUE PROCESS RIGHTS WERE VIOLATED AS A RESULT OF NORTH WILDWOOD'S INACTION.
POINT II: THE STATUTE OF LIMITATIONS DOES NOT BAR BEACH CREEK'S RIGHT TO APPEAL ITS TAX ASSESSMENT.
POINT III: BEACH CREEK'S EQUAL PROTECTION RIGHTS WERE VIOLATED AS A RESULT OF NORTH WILDWOOD'S INACTION.
We discuss each in turn.
Beach Creek's first argument on appeal is that its due process rights were violated by the Tax Court's decision. Relying on Schneider v. City of E. Orange, 196 N.J. Super. 587, 595 (App. Div. 1984), aff'd, 103 N.J. 115, cert. denied, 479 U.S. 824, 107 S.Ct. 97, 93 L.Ed. 2d 48 (1986), Beach Creek argues that it was not given adequate notice and a fair hearing. After a careful review of the record, we disagree.
The essential components of due process are "adequate notice, opportunity for a fair hearing and availability of appropriate review." Family Realty Co. v. Secaucus Town, 16 N.J. Tax 185 (Tax Ct. 1996) (citation omitted). Generally, when a county board of taxation mails a notice to an incorrect address, adequate notice has not been provided. Id. at 193. However, if the intended taxpayer actually receives notice of an assessment, the requisite level of notice has been provided, despite the taxing authority's error. Ibid. Our Tax Court has addressed this issue in prior complaints.
In Centorino v. Tewksbury Twp., 18 N.J. Tax 303, 307 (Tax Ct. 1999), a taxpayer did not receive notice of an increased property assessment for 1998 until August 1 of that year due to an error in the municipality's mailing system. The plaintiff contacted the tax assessor and filed an appeal, which the municipality rejected as untimely. The taxpayer subsequently filed a complaint with the Tax Court. Id. at 308. The municipality contended that it mailed the assessment to the correct address, but to the attention of the previous owner. The taxpayer contended that she never received notice, even one addressed to the previous owner. Id. at 309. The court determined that the taxpayer never received the notice prior to August 1998. Id. at 310. The court also determined that "[u]pon receipt of the bill she took prompt action in contacting the assessor and filing an appeal to the county board." Id. at 319. The Tax Court judge held that "[u]nder these unique facts and circumstances, the principles of due process necessitate the extension of the filing deadline so that the taxpayer is not denied access to the court and the opportunity for a hearing on her appeal." Id. at 321.
The Tax Court has addressed issues of "notice" in other contexts as well. In Family Realty Co., supra, the Tax Court was faced with a taxpayer's petition of appeal to the county board. 16 N.J. Tax, 185. The petition designated its signer as the "Attorney - or person to be notified of hearing and judgment." Id. at 187. When the taxpayer contacted the county to inquire about the status of the appeal, he was advised that the hearing had been scheduled, no one had appeared, and it had been adjourned. Id. at 187-88. A hearing was set four months later, with approximately three weeks notice provided to the petitioner. When the petitioner did not appear at the hearing, the county board granted a motion by the county to dismiss for failure to prosecute. Id. at 189. The county board judgment, which was received by the taxpayer, was incorrectly addressed to him personally despite explicit direction by the taxpayer to use his company's name - due to a sign on the building which referenced only the taxpayer's business.
The Tax Court found that the omission of the name of the petitioner's company on the hearing notice was "a significant departure from the instructions received by the county board." Id. at 194. Accordingly, the Tax Court concluded that the improperly addressed notice was not received, so that the taxpayer should not be denied the opportunity for a hearing on appeal, and denied the municipality's motion to dismiss. Ibid.
Due process principles were also at issue in City of Camden v. Camden Masonic Ass'n, 9 N.J. Tax 331 (1987), aff'd, 11 N.J. Tax 88 (App. Div. 1989). There, the county admitted that it never gave the taxpayer notice of the revocation of its previously-held tax exemption "or notice that the subject property was included as an omitted assessment for the tax years 1983 and 1984, and the county board agreement that, if applicable, the correct assessment was $50,000 and not $394,400." Id. at 336. The court held that the failure of the tax assessor and tax collector to comply with the notice requirements of the alternate method for the omitted assessment statute, N.J.S.A. 54:4-63.35*fn4, and failure to provide a subsequent notice of the regular assessment or resultant tax bill, where the taxpayer had no knowledge of the assessments and did not have the opportunity to timely appeal them in accordance with the relevant statutes, required an extension of the filing deadlines for a reasonable period of time. Id. at 341-42. Our Supreme Court has instructed that when dealing with taxpayers, the "government must turn square corners." F.M.C. Stores Co., supra, 100 N.J. at 426, (quoting Gruber v. Mayor and Twp. Com. of Raritan Twp., 73 N.J. Super. 120 (App. Div.), aff'd, 39 N.J. 1 (1962)).
Here, the record shows that although North Wildwood erred in mailing out Beach Creek's assessments, it has not been demonstrated that it acted in a manner inconsistent with Beach Creek's due process rights. Rather, North Wildwood simply appeared to be confused with respect to the different ownership interests and mailing addresses of the several entities located on the same property. Despite those errors, the notice provided to Beach Creek was sufficient to satisfy the constitutional obligations of due process insofar as Beach Creek had a reasonable time to appeal.
Cocoziello testified that he received notice of the increased tax assessment sometime in "early December 2006." This taken alone would have cast doubt on the Tax Court's determination that Cocoziello had notice on December 1. However, there are other factors that mandate an affirmation.
First, the letter addressed to Cocoziello stated: "It is our understanding that you are taking the necessary steps to resolve the tax issues." This language tends to show that there was some prior communication with Cocoziello that First Community was in possession of the tax assessment. In addition, the letter addressed to Cocoziello on December 1, was purportedly sent via facsimile on the same date. Second, the facts are clear with respect to the extensive relationship between Rubicon Properties and the partners that comprise Marina Bay Towers Urban Renewal II, L.P.; specifically, that Rubicon managed the property owned by that entity. Third, doubt was shed on Cocoziello's testimony by virtue of the fact that First Community did receive other tax notices in November 2006 at the same address to which the original assessment was sent. Also, as both the testimony and the judge's decision reflect, Cocoziello is a "sophisticated real estate investor," the type of investor who would make reasonable inquiries with respect to his respective companies' tax obligations. And finally, the judge noted that, interestingly, Beach Creek did not solicit the testimony or a certification from the author of the December 1 letter.
Therefore, based on the aforementioned, it appears that the notice provided to Beach Creek and the subsequent time to file an appeal under either N.J.S.A. 54:3-21(a) or the reasoning from Centorino, supra, 18 N.J. Tax 303, and Camden Masonic Ass'n, supra, 9 N.J. Tax 331, were sufficient and do not run afoul of any constitutional notions of due process.
Beach Creek's second argument is that the forty-five day limitation on appeal under N.J.S.A. 54:3-21(a) is inapplicable to a taxpayer who never received a Chapter 75 Notice from the taxing authority. In support of that position, Beach Creek relies primarily on the holding in Centorino, supra, 18 N.J. Tax at 303. Centorino is distinguishable, however, for the reasons discussed herein, and Beach Creek is accurate in that the timeframe for appeal under N.J.S.A. 54:3-21(a) does not apply in this case.
First, regarding the inapplicability of Centorino, the municipality mailed the Chapter 75 notice to the wrong owner. Thereafter, realizing its mistake, the notice was sent to the taxpayer on August 1, 1998. Id. at 306. The taxpayer subsequently appealed the assessment twenty-three days later. Id. at 308. The County Board of Taxation found that the taxpayer appealed the assessment in an untimely fashion. Id. at 316. On appeal, the municipality contended that N.J.S.A. 54:3-21 did not apply and the court agreed.
At that time, the discretionary function of the County Board of Taxation was governed by N.J.S.A. 54:3-21.4.*fn5 After finding that the forty-five day appeal period under N.J.S.A. 54:3-21 did not apply because the decision to extend the appeal period was governed by Section 21.4, and that N.J.S.A. 54:3-21.5 was inapplicable, the court went on to hold that forty-five days would, indeed, be a reasonable amount of time and that under N.J.S.A. 54:3-21.4, the county board could have properly extended the time of appeal due to the municipality's failures. Centorino, supra, 18 N.J. Tax at 315.
A similar result was reached in Regent Care Ctr. v. Hackensack City, 18 N.J. Tax 320 (Tax Ct. 1999). In that case, the taxpayer received a property tax assessment notice that erroneously understated the assessment by several million dollars. Id. at 322. The tax assessor claimed that upon realizing the mistake, a second assessment was mailed; the taxpayer contended that it never received the second notice. Ibid. The taxpayer argued that its first notice of the increased assessment occurred when the third quarter tax bill was mailed, which was sometime in "late July" 1997. Id. at 323. Finding that the taxpayer never received any accurate Chapter 75 notice, the court went on to hold that N.J.S.A. 54:3-21 did not apply, but that forty-five days would be a reasonable timeframe in which to appeal. Id. at 325. Because the taxpayer failed to appeal within that "reasonable" timeframe, appealing forty-eight days later, the matter was dismissed.
Beach Creek also relies on Simon v. Chicago Title Ins. Co., 363 N.J. Super. 582 (App. Div. 2003), a case involving the sale of a tax title lien. In that case, the State owned the property in question and with it came a tax exempt status. Id. at 583. However, in 1995 and 1996, there was some confusion by the tax assessor's office, and taxes for the property were assessed against "Inman, William A., et al, unknown address," which was a mistake, and the taxes were not paid. Id. at 585.
Thereafter the township in which the property sat offered for sale, a tax title lien on the property. Ibid. In 1996, the property was purchased, and the purchaser pursued a foreclosure action and ultimately, obtained a favorable judgment. Following the foreclosure, the purchaser found out that the title was not clear because of the State's ownership interest. Ibid.
The purchaser sued the insurance company that conducted the title search, who, in turn, sued the township. The trial court found that the taxes assessed to "Inman, William A., et al, unknown address," were erroneous and that the tax sale and subsequent foreclosure were void. Ibid.
On appeal, the township argued that the State should have appealed the assessment. Rejecting the assertion by the municipality, the court held that the State was never provided with notice. It never received a tax bill nor did it receive a notice of change in assessment. Id. at 586. Therefore, the State did not sit on its rights and as a result, nothing in N.J.S.A. 54:3-21 should be read to create a windfall for taxes to the township to which it was never entitled. Id. at 588.
Simon is distinguishable in that the State had no notice at all of the assessment or tax sale and, thus, the appeal provisions of N.J.S.A. 54:3-21 could not serve to validate the erroneously issued taxes and subsequent tax sale.
Generally, the forty-five day period prescribed under N.J.S.A. 54:3-21 is applicable in three situations, none of which is directly implicated in this case. First, a taxpayer has until April 1 to appeal an assessment; both parties agree this was not possible in this case because Beach Creek did not physically receive the Chapter 75 Notice. Second, if the annual assessment was not received in time to appeal the assessment a taxpayer has forty-five days from the date of bulk mailing to contest the assessment.*fn6 Third, and finally, a taxpayer has forty-five days from receipt of actual notice to challenge a change of assessment notice. Ibid.
Here, the judge found that Beach Creek had received the notice on or before December 1, 2006, albeit from First Community. Nevertheless, even if the court were to decline to accept that finding, rendering N.J.S.A. 54:3-21 inapplicable, the judge also found that Beach Creek received actual notice of the assessment on December 1, 2006, at the latest. This determination was based, in large part, on the credibility, or lack thereof, of Cocoziello. Therefore, applying the forty-five day appeal period employed in both Regent Care Ctr. and Centorino, under principles of fairness, that same timeframe would have required Beach Creek to file its tax appeal by January 16, 2007.
The final argument offered by Beach Creek is that the judge's decision violated its equal protection rights. Specifically, Beach Creek contends that the judge's description of Cocoziello as a "sophisticated" real estate developer evinces a bias and consequently unequal treatment of him - as opposed to a less sophisticated taxpayer. For the following reasons, this argument fails.
Under the New Jersey Constitution, all real property is to be: assessed for taxation under general laws and by uniform rules. All real property assessed and taxed locally or by the State for allotment and payment to taxing districts shall be assessed according to the same standard of value, except as otherwise permitted herein, and such real property shall be taxed at the general tax rate of the taxing district in which the property is situated, for the use of such taxing district. [N.J. Const. art. VIII, § 1, ¶ 1(a).] Similarly-situated taxpayers must be treated in the same fashion. Twp. of W. Milford v. Van Decker, 120 N.J. 354, 361 (1990) (stating that "[e]quality of treatment in sharing the duty to pay real estate taxes is a constitutional right.") (quoting Murnick v. Asbury Park, 95 N.J. 452, 458 (1984)).
In support of its position, Beach Creek cites primarily to Simon, supra, 363 N.J. Super. at 582. Beach Creek contends that the "sophisticated" taxpayer in that case, the State, was not held to a higher standard than a taxpayer with less resources and sophistication. Plaintiff's reading of the case is accurate. In Simon, the court held that:
In the case before us, the State was out of the loop. It was not "called upon to pay tax bills." It received none. Nor did it receive notice of a change in assessment status. Acceptance of the Township's argument would require the State to scour the assessment records each year of every municipality in which it owns property to assure itself that local assessors have not incorrectly assessed its property to third parties and file an appeal in any such instance. There is no basis to impose such an obligation on the State or other public entities to protect against assessors' mistakes. [Id. at 586-87.]
Therefore, as a general proposition, in light of both Article VIII and Simon, it is true, both in terms of financial obligations and affirmative obligations, that all taxpayers must be treated equally.
In this case, neither of those concerns have been demonstrated. Specifically, there has been no evidence presented that any other taxpayer who received a late notice was given more time to contest the notice by virtue of their "sophistication." Moreover, the judge's decision simply does not put any greater burden on Beach Creek than permitted by law.
That is, the judge gave Beach Creek the benefit of the doubt and utilized the latest possible date of actual notice that was supported by the evidence.
Therefore, having properly balanced the principles of fairness discussed in Regent Care Ctr., supra, 18 N.J. Tax 320, with the need to have tax issues resolved in a timely fashion, see McCullough Transp. Co., supra, 113 N.J. Super. at 353, the forty-five day appeal period utilized by the Tax Court was proper and did not violate Beach Creek's constitutional rights.
In light of Beach Creek's actual notice, received at the latest on December 1, 2006, and likely well before forty-five days, was the statutory maximum time for its appeal of the assessment.