On certification to the Superior Court, Appellate Division.
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
The Court addresses a constitutional challenge to the statutorily mandated dismissal sanction of a tax appeal when a taxpayer has failed to respond to a municipal assessor's request for income information from the taxpayer pursuant to N.J.S.A. 54:4-34, or what is commonly referred to as a "Chapter 91 request."
Plaintiff, 1717 Realty Associates, LLC (1717 Realty), owns a large, multi-tenant tenant office building in Fair Lawn, New Jersey. On October 6, 2006, the tax assessor of the Borough of Fair Lawn (Borough) sent a Chapter 91 request to 1717 Realty that fully complied with the provisions of N.J.S.A. 54:4-34: it was mailed to 1717 Realty, via certified mail, at the address the taxpayer had specified; it requested that 1717 Realty render a true and full account of his name and real property and the income therefrom [;]" it provided 1717 Realty the statutorily described forty-five day within which to respond to the information request; it warned 1717 Realty that the failure to respond to the information request in a timely manner would result in the loss of the right to prosecute a tax appeal; and it enclosed a copy of the governing statute with the underscored and commonsense suggestion that 1717 Realty should read it.
1717 Realty failed to respond to the tax assessor's request for information, failed to make any inquiry of the tax assessor, and failed to seek any relief from the time limits for responding. As a result, on March 9, 2007, five months after the request for information was sent to 1717 Realty, the tax assessor valued the fair Lawn property for the year 2007 as follows: $13,608,000 for the land and $16,057,700 for the improvements, for a total valuation of $29,665,700.
On March 19, 2007, 1717 Realty filed a complaint in the Tax Court, challenging that assessment. As provided in N.J.S.A.54:4-34, on September 11, 2007, the Borough timely moved to dismiss 1717 Realty's complaint due to the taxpayer's failure to comply with the Borough's earlier Chapter 91 request. On October 27, 2007, once the issues were joined, the Tax Court granted the Borough's motion in part, ordering, in compliance with Ocean Pines, Ltd. V. Borough of Point Pleasant, that the hearing on 1717 Realty's complaint be limited to the reasonableness of the assessor's valuation based on the data available to the assessor and the methodology used by the assessor in arriving at his assessment. The Tax Court further ordered that, as required by Ocean Pines, 1717 Realty was entitled to conduct an inquiry as to the reasonableness of the underlying data available to the assessor and the reasonableness of the methodology used by the assessor in arriving at the assessment. After providing a reasonable period for discovery, the Tax Court also ordered that if the attorney for 1717 Realty failed to advise the court that 1717 Realty intends to proceed with a reasonableness hearing by January 11, 2008, then, 1717 Realty's complaint would be dismissed for lack of prosecution and that if the taxpayer's attorney advises the court that 1717 Realty intended to proceed with a reasonableness hearing, the hearing would be held on February 1, 2008 at 2:00 p.m.
On February 11, 2008, the Tax Court held a reasonableness hearing. After receiving the parties' proofs and the arguments of counsel, the court concluded that 1717 Realty failed to carry the burden of persuasion imposed on it under Ocean Pines. The court held that 1717 Realty failed to establish that the assessment on the subject property for the tax year 2007 could not have reasonably been arrived at in light of the data available to the assessor at the time of the valuation. The Tax Court found that the tax bill was neither a fine nor a punishment. By order dated April 14, 2008, and based on the reasons placed on the record on February 11, 2008, the Tax Court 1) dismissed 1717 Realty's complaint with prejudice, and 2) affirmed the tax assessor's valuation and assessment of the Fair Lawn property.
1717 Realty appealed and the Appellate Division, in an unpublished opinion, rejected 1717 Realty's constitutional arguments and affirmed the Tax Court's judgment. The Appellate Division concluded that the process and the data relied on were both found to be reasonable by the Tax Court and that 1717 Realty was not assessed any penalty or additional tax for its failure to comply with the Chapter 91 request. Reasoning that the application of the statute did not impose any additional tax on 1717 Realty for its failure to comply, the Appellate Division concluded that the statute as applied does not result in the imposition of an excessive fine prohibited by the United States and the New Jersey Constitutions.
The Supreme Court granted certification.
HELD: Judgment of the Appellate Division is affirmed based on the Court's judgment in Davanne Realty v. Edision Township, also decided today.
1. Before this Court, 1717 Realty advanced two principal arguments: 1) that the application of the appeal-preclusion sanction of N.J.S.A. 54:4-34 in this case violates the Eighth Amendment of the United States Constitution and Article I, Section 1, paragraph 12 of the New Jersey Constitution and 2)that the Tax Court's and the Appellate Division's determination that N.J.S.A. 54:4-34 does not impose an excessive fine is in contravention of the United States Supreme Court decision in Austin v. United States and United States v. Bajakajian. (pp. 7-8)
2. Questions identical to those posed here by 1717 Realty were presented in Davanne Realty v. Edision Township, an appeal also decided today. In that case, the Court considered a published Appellate Division decision that rejected 1717 Realty's mirror-image excessive fines and forfeitures constitutional challenges. In that opinion also filed today, the Court affirmed the judgment of the Appellate Division based substantially on the reasons set forth in Judge Grall's thorough and thoughtful opinion. In this case, the Court likewise affirms the judgment of the Appellate Division based on this Court's judgment in Davanne Realty. (p. 8)
Judgment of the Appellate Division is AFFIRMED.
CHIEF JUSTICE RABNER and JUSTICES LONG, LaVECCHIA, ALBIN, WALLACE, RIVERASOTO and ...