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Frybarger v. Dep't of the Treasury

April 20, 2010


On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-511-07.

Per curiam.


Submitted December 15, 2009

Before Judges Carchman, Lihotz and Ashrafi.

Plaintiff Scott Frybarger appeals from a summary judgment dismissal of his complaint alleging constitutional violations by defendant Department of the Treasury, Division of Taxation, including illegal search and seizure, tortious confiscation of property, infringement of the right to interstate travel, and invasion of privacy. Plaintiff is the owner of Titan Power Equipment, Inc. ("Titan"), an Ohio corporation with its principal place of business in Florida. Plaintiff claims defendant's agents executed a warrant for jeopardy assessment of unpaid sales tax, and then confiscated Titan's construction equipment as it was being transited through New Jersey. The Law Division granted summary judgment on October 16, 2008, concluding plaintiff had failed to file a timely challenge to the tax assessment.

On appeal, plaintiff focuses his challenge on alleged constitutional deprivations and argues the court erred in denying him a jury trial or, alternatively, by denying his request that the matter be transferred to the Tax Court. We have considered these issues in light of the record, the applicable law, and the arguments presented. We concur with the Law Division's determination and affirm.

These are the facts as derived from evidence submitted by the parties in support of, and in opposition to, the summary judgment motion viewed in a light most favorable to plaintiff. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995).

Penny Knowles, an Investigator I for defendant, received information that the driver of an out-of-state pickup truck carrying a load of industrial shop equipment and tools was staying at the Homestead Inn in Woodbridge, New Jersey. At Knowles's request, a Woodbridge police detective went to the motel and observed approximately twelve fully loaded, out-of-state pickup trucks and an enclosed trailer parked in the motel's lot. Magnetic signs containing Titan's address were attached to each pick-up.

On May 20, 2005, Knowles, along with investigator Donald Smith, went to the Homestead Inn accompanied by three local police officers. She questioned the motel manager, who told her a group of individuals driving pickup trucks with Titan signs had stayed at the motel from June to August the previous summer. Knowles questioned two pick-up truck drivers, Joseph R. Sauer and James F. Nelson, Jr. Sauer and Nelson explained they answered an ad in an Ohio newspaper and had been in New Jersey for approximately three weeks.

Their first week was spent being trained at the hotel on how to make the sales. Since then, they and four others, have been loading their pickup trucks from the trailer with equipment, and going to construction sites to make sales. The trailer was periodically restocked by a tractor-trailer. When they make a sale, the price is negotiated via cell phone by Mr. Frybarger or his crew chief.

Knowles called plaintiff, who admitted he owned the trailer and paid drivers for sales of Titan's equipment. Plaintiff also acknowledged he had been selling equipment in New Jersey for four years, under the name Eastern Tool and Equipment. Knowles advised the defendant an assessment would be issued for unpaid sales tax, and the trailer and its contents would be seized.

Following Knowles's investigation, defendant issued a Warrant of Execution Jeopardy Assessment for plaintiff's failure to file and pay sales tax for the period 2002 through 2005, pursuant to N.J.S.A. 54:49-5. Pursuant to N.J.S.A. 54:49-7, an arbitrary assessment of $660,000*fn1 was sent by certified mail to plaintiff's Ohio address. Attached to the warrant was a notification of plaintiff's right to a hearing and appeal, which stated in pertinent part:

New Jersey statutes grant you certain appeal rights. Therefore, if you disagree with any portion of this assessment, you may either (1) protest and request an informal administrative conference with the Conference and Appeals Branch, (2) file an appeal with the required fee to the Tax Court or (3) for assessments regarding periods ending on or after January 1, 1999, a taxpayer who paid the entire assessment within one year after time to protest or appeal has expired may thereafter file a refund claim on form A-1730 within 450 days after the time to protest or appeal has expired. If the taxpayer initially requests a conference or files a refund claim pursuant to the aforementioned, the taxpayer may subsequently appeal that decision to the Tax Court.

The notification further advised that a protest to the Conference and Appeals Branch "must be [submitted] in writing and within (90) [ninety] days from the date of this notice in the form and manner described in N.J.A.C. [18:32-1.2] in order to be valid."*fn2 Finally, the notification specified the necessary information to be included in the protest and provided the address, fax number, and internet address to which the protest should be sent. Finally, the notification explained that while most matters can be resolved through the informal Conference and Appeals process, plaintiff, nevertheless, had the right to file a complaint ...

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