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Hertz v. Lincoln Park Borough

October 15, 2010

BARBARA J. HERTZ, PLAINTIFF-APPELLANT,
v.
LINCOLN PARK BOROUGH, DEFENDANT-RESPONDENT.



On appeal from the New Jersey Tax Court, Docket No. 010866-2007.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued September 21, 2010

Before Judges Carchman, Graves and Waugh.

In these consolidated appeals, plaintiff Barbara Hertz appeals from a June 5, 2009 corrected judgment of the Tax Court ordering that defendant Borough of Lincoln Park refund rollback taxes for the years 2007, 2006 and 2005. In addition, in a fee dispute with her attorney, Steven R. Irwin, by leave granted, plaintiff appeals from an order of the Tax Court ordering Irwin to pay plaintiff the undisputed portion of the refund and hold the remaining funds in escrow pending resolution of the fee dispute. Finally, plaintiff appeals from an order of the Tax Court requiring plaintiff to "file for fee arbitration within 30 days of the date of this order or [plaintiff] will be deemed to have waived any right to seek arbitration."

We conclude that plaintiff's appeal from the June 2009 corrected judgment of the Tax Court is without merit, and we affirm the judgment of the Tax Court. In regard to the issue of the fee dispute, at oral argument, plaintiff represented that she had filed for arbitration pursuant to Rule 1:20A-3. Irwin acknowledged that filing. He stipulated that he would waive any procedural defenses as to the timeliness of such filing and would agree to have the New Jersey District Fee Arbitration Committee for Essex County, District V-B (the Committee) resolve the merits of the fee dispute. Accordingly, we remand the matter to the Committee and dismiss the appeals addressing the fee issue.

We briefly set forth the relevant facts related to the issues remaining in dispute. Although the appeal of the fee issue is now moot by the parties agreement, we relate relevant facts regarding that dispute as it may bear on the hearing before the Committee.

Plaintiff owns a 15.45 acre parcel of land located primarily in Lincoln Park, a portion of which extends into Montville Township. The land has been dedicated to horticultural use, and the land was taxed as farmland in 2005, 2006 and 2007. In 2007, the Lincoln Park Tax Assessor denied plaintiff's application for farmland assessment and pursuant to N.J.S.A. 54:4-23.8, levied rollback taxes on the land for the three years prior. Plaintiff unsuccessfully challenged this decision in the Morris County Board of Taxation. She then filed a complaint in the Tax Court appealing the decision of the Board of Taxation.

During the pendency of that appeal, plaintiff executed a contingent fee agreement with Irwin for representation in the Tax Court. This agreement provided that "counsel fee will be thirty (30.00%) [sic] of any realized tax savings gained at the Tax Court." It further specified that "[t]his fee agreement applies to the 2007 rollback (2006 and 2005) only, and does not apply to further or additional tax appeal work, such as... appeal to the Appellate Division, which will require another specific agreement." Finally, it was agreed that if "the counselor's work requirement is fewer than 40 hours, the payment will be compensated at the customary hourly rate for the actual hours of work."

At the trial in the Tax Court, plaintiff prevailed but the judgment only included a reference to the 2007 tax refund, which totaled $14,618.88, and a check was issued in that amount payable to Irwin and appellant. Defendant appealed but then withdrew the appeal.

Since the rollback affected 2006 and 2005, Irwin sent a letter to Judge Kuskin, the trial judge, noting that the judgment incorrectly omitted the 2005 and 2006 tax years. Then, plaintiff, pro se, moved for and obtained an order from us directing the Tax Court to correct the mistake on May 26, 2009. A corrected judgment was issued on June 5, 2009, and a check for the corrected amount of $51,197.90 was issued, payable to Irwin and plaintiff.

At this point, a dispute developed between Irwin and plaintiff. Irwin claimed that his thirty-percent contingency fee would be applied against the corrected total refund amount representing all three years. Plaintiff disagreed. Following a hearing before Judge Bianco*fn1 on August 28, 2009 regarding the refund, plaintiff was directed to endorse the check, but did so with the words "under protest."

The result of the hearing was a September 2, 2009 order directing that a new check be issued solely to Irwin.*fn2 The order also directed Irwin to deposit the check and return the undisputed portion of the refund (totaling $38,646.22) to plaintiff. Both plaintiff and Irwin agree that this amount was properly paid to plaintiff. This amount was computed by applying a thirty-percent contingency fee to the three-year refund ($41,838.93), but not against the interest and penalty paid by the borough ($9,358.97). Plaintiff does not challenge Irwin's right to a fee for the 2007 refund.*fn3 The fee dispute involves Irwin's claim for thirty-percent of the 2005 and 2006 refund. The order noted that "[i]f a proceeding takes place to contest the amount of the legal fee... nothing in this Order... shall constitute a finding of the amount of money due to [Irwin]." In addition, the order provided notice to plaintiff of her right to seek arbitration and allowed her thirty days to initiate arbitration. If plaintiff failed to file for arbitration, Irwin would be entitled to withdraw the total fees in dispute.

Irwin received the new check, returned the undisputed portion of the refund to plaintiff and moved before the Tax Court for his fees. The judge stayed the matter of the turnover pending this appeal. The order also indicated that plaintiff must "file for fee arbitration within 30 days of the date of ...


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