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Lincoln North Development Corporation v. Town of Kearny

January 28, 2011


On appeal from the Tax Court of New Jersey, Docket No. 9758-08.

Per curiam.


Argued: November 17, 2010

Before Judges Axelrad, R. B. Coleman and J. N. Harris.

Plaintiff Lincoln North, a trade association of businesses located in an industrial area known as South Kearny, appeals from the Tax Court's December 4, 2009 order granting summary judgment to defendants, Town of Kearny, Mayor Alberto Santos and Kearny Town Council (collectively referred to as "Kearny") and the Kearny Municipal Utilities Authority ("the KMUA") (all four are also jointly referred to as "defendants" when appropriate), dismissing plaintiff's amended complaint. We affirm.

Plaintiff represents five of its members who are industrial property owners in South Kearny. South Kearny receives sewer services from the KMUA and its property owners pay the KMUA directly for such services.*fn1 The South Kearny properties also pay sewer charges to Kearny as part of the local property taxes billed to all Kearny property owners.

On March 30, 2007, plaintiff filed a five-count complaint in lieu of prerogative writs against defendants in the Superior Court of New Jersey, Law Division, Hudson County. Defendants filed motions to dismiss the complaint based on improper venue and failure to exhaust administrative remedies, which were denied by orders of August 3, 2007.

On leave granted, plaintiff filed a seven-count amended complaint "in lieu of prerogative writs and for other relief" on December 31, 2007. The First Count alleged Kearny's tax structure was "arbitrary, excessive and incorrect" because it included fees for services plaintiff's members did not receive or enjoy. Plaintiff sought elimination of the service fees from Kearny's general tax structure and reimbursement for all fees paid. The Second Count challenged Kearny's tax structure as violative of state and federal equal protection, alleging it impermissibly distinguished between industrial properties located in South Kearny and the remaining properties in Kearny. Plaintiff further alleged:

As a result of the incorrect tax rate, the assessment of [plaintiff's members'] properties is also excessive, as it exceeds the true or assessable value of the property. The assessment, in effect, imposes charges against Plaintiff for services that are withheld from [its members]. Nor is there any correlation between the assessed value and the utilization of wastewater or sewer utility services.

In addition to the relief sought in the first count, plaintiff sought a reduction in the assessment of its members' properties and an elimination of the sewer fee assessment, as well as a declaration that Kearny's tax rate was unconstitutional.

The Third Count alleged overcharges to the subject properties by the KMUA in failing to provide either or both credits and rebates to them. Plaintiff sought to compel Kearny to turn over the purportedly withheld credits and rebates to the KMUA and direct the KMUA to issue refunds to plaintiff. The Fourth Count alleged defendants denied plaintiff's members equal protection by withholding rebates, which was "tantamount to, double taxation and conversion of [plaintiff's members'] rebate entitlement, for the benefit and unjust enrichment" of Kearny taxpayers. In addition to the relief sought in the third count, plaintiff sought to have the KMUA's overcharges invalidated as unconstitutional.

The Fifth Count alleged Kearny violated the tax uniformity clause of the New Jersey Constitution, article VIII, section 1, paragraph 1(a), because plaintiff's members were taxed for services they did not receive. Plaintiff sought the same relief as in the second count. The Sixth Count alleged Kearny's tax scheme established two sections of Kearny for tax purposes, favoring non-South Kearny taxpayers, in violation of the proscription against special legislation contained in the New Jersey Constitution, article IV, section 7, paragraph 9(13).

Plaintiff sought the same relief as in the second count. The Seventh Count alleged Kearny's conduct violated substantive due process of the Fifth and Fourteenth Amendments of the United States Constitution, as it treated plaintiff's members as "second class citizen[s] and municipal cash cow[s], [which] is so egregious as to shock the conscience . . . ." Plaintiff sought the same relief as in the second count. Defendants filed answers to the amended complaint.

On March 25, 2008, defendants moved to dismiss the amended complaint pursuant to Rule 4:6-2(e), arguing, in relevant part, that plaintiff's claims for monetary damages, sought in every count, were not cognizable in a prerogative writs action and plaintiff's constitutional challenges could not be maintained as a matter of law. By written opinion of August l, 2008, memorialized in an order dated August 5, 2008, Judge Mary Costello dismissed the First Count without prejudice and transferred the remaining counts to the Tax Court for disposition in conformity with the Assignment Judge's August l, 2008 order. See R. 4:3-4(a) and R. 8:2(a) The court found plaintiff, a non-profit trade association of South Kearny businesses, had standing to bring the claims, concluding the "grievances [plaintiff] assert[s] are strictly confined to matters of common interest and do not include any claims that would pertain to one but not all." Similar to Crescent Park Tenants Ass'n v. Realty Equity Corp. of New York, 58 N.J. 98 (1971), in which the Court granted a non-profit tenant association standing to sue the landlord regarding defects in various parts of the common elements, the judge found it was "difficult to conceive of any policy considerations that would justify barring Plaintiff from bringing this claim."

Judge Costello also found plaintiff's prerogative writ claims were untimely as not filed within forty-five days of the "accrual of the right to review, hearing or relief claimed" under Rule 4:69-6(a) and not ...

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