On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-4359-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Parrillo and Yannotti.
The Law Division entered an order dated August 6, 2010, which declared that defendant Liberty Harbor Holding, L.L.C. (LHH) is not required to obtain a license from plaintiff City of Jersey City (City) to operate a parking lot, but is liable for the City's municipal parking tax. LHH appeals and the City cross-appeals from the court's order. For the reasons that follow, we conclude that the trial court correctly found that LHH need not be licensed by the City as an operator of a parking lot, but erred in finding that LHH is subject to the City's parking tax.
LHH is the owner of real property in the City. It entered into two separate, four-year lease agreements for the property, one with the City's School District (School District), and the other with the New Jersey Schools Construction Corporation (SCC). In the leases, LHH agreed to undertake such work as is necessary to "construct a surface parking lot on the Leased Premises." LHH further agreed to provide the School District with 128 parking spaces and the SCC with 92 parking spaces. Under the leases, the School District and the SCC have the sole discretion to allocate the parking spaces between Public School 3 and Middle School 4, and to designate any such spaces as reserved parking spaces.
In addition, the School District's lease requires it to pay LHH rent in the amount of $95 each month for each parking space, for a total yearly rent of $145,920. The SCC's lease requires that it pay yearly rent to LHH in the amount of $104,880, in monthly installments of $8740. Although SCC's lease does not break down the rent according to the number of parking spaces, the annual rent represents $95 per parking space per month.
In both leases, LHH agreed to maintain the property and to repair in a timely manner all major damage "including damage caused by utility construction or repair[.]" The School District and the SCC are, however, responsible "for snow removal, cleaning, security and minor maintenance items such as repair of minor fence damage and pothole repair." The leases additionally provide that, after construction of the parking lot, the lessees must obtain commercial general liability insurance for the leased premises. The School District and the SCC took possession in 2006.
By letter dated December 12, 2008, the City's Assistant Corporation Counsel (ACC) informed LHH that it was required to apply to the City for a parking lot license, as required by section 236 of the City's Municipal Code (Code). In the letter, the ACC also stated that LHH should "immediately complete" the parking tax return forms for the years 2006 through 2008, and remit all of the parking taxes due to the City pursuant to Section 304 of the Code
Thereafter, the City filed a complaint in the Law Division seeking an order compelling LHH to obtain a parking license and pay the license fees owed for years 2006 through 2009. The City also sought an order requiring LHH to pay $114,497.50 in parking taxes, plus interest and penalties, for the 2006 to 2009 tax years. LHH filed an answer, in which it denied that it was required to obtain a parking license or pay the City's parking tax.
In June 2010, LHH and the City filed motions for summary judgment. The trial court considered the motions on August 6, 2010, and placed its decisions on the record, finding that LHH is not required to obtain a parking license because it did not operate a parking lot "as a day-to-day business[.]" The court found, however, that LHH was required to pay the City's parking tax because the rent that LHH collects from the School District and the SCC "is precisely the type of fees that [the Code] seeks to tax[.]" The court entered an order dated August 6, 2010, memorializing its decisions on the motions.
LHH thereafter filed a motion for reconsideration, and for the first time argued that the court did not have jurisdiction to entertain the City's claim for unpaid taxes. The trial court found that it had jurisdiction and entered an order dated August 30, 2010, denying LHH's motion for reconsideration. The court also entered a final judgment dated August 30, 2010, against LHH and in ...