May 30, 2013
JESSE ROSENBLUM, Plaintiff-Appellant,
BOROUGH OF CLOSTER and BEVERLY ANN WATKINS, Defendants-Respondents.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 8, 2013
On appeal from the Tax Court of New Jersey, Docket Nos. 6330-2005, 6572-2006, 14025-2009, 19413-2010, 12312-2011.
Jesse Rosenblum, appellant, argued the cause pro se.
JoAnn Riccardi argued the cause for respondent Borough of Closter (Edward Rogan & Associates, attorneys; JoAnn Riccardi, on the brief).
David M. Watkins, attorney for respondent Beverly Ann Watkins, join in the brief of respondent Borough of Closter.
Before Judges Messano and Ostrer.
Upon cross-motions for summary judgment, the Tax Court granted the motion of the Borough of Closter (Borough) and property owner Beverly Ann Watkins (defendants), dismissing plaintiff's pro se complaint, which challenged the farmland assessment of Watkins's property for the years 2005, 2006, 2009, 2010 and 2011. Plaintiff appeals. Having carefully reviewed the record in light of the applicable legal principles, we reverse and remand.
A Closter resident, plaintiff previously filed numerous petitions challenging the farmland assessment of Watkins's 5.45-acre property. Located in a residential district, the property is bordered to the east by the 150-acre Closter Nature Center; to the west and south by single family homes; and to the north by Dwars Kill. More than half of the property consists of dense woodlands, and the property contains some wetlands. It is also bisected by a brook running north to south. Improvements include a single-family home, a three-car garage with a loft, a barn, a circular paver driveway, a pool and a cabana. Broad lawns and shrubs surround the house, which are bounded by the circular driveway.
The property was purchased by Watkins (and her husband, who later transferred his interest to his wife) in 1989 for $1.1 million. The previous owners had not used it as a farm. Watkins claimed and received a farmland assessment shortly after she acquired the property. The judgment of the Bergen County Tax Board (County Board) for the 2005 tax year assessed the farmland at $1800, and the single family residential property at $541, 700 (consisting of $90, 000 for land, and $451, 700 for improvements). The record includes an undated advertisement, listing the house for sale for $2, 249, 000.
In the application for the 2005 tax year, the landowner certified that .8 acres were devoted to cropland. The reported farm activity included .4 acres for bedding plants; .4 acres of apples; and .8 acres for vegetables, consisting of .4 acres for eggplant, .2 acres of peppers, and .2 acres of white potatoes. Although this itemized activity totaled 1.6 acres, the applicant is required to include "double cropping." The form explains, by way of example, that "two plantings on fifty acres should be reported as 100.0 acres." The landowner claimed 4.59 acres as permanent pasture, but reported no livestock.
For the 2010 tax year, the landowner certified that 1.8 acres were cultivated, although she itemized only 1.6 acres: .5 acres for bedding plants; .4 acres of apples; and .7 acres for vegetables, consisting of .1 acre of lettuce, .2 acres for squash, and .4 acres of tomatoes. The landowner claimed 3.59 acres as permanent pasture, and claimed nine sheep and thirty egg-laying chickens. The report of agricultural activity was unchanged in the application for 2011, except the landowner claimed six sheep and forty chickens. It is undisputed that most, if not substantially all, of the claimed permanent pasture consists of woodlands, and not cleared land. Defendants maintain that this is permissible because they claim the livestock graze in the woodlands.
Farm activity differed during the years preceding those at issue in this appeal. Those previous years are relevant because the municipality argues, as we discuss at length below, that the grant of a farmland assessment for years 1997 through 2000, approved by the Tax Court in a 2002 decision, has preclusive effect on the instant appeal. For the 1999 tax year, the landowner claimed eleven goats, 250 chickens, twelve geese and 3.59 acres of cropland pastured. She claimed 1.8 acres of cropland harvested, but itemized only 1.5 acres — .1 acres of apples; .2 acres of bedding plants; .2 acres of shrubs; .4 acres of lettuce; .2 acres of peas, .2 acres of potatoes, and .2 acres of melons. For the 1997 tax year, she claimed 4.1 acres of cropland harvested, and one acre of cropland pastured, however, the reported livestock and crop activity were the same as reported two years later.
The landowner certified in 2011 that the use of her property had been unchanged since the court's previous decision — apparently referring to the 2002 decision. "The use of my property has been the same for the years which were previously decided by the Tax Court. . . . I have continued to utilize the property farm [sic] raising animals and produce." The landowner filed an identical certification in 2006.
In connection with the cross-motions for summary judgment in 2011, plaintiff submitted two letter briefs, a statement of material facts and a supporting certification dated August 4, 2011, accompanied by numerous exhibits (although not all are included in the record before us). Plaintiff argued that the landowner overstated the area devoted to agricultural use. He asserted that the stream that bisected the property, which he claimed occupied .2 acres, should have been subtracted from the total area allegedly devoted to agricultural use. He contended that the lawns totaling .39 acres should have been excluded as well. He presented photographs to reflect that the woodland was at least partially unenclosed by fencing. He challenged the landowner's claim about the size of the area devoted to vegetables and bedding plants.
Plaintiff also questioned the allocation of woodlands and wetlands as permanent pasture. He challenged counting the wetlands as land devoted to agricultural use because he asserted grazing on wetlands was barred by law. He argued that woodlands could not be considered permanent pasture, citing an email from a person at the Division of Taxation stating, "wooded areas generally are inappropriate as grazing land and . . . would need to be cleared and enclosed with fencing for proper pastureland." The Division email also advised that the first five acres of land "should be at the carrying capacity for raising livestock or poultry on that land[.]"
We have discussed at length, and we shall not recount here, "the tangled procedural web, " which resulted from the Tax Court's failure to timely enter orders, involving plaintiff's challenge to the farmland assessments for years 1997 through 2003. Rosenblum v. Borough of Closter, No. A-1696-09 (App. Div. Mar. 30, 2011). However, we shall summarize the prior procedural history, as defendants urge us to apply principles of issue and claim preclusion based on those prior proceedings.
Suffice it to say, as a result of plaintiff's procedural omissions, we did not address the merits of the Tax Court's decisions regarding assessments for 1997 through 2003. The Tax Court entered judgment in 2007, after a 2001 trial and the 2002 decision, affirming assessments for tax years 1997 through 2000. Id. at slip op. 5, 13. Plaintiff did not directly appeal those judgments, but later moved to amend them. The Tax Court denied the motion. Plaintiff appealed from that denial, and we affirmed, noting plaintiff was precluded from obtaining meaningful review by failing to supply transcripts of the 2001 trial and documentary evidence. Id. at 18-19.
The Tax Court also affirmed the farmland assessments for 2001 through 2003 upon motion, without a trial, by order entered in December 2009. Id. at 16. However, plaintiff did not appeal from the final judgment. Instead, he had appealed, without leave, from an earlier interlocutory order entered October 2009. We declined to grant leave nunc pro tunc. Thus, there was no appellate review of the 2009 judgment affirming the assessments for 2001 through 2003. Id. at 18.
Turning to the instant appeal, over the course of several years, plaintiff filed complaints with the Tax Court challenging the tax assessments for 2005 and 2006 and 2009 through 2011, after unsuccessful appeals to the County Board. The landowner inadvertently did not apply for a farmland assessment in 2008. The parties filed cross-motions for summary judgment. After argument on October 20, 2011, the court, by a new judge, issued an oral decision, and on January 31, 2012, entered separate judgments dismissing plaintiff's complaints as to the six years.
As the judge's 2011 decision rested substantially on the 2002 trial decision of his predecessor, we first review that prior decision. In its 2002 decision, the court rejected plaintiff's claim that less than five acres were actively devoted to agricultural activity. See N.J.S.A. 54:4-23.2. The court found that the landowner met the income requirements of the statute. See N.J.S.A. 54:4-23.5.
The court also found that the woodland acreage was properly counted toward the five-acre minimum because livestock was permitted to graze there.
I find that the facts demonstrate[d] . . . by a fair preponderance that the livestock that is maintained on the property, the goats and chickens and geese and I think there may have been sheep in one or more of the years as well are not exclusively maintained in pens and fed in pens but are allowed to freely roam on the property and that the free roaming of the livestock throughout the property for . . . feeding and grazing purposes is sufficient to permit . . . the given property to qualify for farmland assessment.
The court expressed concern that there was evidence that the woodlands were partially unfenced. But, the court ultimately relied on the assessor, who "made a reasonable inspection of the property" and testified that "there were agricultural uses" on over five acres. The court rejected the opinion of an expert plaintiff presented who apparently opined that inclusion of the woodlands as pastureland was inappropriate.
The court also rejected plaintiff's argument that even if the woodlands were permissibly counted, the total agricultural acreage was less than five acres. Neither party presented a survey or a precise measurement of the land mass devoted to agriculture. The court concluded that the requisite acreage was established, based on the assessor's opinion.
So on the issue of whether or not the areas that should appropriately be excluded from agricultural use, such as the house and the pool and the other recreational areas used by the family members the [water] course which traverses the property and which should be treated as an appurtenant property rather than an actively cultivated property, meaning that there has to be 5 acres independent of the water course, whether all of those areas amount to a sufficient extent as to leave less than 5 acres under active cultivation was a closely litigated and was a vigorously litigated and somewhat close question. But as I say neither party or no party produced actual physical measurements. All of the ultimate conclusions as to whether or not more or less than 5 acres was actively devoted to agricultural purposes depended upon approximate — depended upon approximations based upon observation. And here, again, I am satisfied that the assessor's observations based upon her responsibility to make these determinations and her employment to do so in this and several other taxing districts establishes a factual basis for concluding that there are more than 5 acres utilized so as to preponderate over the testimony of the other parties.
In the 2011 decision granting defendants summary judgment, the court defined plaintiff's argument to be: "one, there's less than five acres on the Defendant's property that are devoted to farmland activities and two, Watkins improperly categorized woodland as permanent pasture on her farmland application." The court credited the landowner's 2011 certification that the use of her property had been unchanged since the court's previous decision. The court concluded that plaintiff had not presented any cognizable evidence to dispute the landowner's claim, referring only to a 2005 certification, and not addressing his submissions in 2011.
The court also found that the 2002 decision precluded relitigation of whether woodlands could be counted as grazing lands devoted to agricultural use. The court also gave preclusive effect to the determination that the five-acre requirement was satisfied.
[The judge in 2002] further found that the goats, sheep, chickens, geese on the property were not exclusively maintained and fed in pens, but were allowed to freely roam on the property for feeding and grazing purposes sufficient to permit the property to qualify for farmland assessment.
Additionally, the property was used for the production of crops, fruits, ornamental shrubs, vegetables, decorative grasses and other products that were raised on the land. [The court] found that the evidence presented by the defendant predominated over that which was presented by plaintiff.
With respect to the issue of acreage put to farmland use, [the court] concluded that the assessor's observations established the factual basis for concluding that there were more than five acres utilized as farmland.
Accordingly, there is a judicial determination addressing all the issues necessary to ascertain the applicability to farmland assessment and ultimately finding that the property was properly assessed as farmland.
Plaintiff appeals from the Tax Court's decision as to 2005, 2006, 2009, 2010 and 2011. He raises the following points for our consideration:
I. THE STATUTORY FRAMEWORK SUPPORTING THE FARMLAND ASSESSMENT ACT PROVIDES NO PROVISIONS TO QUALIFY WOODLAND AS PERMANENT PASTURE FOR THE INITIAL FIVE ACRES.
II. RES JUDICATA WAS INAPPROPRIATE AS THE ISSUES BETWEEN THE PARTIES HAD NOT BEEN FAIRLY LITIGATED.
III. IT WAS AN ABUSE OF DISCRETION FOR THE TAX COURT TO GRANT THE OWNER SUMMARY JUDGMENT BASED ON A CONCLUSIONARY CERTIFICATION.
IV. IT WAS JUDICIAL ERROR FOR THE TAX COURT TO DENY THE MOTION OF PLAINTIFF FOR SUMMARY JUDGMENT.
V. THE TAX COURT RULING IN 202 THAT A THIRD-PARTY PLAINTIFF LACKS STANDING TO CONTEST ERRORS ON THE FILED FORM FA-1 ACCEPTED BY THE ASSESSOR SHOULD BE REVERSED.
Although we generally defer to a Tax Court judge's expertise in our review of factual findings, we review de novo a Tax Court judge's grant of summary judgment, applying the same standard that governs the trial court. Advance Housing, Inc. v. Twp. of Teaneck, 422 N.J.Super. 317, 327 (App. Div. 2011), certif. granted, 209 N.J. 100 (2012). Thus, we must determine "whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party [in this case, plaintiff], are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). Summary judgment must be granted where the facts are so "one-sided that one party must prevail as a matter of law." Ibid. (citation and quotation omitted).
Our decision is guided by settled principles of law governing farmland assessment, as well as claim preclusion and issue preclusion. We address these in turn.
The Constitution, N.J. Const. art. VIII, § 1, ¶ 1(b), and the Farmland Assessment Act (the Act), N.J.S.A. 54:4-23.1 to -23.23, authorize the assessment of land based on its agricultural use, in order to encourage and support agriculture, preserve family farms, and preserve open space. Byram Twp. v. W. World, Inc., 111 N.J. 222, 227-29 (1988). "Farmland assessments are extraordinary . . . because they are based upon the value of a property for a particular kind of use whereas other assessments are based upon market value." Barrett v. Borough of Frenchtown, 6
N.J.Tax 558, 564 (Tax 1984).
A property's eligibility for farmland assessment must be determined anew each year. Hovbilt, Inc. v. Twp. of Howell, 138 N.J. 598, 619 (1994); N.J.S.A. 54:4-23.13; N.J.A.C. 18:15-2.2(b), -2.4. A property owner must demonstrate that at least five acres of land are "actively devoted" to agricultural use, and the activity satisfies a minimum sales threshold. Hovbilt, supra, 138 N.J. at 620; see also N.J. Const. art. VIII, § 1, ¶ 1(b) (directing the Legislature to enact laws for farmland assessment of "land, not less than 5 acres in area, which is determined by the assessing officer of the taxing jurisdiction to be actively devoted to agricultural or horticultural use"); N.J.S.A. 54:4-23.2, -23.5, -23.6(b).
The five acres, "when measured in accordance with the [statute], " N.J.S.A. 54:4-23.6(b), shall include "the area of all land under barns, sheds, seasonal farm markets selling predominantly agricultural products, seasonal agricultural labor housing, silos, cribs, greenhouses and like structures, lakes, dams, ponds, streams, irrigation ditches and like facilities[.]" N.J.S.A. 54:4-23.11. Notwithstanding the statute's apparent plain language, bodies of water may be assessed as farmland only if reasonably related to the agricultural activity. Checchio v. Scotch Plains, 2
N.J.Tax 450, 456 (Tax 1981); N.J.A.C. 18:15-6.2(a)(2) (stating that water bodies must be "supportive and subordinate or reasonably required for the purpose of maintaining agricultural or horticultural uses").
Also, land under the farmhouse and "such additional land as may be actually used in connection with the farmhouse shall be excluded" from the calculation of the area subject to farmland assessment. N.J.S.A. 54:4-23.11. Land used "in connection with the farmhouse" includes "land used for lawns, flower gardens, shrubs, swimming pools, tennis courts and for like purposes[.]" N.J.A.C. 18:15-3.2.
Moreover, where land is used for multiple purposes, the agricultural use must be dominant in order for the land to be deemed actively devoted to agricultural use. Byram Twp., supra, 111 N.J. at 229-30; City of E. Orange v. Twp. of Livingston, 102 N.J.Super. 512, 536 (Law Div. 1968), aff'd o.b., 54 N.J. 96 (1969). Applying this principle, the Tax Court has declined to include as farmland assessable property lawn areas only periodically used by miniature horses for grazing, and primarily used by family members. Brighton v. Rumson Borough, 22
N.J.Tax 39, 53-54 (Tax 2005), aff'd, 23 N.J.Tax 60 (App. Div. 2006).
Even if the only use of land is agricultural, when the contribution of the owner's land to the agricultural use is minimal, it will not be deemed "actively devoted" to agricultural use. Barrett, supra, 6
N.J.Tax at 562. In Barrett, the taxpayer claimed his woodlands should count toward the prerequisite five-acres because his bees foraged there, notwithstanding that his hives occupied only a forty-by-fifty-foot area within the five-acre tract. Id. at 559-60. The court was unconvinced:
The fact that bees occasionally forage for nectar in the wilds of plaintiff's woodlot does not mean that the land is "devoted" to the production of honey. Plaintiff's land is really "devoted" to nothing at all. . . . The land is in a relatively wild, or unused, state. It has not been cultivated or tended in any way to promote an agricultural use.
[Id. at 564.]
See also Brighton, supra, 22 N.J.Tax at 54 (declining to treat as assessable farmland "the bulk of the property [that] is occasionally used by the family, and occasionally used by the horses, but, for the most part, is not actually devoted to anything").
To qualify as land "[d]evoted to agricultural or horticultural use, " lands used for grazing livestock, or ranged poultry, must be "enclosed by a fence sufficient to retain such animals[.]" N.J.A.C. 18:15-6.2(a)(5), -6.2(a)(11); see also N.J.A.C. 18:15-1.1 (defining "[p]asturing of livestock or poultry" to mean "a land area used to support a group of grazing animals enclosed by fencing").
The statute expressly addresses two uses of woodlands: as a source of tree and forest products harvested from the woodlands; and as ancillary land that supports agricultural activity elsewhere, by providing buffers and shade. The regulations do not account for a third use — as permanent pasture. Cf. N.J.A.C. 18:15-6.2(a)(11) (describing land on which livestock is grazed). The definition of "[p]asturing of livestock or poultry" provides that pasture lands "may include a wooded area for shelter, " N.J.A.C. 18:15-1.1, but the definition does not specify that the wooded area may be used to provide food for the grazing animals.
Woodlands that serve an ancillary use are defined as "appurtenant woodland, " which may qualify as farmland assessed property, but may not be counted toward the prerequisite five acres.
"Appurtenant woodland" means a wooded piece of property which is contiguous to, part of, or beneficial to a tract of land, which tract of land has a minimum area of at least five acres devoted to agricultural or horticultural uses other than the production for sale of trees and forest products, exclusive of Christmas trees, to which tract of land the woodland is supportive and subordinate.
On the other hand, "non-appurtenant woodland" is defined as woodland that is "neither supported nor subordinate to other farmland." N.J.A.C. 18:15-1.1. "Non-appurtenant woodland is actively devoted to the production for sale of tree and forest products." Ibid. It "can only qualify for farmland assessment on the basis of being in compliance with a woodland management plan filed with the Department of Environmental Protection." Ibid.; see also N.J.S.A. 54:4-23.3 (requiring woodland management plans).
Assessors are expressly barred from including within an application for farmland assessment woodland that is not appurtenant, unless a woodland management plan is in place.
The assessor shall not approve an application that includes woodland that is not appurtenant woodland until a woodland management plan has been prepared and approved by the State Forester and the owner has managed the woodland in accordance with the approved plan for at least the two successive years immediately preceding the tax year for which valuation, assessment, and taxation under the Farmland Assessment Act is requested.
In amending the Act to require woodland management plans, the Legislature expressed the intent to restrict farmland assessment of woodlands "used exclusively to produce forest products other than Christmas trees and . . . not appurtenant to open farmland." Assembly Economic Development and Agriculture Committee, Statement to Assembly Bill No. 1925 (Feb. 20, 1986).
A taxpayer is not entitled to a farmland assessment if the use of the land for the purpose is unlawful or illegal; however, a taxpayer is not required to prove the legality of agricultural use. See Byram Twp., supra, 111 N.J. at 236; Cheyenne Corp. v. Twp. of Byram, 248 N.J.Super. 588, 596 (App. Div. 1991), certif. denied, 137 N.J. 312 (1994); Sudler Lakewood Land, LLC v. Lakewood Twp., 18
N.J.Tax 451, 460 (Tax 1999), aff'd, 19 N.J.Tax 305 (App. Div. 2001). Rather, the burden rests with the municipality — or a third-party as in this case — to prove illegality of use, such as through a violation of the zoning ordinance. Byram Twp., supra, 111 N.J. at 230-31 (holding that the municipality bears "the burden of proving the ineligibility of the property based on zoning nonconformity"); Sudler Lakewood Land, supra, 18
N.J.Tax at 460.
The Tax Court may determine the question of illegal use, notwithstanding that other tribunals ordinarily would address the question. Cheyenne, supra, 248 N.J.Super. at 596 (reversing Tax Court decision barring municipality from presenting evidence of prohibited use). "The Tax Court should not passively lend its aid to a taxpayer's zoning noncompliance. Nor should it accord favored treatment to an undeserving owner of land." Ibid.
The farmland assessment statute is construed against the party seeking preferential tax treatment. See, e.g., Atl. Coast LEH, LLC v. Twp. of Little Egg Harbor, 26
N.J.Tax 151, 159 (Tax 2011). The landowner bears the burden to establish that his or her land qualifies for farmland assessment. Hovbilt, supra, 138 N.J. at 620. A tax assessor's decision is entitled to a presumption of validity. The same presumption attaches to the county board's decision when it is challenged before the Tax Court. Byram Twp., supra, 111 N.J. at 235.
To overcome the presumption, a taxpayer must present evidence that is "definite, positive, and certain in quality and quantity to overcome the presumption." Aetna Life Ins. Co. v. City of Newark, 10 N.J. 99, 105 (1952) (citation omitted). In this case, where a third-party challenges the assessor's decision in favor of the farmland assessment, the challenger is required to present some prima facie evidence to rebut the presumption. However, once the presumption is overcome, it loses any probative force and the issue is sent to the trier of fact. Ford Motor Co. v. Twp. of Edison, 127 N.J. 290, 312 (1992) (stating that once presumption of correctness of county tax board decision is overcome, the presumption loses any probative force (citation omitted)). The burden of proving that land qualifies for farmland assessment remains with the taxpayer, notwithstanding that the county board's judgment favors the taxpayer. Estell Manor City v. Stern, 14
N.J.Tax 394, 416 (Tax 1995).
We next review two branches of the law of res judicata: claim preclusion and issue preclusion, also known as collateral estoppel. Both doctrines serve the goal of finality, repose, and fairness. First Union Nat'l Bank v. Penn Salem Marina, Inc., 190 N.J. 342, 351-52 (2007) (citation omitted). Claim preclusion requires a more demanding analysis. Id. at 352. For the doctrine to apply,
(1) the judgment in the prior action must be valid, final, and on the merits; (2) the parties in the later action must be identical to or in privity with those in the prior action; and (3) the claim in the later action must grow out of the same transaction or occurrence as the claim in the earlier one.
[McNeil v. Legislative Apportionment Comm'n, 177 N.J. 364, 395 (2003) (quoting Watkins v. Resorts Int'l Hotel & Casino, Inc., 124 N.J. 398, 412 (1991)), cert. denied, 540 U.S. 1107, 124 S.Ct. 1068, 157 L.Ed.2d 893 (2004)).]
"If . . . a claim could not have been presented in the first action, then it will not be precluded in a later action." Watkins, supra, 124 N.J. at 413.
"Collateral estoppel is that branch of the broader law of res judicata which bars relitigation of any issue which was actually determined in a prior action, generally between the same parties, involving a different claim or cause of action." State v. Gonzalez, 75 N.J. 181, 186 (1977). The doctrine extends to "questions of fact or mixed questions of law and fact." Id. at 187 (citations omitted). It also extends to questions of law "where the claims arise from the same transaction, or if injustice would result." Ibid. (citations and quotations omitted).
The doctrine applies if:
 the issue decided in the prior action is identical to the one presented in the subsequent action, . . .  the issue was actually litigated — that is, there was a full and fair opportunity to litigate the issue — in the prior action, . . .  there was a final judgment on the merits, . . .  the prior determination was essential to the judgment, and  the party against whom preclusion is asserted was a party, or in privity with a party, to the proceeding.
[Perez v. Rent-A-Center, Inc., 186 N.J. 188, 199 (2006) (internal citation and quotation omitted), cert. denied, 549 U.S. 1115, 127 S.Ct. 984, 166 L.Ed.2d 710 (2007).]
In its application to taxation, our Court has held that the grant of a farmland tax assessment in one year does not prevent a challenge to the assessment in later tax years. "[T]ax assessment has no res judicata effect on subsequent assessments." Byram Twp., supra, 111 N.J. at 235 (citing Samuel Hird & Sons, Inc. v. City of Garfield, 87 N.J.Super. 65, 75 (App. Div. 1965)). Claim preclusion does not apply to the claim for taxation in a different tax year. See In re Mut. Benefit Life Ins. Co., 35 N.J.Super. 113, 116 (App. Div. 1955) ("Proceedings as to different tax years each present a different cause of action."); see also Hasbrouck Heights v. Div. of Tax Appeals, 54 N.J.Super. 242, 248 (App. Div. 1959); Restatement (Second) of Judgments § 27 comment c (Reporter's Note) (1982) (noting "in some fields . . . especially taxation — it is sometimes contended that total identity is a requisite to preclusion, " and stating that consistent with this view, claim preclusion would not apply where "prior litigation . . . took place at a different time and related to a different tax year").
The Court has acknowledged that preclusive effect may be accorded a determination of the State's right to tax, but only if there is strict identity of facts and issues.
That an adjudication of the State's right to levy a tax as to one year is res adjudicata as to subsequent years where the matter was fully litigated and involved "identically the same facts" and "precisely the same questions" of law, was determined by the former Court of Errors and Appeals in Hancock, Comptroller v. Singer Mfg. Co., 62 N.J.L. 289, 339 (E. & A. 1898). And we have held that "where the factual situation and questions presented are the same, the prior holding of the court in a case of this nature may be controlling." Aetna Life Insurance Co. v. City of Newark, supra, (10 N.J., at p. 104).
[Atl. City Transp. Co. v. Dir., Div. of Taxation, 12 N.J. 130, 144-45 (1953).]
See also Hasbrouck Heights, supra, 54 N.J.Super. at 248 ("[I]n the absence of a statute to the contrary, a judgment determinative of the first assessment is not binding in the subsequent litigation as to the second assessment, except under the doctrine of collateral estoppel — that is, only as to issues actually litigated and determined in the first case." (citations omitted)).
The Court in Atlantic City Transportation Company, supra, declined to apply res judicata because a stipulation applied only to the tax appeal of a specific year, and the questions of fact and law were not fully litigated. 12 N.J. at 145 (internal citation and quotation omitted). In Byram Twp., supra, the Court held that the township, which had appealed to the Tax Court from the county board's grant of a farmland assessment, had not met its burden to show the landowner's agricultural use was not permitted by the zoning ordinance and therefore ineligible for farmland assessment. 111 N.J. at 234-35. However, the Court concluded, "[O]ur ruling today does not prevent the municipality from attempting to make a sufficient showing in later tax years[.]" Id. at 235.
By contrast, the Tax Court applied collateral estoppel in City of East Orange v. 280 South Harrison Street Associates, 16
N.J.Tax 424, 436 (Tax 1997). The court held that the county board's judgment on a tax-exempt property's valuation for 1995 collaterally estopped the municipality from relitigating the property's 1995 valuation in a separate proceeding only several months later, after the property was added to the tax rolls. The court found that the parties and issues were the same. Ibid.
Moreover, even if prerequisites exist for claim preclusion or collateral estoppel, the doctrines need not be applied without exception. "The ability of a court to readdress previously adjudicated issues may under appropriate circumstances be exercised despite the narrow confines of issue preclusion or res judicata." Plainfield v. Pub. Serv. Elec. & Gas Co., 82 N.J. 245, 258 (1980). A court may deny issue preclusion if it would be inequitable or unfair to do so. Perez, supra, 186 N.J. at 199; see also Olivieri v. Y.M.F. Carpet, Inc., 186 N.J. 511, 521-22 (2006).
Exceptions to the doctrines of issue and claim preclusion are especially appropriate "where . . . the issue is purely one of law and a new determination is warranted to avoid inequitable administration of the law." Plainfield, supra, 82 N.J. at 259; see also In re Estate of Dawson, 136 N.J. 1, 22-23 (1994) (following Plainfield); In re Coruzzi, 95 N.J. 557, 568 (stating collateral estoppel shall not be applied "if there are sufficient countervailing interests"), appeal dismissed, 469 U.S. 802, 105 S.Ct. 56, 83 L.Ed.2d 8 (1984); State v. Santomauro, 261 N.J.Super. 339, 342-43 (App. Div. 1993) (declining to apply collateral estoppel to issue of law involving statutory interpretation). The Restatement recognizes that relitigation of an issue may be permissible, if "[t]here is a clear and convincing need for a new determination of the issue (a) because of the potential adverse impact of the determination on the public interest[.]" Restatement (Second) of Judgments § 28(5).
Finally, res judicata is an affirmative defense. See R. 4:5-4. A defendant generally bears the burden to prove an affirmative defense. See Roberts v. Rich Foods, Inc., 139 N.J. 365, 378 (1995) (stating that defendant bears the burden to prove affirmative defense in civil case). In particular, "[t]he party seeking to invoke the doctrine of issue preclusion bears the burden of demonstrating what was determined in the prior adjudication, and 'reasonable doubts as to what was decided by a prior judgment should be resolved against using it as estoppel.'" Sweeney v. Sweeney, 405 N.J.Super. 586, 598 (App. Div.) (quoting Shtab v. Greate Bay Hotel & Casino, Inc., 173 F.Supp.2d 255, 261 (D.N.J. 2001)), certif. denied, 199 N.J. 519 (2009).
Applying the foregoing principles, we conclude as a threshold matter that neither claim preclusion, nor collateral estoppel, governs this case. We also conclude that plaintiff has sufficiently rebutted the presumption of correctness of the County Board's decision, and defendants failed to establish grounds for summary judgment in their favor.
Claim preclusion is inapplicable because plaintiff's challenge pertains to farmland assessments for years other than those adjudicated in the prior appeal. Simply put, plaintiff presents a different claim — the correctness of the farmland assessment in 2005, 2006, and 2009 through 2011. Those claims could not have been, and were not, previously adjudicated. As we have discussed, a tax assessment has no claim preclusive effect on later assessments. See Byram Twp., supra, 111 N.J. at 235; In re Mut. Benefit Life Ins. Co., supra, 35 N.J.Super. at 116.
Nor have defendants satisfied their burden to show that collateral estoppel governs the issues plaintiff raises on his appeal. Defendants have not demonstrated that the court in 2002 squarely addressed the issues plaintiff presents. As noted, collateral estoppel may be granted only if, among other preconditions, the issues were actually litigated and essential to the judgment.
In particular, the court in 2002 did not address the legal issue whether unfenced lands may be included in the five acres. Cf. N.J.A.C. 18:15-1.1, -6.2(a)(5), -6.2(a)(11). Although the court found that the lands were unfenced, it dismissed that fact solely on the basis of the assessor's determination that the livestock actually grazed on the lands.
The court in 2002 did not address at all whether grazing of freshwater wetlands violated environmental statutes and regulations, and therefore was an illegal use. The court also did not expressly reach the legal issue whether woodlands may be considered permanent pasture. Rather, the court simply relied on the assessor's testimony that the woodlands were in fact used for grazing purposes. The court also did not address the issue of the carrying capacity of the land.
Collateral estoppel is also inappropriate because, to the extent it is a mixed issue of law and fact, the facts have undisputedly changed in some respects, and may have changed in others. For example, for the 1999 assessment, the landowner reported she maintained eleven goats, twelve geese and 250 chickens. While the woodlands may have been actively devoted to the sustenance of some or all of those animals, by the time the landowner applied for a farmland assessment for 2011, she owned only six sheep and forty chickens. Much else may have changed in the decade between the landowner's application for farmland assessment for 2000, and her application for 2010 and 2011. Fences that existed in 2000 may have fallen. Woodlands may have become overgrown with vegetation unsuitable for grazing.
Other countervailing considerations militate against application of collateral estoppel. Many of the issues presented are purely legal questions. The claims do not arise from the same transaction; they relate to different tax years; and the failure to apply the doctrine would not result in an injustice. See State v. Gonzalez, supra, 75 N.J. at 187. Moreover, even if collateral estoppel theoretically applies to the purely legal issues in this case, countervailing considerations militate against applying the doctrine. The taxpaying public has an interest in the proper administration of farmland assessment; if the prior court erred in its interpretation, we should not be deterred from correcting that error. "Innocent taxpayers should not be required to shoulder an extra financial burden[.]" Cheyenne Corp., supra, 248 N.J.Super. at 596-97.
We also should be especially reluctant to apply collateral estoppel given the statutory mandate to review eligibility for farmland assessment annually. "Eligibility of land for valuation, assessment and taxation under this act shall be determined for each tax year separately." N.J.S.A. 54:4-23.13.
Having concluded that the Tax Court erred in giving the 2002 decision preclusive effect in 2011, we turn to consider, based on the 2011 motion record, defendants' motion for summary judgment. We conclude that plaintiff has successfully rebutted the presumption of correctness of the County Board's decision. The evidential materials presented, particularly when considered in light of defendant's burden of proof, are sufficient to raise genuine issues of material fact that defeat defendants' motion. See Brill, supra, 142 N.J. at 540 (stating that court must consider applicable burden of persuasion in deciding summary judgment motion).
Plaintiff has presented an aerial photograph and a photograph contained in an advertisement marketing the property for sale, that depict expansive lawns around the house, bounded by a circular paver driveway. These areas do not appear on their face to be permanent pasture actively devoted to agricultural use. See N.J.A.C. 18:15-3.2(b) (including "lawns, flower gardens, [and] shrubs" as land used "in connection with the farmhouse, " and thereby excluded from land actively devoted to agricultural use). Even if sheep were permitted to graze on the front lawn occasionally, that might not suffice, just as such minor use did not in Brighton, supra.
Photographs of the streams and wetlands adequately raised questions about the appropriate allocation of the area. The landowners' application does not list any appurtenant wetland, nor is the area attributable to the streams deducted from the total acreage allegedly devoted to agricultural use. Even the court in 2002 found that the "water course" must be excluded from the five acres.
The photographs of areas that appear unfenced raised an issue whether the land could be properly counted as permanent pasture. Division of Taxation regulations provide that permanent pastureland must be fenced. See N.J.A.C. 18:15-6.2(a)(5), -6.2(a)(11); see also N.J.A.C. 18:15-1.1. Although we recognize that a landowner should not forfeit a farmland assessment because of a temporary hole in a fence, plaintiff has at the very least created an issue as to whether the woodlands were ever adequately enclosed.
As plaintiff has rebutted the presumption of correctness of the County Board's decision, it was incumbent upon defendants, as movants, to demonstrate the absence of a genuine issue of material fact that would prevent judgment in their favor. That, they have failed to do. As we have decided, defendants may not rely on the findings rendered in 2002. Thus, they are left with the landowner's conclusory certification that she has "continued to utilize the property farm [sic] raising animals and produce." On its face, the statement is at best imprecise, as the composition of livestock, the allocation of crops, and the acreage devoted to crops and pasture have changed according to the landowner's own sworn applications for farmland assessment.
The landowner does not specify the acreage devoted to agriculture. She does not specifically respond to plaintiff's estimate that .59 acres should be subtracted from the agriculturally devoted acreage for lawns (.39 acres) and streams (.2 acres). She does not address the evidence that the woodlands were not enclosed by a fence. She does not address the issue of the carrying capacity of the woodlands, and whether the woodlands may be deemed actively devoted to six sheep.
We note that neither the landowner nor the Borough presented the court with measurements of the land deemed devoted to agriculture. The court in 2011 and 2002 accepted the assessor's observations. However, the statute expressly contemplates measurement. N.J.S.A. 54:4-23.6 (referring to "not less than five acres when measured in accordance with [N.J.S.A. 54:4-23.11]" (emphasis added)); cf. Div. of Taxation, Dep't of the Treasury of the State of N.J., Handbook for N.J. Assessors 407 (2013) ("The assessor may require proof of the land area" in determining eligibility for farmland assessment). Particularly given the closeness of the issue, and the need for precision, it was incumbent on defendants to present a reliable measurement of the land area allegedly devoted to agricultural use. The assessor's opinion about acreage — without utilizing any acceptable measuring device — is nothing more than "net opinion." Townsend v. Pierre, 429 N.J.Super. 522, 528 (App. Div. 2013).
We comment also on plaintiff's argument that the landowner's use of the wetlands was unlawful absent a permit. The parties do not dispute the presence of wetlands and their use. We also recognize that regulations under the Freshwater Wetlands Act only exempt farming operations that were established and ongoing as of June 30, 1988, before the landowner here commenced farm operations. See N.J.A.C. 7:7A-2.8(c) (stating that exemption from freshwater wetlands permit applies to "established, ongoing farming, ranching or silviculture operation" that has received or is eligible for farmland assessment); N.J.A.C. 7:7A-1.4 (defining "[e]stablished, ongoing farming, ranching or silviculture operation" as one in use as of June 30, 1988 and continuously thereafter).
However, plaintiff has not demonstrated how the nature of the landowner's use would subject her to the permit requirement in the first place. A permit is required when a person engages in a regulated activity in freshwater wetlands. N.J.A.C. 7:7A-2.1. Regulated activities as defined do not expressly include grazing of animals in woodlands left in their natural state; conceivably, it may involve "[t]he destruction of plant life which would alter the character of a freshwater wetland, " N.J.A.C. 7:7A-2.2(a)(6), or the deposit of animal waste if that were deemed to include "[t]he dumping . . . [of] any materials" in the wetlands. N.J.A.C. 7:7A-2.2(a)(3). However, plaintiff has not, on this record, met his burden to establish an unlawful use of the wetlands. As in Byram Twp., supra, he may renew his argument in the future.
Finally, we do not reach the more difficult legal issue whether woodlands can ever serve as permanent pasture. We note the Tax Court, neither in 2002 nor in 2011, directly addressed that legal issue, notwithstanding that plaintiff presented it. The issue should initially be addressed by the Tax Court. Conceivably, the extent and nature of the landowner's use of the woodlands would affect the court's analysis. We cannot discern from this record whether the landowner engages in any clearing, planting, or management of the woodlands. The Department of Agriculture has suggested that active management of woodlands is required to qualify as actively devoted to agriculture. N.J. Dep't of Agric., New Jersey's Farmland Assessment Act: An Informational Guide on Basic Requirements at 6-7 (2006). Nor is there evidence regarding the "maximum economic potential" of the woodlands deemed permanent pasture. See N.J.A.C. 18:15-1.1.
Moreover, even if the woodlands may be utilized as permanent pasture under the Act, the Tax Court made no finding as to the carrying capacity of this particular woodland. There is no explanation as to why, if the acreage was sufficient to support eleven goats in 1999, it is not excessive for the support of six sheep in 2011. If a single sheep needs only a fraction of an acre to pasture, a landowner may not let it roam over ten acres, and claim the area is "actively devoted" to agricultural use as permanent pasture.
In sum the court erred in granting summary judgment to defendants and dismissing plaintiff's complaint.
Reversed and remanded We do not retain jurisdiction.