Arsenis v. Borough of Bernardsville

• Docket Number: A-0603-21
• Decision Date: 28 June 2023
• Parties: C. ARSENIS, S. ARSENIS, and G. ARSENIS, Plaintiffs-Appellants, v. BOROUGH OF BERNARDSVILLE, EDWARD KERWIN, Tax Assessor, TOM CZERNIECKI, Borough Administrator, and ANTHONY SURIANO, Borough Clerk, Defendants-Respondents.
• Court: New Jersey Superior Court — Appellate Division

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C. ARSENIS, S. ARSENIS, and G. ARSENIS, Plaintiffs-Appellants,
v.
BOROUGH OF BERNARDSVILLE, EDWARD KERWIN, Tax Assessor, TOM CZERNIECKI, Borough Administrator, and ANTHONY SURIANO, Borough Clerk, Defendants-Respondents.

No. A-0603-21

Superior Court of New Jersey, Appellate Division

June 28, 2023

APPROVED FOR PUBLICATION June 28, 2023

Submitted September 21, 2022

On appeal from the Superior Court of New Jersey, Law Division, Somerset County, Docket No. L-1061-21.

Hegge & Confusione, LLC, attorneys for appellants (Michael Confusione, of counsel and on the brief).

Parker McCay, PA, attorneys for respondents (John C. Gillespie and Alexis C. Smith, on the brief).

Chiesa Shahinian & Giantomasi, PC, and Zipp & Tannenbaum, LLC, attorneys for amicus curiae

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Association of Municipal Assessors of New Jersey (John R. Lloyd and Peter J. Zipp, of counsel and on the brief).

Before Judges Haas, DeAlmeida, and Mitterhoff.

OPINION

DeALMEIDA, J.A.D.

We consider whether the Superior Court has jurisdiction to adjudicate claims for monetary damages, filed years after the statutory deadline for filing a tax appeal, based on allegations that municipal officials committed fraud and other torts by assessing real property in a manner inconsistent with law and at an amount above its true market value. We conclude that the Superior Court lacks jurisdiction to hear such claims because they are substantively equivalent to a tax appeal properly venued in the Tax Court or a county board of taxation, and the statutory deadlines for challenging local property tax assessments may not be circumvented by a late-filed complaint seeking damages for alleged torts arising from the tax assessment process. In light of these conclusions, we affirm the trial court order dismissing the complaint in this matter with prejudice for failure to state a claim upon which relief can be granted.

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I.

In 2012, plaintiffs C. Arsenis, S. Arsenis, and G. Arsenis purchased residential real property in defendant Borough of Bernardsville for $6,267,500. The parcels are designated in the records of the municipality as Block 16, Lots 5 and 6.01.

Starting in 2013, and in every year thereafter, plaintiffs submitted a forest management plan seeking to qualify a portion of the property for assessment under the Farmland Assessment Act of 1964, N.J.S.A. 54:4-23.1 to -23.23. Pursuant to annual district-wide reassessments and plaintiffs' farmland assessment applications, the property was assessed for local property tax purposes as follows:

Block 16, Lot 6.01

Year	Acres	Land	Improvements	Total
2012	5	$795,000	$1,694,500	$2,489,500
2013	5	$755,000	$2,224,400	$2,979,400
2014	4	$664,000	$2,394,300	$3,058,300
2015	4	$664,000	$2,475,800	$3,139,800
2016	4	$664,000	$2,509,900	$3,173,900
2017	4	$664,000	$2,417,800	$3,081,800
2018	4	$628,000	$2,321,600	$2,949,600
2019	4	$588,000	$2,732,000	$3,320,000
2020	3	$536,000	$2,673,800	$3,209,800

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Block 16, Lot 6.01, Qual. Q0017

Year	Acres	Land	Improvements	Total
2012	47.58	$7,300	$0	$7,300
2013	47.58	$7,300	$0	$7,300
2014	48	$6,300	$0	$6,300
2015	48	$6,300	$0	$6,300
2016	48	$6,200	$0	$6,200
2017	49	$6,400	$0	$6,400
2018	49	$6,500	$0	$6,500
2019	49	$2,700	$0	$2,700
2020	49	$6,000	$0	$6,000

Block 16, Lot 5, Qual. Q0017

Year	Acres	Land	Improvements	Total
2012	.5	$100	$0	$100
2013	.5	$100	$0	$100
2014	.5	$100	$0	$100
2015	.5	$100	$0	$100
2016	.5	$100	$0	$100
2017	.5	$100	$0	$100
2018	.5	$100	$0	$100
2019	.5	$100	$0	$100
2020	.5	$13,000	$0	$13,000

Plaintiffs did not file complaints in the Tax Court or petitions in the Somerset County Board of Taxation (Board) challenging the assessments on their property for tax years 2013 through 2019. See N.J.S.A. 54:3-21 (establishing deadlines for filing a petition of appeal with a county board of taxation and, for properties assessed in excess of $1,000,000, a complaint with

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the Tax Court, challenging the annual assessment on real property for local property tax purposes.).^[1]

On March 14, 2021, plaintiffs filed a complaint in the Law Division alleging that the assessments on their property for tax years 2013 through 2019 were inflated by municipal officials in a fraudulent scheme to raise revenue. According to the complaint, Bernardsville, and defendants Edward Kerwin, the borough tax assessor, Tom Czerniecki, the borough administrator, and Anthony Suriano, the borough clerk, created false property record cards for plaintiffs' property that failed to note the house on the property lacked a certificate of occupancy due to ongoing renovations. Defendants used the false record cards, plaintiffs allege, to further their fraudulent scheme.^[2]

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Plaintiffs also allege that during the tax years in question, defendants misrepresented the condition of the home; set assessments that were calibrated not to reflect true market value, but to raise specific amounts of taxes; submitted the false property record cards to the bank maintaining the escrow account for plaintiffs' mortgage to fraudulently obtain tax payments on the property; and engaged in illegal "spot assessing." See Twp. of W. Milford v. Van Decker, 120 N.J. 354, 365 (1990). Finally, plaintiffs allege defendants erroneously imposed an added assessment on the property after completion of the renovations.

Plaintiffs allege defendants' conduct constituted: (1) tax/mortgage escrow fraud; (2) common law fraud; (3) unjust enrichment; and (4) negligent misrepresentation. They seek as damages the $251,815 in local property taxes they allege they overpaid as a result of defendants' conduct, as well as interest, treble damages, punitive damages, and "investigation fees."

In lieu of filing an answer, defendants moved to dismiss the complaint with prejudice for failure to state a claim upon which relief can be granted pursuant to Rule 4:6-2. They argued that plaintiffs' claims are the substantive equivalent of tax appeals because they challenge the quantum and method of the assessments on their property and seek damages equal to the taxes they allegedly overpaid. According to defendants, the Superior Court lacked

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jurisdiction to hear such claims and could not transfer them to the Tax Court or county board of taxation because they were filed long after expiration of the statutory deadlines for filing tax appeals for the tax years in question.

In addition, defendants argued that plaintiffs' claims, even if viewed as tort claims, are barred by immunity and notice provisions of the Tort Claims Act (TCA), N.J.S.A. 59:1-1 to 13-10. Finally, defendants argued that all claims against Czerniecki and Suriano should be dismissed because neither have responsibilities with respect to the assessment and collection of local property taxes and Czerniecki started employment with the borough after the actions alleged in the complaint.

Plaintiffs opposed the motion. In addition to urging the court to reject defendants' arguments, for the first time they allege defendants'...