Christian Mission John 3:16 v. Passaic City

• Decision Date: 15 July 2020
• Docket Number: 083487,A-33 September Term 2019
• Citation: 243 N.J. 175,233 A.3d 511
• Parties: CHRISTIAN MISSION JOHN 3:16, Plaintiff-Appellant, v. PASSAIC CITY, Defendant-Respondent.
• Court: New Jersey Supreme Court

243 N.J. 175

233 A.3d 511

CHRISTIAN MISSION JOHN 3:16, Plaintiff-Appellant,

v.PASSAIC CITY, Defendant-Respondent.

A-33 September Term 2019

083487

Supreme Court of New Jersey.

Argued April 28, 2020

Decided July 15, 2020

Tova L. Lutz and Christopher John Stracco argued the cause for appellant (The Lutz Law Group and Day Pitney, attorneys; Tova L. Lutz, Christopher John Stracco, Sarah Sakson Langstedt, Parsippany, and Erin Hodgson, on the briefs).

Kenneth A. Porro argued the cause for respondent (Chasan Lamparello Mallon & Cappuzzo, attorneys; Kenneth A. Porro, of counsel and on the briefs, and Edna J. Jordan, Secaucus, on the briefs).

David R. Oakley submitted a brief on behalf of amici curiae the General Council of the Assemblies of God, the Union of Orthodox Jewish Congregations of America, the Jewish Coalition for Religious Liberty, the Church of Jesus Christ of Latter-day Saints, and the Sisters of Saint Francis of Perpetual Adoration Immaculate Heart of Mary Province (Anderl & Oakley, Sidley Austin, and Yale Law School Free Exercise Clinic, attorneys; David R. Oakley, Princeton, on the brief, and Erika L. Maley and Derek A. Webb, of the District of Columbia bar, admitted pro hac vice, and Gordon D. Todd, of the District of Columbia and Virginia bars, admitted pro hac vice, and Christopher S. Ross, of the District of Columbia, Ohio and New York bars, admitted pro hac vice, and Christopher C. Pagliarella, of the District of Columbia and New York bars, admitted pro hac vice, on the brief).

Mark Salah Morgan submitted a brief on behalf of amicus curiae Coptic Archdiocese of North America (Day Pitney, attorneys; Mark Salah Morgan and Michael L. Fialkoff, Parsippany, on the brief).

JUSTICE SOLOMON delivered the opinion of the Court.

N.J.S.A. 54:4-3.6 exempts from taxation "all buildings actually used for" specific enumerated purposes, including "the work of associations and corporations organized exclusively for religious purposes," subject to certain restrictions. In this appeal, the Court considers whether that exemption may apply to a warehouse owned by Christian Mission John 3:16 (Christian Mission), a Passaic-based Christian congregation, for tax year 2013.

In 2009, Christian Mission purchased a warehouse (the property) on a lot adjacent to its church building and sanctuary in the City of Passaic (the City). Christian Mission used the warehouse for storage of religious items and church-related activities from 2009 to 2011. In 2012, Christian Mission began converting the warehouse to a sanctuary and applied for a religious tax exemption for that property for tax year 2013. That application was denied because the City found that, as of October 1, 2012, the valuation date for the 2013 tax year, the property was not "actually used" for an exempt purpose as required by N.J.S.A. 54:4-3.6 and was without a certificate of occupancy or proof of compliance with safety regulations.¹

In its appeal to the Tax Court, Christian Mission argued it was entitled to the exemption because morning prayer services were held for church members working at the construction site and because church items were stored there. The Tax Court disagreed, finding that any use of the property for prayer services was merely incidental and unsafe because the property was a construction site without a certificate of occupancy and not open to the public. The court therefore granted summary judgment against Christian Mission. The Appellate Division affirmed.

We granted Christian Mission's petition seeking review of the determination that its property did not satisfy the "actual use" requirement of N.J.S.A. 54:4-3.6 as of the valuation date. We hold it was error to grant summary judgment because, construing all inferences in Christian Mission's favor, there is evidence that the property might have been used in a manner that could satisfy the actual use requirement -- storage of religious items and/or other church-related activities at the property before construction began, during construction, and as of the valuation date in 2012. We therefore remand the matter to the Tax Court for further fact-finding and proceedings.

I.

The record in this case reveals that Christian Mission owned a building and an adjacent parking lot on the corner of Madison Street and Leonard Place in Passaic. In 2009, Christian Mission purchased the property at issue here, a commercial warehouse located at 250 Madison Street next to the existing church.

Christian Mission applied at some point for a religious tax exemption for the property; the record does not reveal for which tax year prior to 2013 Christian Mission sought exemption. The City rejected that application based on its finding that the property was not actually being used for an exempt purpose by the relevant valuation date.

In 2012, Christian Mission once again applied for a local property tax exemption for the property, seeking exemption for the 2013 tax year. A tax assessor for the City found that, as of July 2012, the warehouse had been stripped down to "essentially a shell or frame." Additionally, building, electric, and fire inspections remained incomplete, and no certificate of occupancy had been issued as of October 1, 2012, the valuation date for the 2013 tax year. Based on the condition of the structure, as evidenced by photographs of the construction site, the City found that the property was not actually used for a tax-exempt purpose as of the valuation date and denied the application. The City assessed the property at a total value of $213,000 for tax year 2013. Christian Mission appealed.²

On appeal before the Tax Court, the parties filed cross-motions for summary judgment. Christian Mission John 316 v. Passaic City, 30 N.J. Tax 357, 362-63 (Tax 2018). In support of its motion and in opposition to the City's motion, Christian Mission filed an affidavit from Reverend Francisco Joissim (the Reverend). In paragraph five of the affidavit, the Reverend certified in part that,

[f]rom 2009 through [2011], the property remained in its original form, essentially that of a large open space. During this time, Christian Mission continued to use the property in question in one form or another, as an extension of its regular religious activities, which were primarily conducted at the adjoining corner church-house.

These included ceremonial activities, religious services during mild weather months, youth rallies, women's rallies, fundraising activities, fairs and storage of various items associated with church functions. At all times the basement was used for storage of church items. A copy of photographs, taken in January 2012, depict the condition of the church ... during this entire period ....

In the remaining paragraphs of his affidavit, the Reverend certified that "[i]n order to complete the transition ... to a formal church, the premises underwent significant renovations during 2012; commencing around January 2012 and concluding around September 2012," and that "[c]ommunity religious services began sometime around September with formal services commenced around the time of Thanksgiving 2012." The Reverend continued, noting that

[d]uring the entire construction period (January 2012 - September 2012) the church remained in active use. With rare exception, every single morning I went to the site and conducted religious services. These services were comprised of approximately 10 people, including church members who were part of the construction crew, and often other members and/or spouses joining. These services lasted approximately 20 minutes and involved participants holding hands, reading scripture from Psalms and Deuteronomy, singing songs of prayer, shared and personal praying and concluded with me blessing the workers as they were about to begin their work day ahead.

Finally, the Reverend certified that "[d]uring this construction period I also met with and counseled congregants as part of my ministerial duties at the site. Often following morning prayer sessions, but also at various other times."

Christian Mission argued, citing the Reverend's affidavit, that it satisfied the criteria for a local property tax exemption under N.J.S.A. 54:4-3.6 in time for the October 1 valuation date.

The Tax Court upheld the City's denial of the 2013 exemption, holding that, as of the valuation date, the building was not "a fully functional establishment prepared to offer its charitable services to the public." Id. at 368, 373-74. The court stated that, because no contentions had been made as to the 2012 tax year about the property's use for storage, and because the morning prayer services were available primarily to parishioners among the construction crew, the building was not "actually used" for an exempt purpose as of the October 2012 valuation date. Id. at 373-74.

The Tax Court also held that the lack of a certificate of occupancy was evidence in support of its conclusion, noting that no certificate had been issued in part because Christian Mission had yet to demonstrate the safety of the building as a space for religious services or other activities. Id. at 377-78. The court explained that it could not

envision that our Legislature intended to condone behavior of a taxpayer who/which attempts to make actual use of a property under construction, and not previously afforded a tax exemption, prior to the date that such property is permitted to be occupied and used, in order to qualify for local property tax exemption under N.J.S.A. 54:4-3.6. Such actions jeopardize public safety and are counterintuitive to the very purposes of the exemption statute, which is to offer the public a service in an environment free from danger, thereby relieving the State from a concomitant burden.

[ Id. at 377.]

The Tax Court concluded that because no certificate of occupancy had been issued, the property could not, under the facts in this case, "be viewed as actually in use, or fully available for use for religious activities, under N.J.S.A. 54:4-3.6 as of...