Cold Indian Springs Corp. v. Ocean Tp.

• Decision Date: 21 October 1977
• Citation: 380 A.2d 1178,154 N.J.Super. 75
• Parties: COLD INDIAN SPRINGS CORP., a New Jersey Corporation, Middlebrook at Monmouth, Inc., a New Jersey Corporation; Woodmere at Eatontown, Inc., a New Jersey Corporation; Woodshire Apartments, a New Jersey partnership; Raleigh Corporation, a New Jersey Corporation; Continental Enterprises, a New Jersey partnership; Continental Land Developers, Inc., a New Jersey Corporation, Plaintiffs, v. TOWNSHIP OF OCEAN, a Municipal Corporation of the State of New Jersey; and Martin Bailey, Tax Collector of the Township of Ocean, Defendants, and Frank Linzmayer and Eileen L. Youmans, on behalf of themselves and as representatives of tenants in buildings involved in this action, Intervening Defendants-Counterclaimants. CHESTERFIELD ASSOCIATES, INC., a corporation of the State of New Jersey, Plaintiffs, v. TOWNSHIP OF FREEHOLD, a municipal corporation of the State of New Jersey, and Robert N. Ferrell, Tax Collector of the Township of Freehold, Defendants.
• Court: New Jersey Superior Court

Page 75

154 N.J.Super. 75

380 A.2d 1178

COLD INDIAN SPRINGS CORP., a New Jersey Corporation,

Middlebrook at Monmouth, Inc., a New Jersey Corporation;

Woodmere at Eatontown, Inc., a New Jersey Corporation;

Woodshire Apartments, a New Jersey partnership; Raleigh

Corporation, a New Jersey Corporation; Continental

Enterprises, a New Jersey partnership; Continental Land

Developers, Inc., a New Jersey Corporation, Plaintiffs, v. TOWNSHIP OF OCEAN, a Municipal Corporation of the State of

New Jersey; and Martin Bailey, Tax Collector of

the Township of Ocean, Defendants,

and

Frank Linzmayer and Eileen L. Youmans, on behalf of

themselves and as representatives of tenants in

buildings involved in this action,

Intervening

Defendants-Counterclaimants.

CHESTERFIELD ASSOCIATES, INC., a corporation of the State of

New Jersey, Plaintiffs, v. TOWNSHIP OF FREEHOLD, a municipal corporation of the State

of New Jersey, and Robert N. Ferrell, Tax

Collector of the Township of Freehold, Defendants.

Superior Court of New Jersey, Law Division.

Oct. 21, 1977.

Sheppard A. Guryan, Newark, for plaintiffs Cold Indian Springs Corp. et al., and Chesterfield Associates, Inc. (Lasser, Lasser, Sarokin & Hochman, Newark, attorneys).

Dennis M. Crawford, Wanamassa, for defendants Tp. of Ocean and Martin Bailey (Schaefer, Crawford & Hirsch, Wanamassa, attorneys).

Hilton P. Goldman, Newark, for intervenors (Bendit, Weinstock & Sharbaugh, Newark, attorneys).

Duane O. Davison, Freehold, for defendants Tp. of Freehold and Robert N. Ferrell (Kaye & Davison, Freehold, attorneys).

LANE, A. J. S. C.

This is the return day of orders to show cause why orders should not be entered enjoining defendants from enforcing the Tenants' Property Tax Rebate Act, N.J.S.A. 54:4-6.2 et seq., as amended, L.1977, c. 81, against plaintiffs pending further order of the court and enjoining defendants from enforcing tax collector certifications pending further order of the court. Plaintiffs in each case have moved for summary judgment. Defendants in both actions have moved for summary judgment. Both matters are being decided in one opinion; however, they are not consolidated.

Plaintiffs in both actions allege that the Tenants' Property Tax Rebate Act is unconstitutional facially and as applied and that irreparable injury in the form of fines and civil liability to tenants will result if the act is enforced against them. Defendants were preliminarily enjoined from enforcing the Tenants' Property Tax Rebate Act and the tax collector certifications. Obligations represented in the certificates were stayed. Copies of the order to show cause and complaint in lieu of prerogative writs were ordered to be served upon defendants and plaintiffs' tenants. In Cold Indian Springs, copies of the documents were also sent to the Attorney General whose office has responded by letter that it does not intend to intervene at this time, although reserving the right to do so in the future. He has filed a brief.

Plaintiffs in the Cold Indian Springs action are owners of apartment complexes in the Township of Ocean who have joined in this action to present identical grievances about the Tenants' Property Tax Rebate Act. In addition, Cold Indian Springs, Inc. alleges that the rebate certification for Block 218-2, Lot 1-G requires plaintiff to refund monies on account of a reduction in apartment units on the lot in question.

From approximately August 10 to August 15, 1977 plaintiffs received tax collector certifications from Martin Bailey, tax collector of the Township of Ocean. Plaintiffs allege that these certifications improperly included reductions in real estate taxes in 1977 which resulted from a municipal-wide revaluation of properties within the township. Each plaintiff further alleges that this revaluation "was implemented to correct an improper, incorrect and mistaken assessment imposed against plaintiff's premises." Plaintiffs claim that since they did not actually receive cash from the 1977 tax reductions, they cannot be required to pass the reduction on to tenants.

The Township of Ocean answers denying that the certifications were incorrect or that the act is unconstitutional. The township asserts that the certifications were prepared in compliance with the statute and the regulations of the Division of Local Government Services in the Department of Community Affairs. The township states that the statute is presumed to be constitutional. The township disputes Cold Indian Springs' allegation that the number of units in Block 218-2, Lot 1-G changed. The township states that there was a rearrangement of units but that the total number of units and the assessment remained the same. The township also states that the action should be dismissed for failure to join the tenants who are indispensable parties to this action.

Plaintiff in Chesterfield Associates, Inc. v. Township of Freehold is the owner of a multi-family garden apartment complex. Plaintiff received a tax collector certification from the tax collector of the Township of Freehold on or about July 25, 1977. Chesterfield Associates obtained a judgment from the Monmouth County Board of Taxation on November 15, 1976, which reduced the assessment for the premises from $2,206,900 to $1,732,300. That judgment is not reflected in the calculations for the property tax reduction. Plaintiff argues that the reduction occurred before the effective date of the amendments in question. Plaintiff also argues that it is required to return money to tenants which the owner has not actually received. For these reasons plaintiff argues that the act is unconstitutional and an arbitrary and unreasonable deprivation of property without due process of law.

Plaintiff also argues that the interpretation of the act is incorrect. Plaintiff claims that the taxes paid in the base year should reflect reductions obtained from judgments of county boards of taxation. Plaintiff argues that the Legislature intended to allow landlords to retain reductions from tax appeals and if the act is interpreted to require landlords to share such reductions with tenants, a denial of equal protection results in that landlords seeking such reductions are penalized.

The Township of Freehold contends that the statutory method of determining reductions is ambiguous because it is unclear whether the base year figure should reflect reductions resulting from judgments entered by county boards of taxation. The township claims that it requested guidance from John Laezza, Director of the Division of Local Government Services in the Department of Community Affairs, who informed the township that the statute should be read to mean that the base year figure should exclude reductions resulting from judgments of county boards of taxation. The township agrees that such an interpretation may be "unjust" but states that if the court finds that interpretation should be that espoused by the Director of the Division of Local Government Services, the act should be found constitutional nonetheless. The township also opposes plaintiff's demand to free them from all responsibility under the act, arguing that the plaintiff should be required to rebate the correct amount to tenants.

Frank Linzmayer, a tenant in Twin Brook Apartments, owned by Woodshire Apartments, a plaintiff in the Ocean Township action, seeks to intervene as a defendant in this action in order to protect his interest in the rebate and to assert a right to a double rebate on behalf of himself and all other tenants whose rebates are past due. Eileen Youmans, a tenant in West Park Manor Apartments, owned by Raleigh Corporation, another plaintiff in the Ocean Township action, also seeks to intervene in a similar capacity. The intervening class defendants seek to compel the plaintiffs to deposit in court twice the amount of the rebates due.

The intervening defendants seek certification to represent the class of tenants affected by the Cold Indian Springs action as well as all tenants in the State who are entitled to but have not received their property tax rebates. Intervening defendants seek not only the statutory penalties but also punitive damages and costs of the action.

The intervenors claim that the tenants are the real parties in interest and are indispensable parties to this suit.

R. 4:33-1 provides for intervention as of right:

Upon timely application anyone shall be permitted to intervene in an action if the applicant claims an interest relating to the property * * * which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.

R. 4:33-2 further provides for permissive intervention:

Upon timely application anyone may be permitted to intervene in an action if his claim or defense and the main action have a question of law or fact in common. * * * In exercising its discretion the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.

Ordinarily, applications for intervention in an action are treated liberally. State v. Lanza, 39 N.J. 595, 600, 190 A.2d 374 (1963). In Allan-Deane Corp. v. Bedminster Tp., 121 N.J.Super. 288, 291, 292, 296 A.2d 663 (App.Div.1972), rev'd 63 N.J. 591, 311 A.2d 177 (1973), nonresidents of Bedminster sought to intervene as of right and as a class in an action challenging the validity of the township's zoning ordinance. The trial court and the Appellate Division ruled that the proposed intervenors had an insufficient interest in the litigation, sought to intervene in an untimely manner and would interfere with the expeditious disposition of the merits. 121 N.J.Super. at 292-293, 296 A.2d 663. The Supreme Court remanded, directing the trial court to allow the intervention.

It is clear that the tenants, Frank Linzmayer and ...