F.M.C. Stores Co. v. Borough of Morris Plains.

• Decision Date: 30 July 1985
• Parties: F.M.C. STORES CO., Plaintiff-Respondent, v. BOROUGH OF MORRIS PLAINS, Defendant-Appellant. EDISON MALL ASSOCIATES, Plaintiff-Respondent, v. TOWNSHIP OF EDISON, Defendant-Appellant. 115 ACRES VENTURE/FIRST NATIONAL STATE BANK, Plaintiff-Respondent, v. TOWNSHIP OF EDISON, Defendant-Appellant.
• Court: New Jersey Supreme Court

Page 418

100 N.J. 418

495 A.2d 1313

F.M.C. STORES CO., Plaintiff-Respondent, v. BOROUGH OF MORRIS PLAINS, Defendant-Appellant.

EDISON MALL ASSOCIATES, Plaintiff-Respondent, v. TOWNSHIP OF EDISON, Defendant-Appellant.

115 ACRES VENTURE/FIRST NATIONAL STATE BANK, Plaintiff-Respondent, v. TOWNSHIP OF EDISON, Defendant-Appellant.

Supreme Court of New Jersey.

Argued March 19, 1985.

Decided July 30, 1985.

John J. Harper, Morris Plains, for appellant Borough of Morris Plains (Harper & Hansbury, Morris Plains, attorneys).

Jonathan N. Harris, Elmwood Park, for appellant Tp. of Edison (Andora, Palmisano, De Cotiis & Harris, Elmwood Park, attorneys; Anthony D. Andora, Elmwood Park, of counsel).

Steven R. Irwin, West Orange, for respondents (Mandelbaum & Mandelbaum, West Orange, attorneys).

The opinion of the Court was delivered by

HANDLER, J.

In each of these consolidated real property tax appeals, the taxpayer filed its appeal prior to the August 15 deadline prescribed by N.J.S.A. 54:3-21 and the municipality failed prior to the statutory deadline to file its appeal contesting its own tax assessment. The Tax Court granted motions by the municipalities for leave to file belated appeals challenging their original assessments. The Appellate Division reversed these rulings, holding that the taxing districts were required, in order to challenge their own original assessments as too low, to take their appeals by the August 15 statutory deadline. The Appellate Division also held that failure by the municipalities to take timely appeals precluded the Tax Court under these circumstances from granting increases in the original assessments, at least when discrimination is not an issue. F.M.C. Stores Co. v. Borough of Morris Plains, 195 N.J.Super. 373, 479 A.2d 435 (1984).

In the Edison Township cases, the taxpayers, Edison Mall and 115 Acres Venture/First National State Bank, filed on or about August 8, 1983 direct appeals to the Tax Court challenging their property assessment for 1983. They alleged both that these assessments were in excess of true value and were discriminatory. (This claim of discrimination, however, was, and is, not an issue.) The Township of Edison did not respond until March 23, 1984, when it moved for leave to file a late answer and counterclaim to challenge the original assessments. These motions were granted by the Tax Court over the taxpayers' objections, and on April 23, 1984 Edison filed its own tax appeal.

In the Morris Plains case, the taxpayer, F.M.C. Stores, filed a direct appeal to the Tax Court seeking a decrease in its property tax assessment for the year 1983, alleging both that it exceeded true value and was discriminatory. (Discrimination, as in the companion case, is no longer an issue.) The appeal was filed on or about August 15, 1983. Morris Plains filed an answer, which was dated August 15 but was not received by the Tax Court until August 18, 1982. On August 29, Morris Plains filed a motion seeking leave to amend its answer in order to add a counterclaim challenging its original assessment as being below both the true value and the common level. On October 17, 1983 the Tax Court granted this motion over the taxpayer's objection. On October 25, 1983 F.M.C. Stores filed a notice of motion for leave to appeal to the Appellate Division from the Tax Court's interlocutory order. This motion was denied by the Appellate Division on November 23, 1983. F.M.C. Stores then filed with this Court a notice of petition for certification, or, in the alternative, leave to appeal. The taxpayer in Edison Township also filed a notice of motion for leave to appeal to the Appellate Division on December 21, 1983. Following denial by the Appellate Division, the taxpayers brought a similar motion before this Court. We granted the motion in both cases, which were summarily remanded to the Appellate Division for consideration of the merits. 96 N.J. 302, 475 A.2d 594 (1984). The cases were then consolidated by the Appellate Division for disposition.

The Appellate Division held that tax appeals filed by the municipalities after the August 15 statutory deadline were barred, and, in the absence of timely appeals by the taxing districts from their original assessments, the assessments could not be increased, at least when discrimination is not an issue. Each taxing district filed a notice of motion for leave to appeal, which we granted. 99 N.J. 189, 491 A.2d 691 (1984).

I.

The filing of a property tax appeal is governed by N.J.S.A. 54:3-21. This provision directs that both taxpayers and taxing districts aggrieved by the assessed valuation of property, or discriminated against by the assessed valuation of other property, may appeal to the county board of taxation on or before August 15 of that tax year. ¹

The basic rationale adopted by the Tax Court in these cases to permit the filing of appeals by the municipalities after the statutory deadline was that employed by the court in Curtiss-Wright Corp. v. Wood-Ridge, 2 N.J. Tax 143 (Tax Ct.1981). The municipality was there granted leave to file untimely counterclaims in order to avoid "a manifest and gross injustice" to other taxpayers in the taxing districts. 2 N.J. Tax at 153. Central to the position taken by the Tax Court in Curtiss-Wright was the perceived unfairness stemming from the fact that the challenged assessment was based on an artificially-manufactured compromise settlement rather than on normal valuation procedures.

The Appellate Division in these cases held that the August 15 statutory deadline was a nonmodifiable jurisdictional requirement; it rejected the rationale that the doctrine of relaxable court rules was applicable or could overcome statutory deadline requirements. ² 195 N.J.Super. at 381, 479 A.2d 435. Because the right to appeal is prescribed by statute, taxing districts are required to comply with the time prescriptions for the filing of tax appeals, as with all other statutory requirements. Id. We agree. ³

Strict adherence to statutory time limitations is essential in tax matters, borne of the exigencies of taxation and the administration of local government. See, e.g., Princeton Univ Press v. Princeton Borough, 35 N.J. 209, 214, 172 A.2d 420 (1961); N.Y., Susquehanna and W.R.R. v. Vermeulen, 44 N.J. 491, 210 A.2d 214 (1965). This view has long been recognized by New Jersey courts and it has a solid policy basis. Suburban Dep't Stores v. East Orange, 47 N.J.Super. 472, 482, 136 A.2d 280 (App.Div.1957); Montclair v. State Bd. of Tax Appeals, 127 N.J.L. 382, 389, 22 A.2d 525 (Sup.Ct.1941). This policy has been specifically acknowledged and aptly explained by the Tax Court.

The policy of applying strict time limitations to tax matters is based upon the very nature of our administrative tax structure. Municipal budgets must be finalized no later than the 90th day after the beginning of the budget year. N.J.S.A. 54:4-42. Real estate assessments, which constitute the bulk of a municipality's income are established as of October 1 of the pretax year. N.J.S.A. 54:4-23. Throughout our tax legislation, it is clear that our legislature has attempted to set out a well organized time-table for the purpose of enabling a municipality to ascertain the amount of taxable ratables within the jurisdiction in order that it might adopt a responsible and fairly accurate budget.

[Galloway Tp. v. Petkevis, 2 N.J.Tax 85 (Tax Ct.1980).]

See also McCullough Transp. Co. v. Div. of Motor Vehicles, 113 N.J.Super. 353, 360, 273 A.2d 786 (App.Div.1971) ("Limitation periods for claims for refunds are common administrative provisions found in tax legislation and justified by the need for predictability of revenues by public agencies.")

Courts have recognized that both appealing taxpayers and taxing districts must adhere strictly to the deadlines prescribed by statute. Failure to file a timely appeal is a fatal jurisdictional defect. Clairol v. Kingsley, 109 N.J.Super. 22, 262 A.2d 213 (App.Div.), aff'd, 57 N.J. 199, 270 A.2d 702 (1970), appeal dismissed, 402 U.S. 902, 91 S.Ct. 1377, 28 L.Ed.2d 643 (1971). A petition of appeal with the county board of taxation pursuant to N.J.S.A. 54:3-21 filed after the statutory deadline has resulted in the dismissal of the taxpayer's appeal. See Mayfair Holding Corp. v. North Bergen Township, 4 N.J.Tax 38, 41 (Tax Ct.1982) (statutory filing requirement is an "unqualified jurisdictional imperative, long sanctioned by our courts."); Sun Life Assurance Co. of Canada v. Orange, 2 N.J.Tax 25, 28 (Tax Ct.1980) (failure to comply with filing deadline of N.J.S.A. 54:2-39 for appeal from judgment of county board resulted in dismissal of taxpayer's claim).

The Appellate Division in this case rejected the taxing districts' argument that it is essentially unfair and contrary to public policy to bind a municipality to the August 15 deadline date when a taxpayer filed its appeal on or close to the deadline. The Appellate Division pointed out that

[a] municipality has the obligation to satisfy itself as to the correctness of its assessments by the August 15 date. This is especially true in a reevaluation year in which every assessable property is reviewed. Moreover, where an assessment is substantial enough to warrant a direct appeal to the Tax Court, the municipality has not only the obligation but also a special incentive to review the correctness of the assessment. We recognize that a municipality may have a strategic advantage if it is able to challenge its assessment as too low when the taxpayer complains that it is too high. That strategic advantage was in fact acknowledged at oral argument by one of the municipal attorneys here. We are satisfied, however, that this consideration is beyond the framework of the statute and cannot constitute a basis upon which the court can relax the statutory time periods. [195 N.J.Super. at 384, 479 A.2d 435.]

The notion advanced by the municipalities that they will be at a disadvantage...