Levy v. City of Long Branch
| Decision Date | 05 May 2023 |
| Docket Number | 000448-2021 |
| Parties | LEVY, MORRIS, Plaintiff, v. CITY OF LONG BRANCH, Defendant. |
| Court | New Jersey Tax Court |
Michael I. Schneck for plaintiff (Schneck Law Group, LLC attorney). Robert E. Spiotti for plaintiff (Spiotti & Associates, PC, attorney) [1].
Shaun Peterson for defendant (Hoagland, Longo, Moran, Dunst & Doukas, LLP, attorney).
SUNDAR, P.J.T.C.
This opinion decides whether plaintiff is entitled to the benefit of the Freeze Act, N.J.SA. 54:4-34, for tax year 2023 based on this court's final judgment for tax year 2021 "Tax Court case"). The issue calls for a resolution of the effect of the absence of a Freeze Act waiver in the Tax Court case, but the express waiver of the statute in resolving a petition for tax year 2022 filed at the Monmouth County Board of Taxation ("County Board matter"), with both matters being globally settled by the parties.
Plaintiff contends that his affirmative waiver of the Freeze Act in the settlement of his County Board matter does not estop him from electing an application of the Freeze Act to the judgment in the Tax Court case. Defendant, the City of Long Branch ("City"), disagrees. It contends that the parties reached a global settlement agreement for both tax years, with both stipulations of settlement being filed in February 2022 (one before the County Board and one before this court), therefore, plaintiff's waiver of the Freeze Act in the County Board matter extends to, or is implicit in, the Tax Court case. Further, the City argues, since the County Board judgment is a value judgment, it evidences a change in value of the property which therefore negates application of the Freeze Act for tax year 2023.
As further explained below, the court finds that plaintiff can invoke protection of the Freeze Act. The stipulation of settlement in the Tax Court case is silent as to the Freeze Act. Based on the record, the court finds that plaintiff's express waiver of the Freeze Act in settlement of the County Board matter does not extend to, nor is implied in, settlement of the Tax Court case. The court is unpersuaded that the only base year in a multi-year settlement must be the last year of the value judgment. The court is also unpersuaded that, without more, the County Board's judgment is proof of a change in value for Freeze Act purposes. Validating such an argument would nullify the statutory requirement in N.J.S.A. 54:51A-8(b). Plaintiff's motion for application of the Freeze Act to tax year 2023 based on the Tax Court's final value judgment for tax year 2021 is granted.
The facts are based on the documents and testimony proffered at a plenary hearing.[2]Neither party disputed the contents of the documents or the proffered testimony.
For tax year 2021, plaintiff filed the Tax Court case challenging the assessment of $1,513,600 imposed on his house, identified on the tax map as Block 87, Lot 9.030 ("Subject"). While the case was pending, he provided the City an appraisal report in support for his demand for a reduction of the assessment on September 20, 2021.
In January 2022, plaintiff filed the County Board matter challenging the assessment of $1,513,400 imposed on the Subject for tax year 2022.
In late January 2022, the City's Outside Counsel made a settlement offer to Attorney I for both tax years 2021 and 2022. Outside Counsel's partner testified that he could not recollect any details of the offer and did not have any written record of the same.
By letter of January 31, 2022, Attorney I recommended that plaintiff accept the offer which would reduce the 2021 assessment to $1,412,300, and the 2022 assessment to $1,396,800, provided plaintiff waived the interest payable by the City on the resulting refunds. Simultaneously, and in accordance with the routine business practice of the law firm, Attorney I recorded the details of the settlement in a "check-the-box" document his office routinely uses. This document showed the proposed reductions, the tax savings, and the firm's recommendation to plaintiff. The boxes pertaining to "Freeze Act" which included "Yes" "No" and "Years" were left blank. Attorney I testified that if the offer had required a waiver of the Freeze Act, he would have checked the appropriate boxes in this document and would have included the same as a condition in his letter to plaintiff, as is his routine practice.
After receiving plaintiff's agreement to the offer, a staff member of Attorney I's firm emailed the City's assessor of the acceptance, copying Outside Counsel's partner on the e-mail. The assessor e-mailed his reply on the same day that he would prepare the stipulation "for the County matter" within the hour, while Outside Counsel's partner "will prepare the State matter."
The assessor then filled out a form stipulation of settlement for the County Board matter. The stipulation "adjusted" the 2022 assessment to $1,396,800 and noted that the "basis for the settlement" was "market data submitted." Boxes 1 through 5 of the "Terms and Conditions" were checked off which indicated that (1) interest on the resulting refund was waived; (2) taxes and charges should be paid to date; (3) refund would be as a credit against future taxes; (4) the offer should be accepted and received by a date certain; and (5) "Freeze Act under N.J.S.A. 54:51A-8 or 54:3-26 shall not apply to this settlement." The stipulation was electronically signed and forwarded to Attorney I on February 3, 2022, who electronically signed it on the same date. Outside Counsel's partner electronically signed the stipulation on February 4, 2022.
Based on the stipulation, the County Board issued a judgment on February 28, 2022, reflecting the Subject's value as $1,396,800. The judgment noted "Market Data Submitted." It was mailed to plaintiff on March 7, 2022.[3]
On February 16, 2022, the parties filed a stipulation of settlement in the Tax Court case agreeing that (1) the 2021 assessment be reduced to $1,412,300; (2) interest on the resulting refund was waived; and (3) the refund would be as a credit against future taxes. They further agreed that the assessment for tax year 2022 would be $1,396,800, and either party could "file a tax appeal for the 2022 tax year to obtain a judgment to implement, enforce and/or confirm the $1,396,800 assessment agreed upon herein." The stipulation was silent as to the application of the Freeze Act. Outside Counsel's partner testified that a staff member prepared the stipulation, and that he could not recollect the reasons for the absence of the Freeze Act's waiver in the document. The assessor testified that he did not review the stipulation but had relied upon Outside Counsel to prepare, execute, and file the same with the Tax Court.
On February 23, 2022, this court issued a judgment reflecting the Subject's value as $1,413,200 pursuant to the filed stipulation. Based on the stipulation, the judgment also did not contain any language as to the Freeze Act.
In October 2022, the assessor set the assessment for tax year 2023 at $1,713,900. Plaintiff called Attorney I and queried him as to the increase despite the recent settlement. Attorney I testified that since the Freeze Act was waived only in the County Board matter, he filed a motion before this court for application of the Freeze Act asking that the 2023 assessment of $1,713,900 be set at $1,412,300, the final judgment for 2021 in the Tax Court case. The application did not mention the County Board's judgment for tax year 2022 which was final by this time. The City opposed the motion claiming that (1) there was a change in value as evidenced by the County Board's judgment, thus, the Freeze Act does not apply; and (2) plaintiff agreed to waive the Freeze Act since the settlement was a package deal, i.e., covered both tax years 2021 and 2022, one pending in this court and the other before the County Board. The parties then briefed the issue whether there can be only one base year in a multi-year settlement based on the ruling in MSGW Real Est. Fund v. Borough of Mountain Lakes, 18 N.J. Tax 95 (Tax 1999).
The Freeze Act provides as follows:
The identical language applies to county board of taxation judgments. N.J.S.A. 54:3-26. Precedent interpreting the above statutes holds that a final value judgement must be entered by either the Tax Court or a county board of taxation, as a result of a trial or pursuant to a settlement agreement. See Borough of South Plainfield v. Kentile Floors Inc., 92 N.J. 483 (1983). The final value judgment amount for the tax year under appeal (known as the "base year") is mechanically carried forward to each of the succeeding two years (known as the ...
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