Murnick v. City of Asbury Park

• Decision Date: 24 November 1982
• Citation: 187 N.J.Super. 455,455 A.2d 504
• Parties: Theodore MURNICK and Maxine Murnick, his wife, Plaintiffs-Respondents, v. CITY OF ASBURY PARK, Defendant-Appellant.
• Court: New Jersey Superior Court — Appellate Division

Page 455

187 N.J.Super. 455

455 A.2d 504

Theodore MURNICK and Maxine Murnick, his wife, Plaintiffs-Respondents, v. CITY OF ASBURY PARK, Defendant-Appellant.

Superior Court of New Jersey Appellate Division.

Argued Oct. 26, 1982.

Decided Nov. 24, 1982.

Edward G. Rosenblum, Secaucus, for defendant-appellant (Rosenblum & Rosenblum, Secaucus, attorneys; Edward G. Rosenblum, Secaucus, of counsel and on brief).

Carl G. Weisenfeld, Newark, for plaintiffs-respondents (Hannoch, Weisman, Stern, Besser, Berkowitz & Kinney, Newark, attorneys; Carl G. Weisenfeld of counsel and on brief).

Before Judges BOTTER, POLOW and BRODY.

The opinion of the court was delivered by

POLOW, J.A.D.

Plaintiffs are the owners of a 15-story apartment building in Asbury Park. On their tax appeal the Tax Court granted reductions in total assessments for 1977, 1978 and 1979 based upon discrimination. Murnick v. Asbury Park, 2 N.J.Tax 168 (1981). Although the city filed a notice of appeal from the entire judgment, it has presented no argument with respect to the reduced assessment and tax rebate awarded to plaintiff's for the year 1977. It does challenge the ratios employed by the Tax Court in reducing the assessments for 1978 and 1979 as violations of N.J.S.A. 54:1-35a and N.J.S.A. 54:2-40.4 (CHAPTER 123 )¹.

On this appeal the city does not challenge the Tax Court determination with regard to true value for the years 1978 and 1979. It does challenge the taxpayers' right to receive any relief for the years 1978 and 1979, arguing that the trial judge erred in failing to apply chapter 123 ratios and that chapter 123 ratios would bar relief. The taxpayers insist that the Tax Court judge correctly held that in this case "Chapter 123 fails to provide an adequate and equitable remedy," 2 N.J.Tax at 191, for 1978 and correctly applied a stipulated ratio which would permit relief for 1979 although it may not be the chapter 123 ratio.

Hence, the basic controversy is whether the provisions of chapter 123 provide the exclusive method for adjudicating a taxpayer's right to discrimination relief. Such relief is available to a property owner whose tax assessment bears a substantially higher ratio to true value than the "common level range" for other real property within the taxing district. If the Legislature intended chapter 123 ratios to be exclusive, its provisions are mandatory and may not be disregarded in favor of another formula. The city therefore insists that the Tax Court lacked discretion to vary from the chapter 123 ratio for 1978 and that any stipulation to vary from chapter 123 ratios in 1979 "must be declared void and unenforceable as a matter of law."

In In re Appeal of Kents, 2124 Atlantic Ave., Inc., 34 N.J. 21, 166 A.2d 763 (1961), the Supreme Court stressed that upon a showing of substantial unequal treatment in the ratio of assessments to true value within a municipality, relief should be available where there is a reasonable basis to compensate the wrong. Id. at 29, 166 A.2d 763. Similarly, in Piscataway Assoc., Inc., v. Piscataway Tp., 73 N.J. 546, 376 A.2d 527 (1977), the court held that "where a taxpayer's realty is assessed at true value and such assessment is substantially higher than the common level generally applied to other properties, or, in the absence of a common level, than the average ratio of the Director of Taxation, then the taxpayer ordinarily will have shown discrimination and is entitled to relief." Id. at 553-554, 376 A.2d 527 (footnote omitted). Still, our courts have long recognized the difficulty in fixing the average or common ratio within a municipality against which a particular taxpayer's assessment to true value ratio is to be measured. "Mathematical perfection in taxation is unobtainable, and hence relief should not be denied merely because the result lacks absolute precision." Kents, supra, 34 N.J. at 32, 166 A.2d 763.

N.J.S.A. 54:1-35a(b) fixes a "common level range" of plus or minus 15% of the average ratio determined by the Director of the Division of Taxation. This is the core of chapter 123 which was effective commencing with the tax year 1978. L.1976, c. 33. For that year, the average ratio to be applied was the unweighted, unclassified, arithmetic average determined by the Director as of October 1 of the pretax year. However, the provision was further amended in 1979 to redefine the chapter 123 ratio as the Director's weighted ratio. The change from the unweighted to the weighted ratio became applicable for the 1979 tax year. (See Senate, County & Municipal Government Statement, Assembly Bill 1492, L.1979, c. 51).

For the tax year 1978 the Tax Court judge found that the then applicable statutory provision requiring use of the "unweighted" ratio was "inadequate" to provide relief for the taxpayers. 2 N.J.Tax at 191. The chapter 123 unweighted ratio was 80% of true value. Id. at 177. Plaintiffs' assessment was determined to be 91% of true value and therefore less than 15% above the "common level range" determined pursuant to the chapter 123 formula. Thus, the taxpayers would not have been entitled to relief under N.J.S.A. 54:1-35a. Id. at 190-191.

However, without statutory authority, the trial judge applied a ratio for the tax year 1978 of 73.42%. The taxpayers' assessment at 91% of true value ratio was then found considerably in excess of the 15% variation threshold for relief under Chapter 123. Id. at 191-192.

Although he agreed with the taxpayers' position that chapter 123 relief is not exclusive, the judge nevertheless declined to make a specific ruling in that regard. He found the relief granted permissible under Kents because he concluded that the legislative remedy was "inadequate." Id. at 177-178, 191.

We conclude that the Legislature mandated the use of chapter 123 as an exclusive remedy subject to the exceptions contained therein. ² N.J.S.A. 54:2-40.4(a) provides:

Whenever the tax court is satisfied by the proofs that the ratio of the assessed valuation of the subject property to its true value exceeds the upper limit or falls below the lower limit of the common level range, it shall enter judgment revising the taxable value of the property by applying the average ratio to the true value of the property except as hereinafter provided. [Emphasis supplied]

The applicable statutory definitions effective for tax year 1978 under N.J.S.A. 54:1-35a provided:

a. The "average ratio" of assessed to true value of real property for a taxing district for the purposes of this act shall mean the unweighted, unclassified, arithmetic average as determined by the Director of the Division of Taxation from the latest 1-year study data complied by the director for the purposes of P.L.1954, c. 86 (C.54:1-35.1 et seq.), as of October 1 of the year preceding the tax year as revised by the Division of Tax Appeals.

b. The "common level range" for a taxing district is that range which is plus or minus 15% of the average ratio for that district.

We conclude that the words "whenever" and "shall" denote a mandatory provision. The statutory language leaves no room for interpretation--it was not intended simply as a "possible" solution to a discrimination problem, as the taxpayers argue. The word "shall" connotes a mandatory legislative intent unless it is used merely to effectuate a provision relating to form and manner. See Franklin Estates v. Edison Tp., 142 N.J.Super. 179, 184, 361 A.2d 53 (App.Div.1976), aff'd 73 N.J. 462, 375 A.2d 658 (1977). That the Legislature intended chapter 123 to be the formula applied rather than a possible alternative solution is borne out by the Senate Judiciary Committee statement attached to the proposed legislation dated April 2, 1973:

This bill would establish procedures for adjusting the taxable value of property by the county boards of taxation, the Division of Tax Appeals and the Courts.

Under this bill, the Director of the Division of Taxation would determine by April 1 of each year the average ratio of assessed to true value of real property in each taxing district and a "common level range" for each district. That range would be plus or minus 15% of the average ratio.

The county boards of taxation and the State Division of Tax Appeals would then use that common level range as a comparison with the ratio of the assessed value to the true value of any property and if that ratio is outside of the range, the taxable value would be redetermined by applying the average ratio to the true value.

We find no indication in the foregoing statement that the statute was not intended to be mandatory or that its application was not intended to be exclusive.

Although the title of chapter 123 makes reference to "certain rebuttable presumptions," the only "presumption" specifically referred to in the discrimination portion of the act deals with admission of the realty transfer fee and affidavit of consideration as prima facie evidence where "instruments of conveyance do not state the true consideration." ³ There is no basis for the taxpayers' argument that the statute prescribes the Director's ratio only as a "rebuttable presumption" in determining the common level range. The language is not permissive. N.J.S.A. 54:1-35a (a) and (b). Furthermore, "[t]he title to an act is not an index, merely a label, and thus the title should not be scrutinized with an overly technical eye." Howard Savings Inst. v. Kielb, 38 N.J. 186, 201, 183 A.2d 401 (1962).

We agree with the apt comment of Judge Evers in a later Tax Court decision that "the thrust of chapter 123 is to alleviate the statistical sleight-of-hand inherent in pre-chapter 123 discrimination claims." 525 Realty Hold. Co. v. Hasbrouck Heights, 3 N.J.Tax 206, 216 (Tax Ct.1981). He also characterized the purpose of chapter 123 as an attempt to "fortify the fundamental, cardinal principle of taxation--stability of assessments." Ibid.

The trial judge rejected the chapter 123 formula for 1978 because it required...