Parsippany Hills Associates v. Rent Leveling Bd. of Parsippany-Troy Hills Tp.

Decision Date16 March 1984
Docket NumberPARSIPPANY-TROY
Citation194 N.J.Super. 34,476 A.2d 271
PartiesPARSIPPANY HILLS ASSOCIATES, a New Jersey limited partnership and Clearview Gardens Associates, a New Jersey limited partnership, Plaintiffs-Appellants, v. RENT LEVELING BOARD OF the TOWNSHIP OFHILLS and Township Council of the Township of Parsippany-Troy Hills, and The Township of Parsippany-Troy Hills, a municipal corporation, Defendants-Respondents.
CourtNew Jersey Superior Court — Appellate Division

Paul L. Black, Woodbridge, for plaintiffs-appellants.

Debra K. Donnelly, Boonton, for defendants-respondents (Alfred J. Villoresi, Boonton, attorney; Edward J. Buzak, Montville, and Debra K. Donnelly, on brief).

Before Judges BOTTER and O'BRIEN.

The opinion of the court was delivered by

O'BRIEN, J.A.D.

The trial judge affirmed a decision of defendant township council which had affirmed a decision of defendant rent leveling board. That decision required plaintiffs-appellants landlords to rebate to their tenants 75% of the net reduction in real estate taxes resulting from decisions by the Tax Court which reduced assessments on their properties. The action was dismissed against the rent leveling board on the court's own motion. Rebates were ordered for the years 1977, 1978 and 1979. Although the reduced taxes would also apply to 1980 and 1981, the rent leveling board did not deal with those years and the trial judge remanded to the rent leveling board for consideration of those years.

Prior to the judgments of the Tax Court on the landlords' tax appeals, appellants had rebated to their tenants 65% of the amount by which their taxes went down in the years 1977, 1978 and 1979, as compared with the base year of 1976, pursuant to the Tenants' Property Tax Rebate Act, N.J.S.A. 54:4-6.2 et seq.

The decisions of the Tax Court were rendered on May 22, 1980 as to Clearview Gardens Associates (Clearview), and May 29, 1980 as to Parsippany Hills Associates (Parsippany), and dealt with the assessments of these properties for the years 1975, 1976, 1977 and 1978. The parties agreed to the same reductions for 1979 and 1980. 1

The assessment of the Parsippany property was reduced from $1,400,000 to $1,007,925 for 1975, 1976 and 1977, and to $971,535 for 1978, 1979 and 1980. Clearview's assessment was reduced from $360,000 to $260,855 for 1975, 1976 and 1977, and to $251,437 for 1978, 1979 and 1980. The parties agree that the dollar amounts of tax reductions which the township council ordered to be rebated to the tenants for the pertinent years are as follows: 2

The municipality adopted a rent leveling ordinance (No. 73:449) on April 24, 1973. Section 5 of that ordinance provided, in pertinent part,

A landlord may seek a tax surcharge from a tenant because of an increase in municipal property taxes.

A formula was provided for computation of the surcharge. Section 6 required the landlord seeking a surcharge to notify his tenant of the calculations. Section 7 provided that the tax surcharge be paid in six monthly payments commencing July 1 of each year. Section 8 provided that the tax surcharge shall not be considered rent for purposes of computing cost of living rental increases. Section 9 read as follows In the event a tax appeal is taken by the landlord and the landlord is successful in said appeal and the taxes reduced, the tenant shall receive fifty (50) percent of said reduction as applied to its tax portion, after deducting all expenses incurred by landlord in prosecuting said appeal.

On November 12, 1973 the municipality adopted Ordinance No. 73:472, which amended Section 9 to increase the percentage from 50% to 75%.

On October 12, 1978 the municipality adopted Ordinance No. 78:24, amending the rent leveling ordinance, effective October 31, 1978. Sections 5, 6, 7 and 8 were repealed. The new Section 5 established a form of vacancy decontrol and Section 6 authorized the landlord to add permitted C.P.I. formula increases to increases allowed under the vacancy decontrol. Section 7, as amended, reads as follows:

The landlord can, at the time of the next permissible rent increase, add to the base rent the total tax surcharges previously passed through or reserved.

Section 8 provided that the landlord waives permissible rent increases not charged and Section 9 was amended to read as follows:

In the event a tax appeal is taken by the landlord and the landlord is successful in said appeal and the taxes reduced, the tenant shall within 120 days of the final judgment receive seventy-five (75%) percent of said reduction as applied to its tax portion, after deducting all expenses incurred by landlord in prosecuting said appeal.

Subsequent to the filing of this appeal the rent leveling ordinance of the township expired by its own terms on March 21, 1983. 3 Neither the original rent leveling ordinance adopted April 24, 1973, nor any of the amendments adopted thereafter contained a savings clause with respect to rights accrued under the ordinance in the event of expiration or repeal. 4 In light of the expiration of the ordinance, appellants filed a motion for summary disposition or for leave to supplement the record by filing a supplementary brief. The parties were given leave to file supplementary briefs addressed to the effect of the expiration of the ordinance.

Both parties agree that the rules as to the effect of the repeal of a statute govern as well the effect of the repeal of a municipal ordinance, 62 C.J.S., Municipal Corporations, § 438a, p. 839, and that the legal effect of the expiration of the ordinance by its own limitation is the same as though it had been repealed at that time. As a general rule the repeal of a statute without any reservation takes away all remedies given by the repealed statute and defeats all actions and proceedings pending under it at the time of its repeal. The rule is especially applicable to the repeal of statutes creating a cause of action, providing a remedy not known to the common law, or conferring jurisdiction where it did not exist before. The repeal abates proceedings pending even after judgment, but before the entry thereof or pending on appeal. 82 C.J.S., Statutes, § 439, p. 1012-1013; see 5B C.J.S., Appeal & Error, § 1841, p. 244.

In this State it is the general rule that where a statute is repealed and there is no saving clause or a general statute limiting the effect of the repeal, the repealed statute, in regard to its operative effect, is considered as though it had never existed, except as to matters and transactions passed and closed. DiAngelo v. Keenen, 112 N.J.L. 19, 20-21, 169 A. 728 (Sup.Ct.1933), aff'd o.b. 115 N.J.L. 507, 181 A. 44 (E. & A.1935). Furthermore, it is settled law in this State that, unless vested rights are involved, the law in effect at the time of the disposition of the cause by an appellate court governs, rather than the law in effect at the time the cause was decided by the trial court. Staudter v. Elter, 64 N.J.Super. 432, 436, 166 A.2d 394 (App.Div.1960). Thus, unless the tenants have a vested right, the expiration of the ordinance would terminate the right to a rebate.

The tenants argue that the repeal of an ordinance cannot disturb private rights, causes of action or the substance of remedies vested under it, citing 6 McQuillin, Municipal Corporations, §§ 21.40, 21.45 and see § 21.15 (3d Ed.1980); also see Stockhold v. Jackson Twp., 136 N.J.L. 264, 265-266, 55 A.2d 241 (E. & A.1947); Hunt v. Gulick, 9 N.J.L. 205, 207 (Sup.Ct.1827).

The term "vested right" is an elusive term often defined in the context of a given situation. Our Supreme Court framed a general definition in Pennsylvania Greyhound Lines, Inc. v. Rosenthal, 14 N.J. 372, 384-385, 102 A.2d 587 (1954), as follows:

The term "vested right" is not defined in either the Federal or the State Constitution; but it would seem that, generally, the concept it expresses is that of a present fixed interest which in right reason and natural justice should be protected against arbitrary state action--an innately just and imperative right that an enlightened free society, sensitive to inherent and irrefragable individual rights, cannot deny. Such seems to be the principle of Campbell v. Holt, 115 U.S. 620, 6 S.Ct. 209, 29 L.Ed. 483 (1885).

Whether the tenants have a "vested right" to the rebates under the now expired ordinance is a close question. We are told that in addition to the parties in this case, there is a class action pending against 24 owners of multi-unit apartment complexes in the Law Division seeking to compel rebate of tax monies returned to landlords as a result of successful tax appeals for the years 1975 through 1982.

Plaintiffs argue that the rent leveling ordinance was in derogation of the common law and that the expiration of that ordinance reinstates the general or common law. It is argued that the failure of the governing body to reenact the rent control ordinance "eloquently" attests to the passing of the emergency which necessitated rent control in the first place. See Inganamort v. Boro. of Fort Lee, 120 N.J.Super. 286, 293 A.2d 720 (Law Div.1972), aff'd 62 N.J. 521, 303 A.2d 298 (1973). While there is some appeal to that argument, we reject it. When the Tax Court judgments were rendered in May 1980, reducing the landlords' assessments and thereby entitling them to a refund of taxes paid as computed on the old assessments, the tenants became entitled to receive a rebate of 75% of the net tax refund due the landlord within 120 days of the final Tax Court judgments. Before this appeal was filed the rent leveling board, the town council and the Law Division of this court all affirmed the tenants' right to such a rebate and the monies were deposited in an escrow account. While the issue is not without some doubt, we have concluded that the tenants' rights to rebates were vested as that term is defined in Pennsylvania Greyhound Lines, Inc. v. Rosenthal, 14...

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