SF III Kinderkamack, LLC v. Borough of Oradell
| Decision Date | 21 October 2022 |
| Docket Number | 005860-2021 |
| Parties | SF III KINDERKAMACK, LLC, Plaintiff, v. BOROUGH OF ORADELL, Defendant. |
| Court | New Jersey Tax Court |
NOT FOR PUBLICATION WITHOUT APPROVAL OF THE TAX COURT COMMITTEE ON OPINIONS
Paul Tannenbaum for proposed Intervenor Dabby Bergen Medi Pro LLC, Sianes Bergen Medi Pro, LLC, YB 690 Kinder, LLC, and Yazam Investments, LLC, as Tenants-in-Common (Zipp & Tannenbaum, LLC, attorneys).
Michael Ash for plaintiff (Carlin, Ward, Ash & Heiart LLC, attorneys).
Alan Spiniello for defendant (Alan Spiniello Law Offices, attorneys).
ORSEN J.T.C.
This is the court's opinion with respect to Dabby Bergen Medi Pro, LLC, Sianes Bergen Medi Pro, LLC, YB 690 Kinder, LLC, and Yazam Investments, LLC, as tenants-in-common's motion seeking to be joined as a party to the within 2021 tax appeal. For reasons discussed more fully below, such motion is granted.
Plaintiff, SF III Kinderkamack, LLC, filed a tax appeal for Block 807, Lot 1, more commonly known as 690 Kinderkamack Road, Oradell, New Jersey 07649, on March 25, 2021, for the property's 2021 tax assessment.[1] Such appeal was filed prior to the property tax appeal deadline of May 1, 2021.[2] Prior to such deadline, Dabby Investments, LLC ("Dabby Bergen") executed a contract of sale on April 7, 2021 to purchase the subject property from plaintiff. On May 10, 2021, Dabby Bergen Medi Pro, LLC, Sianes Bergen Medi Pro, LLC, YB 690 Kinder, LLC, and Yazam Investments, LLC (collectively "Intervenor"), acquired the property and entered an agreement to become tenants-in-common. As part of the contract of sale, Intervenor became responsible for the real estate taxes as of May 10, 2021, which is the date Intervenor took possession of the property.
On June 11, 2021, Intervenor filed a Complaint in Lieu of Prerogative Writs in the Law Division to contest the tax assessment on the property. Subsequently, Intervenor filed an amended complaint on June 15, 2021.[3] On August 24, 2021, defendant, Borough of Oradell, filed a motion on the matter in the Law Division. On September 24, 2021, the court issued an order denying defendant's motion and transferring the matter to the Tax Court. An amended order transferring the case was entered on October 21, 2021.[4] Defendant filed a motion to dismiss on November 5, 2021, which was assigned a return date of December 3, 2021. The present motion was then filed with the court seeking to join the within appeal. The court elected to consider this motion first.
Intervenor argues that it should be: (1) permitted to substitute as plaintiff; (2) joined in as a party plaintiff; or (3) allowed to intervene in the matter. It further argues that substitution is proper because a transfer of interest occurred during the tax year at issue. Intervenor claims that it meets the requirements for intervention because it was responsible for the property taxes as of May 10, 2021, it has an interest in this appeal, and plaintiff's motives for settling the case might differ because of the pending 2019 and 2020 tax year appeals for the property filed by the seller, SF III Kinderkamack, LLC. Intervenor further argues that it has the right to be a party in this matter to protect its interest in the property and in any potential settlement or trial concerning the 2021 tax assessment. Intervenor also argues that defendant's opposition violates the "square corners doctrine" by attempting to keep Intervenor from joining the within tax appeal on property that it now owns.
Defendant counters that the contract of sale between plaintiff and Intervenor bars Intervenor from being joined in the present action. Defendant points to paragraph 10.1 of the agreement, which states in the relevant part:
Seller hereby reserves the right to institute or continue any proceeding or proceedings for the reduction of the assessed valuation of the Property, and, in its sole discretion, to settle the same, provided however that the effect of any such settlement cannot reasonably be expected to have an impact on taxes payable by Buyer. All net tax refunds and credits attributable to any period prior to the Closing which Seller has paid or for which Seller has given a credit to Buyer shall belong to and be the property of Seller, provided, however, that any such refunds and credits that are the property of Tenants under Leases shall be promptly remitted to Buyer for the credit of such Tenants. All net tax refunds and credits attributable to any period subsequent to the Closing shall belong to and be the property of Buyer. Buyer agrees to cooperate with Seller in connection with the prosecution of any such proceedings and to take all steps, whether before or after the Closing, as may be necessary to carry out the intention of this subparagraph.
Defendant claims that under the contractual language, the Intervenor gave plaintiff the right to litigate or settle any tax appeal within plaintiff's sole discretion. Defendant also argues that Intervenor: (1) does not have standing; (2) is not within the statute of limitations; and (3) fails to meet the standards to join a case as set out in Mobil Administrative Services Co. v. Mansfield Twp., 15 N.J. Tax 583 (Tax 1996), aff'd, 17 N.J. Tax 509 (App. Div. 1997).
In response, Intervenor argues that Dabby Bergen was the contract purchaser prior to the May 1, 2021, filing deadline, so too is Intervenor as the contract of sale's assignee from Dabby Bergen. As a result of being the contract purchaser prior to the filing deadline, it had standing to file a tax appeal. Intervenor states that the motion to intervene is not barred by the statute of limitations because the "relation back doctrine" ties it to plaintiff's original appeal, which was timely filed. Intervenor argues the relation back doctrine is proper since it does not raise new issues and seeks the same relief as plaintiff. [5]
Defendant claims that it would be prejudiced if Intervenor was allowed to join the suit. This prejudice would arise if defendant is forced to deal with multiple plaintiffs regarding the same tax appeal, as plaintiff might have its own motives for how the case is handled. Further, defendant argues prejudice may occur because plaintiff has pending cases from previous years that were properly filed. Intervenor counters that if it filed the property tax appeal before the May 1st deadline, there would have been two appeals on the property and the defendant would have no legitimate argument for prejudice. Oral argument was held.
During oral argument, Intervenor further clarified its three arguments as to why it should be allowed to participate in the present case, all of which are rooted in the court rules. First, Intervenor argues it should be added to the case under R. 4:34-3, substitution of party, because the property was conveyed on May 10, 2021, and on that date the plaintiff no longer held an interest in the property and the Intervenor acquired an interest in the property. Intervenor further claims substitution is proper since it will not be unnecessarily burdensome on the defendant, and the rules of court contemplate instances where there will be multiple plaintiffs in certain cases under R. 8:5-3(a)(8). Second, Intervenor states that it should be permitted to intervene as either a plaintiff or a defendant under R. 4:33 because it derives standing from the contract of sale, and will not be adding new claims; therefore, the filing relates back to the original complaint, and meets the requirements of R. 4:33-1. Third, Intervenor argues that it should be added through R. 4:28 because the present case's factual scenario is similar to Gourmet Dining v. Union Twp., 243 N.J. 1 (2020), a case in which the Tax Court permitted joinder.
Defendant responded that the controlling case here is Mobil and similarly, the motion to join the case should be denied in the present case. Defendant further states that in the present case Intervenor lacks standing because only a taxpayer can file an appeal; to be a taxpayer you must own the property at the date of the filing deadline. Defendant also argues the relevant date is the property's acquisition date. Since property tax appeals are about the property, the party with the right to file the appeal is the record owner as of the filing deadline date. Ultimately, allowing Intervenor to join creates a dangerous precedent by permitting a party who bought the property after the filing deadline to file a tax appeal, which prejudices the defendant into dealing with that number of people filing appeals.
The New Jersey Court Rules allow for a substitution or joinder into a matter under certain circumstances. One such circumstance is if a transfer of interest has occurred. After a transfer in interest has occurred, the rule allows a party to be substituted or joined with the original party under R. 4:34-3, which states in the pertinent part:
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