GALLOWAY TOWNSHIP VS. LUCIENNE DUNCAN (TAX COURT OF NEW JERSEY) ( 2018 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4502-16T3
GALLOWAY TOWNSHIP,
Plaintiff-Appellant/
Cross-Respondent,
v.
LUCIENNE DUNCAN,
Defendant-Respondent/
Cross-Appellant.
______________________________
Argued June 5, 2018 – Decided August 15, 2018
Before Judges Fisher and Sumners.
On appeal from the Tax Court of New Jersey,
Docket No. 014479-2015.
Thomas G. Smith argued the cause for
appellant/cross-respondent (The Law Offices
of Thomas G. Smith, PC; Thomas G. Smith, on
the briefs).
Todd W. Heck argued the cause for
respondent/cross-appellant (Testa, Heck,
Testa & White, PA, attorneys; Todd W. Heck,
on the brief).
PER CURIAM
Galloway Township (the Township) appeals the May 9, 2017 Tax
Court order, which held that Lucienne Duncan was entitled to a
full disabled veteran's personal residence tax exemption (disabled
veteran's tax exemption or exemption) under N.J.S.A. 54:4-3.30(a)
for 2016 and, thus, a refund for the 2016 taxes she paid, based
upon the court's prior decision granting her the same exemption
for the 2015 tax year. Duncan cross-appeals the Tax Court's
decision1 of the same date, which denied her request for attorneys'
fees due to the Township's refusal to recognize her exemption for
2016. For the reasons that follow, we affirm.
This dispute emanates from the Township's unsuccessful effort
to overturn the Atlantic County Tax Board's October 2015 decision
that granted Duncan a full disabled veteran's tax exemption for
the 2015 tax year. In a November 14, 2016 published decision, the
Tax Court entered a judgment denying the Township's appeal; holding
that Duncan – a former Air Force Major neurologist – qualified for
the exemption due to a military service-connected 100 percent
permanent disability and that the Township must refund her 2015
property tax payment. Galloway Tp. v. Duncan, 29 N.J. Tax 520
(2016).
On March 29, 2017, after the Township did not appeal the
judgment, Duncan filed a Rule 1:10-3 and Rule 8:7(d) motion to
enforce the judgment with the same Tax Court that rendered the
1
The record does not include an order memorializing the Tax
Court's decision.
2 A-4502-16T3
decision. Based upon her disabled veteran's exemption status, she
requested an order requiring the Township to refund the property
taxes she paid for 2015, 2016, and 2017.2 Prior to argument,
Duncan's claims for 2015 and 2016 became moot when the Township
refunded her 2015 property taxes and removed her from the property
tax rolls effective January 1, 2017. In opposing Duncan's claim
for property tax exempt status for 2016, the Township argued the
Tax Court lacked jurisdiction to grant her a disabled veteran's
tax exemption because she did not appeal her 2016 property taxes
assessment and, thus, it was unaware that she sought an exemption
for 2016. The Township further argued it was not in a position
to refund her 2016 tax payment because it had already closed its
books for that tax year.
On May 9, 2017, after argument, the Tax Court ordered that
Duncan was entitled to have a full disabled veteran's tax exemption
for 2016, and that the Township must refund her the 2016 property
taxes she paid. In its oral decision, the court rejected the
Township's claims. The court found the Township was fully aware
of her disabled veteran's tax exemption request when it issued her
2016 tax bill. The court also pointed out the disingenuousness
of the "book closing" argument given the Township's ordinance that
2
Duncan paid her taxes with her monthly mortgage payments to her
mortgage company, which sent the payments to the Township.
3 A-4502-16T3
allowed refunds for disabled veteran's tax exemption for up to two
years prior to the date the taxpayer qualified for the exemption.
The Tax Court also rejected Duncan's submission under Rule
8:7(d)3 that the Freeze Act, N.J.S.A. 54:51A-8, which protects a
taxpayer by "freezing" a property tax assessment for the two years
following a tax year for which there is a final judgment of the
Tax Court, applies to her situation. The court explained that the
November 14, 2016 final judgment granted Duncan a property tax
exemption as a disabled veteran, which was not a suspension of the
property's assessment due to the property's use – the two-year
protection specifically afforded by the Freeze Act.
The court, however, concluded that once it ruled Duncan was
entitled to the disabled veteran's tax exemption for the 2015 tax
year, she was also exempt for 2016. The court reasoned that once
it was granted, the exemption was continuous; unlike a tax
assessment due to a property's use that may change from year to
year, and there was no evidence that her military-connected
disability would change. The court granted Duncan's request for
interest on the 2016 tax refund payment, but denied her request
3
To invoke the Freeze Act after entry of a final judgment, "a
taxpayer must file a supplementary motion to the Tax Court in the
first instance, pursuant to Rule 8:7(d)." Hackensack City v.
Bergen Cty., 405 N.J. Super. 235, 251 (App. Div. 2009).
4 A-4502-16T3
for attorney's fees because it did not view the Township's action
denying her exemption for 2106 as a deliberate, egregious act.
In this appeal, the Township reiterates the arguments
rejected by the Tax Court concerning Duncan's right to a disabled
veteran's tax exemption for 2016. We also find them unpersuasive.
In our review of a Tax Court's judgment, we "recognize the
expertise of the [court] in this 'specialized and complex area.'"
Advance Hous., Inc. v. Twp. of Teaneck, 215 N.J. 549, 566 (2013)
(citation omitted). The Tax Court's factual findings "will not
be disturbed unless they are plainly arbitrary or there is a lack
of substantial evidence to support them." Yilmaz, Inc. v. Dir.,
Div. of Taxation, 390 N.J. Super. 435, 443 (App. Div. 2007)
(citation omitted). Thus, we examine "whether the findings of
fact are supported by substantial credible evidence with due regard
to the Tax Court's expertise and ability to judge credibility."
Ibid. (citation omitted). However, our review of the Tax Court's
legal conclusions is de novo. UPSCO v. Dir., Div. of Taxation,
430 N.J. Super. 1, 8 (App. Div. 2013).
We first address the Township's argument that the Tax Court
did not have jurisdiction to determine if Duncan was entitled to
the disabled veteran's tax exemption after 2015. Duncan's
application to have the Township recognize that her exemption
extended beyond 2015 was made under Rule 1:10-3 to enforce
5 A-4502-16T3
litigant's rights under the November 14, 2016 judgment. The rule
authorizes such a motion, when parties "willfully fail to comply
with an order or judgment." Loigman v. Twp. Comm. of Twp. of
Middletown in Cty. of Monmouth, 308 N.J. Super. 500, 503 (App.
Div. 1998) (citation omitted). Prior to granting the motion, the
court must find that the defendant has willfully "failed to comply
with [an] order and that the court's assistance is necessary to
secure compliance." State Dep't of Envtl. Prot. Bureau of Cty.
Envtl. & Waste Compliance Enf't v. Mazza and Sons, Inc., 406 N.J.
Super. 13, 29 (App. Div. 2009); Hynes v. Clarke, 297 N.J. Super.
44, 57 (App. Div. 1997). "The scope of relief in a motion in aid
of litigants' rights is limited to remediation of the violation
of a court order." Abbott v. Burke, 206 N.J. 332, 371 (2011).
Accordingly, the court acted within its authority to determine if
Duncan's right to the disabled veteran's tax exemption after 2015
was afforded by the November 14, 2016 judgment.
As for the Tax Court's enforcement of the judgment, we are
satisfied with its reasoning that Duncan's disabled veteran's tax
exemption for 2015 continued into 2016 and thereafter was derived
from the judgment. We agree with the court that the Township was
fully aware of Duncan's interest in continuing the exemption, and
that there was no evidence that she was no longer fully disabled
and entitled to the exemption. We agree with Duncan that the
6 A-4502-16T3
Township misplaces its reliance on Cty. of Essex v. City of E.
Orange, 214 N.J. Super. 568, 576 (App. Div. 1987) and Blair Acad.
v. Blairstown, 95 N.J. Super. 583, 593 (App. Div. 1967); unlike
the present situation, those disputes concerned property tax
assessment exemptions – for using a property for non-profit
activities – based on statutes that required taxpayer action from
year-to-year to continue the exemption. There is no such
legislative directive requiring an annual application for the
disabled veteran's tax exemption. The exemption is granted not
due to the property's use but because of the taxpayer's disability
attributed to military service. As the court sensibly pointed
out, absent evidence to the contrary, its judgment granting Duncan
the tax exemption for 2015 should continue to successive years of
her ownership of the property. We therefore see no reason to
disturb this decision.
Turning to Duncan's cross-appeal of the denial of her
attorney's fees request, she contends a fee award was appropriate
because the Township failed to comply with the sixty-day grace
period prescribed by N.J.S.A. 54:3-27.2 to refund her any excess
taxes paid. Duncan, however, fails to recognize that under a Rule
1:10-3 motion to enforce litigant's rights, the court has the
discretion to award attorney's fees to the prevailing party. Wear
v. Selective Ins. Co., ___ N.J. Super. ___, ___(App. Div. 2018)
7 A-4502-16T3
(slip op. at 23) (citation omitted). In our review of the Tax
Court's oral decision, we glean no abuse of discretion because
there is no indication that it was "made without a rational
explanation, inexplicably departed from established policies, or
rested on an impermissible basis." Id. at 23-24.
Affirmed.
8 A-4502-16T3