UNIVERSITY HEIGHTS, LLC VS. FRANKLIN LAKES BOROUGH(TAX COURT OF NEW JERSEY)

NOT FOR PUBLICATION WITHOUT THE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-3390-15T3
UNIVERSITY HEIGHTS, LLC,
Plaintiff-Respondent,
v.
FRANKLIN LAKES BOROUGH,
Defendant-Appellant.
Argued May 9, 2017 - Decided May 26, 2017
Before Judges Rothstadt and Mayer.
On appeal from the Tax Court of New Jersey,
Docket No. 015897-2014.
William T. Smith argued the cause for
appellant (Smith, Crotty, Meyer & Bruins,
attorneys; Mr. Smith, on the briefs).
Michael I. Schneck argued the cause for
respondent (Schneck Law Group, LLC, attorneys;
Mr. Schneck, on the brief).
PER CURIAM
Defendant Franklin Lakes Borough (Borough) appeals from the
decision of the Tax Court invalidating and vacating the Borough's
2013 omitted assessment against property owned by plaintiff
University Heights, LLC (University). We affirm for the reasons
stated in Judge Kathi F. Fiamingo's March 16, 2016 thorough and
well-reasoned written opinion. We add these comments.
University is the owner of property in the Borough located
at 100 Sterling Drive (Property), designated as Lot 1 in Block
2514 on the Official Tax Map. University obtained approval to
construct ten residential buildings on the Property, each
containing ten units. The Borough issued certificates of occupancy
for each building constructed by University. Most of the buildings
were completed as of October 1, 2007. A certificate of occupancy
was issued for University's last building prior to October 1,
2008.
The Borough assessed six of University's ten buildings in
2007. In 2008, University completed construction of the last four
buildings. For reasons not entirely clear in the record, the
Borough did not make an additional assessment when the last four
buildings were completed.
University filed tax appeals, challenging the Borough's 2008
and 2009 regular assessments. The parties resolved these two
earlier tax challenges by executing a stipulation of settlement
in December 2010 that stated for 2008 and 2009, the assessed value
of the Property be "at the fair assessable value of the property
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consistent with assessing practices generally applicable in the
taxing district as required by law." The parties also agreed that
for 2010, the property's total assessment would be $12,000,000.
In 2011, the Borough conducted a borough-wide reassessment
to reflect market conditions of property as of 2010. University's
property remained assessed at $12,000,000, the same amount
assessed for that year pursuant to the 2010 stipulation.
In 2014, a new tax assessor discovered an error in the
Property's assessment. The Borough imposed an "omitted
assessment" to include University's last four buildings for the
tax year 2013, increasing the Property's value to twenty million
dollars.
University appealed the imposition of the omitted assessment
to the Bergen County Board of Taxation (Board), which upheld the
assessment. University appealed to the Tax Court.
After considering the tax assessor's testimony and the
pertinent tax records relating to the property, Judge Fiamingo
invalidated the omitted assessment. The judge noted three methods
for imposing assessments outside the annual assessment
requirements authorized by statute – added assessments, omitted
assessments and omitted-added assessments. In this case, the
Borough sought to levy an omitted assessment against the Property
in accordance with N.J.S.A. 54:4-63.31. The Borough claimed it
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utilized the statute's omitted assessment method to assess
improvements on the Property, which, through inadvertence, were
never included on the Borough's tax records. However, relying on
the applicable case law, the judge stated that the omitted
assessment procedure may not be used in every circumstance to
correct situations where improvements to property were not taxed.
See 200 43rd Street, L.L.C. v. City of Union City, 16 N.J. Tax
138, 142 (Tax 1996)(deliberately assessing zero dollars for an
improvement cannot be remedied through the omitted assessment
procedure); Inwood Owners, Inc. v. Twp. of Little Falls, 216 N.J.
Super. 485, 493 (App. Div.), certif. denied, 108 N.J. 184(1987)(increasing the value of property upon conversion from
rental housing to cooperative housing cannot be accomplished by
an omitted assessment); SLR Associates of Millville v. Millville
City, 11 N.J. Tax 1, 3 (Tax 1989)(omitted assessment cannot be
used to correct an alleged clerical error).
Based on the omitted assessment statute and cases
interpreting the statute, Judge Fiamingo held that the buildings
on the Property were completed as of October 1, 2008, the date on
which the Borough's tax assessor set a value for the Property's
improvements. Having signed the December 2010 stipulation of
settlement resolving the 2008 and 2009 annual assessments for the
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Property, the tax assessor knew that all ten buildings were ready
for use and had certificates of occupancy.
Based on this information, the judge concluded that the tax
assessor "made conscious decisions to value [the Property] in the
amounts set forth in those assessments." Quoting Glen Pointe
Associates v. Teaneck Township, 10 N.J. Tax 598, 601 (Tax 1989),
aff'd, 12 N.J. Tax 127 (App. Div. 1991), Judge Fiamingo noted:
An assessor's failure to consider the full
value of improvements about which he was aware
when he placed assessment on those
improvements is not an omission, but "is
simply an erroneous determination of value on
the assessing date," which cannot be corrected
through the omitted assessment procedure.
Based upon her findings, she concluded:
If there was an erroneous determination of
value, as urged by the Borough, it may not be
corrected through the use of the omitted
assessment procedure.
Our review of a Tax Court judgment is limited to whether the
Tax Court's determination is supported by substantial credible
evidence "with due regard to the Tax Court's expertise and ability
to judge credibility." Southbridge Park Inc. v. Bor. of Fort Lee,
201 N.J. Super. 91, 94 (App. Div. 1985) (citing Rova Farms Resort,
Inc. v. Investors Ins. Co., 65 N.J. 474 (1994)). "The scope of
appellate review from a determination of the Tax Court is no
different from that applicable to a nonjury determination of any
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other trial court." G & S Co. v. Bor. of Eatontown, 6 N.J. Tax
at 218, 220 (App. Div. 1982).
There is substantial, credible evidence in the record to
support Judge Fiamingo's decision. The testimony and documents
presented during the trial substantiate her finding that the
assessor knew the number of buildings on University's property as
of 2010, and intentionally assessed them at the value included in
the 2010 stipulation of settlement.
Affirmed.
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