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Brae Associates v. Park Ridge Borough

A-1697-01T2 (N.J. Super. App. Div. 2003) (Unpublished)

TAXATION; FREEZE ACT—It is an unsettled question whether the common form of tax relief judgment allows a taxpayer to seek further assessment reductions during the “Freeze Act” years.

A property owner pursued a successful tax appeal for the tax years 1990 through 1995. In that appeal, the Tax Court established the 1995 assessment. The municipality appealed that judgment and, “during the pendency of the appeal, [the property owner] filed a motion in the Tax Court seeking interim relief under the ‘Freeze Act’” with respect to the 1996 and 1997 assessments. It also filed tax appeals for 1996 through 2001. The Tax Court denied the interim Freeze Act relief because the judgment was still subject to appellate review. Eventually, the New Jersey Supreme Court denied the property owner’s petition for certification on the Freeze Act denial and, on the same day, it denied the municipality’s appeal of the property assessments for 1990 through 1995. Thereafter, the property owner renewed its action to freeze the 1996 and 1997 assessments.

The municipality moved to adjourn the hearing for two weeks to permit “limited due diligence” discovery with respect to “changes in the building’s value between the 1995 base year judgment and the 1996 and 1997 ‘Freeze’ years.” As partial support for the request for adjournment, the municipality argued that “the parties routinely agreed to such adjournments” and that it still had time left within the twenty-eight day period allowed to the municipality for filing an opposition. The Tax Court denied the municipality’s request, “essentially noting the pro forma nature of a Freeze Act application and concluding, in the circumstances of this case, that if a substantial change in valuation had occurred, ’ the change would not have escaped the notice of the Borough.’” The Freeze Act relief was entered and the municipality appealed. Even before the municipality appealed, the property owner wrote to the Tax Court objecting that the Court’s administrator had improperly included a statement in the judgments essentially to the effect that the Freeze Act was a bar to a further reduction for a year in which Freeze Act relief has been granted. The effect of that statement was to bar the taxpayer from filing a further tax appeal for 1996 and 1997.

The Appellate Division rejected the municipality’s contention that it should have been granted an adjournment and limited discovery. In doing so, it concluded that the municipality’s “contentions on appeal are without sufficient merit to warrant discussion in a written decision.” Essentially, the “proof” and reasons offered by the municipality “for an adjournment were insufficient to justify discovery in anticipation of a plenary hearing.” The municipality failed to make a prima facie showing that the changes to the property substantially increased the value of the property. It was clear to the Court that the Tax Court “implicitly found no such requirement” to allow discovery “in light of [the lower court’s] view of a taxpayer’s automatic entitlement to such relief in most cases.” This left the issue as to whether a taxpayer “may simultaneously seek to obtain, and actually obtain, Freeze Act relief, while still reserving its right to proceed on [a] previously filed tax appeal [] seeking a further reduction for the years in which it has already had its assessment reduced.” Both parties agreed, at oral argument before the Appellate Division, that the form of judgment at issue was one uniformly used by the Tax Court administrator in Freeze Act cases. They also agreed that “the problem caused by the form of judgment [was] a recurring one, and that a resolution of the issue would be helpful.” The problem in this case, was that the Tax Court never responded to the letter from the taxpayer’s counsel requesting an amendment to the judgments. Accordingly, the Appellate Division had no judicial decision before it for review. Consequently, it remanded the matter, pointing to the Tax Court’s “familiarity with this case and its possible idiosyncratic factual context.”


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