Opinion
Docket No. 015584-2013
05-09-2014
Re: Estate of Sara Godman v. Township of Medford
Eileen Godman, Executor Estate of Sara Godman Douglas L. Heinold, Esq. Raymond, Coleman, Heinold, Norman, LLP Robert J. Godman, Jr.
NOT FOR PUBLICATION WITHOUT APPROVAL OF
THE TAX COURT COMMITTEE ON OPINIONS
Patrick DeAlmeida
Presiding Judge
Eileen Godman, Executor
Estate of Sara Godman
Douglas L. Heinold, Esq.
Raymond, Coleman, Heinold, Norman, LLP
Robert J. Godman, Jr. Dear Ms. Godman, Mr. Godman and Mr. Heinold:
This letter constitutes the court's opinion with respect to the motion of Robert J. Godman, Jr. to vacate the February 10, 2014 Judgment in this matter. For the reasons stated more fully below, Mr. Godman's motion is denied.
I. Findings of Fact and Procedural History
This letter opinion sets forth the court's findings of fact and conclusions of law based on the parties' motion papers.
This matter concern real property identified in the records of Medford Township, Burlington County as Block 3602, Lot 3. The parcel is commonly known as 115 East Lake Boulevard.
On October 17, 2012, title to the subject property was transferred by deed from the Estate of Marie Meves Loeffler to the Estate of Sara M. Godman. Sara M. Godman died on July 15, 2012, leaving a Last Will and Testament wherein she appointed Eileen Godman as Executrix of her estate. Under the Law Will and Testament of Sara M. Godman, all assets of the estate went into the Robert J. Godman, Sr. and Sara M. Godman Revocable Living Trust. Said Trust appointed Eileen Godman as the First Successor Trustee.
Eileen Godman contested the tax year 2013 assessment on the subject property before the Burlington County Board of Taxation. On August 19, 2013, the county board issued a Judgment affirming the assessment because the taxpayer failed to produce sufficient evidence to overcome the presumption of validity attached to the assessment.
On October 9, 2013, the Estate of Sara M. Godman filed a Complaint in this court challenging the Judgment of the county board. The Complaint and Civil Case Information Statement are signed by Eileen Godman as Executrix of the Estate.
On January 23, 2014, the court received a Stipulation of Settlement signed by Eileen Godman and Douglas L. Heinold, Esq., counsel for the municipality. Mr. Heinold's New Jersey attorney identification number does not appear on the Stipulation of Settlement. The Stipulation provides that the "complaint regarding the assessment of the property located at Block 3602, Lot 3, for the tax year 2013 is hereby withdrawn."
On February 10, 2014, the court entered a Judgment dismissing the Complaint has having been withdrawn by the taxpayer.
On March 10, 2014, after dismissal of the Complaint, Eileen Godman in her role as Executrix of the Estate of Sara M. Godman and First Successor Trustee of the Robert J. Godman, Sr. and Sara M. Godman Revocable Living Trust, conveyed the subject property to Robert J. Godman, Jr.
On March 31, 2014, Robert J. Godman, Jr., filed what he described as a letter brief with the court requesting that the February 10, 2014 Judgment be vacated. The substantive portion of the letter provides as follows:
Please accept this letter brief in lieu of a more formal application to the Court. I am the resident of 115 East Lake Blvd., Medford, New Jersey and have been since @ 10/15/2012.The court notified Mr. Godman that it would treat his letter as a motion to vacate the February 10, 2014 Judgment.
Since 11/1/2012, I have paid 100% of the net property tax bill on my property [Block 3602, Lot 3] in addition to a 38% increase in property tax from 2011 to 2012 and another 5% increase from 2012 to 2013. [.] I did not enter into Mr. Heinold's stipulation of settlement, I did not, I do not and I will not enter into that stipulation, as it was filed with the Court in violation of Rule of Court 1:4-1(b) effective 1 november (sic) 2013.
Thank you for your attention to this matter.
The municipality subsequently filed opposition to Mr. Godman's motion.
The parties waived oral argument and the matter is decided on the moving papers.
II. Conclusions of Law
Rule 4:50-1 provides:
On motion, with briefs, and upon such terms as are just, the court may relieve a party or the party's legal representative from a final judgment or order for the following reasons: (a) mistake, inadvertence, surprise, or excusable neglect; (b) newly discovered evidence which would probably alter the judgment or order and which by due diligence could not have been discovered in time to move for a new trial under R. 4:49; (c) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (d) the judgment or order is void; (e) the judgment or order has been satisfied, released or discharged, or a prior judgment or order upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment or order should have prospective application; or (f) any other reason justifying relief for the operation of the judgment or order.Motions under R. 4:50-1 "shall be made within a reasonable time, and for reasons (a), (b) and (c) of R. 4:50-1 not more than one year after the judgment, order of proceeding was entered or taken." R. 4:50-2.
"A motion under Rule 4:50-1 is addressed to the sound discretion of the trial court, which should be guided by equitable principles in determining whether relief should be granted or denied." Housing Authority v. Little, 135 N.J. 274, 283 (1994) (citing Hodgson v. Applegate, 31 N.J. 29, 27 (1959); Shammas v. Shammas, 9 N.J. 321, 328 (1952)). Our Supreme Court has explained that under subsection (a) of R. 4:50-1 "[c]arelessness may be excusable when attributable to an honest mistake that is compatible with due diligence or reasonable prudence." Mancini v. EDS, 132 N.J. 330, 335 (1993)(citing Baumann v. Marinaro, 95 N.J. 380, 394 (1984)). "The circumstances constituting excusable neglect remain, however, fact-sensitive." Hon. Sylvia B. Pressler, Current N.J. Court Rules, Comment R. 4:50-1 [5.1.2](Gann); and
As a threshold matter, a party must have standing to move to vacation a Judgment pursuant to R. 4:50-1. In re: Adoption of Baby T, 160 N.J. 332, 341 (1999). The "Tax Court is vested with limited jurisdiction" defined by statute. McMahon v. City of Newark, 195 N.J. 526, 546 (2008)(citing N.J.S.A. 2B:13-2 and Union City Assocs. v. City of Union City, 115 N.J. 17, 23 (1989)). "'The right to appeal a real property assessment is statutory, and the appellant is required to comply with all applicable statutory requirements.'" Macleod v. City of Hoboken, 330 N.J. Super. 502, 505 (App. Div. 2000)(quoting F.M.C. Stores Co. v. Borough of Morris Plains, 195 N.J. Super. 373, 381 (App. Div. 1984), aff'd, 100 N.J. 418 (1985)). The statutory scheme establishing this court's jurisdiction is "one with which continuing strict and unerring compliance must be observed . . . ." McMahon, supra, 195 N.J. at 543.
This court's jurisdiction to review assessments on real property is established by N.J.S.A. 54:3-21. The statute provides in relevant part that:
[A] taxpayer feeling aggrieved by the assessed valuation of the taxpayer's property . . . may on or before April 1, or 45 days from the date the bulk mailing of notification of assessment is completed in the taxing district, whichever is later, appeal to the county board of taxation by filing with it a petition of appeal; provided, however, that any such taxpayer . . . may on or before April 1, or 45 days from the date the bulk mailing of notification is completed in the taxing district, whichever is later, file a complaint directly with the Tax Court, if the assessed valuation of the property subject to the appeal exceeds $1,000,000. In a taxing district where a municipal-wide revaluation or municipal-wide reassessment has been implemented, a taxpayer . . . may appeal before or on May 1 to the county board of taxation by filing with it a petition of appeal or, if the assessed valuation of the property subject to the appeal exceeds $1,000,000, by filing a complaint directly with the State Tax Court.N.J.S.A. 54:51A-9 provides "a complaint seeking review of adjudication or judgment of the county board of taxation shall be filed within 45 days of the service of the judgment."
[N.J.S.A. 54:3-21].
Only a taxpayer aggrieved by the assessed valuation of the subject property may establish jurisdiction in this court to challenge the assessment. It is well established that one need not be the owner of real property to challenge the assessment on that property. However, to have statutory authority to file a Complaint, the plaintiff must, at the time of the filing, have a sufficient financial interest affected by the challenged assessment.
For example, in Township of Ewing v. Mercer Paper Tube Corp., 8 N.J. Tax 84, 91 (Tax 1985), this court held that "the Legislature intended to include within the class of 'aggrieved taxpayers,' given the right to appeal tax assessments, any lessee whose lease covers the full tax year and requires him to pay the full assessment of the taxes levied." (footnote omitted). This court concluded, however, that
[b]ecause real estate taxes are a lien against the real estate, N.J.S.A. 54:5-6, and since in addition to a possible reduction there also exists the risk of an increased assessment, F.M.C. Stores, Inc. v. Borough of Morris Plains, 100 N.J. 418 (1985); even though the tenant is solely responsible for the taxes, the owner of the real property is a necessary party, therefore any appeal by the sole tenant . . . must be instituted in the name of the owner by the tenant as express agent for the owner, or, as co-plaintiff, or, in lieu thereof, the owner must be included as a co-defendant.See R. 8:5-3(8)(requiring tenant filing tax appeal to serve a copy of the complaint on the record owner of the property); accord Aperion Enterps., Inc. v. Borough of Fair Lawn, 25 N.J. Tax 70 (Tax 2009)(holding that tenant at single-tenant property responsible for paying all local property taxes under lease has standing to control tax appeal despite owner's previously filed appeal).
[Id. at 91-92.]
In Village Supermarkets, Inc. v. Township of West Orange, 106 N.J. 628, 630-32 (1987), the Supreme Court effectively affirmed the holding in Mercer Paper Tube and held that in some circumstances a single tenant at a multi-tenanted commercial property is a "taxpayer . . . aggrieved by the assessed valuation" of the leased property within the meaning of N.J.S.A. 54:3-21. In that case, an entity that operated a supermarket was the tenant under a lease for a portion of a shopping center. The tenant was required by the lease to pay as additional rent to the landlord all local property taxes due on the portion of the property occupied by the supermarket, as well as an allocated share of the assessment on the common areas of the shopping center. Id. at 629. The tenant filed appeals with this court challenging the assessment on the entire shopping center for three tax years. Id. at 630. The landlord moved to intervene to have the three appeals dismissed for want of jurisdiction. Id. at 631. Although this court granted the motions, the Appellate Division reversed. Ibid.
The Supreme Court allowed the tenant's tax appeals to proceed. The Court held that N.J.S.A. 54:3-21 "is not an insurmountable bar to the prosecution of an appeal by some net-lease tenants, depending upon their economic circumstances." Id. at 631-32. According to Justice O'Hern, who was writing for a unanimous Court, "[t]he most obvious example is the tenant in possession of a free-standing store under a net lease." Id. at 632. "In the context of a long-term lease, the landlord has almost no interest in the assessment." Id. at 632-33. "At the other end of the spectrum, however, is the tenant in possession of an ice cream stand in a suburban mall. Although such a tenant may have a tax payment or tax surcharge clause in its lease, its interest in the shopping center assessment should not properly be considered one that would confer an independent right to prosecute a tax appeal in its own name." Id. at 633. As the Court explained, "[t]he question is one of degree, depending upon the relative circumstances of the parties and their economic interests." Ibid.
Trial courts are to consider several factors before permitting an appeal to be "brought in the owner's name by the tenant with notice to the owner." Ibid. Those factors include:
(1) the provisions of the lease itself, its duration, the burden of the tax surcharge on the tenant, and the possibility that the issue can soon be resolved by renegotiation; (2) the tenant's relationship to the property, whether it is the lead tenant in a shopping center or only one slightly affected by the assessment; (3) whether the tenant will adequately represent the interests of the landlord and other tenants, or whether the tenant has interests adverse to either group; (4) the tenant's ability to mount and prosecute an effective appeal; (5) the landlord's overall relationship with the taxing authority, and whether this is but one of multiple properties as to which the landlord may wish to exercise the right to appeal.
[Id. at 634-35.]
The ability to file an appeal of an assessment has been extended to a mortgagee after a default by the mortgagor. Chemical Bank of N.J. v. City of Absecon, 13 N.J. Tax 1 (Tax 1992). Noting that the mortgagee "has a substantial interest in the property, and . . . many of the attributes of an owner upon the happening of any event of default," the court held that "there is no justifiable reason for prohibiting a mortgagee, whose mortgage is in default, who has paid the real estate taxes, and who seeks to protect its security, from pursuing an appeal of the local property tax assessment on the mortgaged property." Id. at 11. Key to the court's analysis were the common law's creation by the mortgage of "an immediate estate in fee simple in the mortgagee subject to defeasance by the payment of the mortgage debt," id. at 8 (citing Boteler v. Leber, 112 N.J. Eq. 441 (Ch. 1933)), and the mortgage instrument in that case, which vested in the mortgagee significant interests in the property. Id at 11. As is the case in other, similar contexts, the court required that the entity filing the appeal of the assessment provide notice to the property owner. Id. at 13-14.
In Northfield City v. Zell, 12 N.J. Tax 180 (Tax 1991), Judge Lario held that the purchaser of a tax sale certificate was not an aggrieved taxpayer within the meaning of N.J.S.A. 54:3-21. Although the purchaser paid taxes on the relevant property for several years after issuance of the tax sale certificate, the court concluded that she held only an "inchoate right or interest in the property" subject to a right of redemption, which the court determined was insufficient to satisfy the jurisdictional prerequisites of N.J.S.A. 54:3-21. Id. at 184. In addition, the court noted an absence of a statutory grant of authority to a tax sale certificate holder to file an appeal, id. at 185, and a similar absence of a statutory requirement that the certificate holder pay taxes on the relevant property after issuance of the certificate. Id. at 186.
In Lato v. Township of Rockaway, 16 N.J. Tax 355 (Tax 1997), Judge Kuskin disagreed with Judge Lario's holding in Zell and held that the holder of a tax sale certificate who had paid taxes on the subject property subsequent to issuance of the certificate and who initiated foreclosure proceedings has an implied right to file an appeal of the assessment on the property. Judge Kuskin found the certificate holder in these circumstances to have a "significant and substantial property interest equal to, and in some respects greater than, the property interest of a mortgagee or tenant" sufficient to constitute a "taxpayer" under N.J.S.A. 54:3-21. Id. at 366 (citing Jefferson Township v. Block 447A, Lot 10, 228 N.J. Super. 1, 5 (App. Div. 1998)(holding that tax sale certificate vests "a property interest protected by the requirements of due process."). Of particular importance to the court was the fact that the certificate holder likely would be compelled to pay all taxes on the property in order to satisfy the statutory requirement that all taxes be current before the certificate holder could foreclose the right of redemption. Id. at 366. The court required that the certificate holder provide notice to the property owner of the filing of the appeal. Id. at 368.
The meaning of N.J.S.A. 54:3-21 was also examined in Mobil Administrative Serv. Co. v. Township of Mansfield, 15 N.J. Tax 583 (Tax 1997). In June 1995, Mobil filed an appeal with this court challenging the 1995 assessment on property it owned in Mansfield Township. Approximately two months later, in August 1995, while the appeal was pending, Mobil sold the property to Zeta Consumers Products Corporation ("Zeta"). Zeta subsequently moved to intervene in the pending appeal, arguing that it was responsible for the payment of taxes on the property for the portion of 1995 following the purchase. Id. at 587-588. Judge Kuskin denied the motion, based on his conclusion that Zeta was not a taxpayer aggrieved by the assessment within the meaning N.J.S.A. 54:3-21 at the time the Complaint was filed. According to the court, as of the filing deadline for 1995, Zeta "had no interest in the subject property and no obligation to pay property taxes assessed to the property." Id. at 588; see also Pogostin v. Leighton, 216 N.J. Super. 363 (App. Div.)(holding that shareholder who purchased stock after date of merger lacks standing to challenge merger because he had lacked property interest at time of transaction he sought to challenge), certif. denied, 108 N.J. 583, cert. denied, 484 U.S. 964, 108 S. Ct. 454, 98 L. Ed. 2d 394 (1987)). Thus, the court concluded, Zeta could not intervene in an action in which it lacked statutory authority to challenge the assessment.
Finally, in Slater v. Township of Holmdel, 20 N.J. Tax 8 (Tax 2002), Judge Bianco held that a husband, who resides with his wife in the marital home owned by his wife alone, is a taxpayer within the meaning of N.J.S.A. 54:3-21 with the authority to file an appeal challenging the assessment on the residence. The court held that the non-owner husband had a sufficient financial interest in the subject property under N.J.S.A. 54:3-21 because of his statutory rights to remain in the martial home, regardless of who holds title, see N.J.S.A. 3B:28-3 and Pilone v. Banda, 226 N.J. Super. 397, 402 (Ch. Div. 1988), and his common law liability for the necessary expenses of his spouse, see Jersey Shore Medical Center v. Estate of Baum, 84 N.J. 137 (1980), including, presumably, the expenses of maintaining her home. Slater, supra, 20 N.J. Tax at 14.
Here, Mr. Godman submitted an uncertified statement that he was responsible for the "net" property taxes on the subject property during tax year 2013. He submitted no evidence in support of this statement. In addition, a notice of assessment card for the subject property for tax year 2013 attached to Mr. Godman's letter indicates that Marie Loeffler was listed in the records of the municipality as the record owner of the subject property. Nothing in the moving papers suggests that Mr. Godman was a tenant at the subject property during 2013. There is no lease attached to the moving papers and no suggestion that Mr. Godman had a contractual right to pursue a tax appeal for tax year 2013 with respect to the subject property. Nor did Mr. Godman submit proof that he paid the tax year 2013 taxes on the subject property and that he, rather than the Estate of Sara M. Godman or the Robert J. Godman, Sr. and Sara M. Godman Revocable Living Trust ultimately bore the cost of the tax year 2013 taxes. Based on the motion record, the court cannot conclude by a preponderance of the evidence that Mr. Godman is a taxpayer with standing to challenge the tax year 2013 assessment on the subject property. He did not become the title owner of the subject property until March 10, 2014, after tax year 2013 and after the Estate's appeal of the tax year 2013 assessment had been withdrawn.
The court also notes that a tenant's ability to file a challenge to the assessment on real property generally is subordinate to the owner's interest in the assessment. See Target Corp. v. Township of Toms River, 27 N.J. Tax 19 (Tax 2012). Even when a tenant has standing, the appeal is to be brought in the name of the property owner, Mercer Paper Tube, supra, 8 N.J. Tax at 91-92, and on notice to the owner, which may elect to intervene to control the appeal. R. 8:5-3(a)(8). In this case, the owner of the subject property filed a timely challenge to the tax year 2013 assessment and subsequently decided to withdraw its Complaint.
In addition, even if the court were to assume for purposes of this motion that Mr. Godman had a sufficient stake in the tax year 2013 assessment to challenge the assessment, the record contain an insufficient basis to justify vacating the February 10, 2014 Judgment.
The only grounds offered by Mr. Godman for vacating the Judgment is that the Stipulation of Settlement did not contain Mr. Heinold's New Jersey attorney identification number. The requirement that an attorney identification number appear on each paper filed in court became effective November 1, 2013 with an amendment to R. 1:4-1. While it is true that Mr. Heinold overlooked the then-newly enacted requirement, failure to comply with caption and format requirements of R. 1:4-1 does not invalidate the paper filed. Carolina Cas. Ins. Co. v. Belford Trucking Co., 116 N.J. Super. 39 (Ch. Div. 1971), aff'd, 121 N.J. Super. 583 (App. Div. 1972), certif. denied, 63 N.J. 502 (1973). An attorney's identification number, while useful for the administration of the court system, does not have a substantive effect on the contents of the paper filed. This is particularly true here, where the substance of the filing is that the owner of the subject property wishes to withdraw its Complaint. Arguably, the signature of the municipality's counsel was not even necessary to effectuate the withdrawal.
Additionally, the Complaint in this matter was withdrawn pursuant to a settlement between the Executrix and the municipality. "'Settlement of litigation ranks high in our public policy.'" Nolan v. Lee Ho, 120 N.J. 465, 472 (1990)(quoting Jannarone v. W.T. Co., 65 N.J. Super. 472 (App. Div.), certif. denied, 35 N.J. 61 (1961)). "It is the policy of the law to encourage settlements . . . ." Judson v. Peoples Bank and Trust Co., 25 N.J. 17, 35 (1957). Absent compelling circumstances, settlement agreements are enforced. Hagrish v. Olson, 254 N.J. Super. 133 (App. Div. 1992). Mr. Godman has offered no evidence to suggest that the high interest in enforcing the parties' settlement agreement should be disregarded.
Having found no basis on which to grant relief to Mr. Godman, the court denies his motion to vacate the February 10, 2014 Judgment.
Very truly yours,
Patrick DeAlmeida, P.J.T.C.