Opinion
Docket No. 008611-2013
03-28-2014
Re: TD Bank Tower B v. Township of Holmdel
BY ELECTRONIC MAIL James T. Ryan, Esq, Stavitsky & Associates, L.L.C. Lani M. Lombardi, Esq. Cleary Giacobbe Alfieri Jacobs, L.L.C.
NOT FOR PUBLICATION WITHOUT APPROVAL OF
THE TAX COURT COMMITTEE ON OPINIONS
Mala Sundar
JUDGE
BY ELECTRONIC MAIL
James T. Ryan, Esq,
Stavitsky & Associates, L.L.C.
Lani M. Lombardi, Esq.
Cleary Giacobbe Alfieri Jacobs, L.L.C.
Block 51, Lot 3
Dear Counsel:
This is the court's opinion with respect to defendant's motion to dismiss the above-captioned complaint for plaintiff's failure to respond to income and expense information request pursuant to N.J.S.A. 54:4-34 ("Chapter 91 request"). Plaintiff contends that the Chapter 91 sanction does not apply because the property, a bank branch, was owner-occupied "during the "applicable tax year," thus, not income-producing. Defendant contends plaintiff has failed to establish this allegation because it does not explicate what the term "applicable tax year" references and further because a public record evidenced a construction lien on the property, which lien indicated that the property was owned by plaintiff and by TD Bank Holmdel, as tenant/lessee.
For the reasons stated below, the court denies the motion because it is satisfied with the proofs that the subject property is 100% owner-occupied, and therefore, is not income producing. FACTS
The subject property is located at 670 Laurel Avenue, designated as Block 51, Lot 3 ("Subject") in defendant Holmdel Township ("Township").
For tax year 2013, a complaint was filed challenging the assessment on the Subject. The complaint indicated plaintiff as "TD Bank Tower B."
Two complaints were filed in 2012, one for tax year 2012 (land and improvements), and one for tax year 2011 (added assessment for the prorated amount of the assessment allocated to improvements). Both complaints named plaintiff as "TD Bank, NA." A complaint was also filed for tax year 2014 involving the Subject but included Lots 4 and 5. The plaintiff's name was noted as "TD Bank, NA." The complaints involved a challenge to the assessment for the same property, i.e., located at Block 51, Lot 3 (with the 2014 complaint including Lots 4 and 5).
By letter dated June 1, 2012, the Township's assessor sought the income and expense information from plaintiff for the period January 1, 2011 to December 31, 2011. The mailing included, (1) a cover letter with the Subject's information and explanation of the Chapter 91 request and consequences of a failure to respond, (2) a separate sheet which reproduced N.J.S.A. 54:4-34, and (3) the form known as the Annual Statement of Income and Expenses for Income Producing Properties ("I&E Statement"). The cover letter indicated (in bold and capitalized lettering) that if the property was owner-occupied, then the box on top of the I&E Statement was to be checked off, or alternatively, the words "OWNER OCCUPIED" should be written "across" that Statement. The I&E Statement contained such box noting "Owner-Occupied - Please Check this Box."
The Chapter 91 request was addressed to "TD Bank Tower B, 380 Wellington St-12th Fl., London, ON, Canada N6A4S4." This address was used because the Township received a telefax dated August 19, 2009, from TD Bank "aka Commerce Bank" notifying the assessor of a change of billing address for the Subject of record. However, the notified address change did not include "Tower B" as part of the name of the bank. Rather, the address was to be "380 Wellington St, 12th Floor, Tower B, London, Ontario, N6A 4S4, Canada." However, the Chapter 91 request and all mailings placed the "Tower B" portion of the address next to the bank's name.
The telefax requested a change of a billing address for two other properties, and with respect to "TAXES only."
Contrary to the statutory requirement, the Chapter 91 request was sent by first class mail. Since the Township did not receive any response, it sent a second request for the income and expense information by letter dated August 6, 2012, but this time by certified mail on August 8, 2012. The cover letter indicated that it was a "second request" and that a response was to be sent by September 24, 2012. The second request included the same materials provided in the Township's earlier request. The request and the mailing receipt once again indicated that the "Tower B" portion of the address was included next to the bank's name.
Although the Township claims that the second request was sent with a return receipt requested, there is no evidence of the return receipt (commonly known as the "green card") in its moving papers. Only the certified mailing envelope and the certified mail receipt was attached. Thus, there is no proof a delivery date or a signature confirming receipt of the mailing. Nonetheless, it is undisputed that the Chapter 91 request and the certified mailing receipt contained the correct address of the plaintiff and the correct identification of the Subject. Plaintiff does not allege lack of receipt and does not dispute that it did not respond to the second Chapter 91 request.
Plaintiff claims it did not have to respond because the Subject was owner-occupied and was thus not income producing. The Vice President Senior Manager of Lease Administration for TD Bank certified that the Subject "has been owner occupied by the Plaintiff" and "was not income-producing during the applicable tax year."
The Township then produced a construction lien recorded in the Monmouth County Clerk's office on February 11, 2011 against the Subject. That lien was stated to be in favor of a subcontractor, Crescent Electric Supply Company Inc. of New York, (located in New York) for approximately $26,000 and upon the Subject. The document recited that the Subject belonged to "TD Bank Tower B, as Owner" (listing the Canada address noted above) and to "TD Bank Holmdel, as leasee" (listing the Subject's street address also noted above). The document claimed that the lien was for unpaid services/materials provided in November 2010, pursuant to a contract with Bullet Electric, Inc., a New Jersey entity.
In response to the court's questioning in this regard and for a clarification of the bank's name, plaintiff provided an untimely certification of the same Vice President Senior Manager, who certified that TD Bank, NA, was successor by merger into Commerce Bank, thus, there was no separate or specific deed whereby the Subject was transferred from Commerce Bank to TD Bank, NA. She also certified that there is no legal entity named TD Bank, Tower B (plaintiff's name in the complaint for 2013). Rather, the bank's legal corporate name is TD Bank, NA. Any other reference is erroneous. She also stated that there were "no leases" on the Subject "during the relevant time period." She then reiterated her prior averments that the Subject was 100% owner occupied, thus, not income producing "during the applicable tax year." FINDINGS
N.J.S.A. 54:4-34 requires an owner of income producing property to "render a full and true account" of income from such property in response to a "written request of the assessor, made by certified mail." The assessor must also include a copy of the statute with the written request. Ibid. Failure or refusal to provide a response, or provision of a "false or fraudulent" response, within 45 days "of the" Chapter 91 request, bars the property owner from challenging the property's assessment. Ibid. A non-responding property owner is nonetheless entitled to a reasonableness hearing. Ocean Pines, Ltd. v. Borough of Point Pleasant, 112 N.J. 1 (1988).
A return receipt (green card) need not accompany the certified mailing. Green v. City of East Orange, 21 N.J. Tax 324, 334 (Tax 2004).
Because the consequences of non-compliance with a Chapter 91 request are drastic (inability to challenge the assessment unless unreasonable), courts have required a strict compliance by the assessor of the Chapter 91 requirements. See Great Adventure, Inc. v. Township of Jackson, 10 N.J. Tax 230, 233 (App. Div. 1988) ("the severity of the penalty for noncompliance provided for by N.J.S.A. 54:4-34, namely, the taxpayer's loss of his right to appeal the assessment, requires a strict construction of the statute.").
In H.J. Bailey Co. v. Township of Neptune, 399 N.J. Super. 381 (App. Div. 2008), the court held that Chapter 91 does not apply if the property is not income producing. There, as here, the taxpayer did not respond to a Chapter 91 request although the request stated that if the property was owner-occupied, the response should so indicate. Id. at 384. As here, the taxpayer certified that no response was needed since the property did not produce income. Ibid. The court held that the plain language of the statute applied "solely to income-producing properties." Id. at 382-83.
Here, there is no allegation here that the Subject used to be income producing for earlier tax years or "that the assessor had categorized the property as income producing" such that Bailey, supra, does not apply. See e.g. Thirty Mazel, L.L.C. v. City of East Orange, 24 N.J. Tax 357, 365-57 (Tax 2009) (distinguishing the application of Bailey, supra). Rather, the Township maintains that plaintiff's assertions of being owner-occupied is not credible because the February 2011 construction lien claimed that TD Bank Holmdel was a tenant/lessee and TD Bank Tower B was the owner, thus, some sort of tenancy must have existed on the Subject. The court is not persuaded.
First, the recorded lien is being offered as proof that there was a tenancy on the Subject. Plaintiff however certified that there were no leases on the Subject. As noted in State v. Silva, 394 N.J. Super. 270, 275 (App. Div. 2007), a court cannot take judicial notice of something which would effectively "circumvent the rule against hearsay and thereby deprive a party of the right of cross-examination on a contested material issue of fact." Therefore, the court will not consider the lien as evidence of an alleged tenancy, and consequently, proof that the Subject was income producing.
N.J.S.A. 2A:44A-1 et seq. permits contractors, subcontractors and suppliers to impose a lien to the interest of an owner of real property as a mechanism for collection of amounts remaining unpaid.
Even if the lien recitals of ownership interests can be taken to indicate a prima facie indication of a landlord-tenant relationship, the same is refuted by plaintiff's credible certification that there is no such legal entity called TD Bank Tower B. It is clear from the moving papers that Tower B was never plaintiff's name or part of its name. The 2009 fax from TD Bank showed the letterhead as "TD Bank" only. It did not indicate that plaintiff's name was "TD Bank Tower B." The only place "Tower B" was mentioned was in the context of, and as part of the new billing address. The consequent placement of "Tower B" next to the bank's name appears to have been entirely done by the Township (which may have been to fit the entire address within the computerized address fields), since all the subsequent Chapter 91 mailings (including the I&E Statements) reflected Tower B as placed next to plaintiff's name. There is nothing to show that plaintiff had requested this placement or had notified the Township that its name had changed to "TD Bank Tower B." Therefore, the construction lien's naming the bank as owner and as tenant/lessee is not persuasive proof that the Subject was income producing.
It appears the error was perpetuated by plaintiff's counsel when it filed the 2013 complaint naming plaintiff as "TD Bank Tower B." In contrast, the 2012 complaint did not contain this addition even though the judgment of the County Board of Taxation (of the prorated assessment for tax year 2011) named plaintiff as TD Bank Tower B. Plaintiff's name was also correctly named in the 2012 regular appeal, and the 2014 regular appeal.
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The Township argues that plaintiff's opposition is not credible because its references to "applicable tax year" or "relevant time period" in plaintiff's certifications are ambiguous. However, the Chapter 91 request did not reference any particular tax year but asked for information for January 1, 2011 to December 31, 2011. Plaintiff's opposition addresses this period. Therefore, the Township's contentions are not persuasive.
In sum, the court finds the evidence lacking and insufficient to establish that the Subject is income producing. Without more, information reflected in a construction lien by a claimant is not dispositive of an existence of a tenancy. Plaintiff's certification claiming that the construction lien erroneously named "TD Bank Tower B" as an owner and TD Bank Holmdel as a "leasee" has credence given that there are no documents prior to this particular construction lien referring to an entity known as "TD Bank Tower B." The court is inclined to believe that "Tower B" from plaintiff's Canadian billing address, "380 Wellington Street, 12th Floor, Tower B," was erroneously imputed to the plaintiff's entity as "TD Bank Tower B." CONCLUSION
For the foregoing reasons, the Township's motion to dismiss the above-captioned complaint for failure to respond to a Chapter 91 income and expense request pursuant to N.J.S.A. 54:4-34 is denied.
An Order reflecting this memorandum opinion will be entered by the court and accompany this opinion.
Very truly yours
Mala Sundar, J.T.C.