William L. Collins 1998 Trust v. Borough of Cresskill

Full title: WILLIAM L. COLLINS 1998 TRUST, Plaintiff-Appellant, v. BOROUGH OF…

Court: SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION

Date published: May 6, 2013

DOCKET NO. A-0144-12T1 (App. Div. May. 6, 2013)

Opinion

DOCKET NO. A-0144-12T1

05-06-2013

WILLIAM L. COLLINS 1998 TRUST, Plaintiff-Appellant, v. BOROUGH OF CRESSKILL, Defendant-Respondent.

Daniel J. Cohen argued the cause for appellant (Newman & Simpson, LLP, attorneys; Mr. Cohen, on the brief). Christopher E. Martin argued the cause for respondent (Morrison Mahoney, LLP, attorneys; Mr. Martin, of counsel and on the brief; Margaret A. Spaziani, on the brief).

PER CURIAM

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

Before Judges Yannotti and Harris.

On appeal from the Tax Court of New Jersey, Docket No. 018278-2011.

Daniel J. Cohen argued the cause for appellant (Newman & Simpson, LLP, attorneys; Mr. Cohen, on the brief).

Christopher E. Martin argued the cause for respondent (Morrison Mahoney, LLP, attorneys; Mr. Martin, of counsel and on the brief; Margaret A. Spaziani, on the brief). PER CURIAM

This appeal arises under the Correction of Errors statute, N.J.S.A. 54:51A-7. Plaintiff William L. Collins 1998 Trust appeals from the Tax Court's July 27, 2012 order granting defendant Borough of Cresskill's motion for summary judgment dismissing the complaint and denying the Trust's cross-motion for summary judgment. We reverse.

I.

The facts are not in dispute. We glean them from the summary judgment motion record, and view them in the light most favorable to the Trust. See Depolink Court Report. & Liti. Supp. Servs. v. Rochman, __ N.J. Super. __, __ (App. Div. 2013) (slip op. at 2).

The Trust owns residential real property located on Huyler Landing Road in Cresskill. The improvement, a single-family dwelling, was constructed in 1995.

Beginning in 2003, Cresskill underwent a municipality-wide revaluation of properties for tax year 2004. Based upon information established during that revaluation process, the Trust's property was assessed for tax years 2008 through 2011 as follows:

Land: $ 601,700
Improvement: $ 2,799,500
Total: $ 3,401,200

As part of the 2004 revaluation, Cresskill contracted with Market Value Appraisal Service, Inc. to provide operational assistance to Cresskill's tax assessor, James Anzevino. See N.J.A.C. 18:12-4.8(a) ("The revaluation firm acts as the agent of the municipal tax assessor and all determinations made by the firm shall be submitted to, and approved by, the municipal tax assessor."). Market Value sent field inspectors to take measurements of residences, among other property types. In the course of these inspections, Market Value created hand-written field inspection cards for each property, which contained notes, measurements, and other information compiled by Market Value's inspectors. These cards were reviewed by Anzevino with the principal of Market Value before the information was later used to produce Cresskill's official property record cards. See N.J.A.C. 18:12-4.8(a)(7).

The property record card for the Trust's property contained a sketch of the improvement and listed the improvement's total livable area as 13,667 square feet. Anzevino based his 2008 through 2011 tax assessments on the measurements contained in the property record card.

Although he reviewed and approved the property record card for the Trust's property, Anzevino had no direct knowledge of the dimensions of the improvement. He was neither involved in the inspection of the property nor had he verified any measurements appearing on the property record card.

Separately, Cresskill's building department maintained the as-built plans for the Trust's dwelling. The as-built plans indicated that the actual total livable area was 11,034 square feet. Thus, the property record card contained information indicating the size of the home as 2633 square feet larger than reality, an increase of almost twenty-four percent.

Upon discovering the discrepancy, the Trust filed a complaint for correction of the error pursuant to N.J.S.A. 54:51A-7. The relief it sought was to change the assessment to the following:

Land: $ 601,700
Improvement: $ 1,968,300
Total: $ 2,570,000

In the complaint, it was noted that a conventional tax appeal involving the same property was already pending before the Tax Court for tax years 2010 and 2011.

Shortly after the correction of errors complaint was filed, the parties' expert witnesses met to "verify[] the actual dimensions of the residence." Both appraisers confirmed that the as-built plans on file with the building department "accurately depicted the residence built at the subject property."

After a period of discovery, Cresskill and the Trust filed cross-motions for summary judgment. The Tax Court judge stated that while the dimensions listed on the property record card were different from those on the as-built plans, the assessor still used judgment in determining which numbers to use for tax assessment purposes. In her oral opinion, the judge analyzed Hovbilt, Inc. v. Township of Howell, 138 N.J. 598 (1994), stating:

The Legislature's intent, however, was to exclude matters of valuation involving an assessor's opinion or judgment, thus, the only mistakes that are indisputable and not subject to debate about whether the assessment to be corrected resulted from an exercise of discretion are intended to be corrected. The Court asserted that the clearest examples of mistake in assessments are those caused by errors concerning . . . undebatable physical attributes on the land or structures. The Court held, "Mistakes in assessments that are indisputable and cannot plausibly [be] explained on the basis of an exercise of judgment or discretion by the assessor or his or her staff are within the category of mistakes that can be corrected under the statute. Based on our characterization of the category of mistake but correctable assessment, we hold further that the correct assessment must be readily inferable or subject to ready calculation on the basis of the assessment mistake for which the correction is authorized."
To plug in the number that the plaintiff wants to use, because they're based upon [an] as-built diagram and for the expert for the City to say, yes, I agree those are [the correct] measurements doesn't mean that's what an assessor would determine would be used to set this assessment, and that's where I see judgment being required.

Accordingly, summary judgment was granted dismissing the correction of errors complaint, leaving intact the Trust's direct challenge for tax years 2010 and 2011. This appeal followed.¹

1 The Tax Court judge issued a letter opinion after the appeal was filed pursuant to Rule 2:5-1(b) amplifying her initial determination that the Trust was not entitled to relief under N.J.S.A. 54:51A-7.

II.

We start with fundamental principles:

Although the factual findings of a Tax Court judge are entitled to deference because of that court's expertise in the field, the judge's interpretation of a statute is not entitled to such deference and is subject to our de novo review. Dover-Chester Assocs. v. Randolph Twp., 419 N.J. Super. 184, 195 (App. Div. 2011) (citing Twp. of Holmdel v. N.J. Highway Auth., 190 N.J. 74, 86 (2007))[.]
[Advance Hous., Inc. v. Twp. of Teaneck, 422 N.J. Super. 317, 327 (App. Div. 2011), certif. granted, 209 N.J. 100 (2012).]

Also, "[a]n appellate court reviews a grant of summary judgment de novo, applying the same standard governing the trial court under Rule 4:46." Chance v. McCann, 405 N.J. Super. 547, 563 (App. Div. 2009) (citing Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007)). Thus, the "'trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference.'" Estate of Hanges v. Metro Prop. & Cas. Ins. Co., 202 N.J. 369, 382 (2010) (quoting Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)).

The Trust filed the present action under N.J.S.A. 54:51A-7, which provides as follows:

The tax court may, upon the filing of a complaint at any time during the tax year or within the next 3 years thereafter, by a property owner, a municipality or a county board of taxation, enter judgment to correct typographical errors, errors in transposing, and mistakes in tax assessments, provided that such complaint shall set forth the facts causing and constituting the error or errors and mistake or mistakes, or either thereof sought to be corrected and that such facts be verified by affidavits submitted by the plaintiff. The tax court shall not consider under this section any complaint relating to matters of valuation involving an assessor's opinion or judgment.

In addressing this statute, the New Jersey Supreme Court held that:

[M]istakes in assessments that are indisputable, and cannot plausibly be explained on the basis of an exercise of judgment or discretion by the assessor or his or her staff, are within the category of mistakes that can be corrected under the statute. Based on our characterization of the category of mistaken but correctable assessments, we hold further that the correct assessment must readily be inferable or subject to ready calculation on the basis of the assessment mistake for which correction is authorized.
[Hovbilt, supra, 138 N.J. at 618-19.]

Further, "'mistakes in tax assessments' must be construed liberally, and the court should apply the statute to all cases in which the mistakes are not subject to debate about whether the assessment to be corrected resulted from an assessor's exercise of judgment or discretion." 303, Inc. v. City of N. Wildwood, 21 N.J. Tax 376, 383 (Tax 2004) (citing Hovbilt, supra, 138 N.J. at 617-18). "The clearest examples of that category of mistaken assessments are those caused by errors concerning undebatable physical attributes of the land or structures." Hovbilt, supra, 138 N.J. at 618.

Hovbilt requires that the error is such that cannot be explained as "an exercise in judgment or discretion." Ibid. As long as the error cannot be traced to a rational explanation or is a departure from established policies, it could be an error subject to correction under the statute.

According to the as-built plans, the Trust's property has a total livable area of 11,034 square feet:

First Floor: 4,756 square feet
Second Floor: 3,498 square feet
Basement: 2,780 square feet

The as-built dimensions match the reality of the Trust's property, which was confirmed when the parties' experts conducted a property inspection. However, the property record card set the total livable space at 13,667 square feet with the following measurements:

First Floor: 5,164 square feet
Second Floor: 4,372 square feet
Basement: 4,131 square feet

Cresskill offers no plausible explanation or exercise of judgment to explain the differences. Nevertheless, it continues to intone the mantra that the discrepancy was the result of a judgment call, without producing a stitch of factual evidence to support its claim, much like casually arguing that two plus two equals four is an opinion.

Anzevino testified at his deposition that he did not "get out and measure" the Trust's property. Rather, he simply accepted and relied upon the tangibly inaccurate data provided by Market Value. In addition, after a field inspection in 2011, to "verify[] the actual dimensions of the residence," both experts verified that the as-built plans "accurately depicted the residence built at the subject property." We discern no action by the assessor that called for his exercise of judgment, expertise, or discretion regarding the absolute size of the livable area of the Trust's improvement.

There were no claims by the Trust that a different measuring instrument should have been used. Neither party argues that the assessed value is somehow not in line with market values — both issues that clearly would fall within the realm of the judgment and discretion of the assessor. Here, the measurements reported in 2003 do not remotely reflect the real- world actual living area square footage of the Trust's property. That is not a matter of judgment or discretion. The Tax Court judge erred in finding that the error involved an exercise in judgment.

Because the error fits within the "category of mistaken assessments . . . caused by errors concerning undebatable physical attributes of the . . . structure[]," correct calculations are readily available once accurate data is used. Hovbilt, supra, 138 N.J. at 618. Cresskill's expert verified that the Trust's improvement dimensions are accurately reflected in the as-built plans rather than the property record card prepared by Market Value.

In Hovbilt, the Court held that "the correct assessment must readily be inferable or subject to ready calculation on the basis of the assessment mistake for which correction is authorized." Hovbilt, supra, 138 N.J. at 619. Given that the calculations themselves are not being challenged, the correct assessment can be "readily inferable or subject to ready calculation." Ibid. To bring the assessment into alignment with actual conditions, all that needs to be done is arithmetic. That is, have the assessor apply the myriad assessment factors already on the property record card to the correct square footage.

In reviewing the property record card, the residential cost approach calculations were completed by using the incorrect square footage data. As noted by the Trust, calculations and assessment methodology are irrelevant to this case because "[a]ll of the assessor's judgment is contained within the various multipliers and added values appearing in the various formulae . . . . The measurements did not involve any judgment." We agree. The Trust does not contest the multipliers and added values; it merely challenges the underlying square footage used as the basis for the calculations.

We conclude that granting summary judgment to Cresskill was a mistake. Similarly, denying summary judgment to the Trust, at least on the question of whether N.J.S.A. 54:51A-7 applied, was an error. We reverse and remand the matter to the Tax Court to apply N.J.S.A. 54:51A-7 to the appropriate tax years in connection with the Trust's present complaint. Our determination in this matter is not outcome determinative of the Trust's separate direct appeals for 2011 and 2012 under N.J.S.A. 54:3-21.

Reversed and remanded for further proceedings in accordance with this opinion. We do not retain jurisdiction.

I hereby certify that the foregoing is a true copy of the original on file in my office.

CLERK OF THE APPELLATE DIVISION