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NOT FOR PUBLICATION WITHOUT THE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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