NJ Supreme Court: Failure to Name Correct Plaintiff Not Fatal to Tax Appeal
In July 2007, hotel operator WIH entered into a sublease agreement with Bocceli, LLC, who then became responsible for property tax payments on the subject property as part of an underlying long-term lease. In April 2008, the managing member of Bocceli visited the Township’s tax collector’s office to make a tax payment, and request that the tax assessment list be changed to designate “Bocceli, LLC” as the owner to receive notices for the property. The clerk advised him that a deed must be presented to the assessor’s office to change the list, and since no deed was presented, the name and Prime Accounting remained on the list. Prime Accounting is an office that had processed taxes on behalf of a prior lessee, Prime Management Company, which is not affiliated with the owner of the land, Penns Grove, or Bocceli.
Starting in 2007, the Township wrote to Prime Accounting requesting updated income and expense information pursuant to Chapter 91, N.J.S.A. 54:4-34. The inquiry eventually reached WIH, which submitted a late response and paid taxes for 2007. On April 28, 2008, the assessor sent the annual Chapter 91 request to Prime Accounting, which was returned undelivered. The Township discovered that WIH had responded to the prior year’s request, and sent another request to WIH who did not forward the request to Bocceli. In November 2008, the tax collector informed the tax assessor of the address that Bocelli had provided, but the assessor continued to list Prime Accounting as the owner. In early 2009, the assessor notified Bocceli of the annual tax assessment. Thus, at that time, the assessor was aware of Bocceli’s responsibility to pay property taxes and used Bocceli’s mailing address to serve the notice of assessment that prompted this tax appeal. The tax assessment list continued to designate Prime Accounting as the entity responsible to pay the taxes.
In March 2009, Bocceli filed a tax appeal that failed to identify Bocceli, and instead incorrectly listed “Prime Accounting Dept” as the plaintiff and property “owner” despite correctly listing the block, lot and street address. The Township moved to dismiss the complaint under N.J.S.A. 54:4-34 because the assessor had sent Chapter 91 requests for 2007 and 2008 to “the owner” and received no response. Bocceli then revised the caption of its action to designate “Bocceli LLC Formerly Prime Accounting Dept” as the plaintiff, and argued that the Township had failed to send its Chapter 91 notices to the correct entity, despite being on notice of Bocceli’s status when “the owner” went to the tax office and made a 2008 tax payment. The Township replied that it had not received a deed and raised issues concerning the plaintiff’s standing. After the April 1, 2009, deadline Bocceli filed a motion to amend the complaint to designate “Bocceli LLC Tenant Taxpayer for Penns Grove Associates” as the plaintiff and to relate the amended complaint back to the original filing date. The Tax Court denied the motion and dismissed the complaint.
The Tax Court held that subject matter jurisdiction was never established because “Prime Accounting” had no interest in the property at the time of the appeal, was not an aggrieved taxpayer under N.J.S.A. 54:3-21. The court further held that the proposed amended complaint would not relate back to satisfy the April 1 filing deadline. The Appellate Division affirmed, holding that Bocceli had not filed a complaint in the name of the true party in interest as required by N.J.S.A. 54:3-21, and thus the Tax Court lacked jurisdiction; and any amendment to an original complaint that had failed to confer jurisdiction would be futile. Prime Accounting Dep’t v. Twp. of Carney’s Point, 421 N.J. Super. 199 (App. Div. 2011).
Bocelli argued that it was only following the common practice of tax appeal practitioners by listing the name identified on the property record card. It also noted that the Tax Court Management Office had history of returning complaints as unfiled that listed some name other than the one appearing on the property record card. Procedurally, Bocelli argued that the Township was not prejudiced because it had properly listed the block, lot, and street address for the property under appeal. Bocelli also noted that the Township had settled appeals from prior years using the Prime Accounting name. The Township continued to rely on the technicality that Prime Accounting was not an aggrieved taxpayer, and therefore the Tax Court did not have subject-matter jurisdiction.
The New Jersey Supreme Court reversed the decision of the lower courts, and held that Bocceli’s misdesignation did not deprive the Tax Court of subject-matter jurisdiction. It noted that the tax appeal was timely filed, accurately described the property’s details, and put the Township and the public on notice that the 2008 assessment for the property was disputed by the taxpayer at the subject property. The misdesignation did not prejudice the Township, and could be corrected by an amended complaint that relates back to the filing of the original complaint. The Court accepted Bocelli’s argument that the common practice is to list the plaintiff as the party listed on the property tax record, and noted that error could have been prevented before the litigation begun because the Township was on notice that Bocceli had assumed the role of taxpayer, yet did nothing correct its assessment list. The Supreme Court reversed and remanded to the Tax Court for further action in accordance with the opinion.
A copy of the New Jersey Supreme Court’s opinion in Prime Accounting Department v. Township of Carney’s Point may be found here.
McKirdy & Riskin’s Thomas M. Olson, Richard P. De Angelis, and Cory K. Kestner authored the amicus curiae brief submitted to the Appellate Division by the New Jersey State Bar Association.
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