Property Owners Score in a Chapter 91 Trifecta

by: Anthony F. Della Pelle
9 Dec 2013

In a trio of Tax Court cases dealing with Chapter 91, the Tax Court reaffirmed the obligation of municipalities to adhere to the requirements of N.J.S.A. 54:4-34 if they want the court to dismiss tax appeals under the statute.

As has been discussed numerous times on this blog, N.J.S.A. 54:4-34, also known as “Chapter 91,” allows a municipal tax assessor to request from commercial property owners certain income and expense information. Failure to provide a timely response to such a request is grounds for a municipality to move to dismiss a tax appeal in the subsequent year.

Municipalities are quick to raise Chapter 91 in an attempt to avoid ever having to address the appeal on the merits. Dismissals are routinely granted provided the municipality complies with unambiguous requirements under the statute, court rules and case-law. In a review of previous posts on this blog, I realized that we have never listed those requirements. To warrant a dismissal of a tax appeal, the court must find that:

1. The assessor issued a written Chapter 91 request to the property owner by certified mail.
2. The Chapter 91 was in clear, unequivocal and precise in terms of the information that is being requested.
3. The Chapter 91 request included therein a copy of the statute.
4. The Motion to Dismiss was filed timely pursuant to Court Rule 8:7(e) (except in the case of false or fraudulent responses, the motion must have been filed by the earlier of (1) 180 days after the filing of the complaint; or (2) 30 days before the trial date).

In Triplet Square, L.L.C. v. Township of Manalapan the Tax Court denied the municipality’s motion to dismiss as being out of time. There, the plaintiff conceded that it did not respond to the request, but claimed that the motion filed in June 2013 was well out of time considering that the complaint was filed in June 2012. The defendant argued that since its counsel was not notified of the filing of the complaint by the Tax Court Management Office until June 2013. As such, the municipality argued that good cause existed to allow the motion to proceed even though filed out of time. The Tax Court rejected the municipality’s argument finding that there was no just cause to extend the time for the motion when both municipal clerk and assessor had been served a copy of the complaint in June 2012.

In  J.Y.K., Inc. v. Township of Howell  the plaintiff opposed the defendant’s Chapter 91 motion by arguing that the copy of the statute included in with the request was not an exact reproduction of the statute noting several typographical errors such as missing punctuation marks and incorrect capitalization. The Tax Court found that while the errors were inconsequential, the plain language of the law requires a copy of the statute be included with the request. In this regard, the statute requires nothing more or nothing less. As the assessor failed to render an exact reproduction of the statute, the municipality’s motion was denied.

Finally, in 34 Russo Place LLC v. Township of Berkeley Heights the Tax Court denied a Chapter 91 motion to dismiss because it found that the Chapter 91 request lacked the clarity and precision necessary to warrant dismissal. The court noted the assessor’s cover letter identified the requested information as “current income and expense data” while the attached forms sought income and expense information for the “year ending December 31, 2012,” which the Court found rendered the scope of the request unclear. Moreover, the court found that the form enclosed with the request was itself confusing as it was entitled “2013 Annual Statement of Business Income and Expenses” but requested information relating to the year ending December 31, 2012.

These three cases should serve as a reminder to municipalities that the Tax Court will not grant the extraordinary relief of dismissing a tax appeal absent a showing of full compliance with all applicable requirements under the law.

For more on Chapter 91 cases please see:

No Landlord-Tenant Relationship Means No Dismissal Under Chapter 91

Two More Taxpayers Victims of Chapter 91 “Litigation Gamesmanship”

To Wield Chapter 91 Sword to Dismiss Tax Appeals Towns Must Play by the Rules

Property Owner’s “False” Responses Lead to Dismissal of Tax Appeal

Property owner survives Verona’s “Chapter 91″ attack

Chapter 91 Strikes Another Taxpayer

Tax Court Denies Phillipsburg’s Chapter 91 Motion to Dismiss

Taxpayers Strikeout in Chapter 91 Doubleheader