***** **NOT FOR PUBLICATION WITHOUT APPROVAL OF**  **THE TAX COURT COMMITTEE ON OPINIONS**

**________________________________________ NEW WEST DEVELOPERS, LLC**  **, : TAX COURT OF NEW**  **JERSEY :**  **: DOCKET NO**  **s.: 014704-2013, Plaintiff,**  **: 010653-2014, 009474-2015, : 014706-2013, 010648-2014,** 

**v. : 009475-2015**  **: TOWNSHIP OF IRVINGTON**  **, : :** 

**Defendant. :**  **_______________________________________ :**

**________________________________________ CROWN REAL ESTATE HOLDINGS**  **, INC.,**  **: DOCKET NOs.: 009727-2016, : 009728-2016**  **Plaintiff, :**  **:**

**v. : :**  **TOWNSHIP OF IRVINGTON ,**  **: :** 

**Defendant. :**  **_______________________________________ :**

**Decided: December**  **23, 2021 Daniel G. Keough for plaintiffs (Ventura, Miesowitz, Keough & Warner,**  **PC, attorneys ).**  **Jarrid H. Kantor for defendant (Antonelli Kantor , PC**  **, attorneys).**
**BEDRIN MURRAY , J.T.C.** 
**I. Introduction**  **Before the court are**  **defendant’s motion s**  **to dismiss the**  **above-captioned comp laints**  **under**
**N.J.S.A. 54:51A**

**- 1(b), which requires a taxpayer to**  **satisfy certain**  **local property tax obligations prior to filing**  **a n action**  **in the Tax Court** 

**. Plaintiff**  **s’ opposition is two** 

**- fold** 

**. First,**  **plaintiff s contend**  **the provision**  **in N.J.S.A. 54:51A-**  **1(b) permitting the Tax Court to relax the tax payment**  **requirement in the “interests of justice”**  **lends itself to the facts in these matters ,**  **an d should be**  **Approved for Publication In the New Jersey**  **Tax Court Reports 2** 

**applied to defeat**  **defendant’s motions. Next**  **, plaintiff s**  **argue that defendant has waived its right to**  **object to the unpaid taxes because it failed to do so when these matters were heard by the count y**  **board of taxation . A separate but similar s**  **tatute, N.J.S.A. 54:3 -27**  **, requires that municipal taxes and charges be paid in order for**  **a county board of taxation**  **appeal to**  **be heard . For the reasons set**  **forth more fully**  **below, the court concludes that plaintiff**  **s’ objections are insufficient to**  **survive the motions at bar. As such, defendant’s motions to dismiss are granted.** 
**II. Findings of Fact and Procedural Posture**  **It is noted from the outset that the referenced complaints brought by**  **plaintiffs New West**  **Developers, LLC (New West) and Crown Real Estate Holdings, Inc. (Crown) pertain to fiftee**  **n vacant parcels of land situated in**  **defendant, the**  **Township of Irvington. The complaints filed by plaintiff**  **New West challenge the tax assessments for these properties**  **for tax y ears 2013, 2014,**  **and 2015 . Plaintiff**  **Crown was New West’s mortgagee**  **on the properties. On June 25, 2015,**  **Crown acquired the properties at a sheriff’s sale and subsequently**  **filed the two 2016 complaints separately**  **captioned. 1**  **In opposing the motions at bar, p**  **laintiffs rely on one set of opposition papers.**  **As mentioned above, plaintiffs contend that**  **defendant failed to seek dismissal of the appeals at the county tax board level for non** 

**- payment of taxes,**  **and should be**  **barred from raising the issue in the instant matters. In this regard, plaintiffs’ opposition speaks to all docket years.**  **The other argument**  **advanced is that the tax payment requirement should be relaxed in the interests of justice , under** 
**N.J.S.A. 54:51A**

**- 1(b). Crown alone argues this point. As such, the court will distinguish its**  **analysis as to each plaintiff accordingly.**

**1 The**  **2016 complaints were filed in the name of plaintiff New West. Crown has since substituted**  **in as plaintiff in these matters. Crown is the owner of the properties at issue pursuant to a June 25,**  **2015 sheriff’s sale. 3** 

**The central facts in these matters are not in dispute**

**. F**  **or tax years 2013 through 201**  **5,**
**p laintiff**  **New West f** 

**iled appeals with the Essex County Board of Taxation (the Board) challenging the assessment of**  **fifteen properties situated in the Township of Irvington. For each tax year,**  **New**
**West filed two appeals,**  **one for Block 160, Lots 1, 2, 3, 4, 5, 8, 9, 10, 11, 14, 15, 16, and 17**  **, and the other for Block 112, Lot 1 for**  **tax year 2013, and Block 112, Lots 1 and 4 for tax years 2014 and 2015 (together, the**  **“ Properties**  **” ).**  **For tax years 2013 through 201 5,**  **the Board issued**  **judgments affirming the P**  **ropert ies’**  **assessments. In turn,**  **New West timely filed complaints with**  **the Tax Court for tax years 2013, 2014, and 2015**  **on September 25, 2013, July 8, 2014, and June**  **1, 2015, respectively, totaling six**  **complaints that remain pending and are the subject of defendant’s motions to dismiss.**  **Likewis e,**  **plaintiff Crown filed**  **two appeals with the Board for tax year 2016 for the** 
**P roperties.**  **2 As with tax years 2013, 2014, and 2015, the Board issued judgments affirming the** 
**2016 P ropert**  **ies’ assessments. Crown then timely filed complaints with the Tax Cou**  **rt for tax year 2016 on June 23, 2016.**  **These complaints are included in defendant’s motions to dismiss.**  **In short, defendant contends that as of the**  **date of filing of each Tax Court**  **complaint, municipal taxes were due and owing on the**  **P roperties**  **for the ta**  **x year**  **for which**  **review was sought, contrary to**  **the requirement in N.J.S.A. 54:51A**

**- 1(b) that all taxes be paid**  **at the time of filing the**  **complaint for the**  **tax year to be reviewed. In support of the motions at bar, defendant submits the** 

**c ertification of Beverly Baytops,**  **its t**  **ax c**  **ollector , as to each separate complaint. Ms. Baytops**  **certifies in detail as to the status of each property’s tax account for tax years 2013 through 2016,**  **with copies of defendant’s tax account detail reports and lien account status reports attached.**  **Ms.**

**2 The county tax board appeals for tax year 2016 were filed under the name of New West**  **although Crown was the owner of the Properties prior to the assessment date.** **4**

**Baytops concludes that at the time of filing of each complaint**  **, taxes were due for the pertinent**
**year. While some arrearages were paid**  **beginning in 201 6**  **, and the accounts fully satisfied in 2017, not a single property was current at the time of filing of each complaint. The court so fi**  **nds. Plaintiff**  **New West offers no opposition in this regard. Plaintiff Crown, however**  **, contends that**  **i t**  **was prejudiced due to its “**  **secondary” position as lender as opposed to property owner. This,**  **Crown urges, warrants**  **relaxation of the statute requiring payment of taxes prior to filing a complaint in the Tax Court.** 
**Crown relies on the**  **c ertifications of**  **Jacinto Rodrigues, the Chairman and Chief Executive Officer of Crown Bank, purportedly an affiliate of**  **Crown**

**. In his first of two certifications,**  **Mr. Rodrigues**  **states upon taking possession of the properties, Crown began communicating wit**  **h defendant’s tax collector in order to determine the st**  **at us of the accounts. He states that this led to**  **the payment of all amounts due for**  **at least five of the fifteen properties , and that defendant failed**  **to apprise Crown of the existence of other overdue accounts. Mr. Rodrigues certifies that on**  **several occasions, Crown’s checks were held for prolonged periods by defendant, and that C rown**  **was later notified the amounts due differed from the amounts remitted. Mr. Rodrigues attache**  **s a number of document**  **s to his certification in order to**  **illustrate the efforts of Crown to timely pay the sums due; however, he provides no**  **explanation as to**  **how the documents accomplish this goal. Moreover, all sums were well overdue by the time of Crown’s intervention.**  **In his second certification,**  **M r. Rodrigues**  **states that Crown purchased the properties at a** 

**s heriff’s sale on June 25, 2015, and received the recorded deed sometime in August 2015.**  **He states he first became aware of outstanding taxes on the**  **P roperties whe**  **n he received a Notice of Intent to Foreclose certain tax sale certificates on July 19, 2016 as to four propert**  **ies, specifically**  **Block 160, Lots 1, 3, 4, and 8. This account differs from Mr. Rodrigues’ statement in his first 5** 

**c ertification that upon taking**  **possession of the properties, Crown contacted**  **defendant to reconcile**  **its accounts . As to the tax sale certificates, t**  **he record reflects that defendant had acquired them**  **, along with others on the**  **P roperties, and intended to foreclose this particular group. On August 25,**  **2016, Crown remitted approximately $8**  **,000 to defendant to redeem**  **certain tax sale certificates** 

**. In addition, in support of Crown’s contention that it had difficulty**  **obtaining information from defendant as to what was owed, Mr. Rodrigues states that Crown remitted**  **a check in the amount of $39,158.88 to the tax collector on April 7, 2017, but that the check was returned in June**  **2017. The record reveals, however, that this check was**  **for payment of**  **first quarter 2017 taxes**  **rather than for arrearages at issue**  **in the complaints before the court.**  **Another check sent by Crown**  **in payment of third**  **quarter 2017 taxes was returned due to there being municipal liens on some of the properties.**  **Mr. Rodrigues certifies that all arrearages were satisfied by payment of approximately $262,000 remitted on August 30, 2017.** 
**III. Conclusions of Law** 
A. Relaxation of the tax payment requirement in the interests of justice under N.J.S.A. 54:51A-1(b) is not warranted in these matters

**. It is a hallmark of local property tax law that “taxes must be paid when due as a conditi**  **on to litigating liability for the amount alleged due . . . .” Wellington Belleville, L**  **.L.C. v.**  **Twp. of Belleville**  **, 20 N.J. Tax 331, 333 (Tax 2002) (quoting Woodlake**  **Heights Homeowners Ass ’n**  **. v. Twp. of**  **Middletown , 7 N.J. Tax 364, 366 (App. Div. 1984)**  **). Significantly, t**  **he tax payment requirement**  **is intended “to assure**  **the flow of revenue to a municipality while an appeal is pending.”**  **Id. at 335** 

**- 36 (**  **citing Lecross Assoc**  **s . v. City Partners**  **, et al.**  **, 168 N.J. Super. 96 (App.**  **Div. 1979)). The tax payment requirement contained in N.J.S.A. 54:3**  **-27 is**  **a precondition to filing an appeal at the county board of taxation level, and provides**  **in relevant part: 6**  **A taxpayer who shall file an appeal from an assessment against him shall pay to the collector of the taxing district no less than the total**  **of all tax es and municipal charges due, up to and including the first**  **quarter of the taxes and municipal charges assessed against him for the current tax year in the manner prescribed in 54:4-66.** 

**. . . Notwithstanding the foregoing, the county board of taxation may**  **relax the tax payment requirement and fix such terms for payment of the tax as the interests of justice may require . . . .**  **[N.J.S.A. 54:3-27 (emphasis added).]**
**N.J.S.A. 54:51A -1(b)**  **similarly requires payment of taxes in order to**  **prosecute a complaint in the Tax Court appealing a county board of taxation’s judgment:** 

**At the time that a complaint has been filed with the Tax Court seeking review of judgment of county tax boards, all taxes or any**  **installments thereof then due and payable for the year for whi ch**  **review is sought must have been paid. Notwithstanding the foregoing, the Tax Court may relax the tax payment requirement and**  **fix such terms of payments as the interest s of justice may require.**  **[N.J.S.A. 54:51A-1(b) (emphasis added).] Prior to 1999**  **when the Legislature amended these statutes to add the emphasized portions, 3**  **the payment requirements were jurisdictional. “[I]f a taxpayer instituted an a ction at the county**  **level which was dismissed for failure to pa y taxes pursuant to N.J.S.A. 54:3** 

**- 27, the Tax Court was**  **without jurisdiction to hear the appeal . . . and was obligated, as a matter of law, to dismi ss any**  **complaint which was dismissed at the county level for failure to pay taxes.” Sun Pipe Line Co. v.**  **Twp. of W. Deptford, 25 N.J. Tax 466, 476 (Tax 2010) (quoting Christian Asset Management Corp. v. City of East Orange, 19 N.J Tax 469, 474** 

**- 75 (Tax 2001)**  **). A lthough the two statutes dictate**  **different payment terms depending on whether the matter is**  **before the county tax board**  **as an**

**3 L.**  **1999, c.**  **208 § 5 and § 14, respectively. 7** 

**initial petition or the**  **Tax Court as an appeal from a county board judgment, they now allow**  **both tribunals**  **discretion in relaxing the respective requirements if justice so**  **warrants**

**. 4**  **The grant of discretion, however, is limited and should be doled out**  **with frugality**

**. Wellington Belleville**  **, 20 N.J. Tax at 336. The taxpayer in**  **Wellington Belleville sought the court’s**  **largess after it knowingly purchased a fifteen**

**- acre property containing several abandoned**  **buildings with possible asbestos contamination. Id.**  **at 332. The p**  **laintiff’s two complaints were dismissed by the county tax board**  **under N.J.S.A. 54:3-**  **27 for failure to pay taxes. Ibid** 

**. The**  **litigant appealed to the Tax Court for relaxation of the tax payment requirement in the i nterests of**  **justice under N.J.S.A. 54:51A**

**- 1(b).**  **In considering the request, the court devised a three -prong**  **test for det ermining if equitable relief in the form of relaxation of the payment requirement wa**  **s appropriate:**  **“At a minimum, it would seem that such circumstances**  **must be (1) beyond the control of the property owner, not self** 

**- imposed; (2) unattributed to poor judgment, a bad investment or a**  **failed business venture, and (3) reasonably unforeseeable.” Id.**  **at 336. The court concluded that the plaintiff’s financial troubles placed him outside the limited bounds of the intere**  **sts of justice exception.**  **Id. at 337.** 
**In Huw**  **ang v. Twp. of Hillside**  **, 21 N.J. Tax**  **496 (Tax 2004), the court clarified that the Wellington Belleville**  **criteria “were not intended to be all encompassing.” Id.**  **at 505. In that case, the taxpayers’**  **petition before the county b**  **oard of taxation was dismissed for failure to pay property**  **taxes. The taxpayers then filed a complaint before the Tax Court challenging the c ounty b**  **oard’s judgment of dismissal, and the municipality moved for summary judgment on the same grounds**  **as below. Id.**  **at 500. The taxpayers, however, had sought relief in the United States Bankruptcy Court, and were paying the property tax arrearages in accordance with the bankruptcy court’**  **s**

**4 Note that N.J.S.A. 54:3-27 also applies to direct appeals to the Tax Court.** **8**

**restructuring plan. Id.**  **at 499. In concluding the taxpayers were entitled to relaxation of the tax payment requirement in the interests of justice under N.J.S.A. 54:51A** 

**- 1(b), the court**  **held it was**  **necessary to “weigh all evidence relating to the totality of the circumstance s resulting in non** 

**** **payment of taxes, and make a fact sensitive determination on a case -by-**  **case basis, as to whether the statutory tax payment should be relieved in the interests of justice.”**  **Id. at 505.**  **As to the 2013, 2014, and 2015 matters , New West**  **offers no justification**  **whatsoever as to**  **why the tax payment requirement should be relaxed under N.J.S.A. 54:51A- 1(b).**  **On the other hand, while Crown filed only the 2016 complaints, it contends that all pending complaints should be permitted to proceed.**  **The gravamen of Crown’s opposition to the motions**  **at bar is that its**  **role as lender**  **to New West placed it in a disadvantageous position in obtaining tax**  **information from defendant. With regard to the 2013, 2014, and 2015 complaints, t he record does**  **not reveal if Crown, in its capacity**  **as mortgagee**  **, was responsible for collecting tax escrow from** 
**New West and remitting the tax payments to defendant** 

**. Even i**  **f the obligation did not fall to**  **Crown under the mortgage documents, it is**  **un likely a lender would be unaware of several years**  **of non- payment of taxes by**  **its borrower.**  **Regardless, the record contains no evidence of the**  **process in place for payment of taxes by lender or borrower during the relevant time period, or if**  **Crown, the lender, was notified of delinquencies. G**  **iven the lack of opposition of New West, and**  **the scant record as to Crown’s actions as mortgagee during**  **this time , the court**  **is satisfied that the**  **interests of justice do not warrant relaxation of the tax payment requirement under N .J.S.A.**  **54:51A-1(b) with regard to the 2013, 2014, and 2015 complaints. Nor is the court persuaded that relaxation of the tax payment requirement should apply to**  **the 2016 complaints filed by Crown. Mr. Rodrigues certifies**  **that Crown**  **was unaware of outstanding taxes on the properties until**  **it received a Notice of Intent to Foreclose certain tax sale 9** 

**certificates on July 19, 2016. Assuming, arguendo, that Crown**  **did not know there were arrearages on the property at the time it purchased the**  **Properties at the Sheriff’s sale on June 25, 2015, it**  **should reasonably have known, in particular as a sophisticated**  **commercial lender, that property taxes were due for the th**  **ird quarter 2015. Neither these nor subsequent taxes were paid, however,**  **until the following year. In fact, at the time Crown’s complaints for tax year 2016 were filed on**  **June 23, 2016, the taxes due on the P**  **roperties for 2016 were not paid. No explanat**  **ion is offered as to why the tax bill for 2016 was not obtained by Crown. Instead, Crown speaks only to the**  **purported difficulty it encountered attempting to pay the arrearages. In sum, the court concludes**  **the interests of justice would be subverted by relaxing the tax payment requirement in**  **these matters, and allowing the complaints to proceed.** 
B. Defendant’s failure to object to the non

- payment of taxes at the county board level does not bar it from raising the issue before the Tax Court

**. Plaintiff**  **s next contend**  **that defendant is precluded from raising non -payment**  **of taxes in**  **the Tax Court because it failed to do so when the matters were heard by the county tax board , citing**  **Frisina v. City of Newark**  **, 15 N.J. Tax 357 (Tax 1995). The court disagrees. Appeals to the county**  **board and those to the Tax Court are governed by separate and distinct statutes. There is no**  **language in either statute or in our common law to suggest otherwise. In Frisina**  **, the court denied defendant municipality’s motion to dis**  **miss the plaintiff’s complaints for unpaid sewer and water**  **bills, which were not raised at the county tax board. The statute governing payment requireme nts**  **in county tax board appeals, N.J.S.A. 54:3-27, requires all taxes and municipal charges to be paid**  **through the first quarter of the year under review. Ibid.**  **The statute governing appeals to the Tax Court is N.J.S.A. 54:51A** 

**- 1(b), which requires payment of tax**  **es at the time of filing the complaint,**  **but not municipal charges. The court concluded**  **that “[s]ince the statutory language in the two jurisdictional standards, N.J.S.A. 54:3** 

**- 27 and N.J.S.A. 54:51A** 

**- 1b, is different and since it is** **10**

**permissible to have different standards, there is simply no reason for this court to read the water**  **and sewer charge payment requirement of N.J.S.A. 54:3**

**- 27 into the tax payment requirement of** 
**N.J.S.A. 54:51A -1b.”**  **Frisina , 15 N.J Tax at 362**  **-63. In the matters at bar, defendant’s motion is**  **based on non**

**- payment of taxes u**  **nder N.J.S.A. 54:51A**

**- 1(b), which provides a different payment**  **scheme than that set forth in N.J.S.A. 54:3-27. In addition, plaintiff** 

**s cite**  **, without explanation, Sun Pipe Line Co. in support of**  **their argument that defendant waived the objection to non** 

**- pay**  **ment of taxes at the county tax board level. That case**  **however, concerns relaxation of tax payments going forward rather than those due in accordance with N.J.S.A. 54:51A**  **-1(b). 25 N.J. Tax at 47**  **6. In sum, the court concludes that**  **defendant is not precluded from raising the issue of non-payment of required taxes in these c ases.**  **In light of the foregoing, defendant’s motions are granted, and plaintiff s’**  **complaints are dismissed**  **with prejudice.**