187 Dey Road Association, LLC v. Township of South Brunswick

• Court: New Jersey Tax Court
• Decided: October 25, 2021
• Docket: 013415-2019
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT APPROVAL OF THE TAX COURT COMMITTEE ON OPINIONS

------------------------------------------------------x 187 DEY ROAD ASSOCIATION, LLC, : : DOCKET NO: 013415-2019 : Plaintiff, : : v. : : TOWNSHIP OF SOUTH BRUNSWICK, : : Defendant. : CIVIL ACTION : ------------------------------------------------------x

Decided: October 22, 2021.

Robert P. Merenich for plaintiff (Gemmel, Todd & Merenich, attorneys).

Michael Y. Kim for defendant (James P. Nolan & Associates, LLC, attorneys).

CIMINO, J.T.C.

The property in question consists of 83.53 acres in the Township of South

Brunswick. Of the 83.53 acres, one acre is devoted to residential use for a home

located on the property. Through 2017, the then tax assessor of South Brunswick

Township granted farmland assessment for 82.53 acres.

For 2018, the Middlesex County Board of Taxation determined that a partial

rollback judgment be entered for 65 acres due to no agricultural use. Subtracting the one acre of homestead, this would leave 16.53 acres eligible for agricultural

assessment.

The 16.53 acres is the portion of the property fronting Dey Road. The

property is utilized for the growing of crops, there is a pen for the pasturing of goats

and sheep, and appurtenant woodlands.

In dispute is the rear 65 acres of the property, which is primarily wooded and

is traversed by a stream. The taxpayer asserts that he allows the goats and sheep to

graze the 65 acres, but had not been able to do so in 2018 due to flooding caused by

heavy rainfall and beaver activity damming the traversing stream. The beaver

activity was significant enough for taxpayer to obtain a beaver damage control

permit for 2018 from the Division of Fish and Wildlife, Department of

Environmental Protection. With the permit, taxpayer hired a trapper and “seven

beaver were taken.” The parties agree that the rear 65 acres is not fenced. The

municipality disputes grazing activity was taking place on the back 65 acres.

Of the total 83.53 acres, 75.7 acres is wetlands, and 29.7 acres consists of

capable soils for horticultural or agricultural use. It is unclear what portion of the

back 65 acres is wetlands or has capable soils.

The Farmland Assessment Act of 1964 was adopted in response to a

constitutional amendment allowing land actively devoted to agricultural or

horticultural uses to be assessed differently than other lands in the state. N.J. Const.,

-2- Art. VIII, § 1, ¶ 1; N.J.S.A. 54:4-23.1 to -23.23. In particular, land assessed as

farmland is to be valued as if its highest and best use is agricultural or horticultural

use. N.J.S.A. 54:4-23.2. This is typically less than the value for other uses for which

land is suitable. Farmland assessment differs from the general constitutional

mandate that all property be assessed according to the same standard of value

considering the concept of highest and best use. See N.J. Const., Art. VIII, §1, ¶

1(b); Clemente v. Township of South Hackensack, 27 N.J. Tax 255, 267-272 (Tax

2013), aff’d, 28 N.J. Tax 337 (App. Div. 2015) (application of highest and best use).

To receive farmland assessment, the land must be not less than 5 acres and be

actively devoted to agricultural or horticultural use for the two years prior to the

current tax year. N.J.S.A. 54:4-23.2. Agricultural use includes the production of

livestock such as sheep or goats. N.J.S.A. 54:4-23.3. The Director is empowered to

promulgate such rules and regulations as he shall deem necessary to effectuate the

purposes of the Act. N.J.S.A. 54:4-23.21. To that end, the Director enacted

regulations indicating that “devoted to agricultural or horticultural use” means

“[l]and on which livestock is boarded, raised, pastured, rehabilitated, trained, or

grazed, and enclosed by a fence sufficient to retain such animals that are themselves

or their products sold . . . .” N.J.A.C.18:15-6.2(a)(11) (emphasis added). The

regulations also include as “devoted to agricultural or horticultural use” the “[l]and

that consists of lakes, ponds, streams, stream buffer areas, hedgerows, wetlands,

-3- and/or irrigation ponds that are supportive and subordinate or reasonably required

for the purpose of maintaining agricultural or horticultural uses of a tract . . . other

than to the production for sale of trees and forest products” and “[l]and that is

supportive and subordinate woodland or wetlands and that is contiguous to, part of,

or beneficial to land that is cropland harvested, cropland pastured, or permanent

pasture.” N.J.A.C. 18:15-6.2(a)(2), (13).

A devotion to agricultural or horticultural use is not enough. The land must

be actively devoted to agricultural or horticultural use. N.J.S.A. 54:4-23.5. Land is

deemed to be actively devoted to agricultural or horticultural use when the amount

of gross sales average at least $1,000 per year during the two-year period preceding

the tax year at issue and is at least 5 acres in area.1 Ibid. An application for farmland

assessment must be made on or before August 1st of the year immediately preceding

the tax year. N.J.S.A. 54:4-23.6.

In the event that land which is farmland assessed is put to a use other than

agricultural or horticultural, it is subject to additional taxes referred to as rollback

taxes in an amount equal to the difference between the taxes with farmland

assessment and the taxes with the land value assessed as other lands in the taxing

1 For each acre above five, there is an additional income requirement of $5 per acre for agricultural or horticultural use, and 50 cents per acre for woodlands or wetlands. Ibid. -4- district. N.J.S.A. 54:4-23.8. The rollback tax applies not only to the current tax

year, but the two years prior. Ibid.

This matter comes before the Court on a motion for summary judgment filed

by the taxpayer. It has long been said that a motion for summary judgment is an

appropriate method for disposing of a matter if there are not disputed issues of

material fact which require a determination of credibility. Brill v. Guardian Life Ins.

Co. of Am., 142 N.J. 520, 540 (1995). The taxpayer asserts in its brief that it did not

cease or abandon an agricultural use of the back 65 acres, nor did it convert the

property to non-agricultural use. The municipality asserts that its inspections did not

reveal grazing on the back 65 acres. The parties are sharply divided on whether there

was grazing taking place on the back 65 acres. This is certainly a question of factual

credibility which cannot be resolved on summary judgment.

The municipality indicates that discovery is not complete, including

depositions and such. In addition to factual disputes involving the grazing of the

goats and sheep, there are also factual questions of whether any or all of the back 65

acres are appurtenant land subject to farmland assessment. “Generally, our courts

seek to afford ‘every litigant who has a bona fide cause of action or defense the

opportunity for full exposure of his case.’” Mohamed v. Iglesia Evangelica Oasis

De Salvacion, 424 N.J. Super. 489, 498 (App. Div. 2012) (citing Velantzas v.

Colgate-Palmolive Co., 109 N.J. 189, 193 (1988)). Summary judgment should not

-5- be granted when one side needs information from the other to fully prepare the case.

Id. at 499. Both parties need to be given the full and fair opportunity to develop the

record through discovery. Since discovery is not complete, summary judgment

would not be appropriate at this point.

There are four decisions which may help guide the parties in focusing

discovery and resolving the dispute. The first of these decisions is Township of

Burlington v. Messer, 8 N.J. Tax 274 (Tax 1986), aff’d o.b., 9 N.J. Tax 634 (App.

Div. 1987). A new assessor was appointed and determined that the property in

question did not qualify for farmland assessment in 1984. Id. at 277. The property

consisted of 90 acres of which the taxpayer asserted 6 acres were farmed and the

remainder consisted of harvested woodlands. Id. at 276-77. The property had been

assessed as farmland for many years. Id. at 284. No appeals had been taken by the

municipality of the prior annual determinations of the assessor finding the property

qualified for farmland assessment. Ibid. Messer argued that there had to be a

change in use and that the municipality had to prove that the property was used

differently prior to the new assessor determining the property was not used as

farmland in 1984. Id. at 283.

This court indicated in Messer that both the Constitution and the

implementing statutory provision indicate that rollback taxes are imposed when the

land “is applied” to a use other than agricultural or horticultural. Id. at 284-85 (citing

-6- N.J. Const., Art. VIII, §1, ¶1(b); N.J.S.A. 54:4-23.8). The words “change in use” as

subsequently used in the rollback statute are general words that provide abbreviated

reference to the “is applied” standard. Id. at 285. Thus, to establish a rollback, a

municipality must prove (1) the land in the alleged rollback year or in the two years

immediately preceding has been specially taxed as farmland under the act; and, (2)

in that year the land has not been applied to agricultural or horticultural use. Id. at

286. “If defendant’s proposed interpretation [of requiring a change in use] were

accepted, where a landowner incorrectly receives a farmland assessment, the taxing

district could never recapture any of the tax reductions if subsequently the non-

agricultural use, no matter what it may be, is not a change.” Id. at 284. Ultimately,

the court granted judgment imposing rollback assessments for 2002, 2003 and 2004.

Id. at 287.

In Wilson v. Hopewell Township, 23 N.J. Tax 240 (Tax 2006), the property

had been assessed as farmland for a number of years. Id. at 242. In a prior appeal,

the court rejected the taxpayer’s claim that the subject property was entitled to

assessment as farmland for 2004. Id. at 242. Nevertheless, the issue still remained

as to whether the taxpayer would be responsible for rollback assessments for certain

woodlands for the years 2002 and 2003. Id. at 246. While there was some woodland

harvesting activity taking place in 2004, taxpayer did not satisfy the statutory

requirements until 2005 which would lead to the actual farmland assessment in 2007.

-7- Id. at 247, 248. Nevertheless, the Court determined as to the woodlands, that there

was not a change of use established by the municipality and let the prior farmland

assessment for 2002 and 2003 remain. Id. at 248-49.

In Township of Hamilton v. Lyons, 8 N.J. Tax 112 (Tax 1986), 16 acres were

taken out of agricultural production for mining purposes. Id. at 117. The property

owner asserted that once the mining was completed, the land would be restored and

would actually be more productive. Ibid. The court noted that “[l]eaving land fallow

is not a change of use as intended by the roll-back statute, but instead, it is

comparable to rotating crops and under correct circumstances it is a prudent and

recommended agricultural devotion. Mineral excavation is a use completely foreign

to agricultural devotion.” Id. at 119.

In Andover v. Kymer, 140 N.J. Super. 399 (App. Div. 1976) the farmland

assessment of a 200-acre parcel was in dispute. Id. at 401. The taxpayer asserted

that 100 acres were farmland. Ibid. The township engineer asserted only 52 to 70

acres could be used for farmland and the assessor asserted that 41 acres qualified as

farmland. Id. at 401-02. The court determined that the tract basically was in fact

dominantly devoted and dedicated to agricultural use. Id. at 402. No portion of the

land was used for a purpose other than farming. Id. at 403. The non-farmed portions

of the property consisted of woodlands, swampy areas and rocky terrain. Ibid.

While the primary goal of farmland assessment was to save the family farm and

-8- provide farmers some economic relief, there are other objectives as well, such as

encouraging the maintenance and preservation of open space and the beauty of the

countryside. Id. at 404. Marginal farmers and those with substantial sections of

poor land would be severely hurt if they had to farm every single acre. Id. at 404.

Moreover, requiring a thorough investigation of every part of each parcel subject to

farmland assessment would impose upon the assessor the staggering undertaking of

extracting from the land non-fertile areas such as rocky, swampy or wooded areas.

Id. at 404-05.

Without a settled factual record, it is impossible for this court to apply the

above referenced decisions. At the end of the day, some of these decisions may be

inapplicable depending on the findings of fact. As the facts develop, there may be

other applicable decisions. If the parties cannot agree upon and settle the record, a

trial will need to be held by this court to determine the facts of this case before the

court is able to apply the law to the facts. However, this step will await the

completion of discovery.

For the foregoing reasons, the taxpayer’s motion for summary judgment is

DENIED.

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