The opinion of the court was delivered by
STERN, P.J.A.D.
The Hudson County Sheriff appeals from a judgment entered on April 19, 1999, declaring that “N.J.S.A. 22A:4-8 as applied to the commissions sought by the Hudson County Sheriff from plaintiff in this case is unconstitutional,” and denying the Sheriffs requested order to show cause seeking payment of his statutory fee. The Sheriff argues that he is entitled to the statutory commission or fee provided in N.J.S.A. 22A:4-8 when a judicially ordered sale does not go forward by virtue of a settlement; that the settlement resulted from the conduct of the Sheriff in preparing for the sale; and that plaintiff is not entitled to the exemption from such payment awarded to federal agencies or departments, as prescribed in Resolution Trust Corp. v. Lanzaro, 140 N.J. 244, 658 A.2d 282 (1995).
N.J.S.A. 22A:4-8, entitled “Fees and mileage of sheriffs and other officers,” in Title 22A “fees and costs,” provides in part regarding “execution sales” that:
When the execution is settled without actual sale and such settlement is made manifest to the officer, the officer shall received of the amount of percentage allowed herein in ease of sale.
[479]*479Based on the statute, the Sheriff seeks a commission of $30,-408.64, and seeks to distinguish the Resolution Trust case. The plaintiff, which obtained a judgment for $3,830,913.23 and a Writ of Execution, contends that the commission is a “tax” to support the general operations of the Sheriffs Department or county government, and, as such, is unconstitutional. The parties stipulated that the value of the services actually performed and expenditures actually involved (independent of indirect costs of personnel and equipment utilized, which would be normal expenses) amounted to $971.14.1 There is no dispute that these actual expenses that were incurred by the Sheriff are payable to the Sheriff. In fact, they were paid out of plaintiffs $1,000 deposit.
Defendant, 350 Warren, L.P., paid plaintiff $2,400,000 (in settlement of the $3,830,913.23 judgment plaintiff obtained against defendant), and the parties to this appeal agree that the commission would be $30,408.64 if the statutory fee is enforceable.2 Plaintiff would not pay the disputed statutory fee and the Sheriff sought an order to show cause. The Attorney General, after receiving notice required by R. 4:28-4, elected not to participate in the proceedings.
The trial judge held the statute to be unconstitutional as applied, concluding:
that N.J.S.A. 22A:4-8 is unconstitutional as applied to the plaintiff in this case, where the disproportion between the charge and the cost of the service is excessive, the charge imposed is intended primarily to raise revenue, and not to compensate the governmental entity for the cost of providing the service. As a result, the charge is essentially the equivalent of a tax, measured by the sale price of the foreclosed property, it is apparent in this case that the charge is grossly disproportionate to the cost of the services rendered under any measure, and is premised solely on the statutory authorization appearing in 22A:4-8, which permits [480]*480the Sheriff to receive one-half of the amount of the percentage allowed in the event a sale is made.
[citation omitted.]
The judge also determined:
that the tax violates Article 4, Section 7, Paragraph 4 of the New Jersey Constitution for, among other reasons, the reason that the statute 22A:4-8 has the following title: Fees and Mileage of Sheriffs and other Officers, that’s the title to the statute... And so, the court concludes that 22A:4-8 violates the New Jersey Constitution, since it gives no notice or indication of the purpose of the statute, which purpose is to permit or impose taxation.3
We conclude, as did the trial judge, that the issue before us is controlled by Resolution Trust, supra, 140 N.J. 244, 658 A.2d 282, and that the fee in this case constituted a tax. While we reject the trial judge’s constitutional analysis, we conclude that the “fee” is unenforceable because of its lack of proportionality to the services rendered and the absence of any legislative intent to impose a tax.
It is true, as the Sheriff argues, that Resolution Trust required the Supreme Court to determine whether, under the standards established by federal law, the charge authorized by N.J.S.A. 22A:4-8 was a “fee” or a “tax.” This was because under controlling federal law, if the statute authorized a “tax” the federal agency would be exempt from paying the tax. Id. at 252, 658 A.2d 282. It is also true, as the Sheriff argues, that the Supreme Court in Resolution Trust ultimately held that it was “fully satisfied that for purposes of [the controlling federal statute] and its statutory exemption of RTC from state and local taxation, the charge sought to be imposed by the Sheriff of Monmouth County is essentially equivalent to a tax measured by the sale price of the foreclosed property.” Resolution Trust, supra, 140 N.J. at 260, 658 A.2d [481]*481282. Accordingly, “[a]s such, it [could not] lawfully be imposed on ETC” because of federal law. Ibid.
However, in examining the question of whether the Sheriffs charge under the statute “is a permissible fee or a prohibited tax,” id. at 253, 658 A.2d 282, the Supreme Court found “instructive” New Jersey precedent dealing with fees and assessments “purporting to be regulatory but challenged on the ground that they were designed primarily to raise revenue.” Ibid. Citing New Jersey precedent, the Court made clear that “[i]f the primary purpose of the fee is to raise general revenue, it is a tax,” whereas the fees would be sustainable when “the primary purpose is to reimburse ... for services reasonably related” to the services performed. Id. at 254, 658 A.2d 282 (quoting Holmdel Builders Ass’n v. Township of Holmdel, 121 N.J. 550, 582, 583 A.2d 277 (1990)). The Court also made clear that to be a valid fee, as opposed to a tax, the amount charged had “to bear a reasonable relationship to the cost of the services rendered.” Id. at 257, 658 A.2d 282 (quoting Capital Cities Communications, Inc. v. Federal Communications Comm’n, 554 F.2d 1135, 1138 (D.C.Cir.1976)). Hence, the Resolution Trust Court stated that:
Irrespective of its statutory designation as a fee, both our own eases and the federal precedents view as controlling the relationship between the amount of the charge and the cost of the service rendered. This record reveals an enormous disparity: the services rendered by the Sheriff and employees of his office require approximately ten hours of work; the fee imposed, determined solely on the basis of the amount of the successful bid for the property, was $275,000. Where the disproportion between the charge and the cost of the service is excessive, as it is here, the conclusion is inescapable that the charge imposed is intended primarily to raise revenue and not to compensate the governmental entity for the cost of providing its service.
[Id.
Free access — add to your briefcase to read the full text and ask questions with AI
The opinion of the court was delivered by
STERN, P.J.A.D.
The Hudson County Sheriff appeals from a judgment entered on April 19, 1999, declaring that “N.J.S.A. 22A:4-8 as applied to the commissions sought by the Hudson County Sheriff from plaintiff in this case is unconstitutional,” and denying the Sheriffs requested order to show cause seeking payment of his statutory fee. The Sheriff argues that he is entitled to the statutory commission or fee provided in N.J.S.A. 22A:4-8 when a judicially ordered sale does not go forward by virtue of a settlement; that the settlement resulted from the conduct of the Sheriff in preparing for the sale; and that plaintiff is not entitled to the exemption from such payment awarded to federal agencies or departments, as prescribed in Resolution Trust Corp. v. Lanzaro, 140 N.J. 244, 658 A.2d 282 (1995).
N.J.S.A. 22A:4-8, entitled “Fees and mileage of sheriffs and other officers,” in Title 22A “fees and costs,” provides in part regarding “execution sales” that:
When the execution is settled without actual sale and such settlement is made manifest to the officer, the officer shall received of the amount of percentage allowed herein in ease of sale.
[479]*479Based on the statute, the Sheriff seeks a commission of $30,-408.64, and seeks to distinguish the Resolution Trust case. The plaintiff, which obtained a judgment for $3,830,913.23 and a Writ of Execution, contends that the commission is a “tax” to support the general operations of the Sheriffs Department or county government, and, as such, is unconstitutional. The parties stipulated that the value of the services actually performed and expenditures actually involved (independent of indirect costs of personnel and equipment utilized, which would be normal expenses) amounted to $971.14.1 There is no dispute that these actual expenses that were incurred by the Sheriff are payable to the Sheriff. In fact, they were paid out of plaintiffs $1,000 deposit.
Defendant, 350 Warren, L.P., paid plaintiff $2,400,000 (in settlement of the $3,830,913.23 judgment plaintiff obtained against defendant), and the parties to this appeal agree that the commission would be $30,408.64 if the statutory fee is enforceable.2 Plaintiff would not pay the disputed statutory fee and the Sheriff sought an order to show cause. The Attorney General, after receiving notice required by R. 4:28-4, elected not to participate in the proceedings.
The trial judge held the statute to be unconstitutional as applied, concluding:
that N.J.S.A. 22A:4-8 is unconstitutional as applied to the plaintiff in this case, where the disproportion between the charge and the cost of the service is excessive, the charge imposed is intended primarily to raise revenue, and not to compensate the governmental entity for the cost of providing the service. As a result, the charge is essentially the equivalent of a tax, measured by the sale price of the foreclosed property, it is apparent in this case that the charge is grossly disproportionate to the cost of the services rendered under any measure, and is premised solely on the statutory authorization appearing in 22A:4-8, which permits [480]*480the Sheriff to receive one-half of the amount of the percentage allowed in the event a sale is made.
[citation omitted.]
The judge also determined:
that the tax violates Article 4, Section 7, Paragraph 4 of the New Jersey Constitution for, among other reasons, the reason that the statute 22A:4-8 has the following title: Fees and Mileage of Sheriffs and other Officers, that’s the title to the statute... And so, the court concludes that 22A:4-8 violates the New Jersey Constitution, since it gives no notice or indication of the purpose of the statute, which purpose is to permit or impose taxation.3
We conclude, as did the trial judge, that the issue before us is controlled by Resolution Trust, supra, 140 N.J. 244, 658 A.2d 282, and that the fee in this case constituted a tax. While we reject the trial judge’s constitutional analysis, we conclude that the “fee” is unenforceable because of its lack of proportionality to the services rendered and the absence of any legislative intent to impose a tax.
It is true, as the Sheriff argues, that Resolution Trust required the Supreme Court to determine whether, under the standards established by federal law, the charge authorized by N.J.S.A. 22A:4-8 was a “fee” or a “tax.” This was because under controlling federal law, if the statute authorized a “tax” the federal agency would be exempt from paying the tax. Id. at 252, 658 A.2d 282. It is also true, as the Sheriff argues, that the Supreme Court in Resolution Trust ultimately held that it was “fully satisfied that for purposes of [the controlling federal statute] and its statutory exemption of RTC from state and local taxation, the charge sought to be imposed by the Sheriff of Monmouth County is essentially equivalent to a tax measured by the sale price of the foreclosed property.” Resolution Trust, supra, 140 N.J. at 260, 658 A.2d [481]*481282. Accordingly, “[a]s such, it [could not] lawfully be imposed on ETC” because of federal law. Ibid.
However, in examining the question of whether the Sheriffs charge under the statute “is a permissible fee or a prohibited tax,” id. at 253, 658 A.2d 282, the Supreme Court found “instructive” New Jersey precedent dealing with fees and assessments “purporting to be regulatory but challenged on the ground that they were designed primarily to raise revenue.” Ibid. Citing New Jersey precedent, the Court made clear that “[i]f the primary purpose of the fee is to raise general revenue, it is a tax,” whereas the fees would be sustainable when “the primary purpose is to reimburse ... for services reasonably related” to the services performed. Id. at 254, 658 A.2d 282 (quoting Holmdel Builders Ass’n v. Township of Holmdel, 121 N.J. 550, 582, 583 A.2d 277 (1990)). The Court also made clear that to be a valid fee, as opposed to a tax, the amount charged had “to bear a reasonable relationship to the cost of the services rendered.” Id. at 257, 658 A.2d 282 (quoting Capital Cities Communications, Inc. v. Federal Communications Comm’n, 554 F.2d 1135, 1138 (D.C.Cir.1976)). Hence, the Resolution Trust Court stated that:
Irrespective of its statutory designation as a fee, both our own eases and the federal precedents view as controlling the relationship between the amount of the charge and the cost of the service rendered. This record reveals an enormous disparity: the services rendered by the Sheriff and employees of his office require approximately ten hours of work; the fee imposed, determined solely on the basis of the amount of the successful bid for the property, was $275,000. Where the disproportion between the charge and the cost of the service is excessive, as it is here, the conclusion is inescapable that the charge imposed is intended primarily to raise revenue and not to compensate the governmental entity for the cost of providing its service.
[Id. at 259, 658 A.2d 282 (citation omitted).]
We agree with the trial judge that Resolution Trust requires us to hold, as a matter of state law, that the “fees” charged in this case constitute a “tax” and are so disproportionate to the services rendered that collection thereof cannot be enforced.
In Resolution Trust this court had held that the ETC was required to pay the “fee” on the basis that it was not a “tax” [482]*482because the reasonableness of the assessment could not be “properly determined ... by a single transaction but rather by the overall statutory scheme, which is designed to provide for the self-support of this function of the Sheriffs office.” 271 N.J.Super. 189, 191, 638 A.2d 812 (App.Div.1994), rev’d, 140 N.J. 244, 658 A.2d 282 (1995). We concluded that the “reasonableness may be evaluated in terms of the benefit conferred upon the person required to pay as well as in terms of the expense to the sheriff in providing the service.” Id. at 191-92, 638 A.2d 812. In reversing the judgment, the Supreme Court rejected this thesis. 140 N.J. at 258-60, 658 A.2d 282. According to Justice Stein:
Nor is the revenue-raising characteristic of the Sheriffs fee diminished by the statistics, emphasized by the lower courts, demonstrating that the annual amount of the fees collected by the Sheriff and remitted to the County defray a substantial portion of the cost of operating the Sheriffs office. That the Sheriffs fees are substantial enough to offset approximately one-third of the budgeted costs of operating his office may well substantiate the soundness of the fee schedule as a matter of legislative policy. But the success of the fee schedule as a revenue source cannot justify imposition of the fee on an entity that Congress has declared to be totally exempt from such exactions.
[Id. at 259-60, 658 A.2d 282.]
Although the issue involved in Resolution Trust concerned the federal exemption from payment of a tax, that case does not change the essence of the Supreme Court’s analysis that the fee under N.J.S.A. 22A:4-8, even though used to help defray the cost of operating the Sheriffs office or commensurate to the benefit received by plaintiff, was nonetheless a tax because of the “disproportion between the charge and the cost of the service.” Id. at 259, 658 A.2d 282.
The precedent cited in Resolution Trust deals with municipal ordinances, whereas the Legislature can impose a tax. However, the trial judge here held that the Legislature cannot impose a tax in a statutory enactment bearing a title that refers to “fees and costs” for services rendered. See N.J. Const, art. IV, § 7, ¶ 4.4 We disagree with the judge’s conclusion in this regard. The [483]*483statute clearly relates to the amounts the Sheriff can collect for services rendered, and:
‘If the ‘leading' or general subject of a statute is fairly expressed in the title, the constitutional mandate is satisfied. The ‘object' of a law is not to be confused with its ‘product.’ The product may be ‘as diverse as the object requires and finds its expression in the terms of the enactment only.’ The criterion is whether the title is such that thereby the members of the legislature are given notice of the subject to which the act relates, and the public informed of the kind of legislation that is under consideration. And it is the settled rule that a statute will not be judicially declared inoperative and unenforceable on this ground unless it is palpably in contravention of the constitutional command.
[Bucino v. Malone, 12 N.J. 330, 343, 96 A.2d 669 (quoting Jersey City v. Martin, 126 N.J.L. 353, 363, 19 A.2d 40 (E. & A.1941))(intemal citations omitted).]
As the Supreme Court has said:
The law of this State is well settled. As recently as Bucino v. Malone, 12 N.J. 330, 342-344, 96 A.2d 669 (1953), this court reiterated the principle, inherent in decisions antedating it, that “It is unnecessary and in fact undesirable for a title to give a resume of the provisions of the act. The constitutional provision is complied with when the title gives notice to the Legislature and the public of the general purpose of the act." Where the general purpose of the act is thus expressed and all the provisions of the enactment are in furtherance of that purpose, [lfe., “reasonably connected therewith, and appropriate to the achievement of the [484]*484legislative object,” Jersey City v. Martin, 126 N.J.L. 353, 363, 19 A.2d 40 (E. & A.1941), it does not violate this constitutional restriction on legislation.
[General Public Loan Corp. v. Director of Div. of Taxation, 13 N.J. 393, 403, 99 A.2d 796 (1953)].
See also, e.g., Painter v. Painter, 65 N.J. 196, 206-07, 320 A.2d 484 (1974).
We nevertheless affirm the judgment of the trial court. We agree with the trial judge’s suggestion that, in the absence of any legislative history to support a contrary conclusion, there is no evidence that the Legislature intended to impose a tax that was so disparate and disproportionate to the services rendered. Given the holding of the Resolution Trust case that the disproportionate fee is a tax, we cannot enforce a tax where the Legislature did not intend to impose one. As our Supreme Court has said in other contexts with respect to taxation, “[t]he legislative body must express its intention to tax in distinct and unambiguous language.” Kingsley v. Hawthorne Fabrics, Inc., 41 N.J. 521, 529-30, 197 A.2d 673 (1964)(quoting Public Service Co-ordinated Transport v. State Bd. of Tax Appeals, 115 N.J.L. 97, 105, 178 A. 550 (Sup.Ct.1935)). See also Fedders Fin. Corp. v. Director, Div. of Taxation, 96 N.J. 376, 386, 476 A.2d 741 (1984).
We agree with the general principles referred to by our dissenting colleague, even though we have doubt about a presumption in favor of a taxing measure not embodied in Title 54 and enacted in a source statute adopted long before individuals were taxed other than on real property. However, the principles referred to by the dissent have no application in this ease. We merely hold, as a matter of apparent statutory intent, that there is no evidence the Legislature intended to put the disproportionate burden of taxation on a limited number of users of the Sheriffs services. The Sheriff is a constitutional officer and public official. He or she is not a private sector salesman or a broker entitled to contractual commissions, no matter what the costs may be.
Accordingly, we affirm the judgment of the Chancery Division, holding that the billed fees may not be collected in this case. We have no doubt, however, that the Legislature would want the statute interpreted to permit collection of a non-disproportionate [485]*485fee, after all factors which may be relevant in determining that question are considered. See Hutches v. Borough of Hohokus, 82 N.J.L. 140, 142, 81 A. 658 (Sup.Ct.1911). See also, e.g., Township of Saddle Brook v. A.B. Family Ctr., Inc., 307 N.J.Super. 16, 31-32, 704 A.2d 81 (App.Div.1998), aff'd and remanded, 156 N.J. 587, 722 A.2d 530 (1999). We might ordinarily remand to the trial court to permit the Sheriff to make a showing of what would be a non-disproportionate assessment for purposes of collection. In this case, however, the parties stipulated to the value of the services rendered. It is clear as a matter of law that a greater than thirty-to-one ratio of assessment to cost is disproportionate. Hence, the Sheriff may collect only the amount stipulated by the parties to be for services rendered.
Given the potential impact of our decision on other cases, our holding is prospective only. Salorio v. Glaser, 93 N.J. 447, 463-69, 461 A.2d 1100, cert, denied, 464 U.S. 993, 104 S.Ct. 486, 78 L.Ed.2d 682 (1983).
The judgment is affirmed as modified.