IN THE MATTER OF NEW JERSEY SPORTS AND EXPOSITION AUTHORITY RESOLUTION 2016-70 (NEW JERSEY SPORTS AND EXPOSITION AUTHORITY) (CONSOLIDATED)

• Court: New Jersey Superior Court Appellate Division
• Decided: November 9, 2017
• Docket: A-2602-15T3/A-2815-15T4
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-2602-15T4 A-2815-15T4

IN THE MATTER OF NEW JERSEY SPORTS AND EXPOSITION AUTHORITY RESOLUTION 2016-70. _________________________________________

Submitted October 3, 2017 – Decided November 9, 2017

Before Judges Yannotti and Mawla.

On appeal from the New Jersey Sports and Exposition Authority.

Castano Quigley LLC, attorneys for appellant Town of Kearny in A-2602-15 and respondent Town of Kearny in A-2815-15 (Gregory J. Castano, Jr., on the briefs).

Pearce Law, LLC, attorneys for respondent Borough of North Arlington in A-2602-15 and appellant Borough of North Arlington in A-2815-15 (Randy T. Pearce and Gregory A. Randazzo, of counsel and on the briefs).

Basile Birchwale & Pellino, LLP, attorneys for intervenor Borough of Ridgefield (Stephen F. Pellino, on the brief).

Lowenstein Sandler LLP, attorneys for respondent New Jersey Sports and Exposition Authority (James Stewart and Rachel Warren, on the brief).

PER CURIAM On January 14, 2016, the New Jersey Sports and Exposition

Authority (Authority) adopted Resolution 2016-70 (2016

Resolution), which certified the 2016 meadowlands adjustment

payments for constituent municipalities, pursuant to the

Hackensack Meadowlands Agency Consolidation Act (Act), N.J.S.A.

10A-1 to -68. The Town of Kearny and the Borough of North Arlington

appeal from the 2016 Resolution. Thereafter, we granted the

Authority's motion to consolidate the appeals, and permitted the

Borough of Ridgefield to intervene.1

For the reasons that follow, we conclude that Ridgefield may

not challenge its 2015 adjustment payment; the Authority erred by

failing to calculate the 2016 adjustment payments in the manner

prescribed by N.J.S.A. 5:10A-59(a); and the Authority did not err

by including a $1.1 million payment that North Arlington received

in 2012 when determining the amount of North Arlington's pre-

adjustment payment for 2012 and the adjustment payments for 2015

and 2016. Accordingly, we reverse Resolution 2016-70 and remand

for recalculation of the 2016 adjustment payments in accordance

with N.J.S.A. 5:10A-59(a).

1 East Rutherford also was granted leave to intervene, but did not file a brief and is no longer participating in the appeal.

2 A-2602-15T4 I.

The Hackensack Meadowlands District is comprised of fourteen

constituent municipalities, which include Kearny, North Arlington,

and Ridgefield. The Act provides in pertinent part for the

establishment of an intermunicipal account and requires the

Authority to compute the amounts that the constituent

municipalities should pay to the account and be paid from the

account each year. N.J.S.A. 5:10A—59(a). The Authority then must

certify the adjustment payments for each constituent municipality.

Ibid. The payments are

determined by adding all the payments payable to that municipality from the intermunicipal account for school district service payments, guarantee payments, and apportionment payments, if any, and by subtracting therefrom the obligations of that municipality to the intermunicipal account, as calculated pursuant to [N.J.S.A. 5:10A-53 to -58]. The amount so derived shall be referred to as the meadowlands pre-adjustment payment. For calendar year 2015, the meadowlands adjustment payment shall be the average of the meadowlands pre-adjustment payments for calendar years 2012, 2013, and 2014. For calendar year 2016 and subsequent years, the meadowlands adjustment payment shall be the average of the meadowlands pre-adjustment payments for the prior three calendar years.

[Ibid. (emphasis added).]

The adjustment payments are funded primarily through the

Meadowlands Regional Hotel Use Assessment, which is imposed

3 A-2602-15T4 pursuant to N.J.S.A. 5:10A-85(a). The Act provides that in the

event the assessment generates insufficient revenue for the

adjustment payments, the State Treasurer must provide the

Authority with the funds needed to make up the shortfall. N.J.S.A.

5:10A-85(d).

For calendar year 2015, the Authority calculated the

adjustment payments by taking the average of each municipality's

pre-adjustment payments for 2013, 2014, and 2015. On January 30,

2015, the Authority adopted Resolution 2015-01, certifying the

payments due to the constituent municipalities for that calendar

year. Based on information received from a constituent

municipality, the Authority revised the payments for 2015 and on

April 16, 2015, adopted Resolution 2015-12, which certified a

revised payment schedule for 2015.

The Authority then paid the designated amounts to the

municipalities, as required by N.J.S.A. 5:10A-59(b). None of the

constituent municipalities filed an appeal challenging the

approved payments for 2015.

For calendar year 2016, the Authority calculated the

adjustment payments using the average of the municipality's pre-

adjustment payments for years 2014, 2015, and 2016. The Authority

then adopted Resolution 2016-70 certifying the payments for 2016.

These appeals followed.

4 A-2602-15T4 On appeal, Kearny, North Arlington, and Ridgefield argue that

the Authority erred by calculating the adjustment payments for

2016 because the Authority did not use the average of the pre-

adjustment payments for the three prior calendar years, as required

by N.J.S.A. 5:10A-59(a). Ridgefield challenges the 2015 adjustment

payments for the same reason. In addition, North Arlington argues

that the Authority erroneously calculated its 2016 adjustment

payment by applying the amount of a payment North Arlington

received in 2012 pursuant to a settlement of a tax appeal.

II.

The Authority argues that Ridgefield is precluded from

challenging its 2015 adjustment payment because it failed to file

a timely appeal from the resolutions the Authority adopted in

2015, which approved the adjustment payments for that calendar

year. The Authority also argues that the doctrine of laches bars

Ridgefield from challenging its 2015 adjustment payment.

Rule 2:4-1(b) states that appeals must be taken from final

decisions or actions of state administrative agencies within

forty-five days after "the date of service of the decision or

notice of the action taken." When an appeal is not filed within

the time prescribed by the rule, the court lacks jurisdiction to

decide the matter on the merits. Alberti v. Civil Serv. Comm'n,

5 A-2602-15T4 41 N.J. 147, 154 (1963); In re Hill, 241 N.J. Super. 367, 372

(App. Div. 1990).

The forty-five-day filing requirement applies to an

administrative "agency's quasi-judicial decisions that adjudicate

the rights of a particular individual." Nw. Covenant Med. Ctr. v.

Fishman, 167 N.J. 123, 135 (2001) (quoting Pressler, Current N.J.

Court Rules, comment 2 on R. 2:4-1 (2001)). In determining whether

an agency's decision is a quasi-judicial act, the key question is

"whether the fact finding involves a certain person or persons

whose rights will be directly affected." Id. at 136 (quoting

Cunningham v. Dep't of Civil Serv., 69 N.J. 13, 22 (1975)).

The Authority's 2015 resolutions are quasi-judicial acts

because those resolutions represent factual determinations

pertaining to the adjustment payments due to the District's

constituent municipalities in 2015. Because Ridgefield did not

file a timely appeal from the Authority's 2015 resolutions, it may

not challenge its adjustment payment, which was authorized by

those actions.

In view of our decision, we need not address the Authority's

argument that the laches doctrine also precludes Ridgefield from

challenging the 2015 adjustment payment.

6 A-2602-15T4 III.

Kearny, North Arlington, and Ridgefield argue that the

Authority erred in calculating their 2016 adjustment payments.

These municipalities argue that the Authority erroneously based

the payments on the average of each municipality's pre-adjustment

payments for 2014, 2015, and 2016, rather than the pre-adjustment

payments for 2013, 2014, and 2015, as expressly required by

N.J.S.A. 5:10A-59(a).

The scope of our review in an appeal from a final

determination of an administrative agency is strictly limited. In

re Proposed Quest Acad. Charter Sch. of Montclair Founders Grp.,

216 N.J. 370, 385 (2013). An agency's decision will not be reversed

unless it is arbitrary, capricious, or unreasonable. Ibid. (citing

In re Petition for Rulemaking, N.J.A.C. 10:82-1.2 & 10:85-4.1, 117

N.J. 311, 325 (1989)). Therefore, the court's role in reviewing

an agency's decision is limited to three inquiries:

(1) whether the agency's action violates express or implied legislative policies, that is, did the agency follow the law; (2) whether the record contains substantial evidence to support the findings on which the agency based its action; and (3) whether in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors.

[Id. at 385-86 (quoting Mazza v. Bd. of Trs., 143 N.J. 22, 25 (1995)).]

7 A-2602-15T4 Furthermore, we are "not bound by the agency's legal

opinions." A.B. v. Div. of Med. Assistance & Health Servs., 407

N.J. Super. 330, 340 (App. Div.) (quoting Levine v. State Dep't

of Transp., 338 N.J. Super. 28, 32 (App. Div. 2001)), certif.

denied, 200 N.J. 210 (2009). The construction of a statute is "a

purely legal issue [that is] subject to de novo

review." Ibid. (citing Mayflower Sec. Co. v. Bureau of Sec., 64

N.J. 85, 93 (1973)).

Here, the municipalities challenge the Authority's

interpretation and application of N.J.S.A. 5:10A-59(a). When the

court interprets statutory language, "the goal is to divine and

effectuate the Legislature's intent." State v. Shelley,

205 N.J. 320, 323 (2011) (quoting DiProspero v. Penn, 183 N.J.

477, 492 (2005)). We begin our inquiry with the language of the

statute, giving the words used therein their ordinary and accepted

meaning. Ibid. (citing DiProspero, supra, 183 N.J. at 492). If the

statutory language is clear and unambiguous, we must "construe and

apply the statute as enacted." In re Closing of Jamesburg High

Sch., 83 N.J. 540, 548 (1980).

N.J.S.A. 5:10A-59(a) states that for calendar year 2015, the

adjustment payments "shall be the average of the meadowlands pre-

adjustment payments for calendar years 2012, 2013, and 2014." The

statute also states that for calendar year 2016 and all subsequent

8 A-2602-15T4 years, "the meadowlands adjustment payment shall be the average

of the meadowlands pre-adjustment payments for the prior three

calendar years." Ibid.

Thus, N.J.S.A. 5:10A-59(a) plainly and unambiguously requires

that the 2016 adjustment payments must be based on the average of

the pre-adjustment payments for 2013, 2014, and 2015. It is

undisputed that for 2016, the Authority based the adjustment

payments upon the average of each municipality's pre-adjustment

payments for 2014, 2015, and 2016. Therefore, the Authority did

not calculate the payment in accordance with N.J.S.A. 5:10A-59(a).

The Authority maintains, however, that its calculation of

the 2016 adjustment payments was reasonable. According to the

Authority, it calculated the 2016 payments in accordance with the

prior statutory formula, which required the Authority to base the

adjustment payments upon the average of the pre-adjustment

payments for three calendar years — the current year and the two

prior years. See N.J.S.A. 13:17-74(a).2 The Authority asserts its

continued use of the prior statutory formula is entitled to

deference. We disagree.

2 N.J.S.A. 5:10A-2(j) provides that in the event there is any conflict between the Act and L. 1968, c. 404 (codified at N.J.S.A. 13:17-1 to -86), the provisions of the Act will control.

9 A-2602-15T4 The Authority's action is inconsistent with the plain

language of N.J.S.A. 5:10A-59(a). Although the Authority may have

made its calculations based on the former statutory formula, the

Act established a new formula and required that it be applied

beginning in 2015. Ibid. The Authority was required to apply the

new formula in determining the adjustment payments for 2016. It

erred by failing to do so.

The Authority further argues that if the court determines

that the 2016 adjustment payments should have been calculated

based on the average of the pre-adjustment payments for the three

prior calendar years, it should be allowed to address any issues

resulting from the erroneous calculation of the 2016 payments,

including any underpayments or overpayments, when it calculates

the next annual adjustment payments, which now would be in February

2018. We conclude it would be reasonable for the Authority to

address these issues when it next calculates the adjustment

payments.

Accordingly, the 2016 Resolution is reversed and the matter

remanded to the Authority to recalculate the 2016 adjustment

payments in accordance with N.J.S.A. 5:10A-59(a). Furthermore, the

Authority may address any issues arising from the erroneous

calculation of the 2016 adjustment payments when it calculates the

payments for 2018.

10 A-2602-15T4 IV.

In addition to arguing that the Authority erred by basing its

2016 adjustment payment on the basis of the average of the pre-

adjustment payments for 2014, 2015, and 2016, North Arlington

argues that the Authority erred by including $1.1 million that it

A constituent municipality's adjustment payment is based in

part on the amount that municipality is required to pay into the

intermunicipal account. Ibid. The amount payable to the account

is based in part upon the increase, if any, in the aggregate true

value of taxable real property in the municipality in a comparison

year. N.J.S.A. 5:10A-53(f).3 Any payments in lieu of taxes (PILOT)

on real property that the municipality has received are taken into

account in determining the increase or decrease in the aggregate

true value of taxable real property in the municipality. N.J.S.A.

5:10A-53(e).

The record shows that in April 2011, the New Jersey

Meadowlands Commission (Commission) filed a tax appeal challenging

North Arlington's real estate tax assessment upon property that

the Commission owned in that municipality. The parties eventually

3 The term "comparison year" is defined as "the second calendar year preceding the adjustment year." N.J.S.A. 5:10A-3.

11 A-2602-15T4 settled the appeal, and the Commission agreed to pay North

Arlington $1.1 million.

The settlement agreement required North Arlington to execute

a PILOT agreement, which states in part that the $1.1 million

would be paid to the municipality as a payment in lieu of taxes

"for the period from May 2008 through December 31, 2011[,] and in

settlement of all future payments in lieu of taxes on the

[p]roperty through December 31, 2030[,] or until such time as use

of the [p]roperty changes . . . [.]" The PILOT agreement also

states that the parties agreed the payment would be made "in

satisfaction of all past and future taxes or payments in lieu of

taxes on the [p]roperty for the period through December 31, 2030[,]

. . . ." It is undisputed that the $1.1 million was paid to North

Arlington in 2012.

On appeal, North Arlington argues that the Authority

erroneously included the $1.1 million it received in 2012 in

calculating its pre-adjustment payment for 2012. North Arlington

contends that if the Authority had not included the $1.1 million

payment in determining that pre-adjustment payment, its adjustment

payments for 2015 and 2016 would have been significantly greater.

We reject North Arlington's arguments because they are not

supported by the plain language of N.J.S.A. 5:10A-53(e). As noted,

the statute expressly provides that if a constituent municipality

12 A-2602-15T4 has received in any comparison year "a payment in lieu of real

estate taxes on property located within the district," that payment

must be taken into account when determining whether there has been

an increase or decrease in the aggregate true value of all taxable

real property in the municipality. Ibid.

As noted, the aggregate true value of all taxable property

is part of the calculation that ultimately results in the

determination of the municipality's adjustment payment. N.J.S.A.

5:10A-53(b)-(f); N.J.S.A. 5:10A-59(a). The 2012 payment was

properly considered in determining North Arlington's pre-

adjustment payment for 2012, and therefore properly taken into

account in calculating the adjustment payments for 2015 an 2016.

North Arlington contends that, at best, the payment it

received in 2012 was largely for unpaid real estate taxes and not

future tax assessments. It argues that the revenue was not related

to any 2012 tax assessments. North Arlington further contends that

the Commission labeled the payment a PILOT payment for its

"internal purposes." North Arlington therefore maintains that the

payment should not have been used in determining its 2012 pre-

adjustment payment, or the adjustment payments for 2015 and 2016.

We are not persuaded by these arguments. As noted, the PILOT

agreement declares the payment to be a PILOT payment, and North

Arlington received the payment in 2012. The Authority's decision

13 A-2602-15T4 to take the 2012 payment into account when calculating North

Arlington's 2012 pre-adjustment payment was consistent with the

plain language of N.J.S.A. 5:10A-53(e) and supported by sufficient

credible evidence in the record.

Reversed and remanded to the Authority for recalculation of

the 2016 adjustment payments in accordance with this opinion. We

do not retain jurisdiction.

14 A-2602-15T4