Metz Family Ltd. Partnership v. Township of Freehold

*
NOT FOR PUBLICATION WITHOUT APPROVAL OF
THE TAX COURT COMMITTEE ON OPINIONS
____________________________________
METZ FAMILY LTD. PARTNERSHIP, : TAX COURT OF NEW JERSEY
:
Plaintiff, : DOCKET NOs. 001064-2015
: 000482-2016
: 000783-2017
v. :
:
TOWNSHIP OF FREEHOLD, :
:
Defendant. :
___________________________________ :
Decided: October 20, 2020
Daniel J. Pollak and Michael Rienzi for plaintiff
(Brach Eichler, L.L.C., attorney).
Martin Allen and Wesley E. Buirkle for defendant
(DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer &
Flaum, P.C., attorney).
Abiola G. Miles and Michelline Capistrano Foster for the Monmouth
County Board of Taxation and the Director, Division of Taxation
(Gurbir S. Grewal, Attorney General of New Jersey, attorney).
SUNDAR, J.T.C.
This opinion decides the motions of Defendant (Township) seeking Orders for the joinder
of the Monmouth County Board of Taxation (County Board) and the Director, Division of
Taxation (Director or Taxation) (collectively governmental entities) under R. 4:28-1 for purposes
of determining the issue raised by the court: whether the Chapter 123 ratio (average ratio),
promulgated by the Director for the Township, should apply under N.J.S.A. 54:51A-6 to the value
determinations made by this court in the above captioned matters. The governmental entities
oppose the motions claiming that the application of the average ratio is a routine exercise in any
local property tax appeal such as the above appeals, and that in any event, issues in this regard are
Approved for Publication
In the New Jersey
Tax Court Reports

2
matters of pure statutory/regulatory interpretation which can be decided by the court without their
joinder. Plaintiff joins their opposition claiming that it is the court’s duty to apply the average
ratio as promulgated which obviates the need for joinder of either governmental entity.
For the reasons stated below, the court grants the Township’s motions.
PROCEDURAL BACKGROUND
By letter opinion dated March 9, 2020, this court determined the value of property owned
by Plaintiff, a local retail shopping center with a warehouse component to the rear (Subject), for
each tax year 2014 to 2017. Those value conclusions were lower in amount than the annual local
property tax assessments for each such tax year. In a subsequent letter opinion dated April 14,
2020, the court denied the Township’s motion to reconsider the value conclusions.
The court left open the issue whether the average ratio should apply to its value
conclusions. This is because when it had applied the average ratio to its value determination of a
property in another taxing district in Monmouth County, that taxing district, by a reconsideration
motion, argued that the average ratio does not apply because under Real Property Assessment
Demonstration Program (ADP), N.J.S.A. 54:1-101 to 1-106, in which Monmouth County
participates, taxing districts in the county perform annual reassessments approved by the County
Board. Therefore, the taxing district contended, its annual reassessments are excepted from
application of the average ratio under N.J.S.A. 54:51A-6(d).1
In a conference call with counsel for the parties, the court discussed the procedural
mechanisms of addressing the average ratio issue and suggested inviting the Attorney General’s
Office, which represents both the County Board and the Director, to participate in the matters (via
1 That case is Volovnik v. Twp. of Manalapan, Docket No. 004967-2019. The court has not issued
its decision on the reconsideration motion due to the pendency of the identical issue in the instant
matters.

3
briefing/oral arguments). The Township raised the issue of its ability to include these two
governmental agencies on appeal without their formal involvement, therefore, the court directed it
to file appropriate motions in this regard. The Township then filed the instant motions.2
AVERAGE RATIO
After the court finds true value, it should apply the average ratio to the same. See Passaic
Street Realty Assoc., Inc. v. City of Garfield, 13 N.J. Tax 482, 484, 485 n.1 (Tax 1993) (the Tax
Court must “first . . . find the fair market value of the property” and then determine “the proper tax
assessment of the property . . . after the application of that portion of chapter 123 . . . codified at
N.J.S.A. 54:51A-6,” the Chapter 123 ratio being the “average ratio”); Glenpointe Assocs. et al. v.
Twp. of Teaneck, 2020 N.J. Tax LEXIS 9, at *88 (Tax 2020) (“Pursuant to N.J.S.A. 54:51A-6(a),
in a non-revaluation year an assessment must be reduced when the ratio of the assessed value of
the property to its true value exceeds the upper limit of the common level range”).3 The ratio of
assessed-to-true value is obtained by dividing the assessment (set by the assessor) by the property’s
true value (as determined by the court). If this ratio falls below or above the common level range,
then the court should apply the average ratio to its value determination. See Campbell Soup Co.
v. City of Camden, 16 N.J. Tax 219, 227, n.3 (Tax 1996) (court “divides the assessment amount
by the true value amount as determined by the court at trial” and if the “resulting percentage . . .
falls outside the 85%-115% ‘corridor,’” it applies the average ratio to the true value, “which can
result[] in either an increase or decrease in the assessment.”).
2 The parties agreed that tax year 2014 was not implicated by the average ratio issue, with the
Township noting that 2014 was “not a reassessment year.”
3 Approved for publication in the New Jersey Tax Court Reports.

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The statute “requires the Director . . . to determine the average ratio and the common level
range for each municipality.” Ennis v. Twp. of Alexandria, 13 N.J. Tax 423, 428 (Tax 1993).
“The ‘average ratio’ of assessed to true value of real property for a taxing district” is the “ratio
promulgated by the Director” under N.J.S.A. 54:1-35.1 “as of October 1 of the year preceding the
tax year, as revised by the tax court.” N.J.S.A. 54:1-35a(a).4 See also N.J.A.C. 18:12A-
1.14(b)(1)(v) (“The Director’s Ratio is the average ratio of assessed to true value for each taxing
district as determined by the Director . . . in the Table of Equalized Valuations promulgated
annually pursuant to N.J.S.A. 54:1-35.1.”). “The ‘common level range’ . . . is that range which is
plus or minus 15% of the average ratio for that district.” N.J.S.A. 54:1-35a(b). See also Campbell
Soup Co., 16 N.J. Tax at 227 n.3 (“Upper and lower limits are established by taking the average
ratio (a promulgated ratio that is equal to the average of the assessed value to true value of certain
properties recently sold in the municipality) times 115% and 85%.”).
The average ratio does not apply to an appeal of an assessment for a tax year “in which
the taxing district shall have completed and put into operation a district-wide revaluation program
approved by the Director . . . [under] . . . []N.J.S.A. 54:1-35.35 et seq.[], or a reassessment program
approved by the county board of taxation.” N.J.S.A. 54:51A-6(d). See also Ennis, 13 N.J. Tax at
428 (“The Legislature provided that the common level ratio is available as a remedy for taxpayers
unless a complete revaluation or reassessment program is adopted by the municipality for the tax
year . . . . Adoption of either program bars taxpayer relief under this statute.”).
The Director’s published Chapter 123 ratios for the Township was 89.95% (2015); 89.78%
(2016) and 93.42% (2017). However, for each tax year 2015-2017, the Director included the
4 N.J.S.A. 54:1-35.1 requires the Director to “promulgate a table of equalized valuations” (for
calculating and apportioning school aid distribution). This table should contain, among others, the
average ratio for each taxing district. N.J.S.A. 54:1-35.2.

5
Township in his list titled “Approved Revaluations and Reassessments,” tabulating municipalities
(by county and by “type of activity”) which were “verified for compliance with N.J.A.C. 18:12A-
1.14(g),”5 therefore, “will be recognized in” his Table of Equalized Valuations for a particular tax
year “for implementation of a Revaluation/Reassessment.”6 On each list for tax years 2015-2017,
the Director included the Township as having performed a “reassessment.”7
THE ADP LAW
The ADP law was enacted in 2013. See N.J.S.A. 54:1-101 to -106. The ADP law does
not contain the phrase “annual reassessment” or “average ratio” nor reference Chapter 123 or
N.J.S.A. 54:51A-6. Monmouth County, where the Subject is located, participates in the ADP.
In Tartivita v. Borough of Union Beach, 31 N.J. Tax 335, 342-43 (Tax 2019) (appeal
pending), this court analyzed certain provisions of the ADP law after testimony of the assessor as
to his responsibilities and functions when he performed, what he stated to be an annual
reassessment. The court then held that for purposes of application of the Freeze Act, N.J.S.A.
54:51A-8, an annual assessment conducted by a township located in Monmouth County is not a
complete or district-wide reassessment, even if labeled as an annual reassessment purported to be
conducted solely pursuant to the ADP law. Id. at 343.8
5 N.J.A.C. 18:12A-1.14(g) provides that “[n]o revaluation or district-wide reassessment will be
credited by the Director for recognition on the Director’s annual Table of Equalized Valuation
where less than 50 percent of the line items have changed. Ordinarily revaluations or district-wide
reassessments involve adjustments to 100 percent of the line items.”
6 Available at https://www.nj.gov/treasury/taxation/lpt/revaluation.shtml.
7 The other type of activity in these years’ lists was revaluation. For tax year 2019, the type of
activity included “annual reassessment,” and for tax year 2020, the list also included “district-wide
reassessment.”
8 Under N.J.S.A. 54:51A-8, a final judgment of the Tax Court is “conclusive and binding” for two
years after the assessment year “covered by the final judgment” but this finality “shall terminate
with the tax year immediately preceding the year in which a program for a complete revaluation
or complete reassessment of all real property within the district has been put into effect.”

6
A similar conclusion followed in Pella v. City of Paterson, 31 N.J. Tax 74, 479 (Tax 2020)
(“the court . . . concludes that implementation of an Annual Reassessment Program does not
preclude application of the Freeze Act . . . as same does not constitute a complete revaluation or
complete reassessment of all real property in the taxing district, [and] . . . invocation of an improper
Annual Reassessment Program will not serve to bar application of the Freeze Act.”). Note that the
taxing district in Pella was not in an ADP-participant county.
Neither Tartivita nor Pella had directly before it the issue of whether the average ratio
applies, therefore, did not decide the same. Note that in Tartivita, the court alluded to the average
ratio but in the context of deciding whether the annual assessment therein was a complete or
district-wide reassessment for purposes of the Freeze Act. See 31 N.J. Tax at 357 (“If the annual
assessments are deemed a complete reassessment, it is unclear why [the Director’s] published
average ratio for the Borough [of Union Beach] is not 100% each tax year.”). In Pella, the court
rejected the Director’s argument that Paterson received “credit for a district-wide reassessment”
on the Certified Table of Equalized Valuations under N.J.A.C. 18:12A-1.14(g) because it had
changed more that 50% of its assessment line items for the tax years at issue, as the cited regulation
only applied to a “‘revaluation or district-wide reassessment,’” and not to an “Annual
Reassessment Program.” 31 N.J. Tax at 500-01.
ARGUMENTS
The thrust of the Township’s argument is that the average ratio does not apply because the
Township’s annual local property tax assessments are “annual reassessments” pursuant to the ADP
law and N.J.A.C. 18:12A-1.14(i), the only regulation addressing annual reassessments (hereinafter
ARR which stands for Annual Reassessment Regulation). It also argues that application of the
average ratio is excepted under N.J.S.A. 54:51A-6(d). For purposes of these motions, the

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Township maintains that the Director and the County Board have an essential interest in whether
a reassessment conducted under the ARR constitutes a “reassessment program approved by the
county board of taxation” under N.J.S.A. 54:51A-6(d) because (1) both entities approved the
Township’s annual reassessments pursuant to the ARR so they should have to defend their
approval; (2) at issue is the validity and construction of the ARR, which being promulgated by
Taxation, should also be defended by Taxation. Without these two parties, the Township argues,
it would have to defend their actions, when all it is doing is acting on their approvals; and (3) if
the average ratio were to apply to the Subject, it would be at the expense of every non-appealing
taxpayer in the Township because their properties are assessed at what the Township considers to
be 100% of market value, thus, they are paying higher taxes than would Plaintiff.
The governmental entities claim that “simply because” they have “regulatory
administrative or quasi-judicial oversight or authority at some point regarding the subject matter
of a dispute in litigation,” it does not mean they should participate (citing Borough of Hasbrouck
Heights v. Div. of Tax Appeals, 48 N.J. Super. 328, 333 (App. Div. 1958)). They acknowledge
that joinder is appropriate if “the interest of the public in the litigation reaches out decidedly
beyond that of the immediate parties, and in connection with which the agency has a general public
duty to perform,” or “where the public is concerned with the maintenance of uniformity in the
administration” of law, or where there is a decided public interest in the matter which may be
overlooked because the position taken by the agency is vigorously opposed by all other parties.”
Id. at 333-34. However, they claim, such are not the circumstances here. Thus, and absent any
constitutional or other challenge to the validity of the statute or regulations by the Township, they
should not be joined. They also contend that:

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(1) Application or otherwise of the average ratio has always been a matter of
routine by this court without seeking participation of either government entity,
as seen in several unpublished opinions. It should be no different here.
(2) Interpretation of N.J.S.A. 54:51A-6(d) is a legal matter for which their
involvement is not required (but noting that this statute does not require a
“complete” reassessment).
(3) The ARR does not apply to assessments conducted in ADP-participant counties
such as Monmouth County, because the regulation never cites to the ADP law
as the authority for its promulgation. In any event, interpretation of the ARR is
a matter of law, therefore, the Director’s joinder is unnecessary. However, if
this court were to declare the regulation invalid, then the governmental entities
must be requested to join the proceedings.
(4) Determination of whether assessments in Monmouth County qualify as an
annual reassessment involve facts which are solely within the knowledge of the
assessor imposing such assessments, therefore, it is the assessor’s participation
that is appropriate and necessary.
However, they note that “the processes and procedures” of district-wide reassessments
under N.J.A.C. 18:12A-1.14(c) are “essentially the same” as those for annual reassessments under
the ARR, namely: the assessor must propose and submit a plan; either plan should be approved by
both the County Board and the Director; the assessor must provide periodic status reports to both
these entities; both entities monitor the entire process under either plan (citing N.J.A.C. 18:12A-
1.14(d), (e); and Forms AFR and AFR-A9). The claim that either type of reassessment results in
valuing properties at their market value under N.J.S.A. 54:4-23, “including a change in more than
50% of the taxing district’s line items,” and that if more than 50% of the line items are changed,
as verified by both the County Board and the Director, then “the revaluation, reassessment or
annual assessment will be given credit on the Director’s” Table of Equalized Valuations (citing
N.J.A.C. 18:12A-1.14(g)).
9 Both forms are issued by Taxation. An assessor must submit either form for approval of the
governmental entities, prior to performing any reassessment. Form AFR (Application for Full
Reassessment) is to be used for a district-wide or complete reassessment. N.J.A.C. 18:12A-
1.14(c). Form AFR-A (Application for Annual Reassessment) is to be used for an annual
reassessment. N.J.A.C. 18:12A-1.14(i).

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ANALYSIS
Rule 4:28-1 allows for the joinder of parties to an action to achieve “just adjudication.”
Subsection (a) of the rule addresses joinder where “feasible” of a party “who is subject to service
of process.” The subsection states as follows:
Persons to be Joined if Feasible. A person who is subject to service
of process shall be joined as a party to the action if (1) in the person’s
absence complete relief cannot be accorded among those already
parties, or (2) the person claims an interest in the subject of the
action and is so situated that the disposition of the action in the
person’s absence may either (i) as a practical matter impair or
impede the person’s ability to protect that interest or (ii) leave any
of the persons already parties subject to a substantial risk of
incurring double, multiple, or other inconsistent obligations by
reason of the claimed interest. If the person has not been so joined,
the court shall order that the person be made a party. If the person
should join as a plaintiff but refuses to do so, the person may be
made a defendant.
[R. 4:28-1(a).]
The court rule also addresses situations of joinder where the person sought to be joined
“cannot be served with process.” R. 4:28-1(b). This subsection states as follows:
Disposition by Court if Joinder Not Feasible. If a person should be
joined pursuant to R. 4:28-1(a) but cannot be served with process,
the court shall determine whether it is appropriate for the action to
proceed among the parties before it, or should be dismissed, the
absent person being thus regarded as indispensable.
[R. 4:28-1(b).]
The subsection then lists the factors a court should consider before dismissing a complaint for non-
joinder. Ibid. Subsection (b) does not apply here since both governmental entities were served
with, and opposed, the Township’s motion. Therefore, the court need not analyze whether these
entities are “indispensable” parties, that term only being used under subsection (b) of the rule.

10
The court agrees with the Township that the Director and the County Board can and should
be joined as parties under R. 4:28-1(a). These governmental entities concede that they approve
the assessor’s initial application to perform an annual reassessment (Form AFR-A), allegedly
monitor the assessor’s progress, and the Director allegedly verifies the finalized assessment for
“credit” on his Table of Equalized Valuations. Indeed, the ARR sets out the Director’s and County
Board’s roles in terms of review and approval of a Form AFR-A. See N.J.A.C 18:12A-1.14(i)(2)-
(4). Having provided such approval, allegedly monitored the assessor’s actions,10 and having
apparently verified the assessment as qualifying on the Director’s list for implementation of a
Revaluation/Reassessment, it is these entities who should explain and defend their process and
explain why there is no average ratio for these assessments (i.e., the ratio is at 100%). This is not
the burden of the Township or its assessor.
After claiming to be the gatekeepers of the assessor’s actions, the entities nonetheless ask
the Township to fathom their process, methodology, checks, counter-checks in connection with an
assessor’s proposed and finalized annual reassessment, where that reassessment is the basis for the
alleged non-application of the Director’s average ratio. How is the Township to know any facts
in this regard? How is the Township to know how and when the alleged checks are done by either
or both governmental entities in determining that the reassessment qualifies to be tabulated under
the annual “Approved Revaluations and Reassessments” list? This is especially where the
Director’s regulation, N.J.A.C. 18:12A-1.14(g), authorizing the “credit” does not reference nor
mention, an annual reassessment.11 That the consequence of more than 50% line item changes is
10 Note that neither N.J.A.C. 18:12A-1.14(d) nor 12A-1.14(e), the regulations cited by the
governmental entities as the authority for monitoring the assessor’s actions, address an annual
reassessment.
11 See supra n.5.

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the same for a district-wide or complete reassessment and an annual reassessment as asserted by
the governmental entities, is not controlling. It is not the end result that matters, but the verification
process leading to that end result which is being sought here. Only the County Board and the
Director can provide such information.12
In this connection, the governmental entities’ argument that only an assessor is the
appropriate joinable party to decide whether an assessment qualifies as a reassessment to which
the average ratio does not apply, is also questionable. The entities maintain that the ARR does not
apply to Monmouth County since it does not cite the ADP law as its source authority.13 If so, how
is an assessor in that county guided as to what is or should be a reassessment for purposes of the
average ratio issue? Presumably, it is by the County Board’s written directives or regulations
pursuant to the ADP law. This would then require the County Board’s joinder. Note that the ADP
12 See e.g. 49 N.J.R. 271(a) (Feb. 2017) where Taxation disagreed with the suggestion from the
New Jersey Association of County Tax Boards (NJACTB) that a new section be promulgated
providing that “a minimum of (10% or 20%) of the line items must be changed in value in order
for the program to be credited by the Director for recognition on the Director’s Annual Table of
Equalized Valuations and to allow for the use of the page 8 formula in calculating the annual
equalization ratio.” The reason for the disagreement was simply that Taxation “does not agree that
it is necessary to add a new section at this time.” Ibid.
13 See e.g. 48 N.J.R. 1605(a) (Aug. 2016) (proposing the ARR “because many municipalities are
performing annual reassessments and are moving away from a four-year period of reassessments
with 25 percent annual inspection report to a five-year period of inspection with 20 percent annual
inspection requirement” which would lower “costs through extending the inspection period” and
the ARR was being “proposed for the purposes of equity and reducing costs because of the changes
affecting only certain counties under N.J.S.A. 54:1-101 et seq.”). The statutory authority for the
amendments to N.J.A.C. 18:12A was cited as N.J.S.A. 54:1-35, 54:1-35.35, 54:3-14, 54:4-26, and
54:4-35. See 48 N.J.R. 1605(a). See also 49 N.J.R. 271(a) (finalizing the proposed amendments
to N.J.A.C. 18:12A and citing to the same statutory authority).
Note that comments to the proposed regulations were authored by Robert M. Vance, CTA, Tax
Administrator for Somerset County, on behalf of the NJACTB Task Force members. Ibid.
Comment 2 suggested including the word “annually” in the ARR so as “to convey that it is for
annual reassessments” and replacing the phrase “proposed district-wide reassessment” with
“proposed annual reassessment program” in that regulation since it did “not pertain to district-wide
reassessment programs.” Ibid. The Director agreed to such replacement “because the intent of the
amendments was to provide for regulations governing annual reassessments.” Ibid.

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law does not contain the phrase “annual reassessment,” does not reference Chapter 123 or N.J.S.A.
54:51A-6, and does not declare that assessments performed by a taxing district within an ADP-
participant county are excepted from N.J.S.A. 54:51A-6 or excluded under N.J.S.A. 54:51A-6(d).
Rather, it leaves implementation of the ADP entirely to the participant county with input from the
Director who can also “take any action” that was “necessary and consistent with the intent of” the
ADP law including “waiv[ing] any provisions of statutory law and regulations that” were
“inconsistent with the intent or application of the” ADP law. N.J.S.A. 54:1-104(g). If there are
no regulatory or other formal guidance by the County Board on reassessments, how are the
reassessments concluded to be so for purposes of the average ratio issue? These questions render
both governmental entities as appropriate joinable parties here.
Additionally, if as argued here, the ARR does not apply to Monmouth County, then what
is the source authority for the regulation? N.J.S.A. 54:51A-6? If there is no identifiable source,
would the ARR be an exercise of exceeded regulatory authority? The court should not be asked
to first decide this issue and then invite the participation of the governmental entities.
The court agrees with the Township that the issue is of first impression and involves
significant public interest since it can impact all the assessments in the Township, and it implicates
the Uniformity Clause of our State’s Constitution. The unreported cases relied upon by the Director
and the County Board as examples of “routine” non-application of the average ratio are not
precedential nor controlling. 14 Further, they preceded the ADP law and the ARR; did not involve
an ADP-participant county; and did not contain any analysis as to why there is no average ratio
14 To the extent the governmental entities contend that application of the average ratio is a simple
and routine exercise, they are over-simplifying the issue. If it were so, the court would not have
even left it open. Indeed, when the court applied the average ratio, it prompted an immediate
motion for reconsideration on grounds such application was improper. See supra n.1.

13
for the annual assessments (i.e., why the assessments should be deemed to be at 100% of value).
Therefore, under Hasbrouck Heights, these cases are those where “the interest of the public in the
litigation reaches out decidedly beyond that of the immediate parties” and “the public is concerned
with the maintenance of uniformity in the administration of the administrative law.” 48 N.J. Super.
at 333-34.
CONCLUSION
For the aforementioned reasons, the court grants the Township’s motions to have the
Director and the County Board be joined as parties to the litigation for purposes of the outstanding
issue in these matters: application of the average ratio.