Target Corp. v. Township of Toms River, No. 007812-2009; Tax Court; opinion by DeAlmeida, P.J.T.C.; decided November 29, 2012; approved for publication January 14, 2013. DDS No. 35-5-8339 [12 pp.]

This constitutes the court’s opinion with respect to three motions concerning the same parcel of real property in Toms River Township. Plaintiff Target Corp., one of six tenants at the subject property, filed complaints challenging the assessments on the property for tax years 2009 and 2010. Plaintiff SDD Inc., the owner of the subject property, also filed complaints challenging the assessments on the property for tax years 2009 and 2010.

Target, which is responsible for the payment of taxes associated with the portion of the property that it leases, moved to consolidate the four appeals. SDD opposed the motion and cross-moved to intervene in the Target appeals for the purpose of seeking the dismissal of those appeals. SDD argues that as owner of the property it has the right to control the legal challenge to the assessments. Finally, Lowe’s Home Centers Inc., another tenant, moves to intervene in all four appeals, arguing that its obligation to pay taxes on the portion of the subject property it leases gives it a right to be a party in the appeals.

While the motions were pending, SDD submitted to the court a fully executed stipulation of settlement between SDD and the municipality reducing the assessment on the subject property for both tax years.

Held: SDD, the property owner, has the controlling interest in challenging the assessments on the subject property for tax years 2009 and 2010. SDD’s motion to intervene in the Target appeals is granted. SDD’s motion to dismiss those appeals is granted.

The court first concludes that SDD should be permitted to intervene in the Target appeals. SDD owns the property that is the subject of those appeals. The assessments at issue concern the entire SDD property, not just the portion of the property for which Target is liable to pay taxes. SDD is presumably in possession of books and records concerning the income and expenses associated with all six tenants at the property, information that is crucial to a determination of the true market value of the commercial shopping center. Moreover, SDD filed its own appeals of the assessments on the subject property for tax years 2009 and 2010. SDD has adequately represented the interests of its tenants in those appeals by negotiating significant reductions in the assessments on the subject property for tax years 2009 and 2010.

Having granted SDD’s motion to intervene in the Target appeals, the court must determine whether SDD has an interest in controlling the appeals sufficient to warrant dismissal of the Target matters in favor of the SDD appeals, which have been settled with the municipality.

The court finds that the relevant factors militate toward the conclusion that SDD should have control over the prosecution and resolution of the tax appeals.

The Target lease, while authorizing the filing of a tax appeal by the tenant, expressly contemplates the filing of a tax appeal by the property owner. The tenant’s right to file an appeal is not, therefore, exclusive. Target’s interest in a refund from a reduction in the assessments is protected by the lease, which provides that Target’s proportionate share of any refund from SDD’s appeals will be returned to Target.

Target is one of six tenants at the subject property. Although Target occupies 38 percent of the improved portion of the property, its interest is significantly less than the interest of SDD, which owns the entire parcel and is, ultimately, responsible for the local property taxes assessed on the property. The interests of the other tenants, with whom Target presumably has no relationship, but who are in contractual relationships with SDD, will be affected by the outcome of the appeals.

SDD can adequately represent the interests of Target. SDD is represented by experienced tax counsel who has demonstrated diligent pursuit of its appeals. SDD’s counsel has executed a stipulation of settlement that provides for a significant reduction in the assessments on the property for 2009 and 2010.

SDD demonstrated its ability to mount an effective appeal by securing a significant reduction in the assessments for the relevant tax years.

Although is not clear whether SDD owns other property in Toms River and whether it may be pursuing other land use and development issues with the municipality, whatever interests SDD had are presumably reflected in the settlement it reached with the township.

The court concludes that SDD’s interest in the assessments on the subject property for 2009 and 2010 predominates over that of Target. SDD will be permitted to control and resolve the challenges to the 2009 and 2010 assessments on the subject property. The court will enter judgments in the two SDD matters, reducing the assessments for tax years 2009 and 2010 in accordance with the stipulation of settlement between SDD and the township. The two Target matters will be dismissed. Target’s motion to consolidate the four appeals is dismissed as moot. Lowe’s motion to intervene is denied.

For plaintiffs: Target Corp. and proposed intervenor Lowe’s Home Centers Inc. — Maria H. Yoo (Stavitsky & Associates); SDD Inc. — Paul Tannenbaum (Zipp & Tannenbaum). For defendant Township of Toms River — Kenneth B. Fitzsimmons, Township Attorney.