Tyler DePina and Dina DePina v. Dir., Div. of Taxation

TAX COURT OF NEW JERSEY
JOSHUA D. NOVIN Dr. Martin Luther King, Jr. Justice Building
Judge 495 Dr. Martin Luther King, Jr. Blvd., 4th Floor
Newark, New Jersey 07102
Tel: (609) 815-2922, Ext. 54680

NOT FOR PUBLICATION WITHOUT THE APPROVAL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

September 13, 2024

Mr. and Mrs. Tyler DePina
1 Shore Lane, Unit 1112
Jersey City, New Jerey 07310

Deputy Attorney General Timothy M. Kawira
Office of the New Jersey Attorney General
R.J. Hughes Justice Complex
25 Market Street
P.O. Box 106
Trenton, New Jersey 08625

Re: Tyler DePina and Dina DePina v. Dir., Div. of Taxation
Docket No. 010254-2023

Dear Mr. and Mrs. DePina and Deputy Attorney General Kawira:

This shall constitute the court’s opinion on the Director, Division of Taxation’s (the

“Director”), motion for summary judgment. At issue is the timeliness of Tyler and Dina DePina’s

(“plaintiff”) refund claim of the New Jersey Mansion Tax, under N.J.S.A. 46:15-7.2c.

For the reasons more particularly set forth below, the court grants the Director’s motion

for summary judgment and dismisses plaintiff’s complaint with prejudice.

I. Procedural History and Factual Findings

In accordance with R. 1:7-4(a), the court makes the following factual findings based on the

pleadings and submissions of the parties.

On or about December 7, 2018, plaintiff’s purchased the single-family residential

condominium known as Unit 1112 at 1 Shore Lane, Jersey City, Hudson County New Jersey (the

“subject property”), from Hui-Ming Chou a/k/a Hui Ming Chou and Nien-Sheng Chou (the
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“seller”), for consideration of One Million Seventy Thousand ($1,070,000.00) Dollars. 1 The

subject property comprises a residential condominium unit in The Shore Phase II Condominium,

also known as the Shore North (the “Condominium”), a luxury residential condominium complex

in Jersey City, New Jersey.

On January 4, 2019, the subject property’s Unit Deed was recorded in Book 9370, Page

408 of the Hudson County Register of Deeds’ office (the “Unit Deed”). Attached to the Unit Deed

is an Affidavit of Consideration for Use by Buyer, RTF-1EE, signed by plaintiff, certifying that

the subject property was “Class 2 – Residential,” and that the consideration paid to seller was

$1,070,000.00. 2 Accordingly, a Mansion Tax (as such term is defined herein) of one percent (1%)

of the subject property’s purchase price, or $10,700.00, was collected from plaintiff and paid to

the Hudson County Register of Deeds Office in connection with the recording of the Unit Deed.

On or about August 28, 2020, a complaint was filed in the Superior Court of New Jersey,

Hudson County, Law Division, on behalf of the Condominium unit owners against its developer,

the developer’s representatives, and/or agents (the “Complaint”). The Complaint alleged that the

developer distributed “false and misleading advertising and related sales and marketing materials

and [made] untrue statements as to the size and square footage of each of . . . [the] condominium

units.” The Complaint asserted that “the square footage advertised and stated . . . was not

consistent with the description of the units in the Public Offering Statements and Master Deeds”

(the “Litigation”). The Complaint sought treble damages under the New Jersey Consumer Fraud

1
The Unit Deed (as defined herein) reflects that plaintiff’s purchased an 80% interest in the subject
property, and Mohamed Murad Mekawi purchased a 20% interest in the subject property.
2
“[I]f a transfer includes property otherwise subject to subsection a. of [N.J.S.A. 46:15-7] . . . ,
then an affidavit of consideration shall be filed by one or more of the grantee parties named in the
deed or by the grantee’s legal representative declaring the consideration and shall be annexed to
and recorded with the deed as a prerequisite for the recording of the deed.” N.J.S.A. 46:15-7.2d(2).
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Act, N.J.S.A. 56:8-1 et seq., and “[c]ompensatory damages measured by the loss in value of each

unit as a result of the diminished size of the units.”

In or about September 2022, plaintiff received approximately One Hundred Fifty-Six

Thousand Nine Hundred and Forty-Two and 35/100 ($156,942.35) Dollars, in settlement of all

claims related to the Litigation.

On February 24, 2023, plaintiff submitted a Claim for Refund – Realty Transfer Fee, RTF-

3. Plaintiff’s asserted that because of the Litigation settlement, the consideration paid under the

Unit Deed for the subject property should have been reflected as Nine Hundred Thirteen Thousand

and Fifty-Seven and 55/100 ($913,057.55) Dollars. 3

On September 12, 2023, the Director issued a determination letter denying plaintiff’s claim

for a refund of the Mansion Tax (“Timeliness Determination letter”). Referencing Chapter 33,

P.L. 2006 (codified as N.J.S.A. 46:15-7.2), the Timeliness Determination letter stated that “a

taxpayer may file a claim under oath for refund at any time within 90 days after the payment of

any original fee. Your refund claim is dated February 23, 2023. Therefore, the time allowed by

statute to file for this refund has expired and the claim has been denied for late filing.” The

Timeliness Determination letter further advised plaintiff that they “have the right to appeal this

decision to the Tax Court of New Jersey within 90 days after the date of the action sought to be

reviewed.”

On November 28, 2023, plaintiff filed a complaint in the Tax Court challenging the

Director’s Timeliness Determination letter. Plaintiff’s complaint asserts that “[w]e had no way of

3
Plaintiff’s computed the $913,057.55 by taking the subject property’s $1,070,000 purchase price
and deducting the $156,942.35 settlement proceeds from the litigation. However, plaintiff’s
computation was apparently off by $0.10.
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asking for a [M]ansion [T]ax refund within the allowed time period . . . we were subject to fraud

and had no way of knowing that our unit was not advertised with the correct square footage . . .

[until] the lawsuit against the developer was settled.”

On August 13, 2024, the Director filed the instant motion for summary judgment. The

Director emphasizes that the material facts are undisputed: (i) on January 4, 2019, the subject

property’s Unit Deed was recorded and the Mansion Tax paid; and (ii) plaintiff’s Mansion Tax

refund claim was submitted on February 23, 2023. The Director highlights that N.J.S.A. 46:15-

7.2c, “established a 90-day period [after payment of any original fee] during which a taxpayer can

apply for a refund of realty transfer fees paid.” The Director argues that plaintiff’s Mansion Tax

refund claim was filed more than three (3) years and ten (10) months after the applicable limitations

period had expired. Thus, “plaintiff did not timely file a claim for refund” with the Director, and

summary judgment should be granted dismissing plaintiff’s complaint with prejudice.

In response, plaintiff asserts that despite the clear and unambiguous language of the statute,

plaintiff's Mansion Tax refund claim, while admittedly filed more than ninety (90) days after

recording the Unit Deed and payment of the fee, was unable to be timely filed because the

Litigation had yet to be resolved. Thus, plaintiff asks the court to extend the limitations period for

the filing of their Mansion Tax refund claim.

II. Conclusions of Law

A. Summary judgment standard

Summary judgment “‘serve[s] two competing jurisprudential philosophies’: first, ‘the

desire to afford every litigant who has a bona fide cause of action or defense the opportunity to

fully expose his case,’ and second, to guard ‘against groundless claims and frivolous defenses,’

thus saving the resources of the parties and the court.” Globe Motor Co. v. Igdalev, 225 N.J. 469,
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479 (2016) (quoting Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 541-42 (1995) (emphasis

in original)).

Rule 4:46-2 outlines the circumstances under which summary judgment should be granted:

if the pleadings, depositions, answers to interrogatories and
admissions on file together with the affidavits, if any, show that
there is no genuine issue as to any material fact challenged and that
the moving party is entitled to a judgment or order as a matter of
law.

[R. 4:46-2.]

In Brill, our Supreme Court adopted the federal approach to resolving motions for summary

judgment, in which the “essence of the inquiry [is] whether the evidence presents a sufficient

disagreement to require submission to a jury or whether it is so one-sided that one party must

prevail as a matter of law.” 142 N.J. at 536 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 251-52 (1986)). In conducting this inquiry, the trial court must engage in a “kind of weighing

that involves a type of evaluation, analysis and sifting of evidential materials.” Ibid. The standard

established by our Supreme Court in Brill is as follows:

[W]hen deciding a motion for summary judgment under R. 4:46-2,
the determination of whether there exists a genuine issue with
respect to a material fact challenged requires the motion judge to
consider whether the competent evidential material presented, when
viewed in the light most favorable to the non-moving party in
consideration of the most applicable evidentiary standard, are
sufficient to permit a rational fact finder to resolve the alleged
disputed issue in favor of the non-moving party.

[Id. at 536.]

In considering all the material evidence before it with which to determine if there is a

genuine issue of material fact, the court must view most favorably those items presented to it by

the party opposing the motion and all doubts are to be resolved against the movant. Ruvolo v.
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American Casualty Co., 39 N.J. 490, 491 (1963). A court charged with “deciding a summary

judgment motion does not draw inferences from the factual record as does the factfinder in a trial,

. . . [i]nstead, the motion court draws all legitimate inferences from the facts in favor of the non-

moving party.” Globe Motor Co., 225 N.J. at 480 (internal citations omitted). Thus, the moving

party bears the burden “to exclude any reasonable doubt as to the existence of any genuine issue

of material fact” with respect to the claims being asserted. United Advertising Corp. v. Borough

of Metuchen, 35 N.J. 193, 196 (1961).

“By its plain language, R. 4:46-2 dictates that a court should deny a summary judgment

motion only where a party opposing the motion has come forward with evidence that creates a

‘genuine issue as to any material fact challenged.’” Brill, 142 N.J. at 529. However, when the

party opposing the motion merely presents “facts which are immaterial or of an insubstantial

nature, a mere scintilla, fanciful, frivolous, gauzy or merely suspicious,” then an otherwise

meritorious application for summary judgment should not be defeated. Judson v. Peoples Bank

and Trust Co., 17 N.J. 67, 75 (1954). Hence, “when the evidence is so one-sided that one party

must prevail as a matter of law . . . the trial court should not hesitate to grant summary judgment.”

Brill, 142 N.J. at 540 (quoting Liberty Lobby, Inc., 477 U.S. at 252).

Applying the foregoing standards to the Director’s motion for summary judgment and

having reviewed the certifications and exhibits submitted in support of, and in opposition thereto,

the court finds that no genuine issues of material fact exist. The instant matter involves application

of the law, accordingly, resolution by summary judgment is appropriate.

B. New Jersey Mansion Tax

In New Jersey, a fee is imposed on all non-exempt transfers of real property as a

prerequisite to recording the deed with the county recording officer. See N.J.S.A. 46:15-1 to -18.
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The fee is measured by the total consideration paid for the real property being conveyed. In

general, the fee is imposed upon the grantor. N.J.S.A. 46:15-7a.

However, “in addition to all other fees imposed under . . . N.J.S.A. 46:15-5,” a fee is

imposed on the grantee for the transfer of certain real property when the consideration exceeds

$1,000,000, commonly referred to as the “Mansion Tax.” N.J.S.A. 46:15-7.2a. Specifically,

N.J.S.A. 46:15-7.2a provides, in part, that:

there is imposed a fee upon the grantee of a deed for the transfer of
real property:

(1) that is classified pursuant to the requirements of N.J.A.C.18:12-
2.2 as Class 2 “residential”;

...

that is transferred for consideration in excess of $1,000,000 recited
in the deed, which fee shall be an amount equal to 1 percent of the
entire amount of such consideration, which fee shall be collected by
the county recording officer at the time the deed is offered for
recording and remitted to the State Treasurer. . . .

[N.J.S.A. 46:15-7.2a.]

Although the obligation imposed under N.J.S.A. 46:15-7.2a is referred to as a “fee,” it is

expressly subject to the provisions of the State Tax Uniform Procedure Law, N.J.S.A. 54:48-1 to

-7, and our courts have “considered [it] to be a State tax.” Terrell v. Dir., Div. of Taxation, 22 N.J.

Tax 297, 300 (Tax 2005). The statute requires the county recording officer to remit “[t]he State

portion of the basic fee, the additional fee [imposed under N.J.S.A. 46:15-7.2a], and the general[-

]purpose fee . . . to the State Treasurer for use of the State . . . on the tenth day of each month

following the month of collection.” N.J.S.A. 46:15-8b(2).

Notably, the Mansion Tax statute provides that the four-year limitations period

traditionally afforded for filing a refund claim of a tax paid, under N.J.S.A. 54:49-14a, is not
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applicable to the Mansion Tax. Rather, to seek a refund of Mansion Taxes paid, the taxpayer must

“file a claim under oath for refund at any time within 90 days after the payment of any original

fee. . . .” N.J.S.A. 46:15-7.2c.

C. Jurisdiction

The Tax Court is a “court of limited jurisdiction.” McMahon v. City of Newark, 195 N.J.

526, 542-543 (2008). The court’s “jurisdiction is constrained by the language of its enabling

statutes.” Prime Accounting Dept. v. Twp. of Carney’s Point, 212 N.J. 493, 505 (2013). The

statutory jurisdiction conferred on this court is expressed, in part, as the authority “to review

actions or regulations with respect to a tax matter of . . . [a] county Board. . . .” N.J.S.A. 2B:13-2.

Moreover, R. 8:2(a) provides that: "[t]he Tax Court shall have initial review jurisdiction of all final

decisions including any act, action, proceeding, ruling, decision, order or judgment . . . [of] the

Director of the Division of Taxation . . . or any country or municipal official with respect to a tax

matter (including the realty transfer fee).” R. 8:2(a). Under, R. 8:4-2(b), a complaint “seeking to

review actions of the Director of the Division of Taxation . . . shall be filed within 90 days after

the date of the action to be reviewed.” R. 8:4-2(b).

Here, on September 12, 2023, the Director issued its Timeliness Determination letter. On

November 28, 2023, approximately seventy-seven (77) days later, plaintiff filed their complaint.

Thus, it is undisputed that plaintiff’s timely challenged the Director's Timeliness Determination

letter thereby vesting the Tax Court with jurisdiction in this matter. Rather, the narrow issue facing

the court is whether plaintiff’s underlying Mansion Tax refund claim was timely.

It is well-settled that, “the Director’s expertise in the highly specialized and technical area

of taxation . . . is entitled to great respect by the courts. Moreover, the agency’s interpretation of

the operative law is entitled to prevail, so long as it is not plainly unreasonable.” Quest
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Diagnostics, Inc. v. Dir., Div. of Taxation, 387 N.J. Super. 104 (App. Div. 2006), cert. denied, 188

N.J. 577 (2006) (citing Metromedia, Inc. v. Dir., Div. of Taxation, 97 N.J. 313, 327 (1984).

However, the courts “deference” for the Director’s decisions is not absolute, “as the courts remain

the ‘final authorities’ on the issues of statutory construction and are not obliged to ‘stamp’ their

approval of the administrative interpretation.’” Koch v. Dir., Div. of Taxation, 157 N.J. 1, 15

(1999) (citing New Jersey Guild of Hearing Aid Dispensers v. Long, 75 N.J. 544, 575 (1978)).

To claim a refund a taxpayer must adhere to the statutory requirements and accepted

governmental regulations. “Refund moneys are available to be claimed by a taxpayer . . . according

to well-defined procedures. An otherwise eligible taxpayer or vendor who does not comply with

the established procedures waives his entitlement to any refund.” Commercial Refrigeration &

Fixture Co., Inc. v. Dir., Div. of Taxation, 2 N.J. Tax 415, 419 (Tax 1981). Similarly, a taxpayer

who elects not to observe the established administrative guidelines and protocols will be barred

from its claim for a refund. “Limitation periods for claims for refunds are common administrative

provisions found in tax legislation and justified by the need for predictability of revenues by public

agencies.” William McCullough Transp. Co. v. Div. of Motor Vehicles, Bureau of Motor Carriers,

113 N.J. Super. 353, 360 (App. Div. 1971) (quoting Wm. Eisenberg & Sons, Inc. v. Martin, 120

N.J.L. 348 (Sup. Ct. 1938)). “Thus, filing a refund claim just one day late, even when the claim

was mailed to the Director several days prior to the filing deadline, justifies its rejection as

untimely.” Estate of Ehringer v. Dir., Div. of Taxation, 24 N.J. Tax 599, 611 (Tax 2009) (citing

Lenox, Inc. v. Dir., Div. of Taxation, 19 N.J. Tax 437 (Tax 2001)).

Plaintiff contends that, while the refund request was admittedly filed more than ninety (90)

days after the Unit Deed was recorded and the Mansion Tax paid, the refund request was unable

to be timely filed because the Litigation had not been resolved.
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The Mansion Tax’s statutory scheme makes no distinction for the filing a refund claim

arising from an alleged fraud or misrepresentation based on the square footage of a property, or

for any other reasons. The statute plainly and explicitly provides a singular remedy that, "a

taxpayer may file a claim under oath for refund at any time within 90 days after the payment of

any original fee.” Ibid. This includes all refund claims, whether they are based on an alleged fraud

or misrepresentation of the property’s square footage, or a mathematical miscalculation of the fee.

Accordingly, the court finds that the ninety (90) day deadline for filing a Mansion Tax refund

claim, under N.J.S.A. 46:15-7.2c, is applicable to plaintiff.

Importantly, contrary to plaintiff’s assertions, a timely remedy was available to plaintiff to

preserve their right to a Mansion Tax refund, the filing of a protective refund claim with the

Director. Filing a protective refund claim within the applicable limitations period affords a

taxpayer the right to assert a claim for a refund when the refund amount can be finally determined,

which may not arise until after the limitations period has expired. “A protective refund claim puts

the Director on notice within the statutory refund claim period that likely future events will entitle

the taxpayer to a refund in an amount that can be determined with certainty only after expiration

of the limitations period.” Estate of Ehringer v. Dir., Div. of Taxation, 24 N.J Tax 599, 614 (Tax

2009). As succinctly explained by Judge Lasser, protective “[r]efund claims are frequently filed

dependent on future events such as the result of future federal audits or the results of litigation.”

Forbes v. Dir., Div. of Taxation, 14 N.J. Tax 257, 264 (Tax 1994).

Here, the statute clearly and unambiguously provides that a “taxpayer may file a claim

under oath for refund [of the Mansion Tax] at any time within 90 days after the payment of any

original fee. . . .” N.J.S.A. 46:15-7.2c. Plaintiff paid the original fee on January 4, 2019, the date

that the Unit Deed was recorded. Thus, for plaintiff’s refund claim to have been timely, it must
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have been filed by April 4, 2019. Instead, plaintiff’s refund claim was not filed until February 23,

2023, more than three years and ten months following the Unit Deed recording and payment of

the Mansion Tax.

In New Jersey, “statutes of limitations applicable to the filing of claims for tax refunds are

to be strictly construed.” M.J. Ocean, Inc. v. Dir., Div. of Taxation, 23 N.J. Tax 646 (2009). As

our Supreme Court noted in F.M.C. Stores Co. v. Morris Plains Borough, 100 N.J. 418, 424-425

(1985), “[a] strict adherence to statutory time limitations is essential in tax matters, borne of the

exigencies of taxation and the administration of local government.” This guiding principle is

deeply rooted in public policy. “Public policy discourages suits for the refund of taxes erroneously

paid or illegally collected. It is a well-established principle that statutes of limitation applicable to

suits against the government are conditions attached to the sovereign’s consent to be sued and must

be strictly construed.” H.B. Acquisitions, Inc. v. Dir., Div. of Taxation, 12 N.J. Tax 60, 65 (Tax

1991). Thus, the court’s fastidious observance of the time periods afforded under the applicable

statutes of limitations is necessary to “provide finality and predictability of revenue to state and

local government.” Bonanno v. Dir., Div. of Taxation, 12 N.J. Tax 552, 556 (Tax 1992) (citing

Pantasote, Inc. v. Dir., Div. of Taxation, 8 N.J. Tax 160, 164-166 (Tax 1985)).

Plaintiff failed to timely submit a protective Mansion Tax refund claim or Mansion Tax

refund claim within the applicable ninety-day limitations period, under N.J.S.A. 46:15-7.2c. The

court finds no legal or equitable basis to extend the limitations period applicable to plaintiff’s

Mansion Tax refund claim.
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III. Conclusion

Accordingly, for the above stated reasons, the court grants defendant’s motion for summary

judgment and dismisses plaintiff’s complaint with prejudice.

Very truly yours,

Hon. Joshua D. Novin, J.T.C.