Opinion
Docket No. 013621-2012
04-01-2015
Re: Gloucester Holding, LLC c/o UDI/Hudson Advisors v. City of Gloucester City
NOT FOR PUBLICATION WITHOUT APPROVAL OF THE TAX COURT COMMITTEE ON OPINIONS
James T. Ryan, III, Esq.
Stavitsky & Associates, LLC
350 Passaic Avenue
Fairfield, New Jersey 07004
John B. Kearney, Esq.
Kearney, Campbell & Burns, P.C.
210 White Horse Pike
P.O. Box 279
Haddon Heights, New Jersey 08035
Dear Counsel:
This letter constitutes the court's opinion with respect to defendant's motion to dismiss the Complaint for want of jurisdiction pursuant to N.J.S.A. 54:51A-1(c) in light of plaintiff's failure to prosecute its appeal before the county board of taxation. For the reasons explained more fully below, the motion is denied.
I. Findings of Fact and Procedural History
The court's findings of fact are based on the moving papers and the pleadings. R. 1:7-4.
Plaintiff Gloucester Holding, LLC is the owner of real property in defendant Gloucester City, Camden County. The property is designated in the records of the municipality as Block 112.01, Lot 1 and is located at Fifth and Pine Streets. For tax year 2012, the property was assessed as follows:
| Land | $400,000 |
| Improvements | $545,000 |
| Total | $945,000 |
In 2012, plaintiff filed a Petition of Appeal with the Camden County Board of Taxation challenging the assessment on the property for tax year 2012.
On May 17, 2012, plaintiff's counsel appeared before the county board for the hearing scheduled in the matter. John Dymond, the Gloucester City tax assessor, was present at the hearing, as he is required to be by N.J.A.C. 18:12A-1.9(f). That regulation provides as follows:
When a case is set down for hearing, the assessor of the taxing district involved shall attend said hearing together with counsel for the taxing district, unless the board shall in individual cases decide otherwise.
[N.J.A.C. 18:12A-1.9(f).]
Plaintiff's counsel called Mr. Dymond as plaintiff's only witness. According to Mr. Dymond's certification:
At the hearing before the County Tax Board an attorney from Mr. Stavitsky's office appeared but presented no evidence. The entirety of his case was to question me. I refused to be questioned as it was apparent to me that his questioning of me was a sham solely designated (sic) to avoid a dismissal for lack of prosecution. He did not present any comparables. He did not present any witnesses.
The municipal attorney and the county board acquiesced in the tax assessor's refusal to testify. Because of the board's decision not to permit Mr. Dymond's testimony, plaintiff presented no evidence in support of its appeal.
On June 22, 2012, the county board mailed to plaintiff's counsel a Judgment dismissing the appeal under Judgment Code 5B - "No evidence provided (lack of prosecution)."
On August 6, 2012, plaintiff filed a Complaint in this court challenging the assessment and the Judgment of the county board.
On December 26, 2014, more than two years after the Complaint was filed, the municipality moved to dismiss for want of jurisdiction.
Mr. Dymond's certification states that his "office has no record of receiving the 2012 appeal" and that he "was not made aware of the 2012 appeal until the summer of 2014 . . . ." If this is true it is because of a lack of communication between the city's counsel and Mr. Dymond. On October 19, 2012, the court mailed to defendant's counsel a Notice of Docketing of the Complaint. On January 16, 2014, the court mailed to defendant's counsel a Case Management Notice scheduling the matter for trial on June 4, 2014. On March 11, 2014, the court mailed to defendant's counsel a Mandatory Report 10 Day Notice. On March 26, 2014, defendant's counsel filed with the court a Mandatory Settlement Conference Report reporting that the parties had met in an attempt to settle the matter and listing Mr. Dymond as the witness defendant intended to call at trial on June 4, 2014. Prior to June 4, 2014, defendant's counsel reported the matter settled. In October 2014, after the court contacted defendant because it had not received a fully-executed Stipulation of Settlement, defendant's counsel reported that defendant intended to move to dismiss the Complaint for want of jurisdiction. The court notes that a Proof of Service attached to the Complaint indicates that it was served on the tax assessor and the Clerk of Gloucester City on August 3, 2012. Attached to the Complaint is a copy of the county board Judgment which plainly indicates that the board dismissed the matter for lack of prosecution. The municipality was, therefore, apprised of its potential jurisdictional argument more than two years before it made its motion.
Plaintiff opposed the motion.
The parties waived oral argument.
II. Conclusions of Law
N.J.S.A. 54:51A-1(c) provides:
If the Tax Court shall determine that the appeal to the county board of taxation has been . . . (2) dismissed because of appellant's failure to prosecute the appeal at a hearing called by the county tax board . . . there shall be no review.
Where a taxpayer's counsel appears at a county board hearing, the appeal is properly dismissed for lack of prosecution only if counsel fails to produce "some evidence" of the value of the subject property. N.J.A.C. 18:12A-1.9(e), applicable to the County Boards, provides:
A petitioner shall be prepared to prove his case by complete and competent evidence. In the absence of some evidence, the board may dismiss the petition. In the case of failure to appear, the board may dismiss the petition for lack of prosecution.
The distinction between a failure to produce sufficient evidence and a failure to prosecute is significant. Dismissal of an appeal by a county board where the taxpayer produces some, but insufficient, evidence of value will not preclude further review by this court. However, dismissal of an appeal because a taxpayer has not produced even some evidence of value before a county board equates to a dismissal for failure to prosecute and deprives this court of jurisdiction. See Pipquarryco, Inc. v. Borough of Hamburg, 15 N.J. Tax 413, 418 (Tax 1996).
This court is vested with the power to determine, de novo, whether there has been a failure to prosecute before the county board within the intendment of N.J.S.A. 54:51A-1(c)(2) and whether dismissal for lack of prosecution by a county board was warranted. See Veeder v. Township of Berkeley, 109 N.J. Super. 540, 545 (App. Div. 1970); Pipquarryco, supra, 15 N.J. Tax at 418. Such a dismissal should, therefore, be circumscribed by the same obligations to administer justice as are applicable to the Tax Court, and all doubts should be resolved in favor of the taxpayer. Ibid. "[A] motion to dismiss should be granted only in the most egregious circumstances." See Wilshire Oil Co. of Texas v. Township of Jefferson, 17 N.J. Tax 583, 585 (Tax 1998). Whether there has been a failure to prosecute involves a question of fact. See Veeder, supra, 109 N.J. Super. at 545. "In reviewing the determination of a county board of taxation, the Tax Court must take into account the facts available to the county board at the time of its ruling." Pipquarryco, supra, 15 N.J. Tax at 418.
Two Appellate Division precedents control the outcome here. In VSH Realty, Inc. v. Township of Harding, 291 N.J. Super. 295 (App. Div. 1996), the taxpayer filed a petition with the Morris County Board of Taxation challenging an assessment on commercial property. At the scheduled hearing, plaintiff's counsel appeared and indicated his intention to call as his only witness the tax assessor. Id. at 298. Although the town initially objected, the tax assessor was offered as a witness and testified as to the physical characteristics of the property and the process he used to reach the assessment. Ibid. On cross-examination by plaintiff's counsel, the tax assessor provided information regarding the equalized per square foot value of the subject property and admitted that he knew of no sale in the township for an amount in that price range. Ibid. The county board dismissed the appeal for lack of prosecution. Id. at 298-99. This court sustained the dismissal. Id. at 297.
The Appellate Division reversed. As a threshold matter, the court recognized the need to ensure that County Board proceedings be meaningful and that taxpayers not be permitted readily to by-pass the County Boards, which relieve this court of "what would otherwise be a very substantial burden of cases." Id. at 301 (internal quotations omitted). The court observed, however, that the "'court system exists to administer justice, not merely to satisfy the court's desire to dispose of cases on its calendar . . . [t]he administration of the court's calendar with blind rigidity cannot take priority over a party's constitutional right to contest its assessment.'" Id. at 301 (quoting Rutherford Realty Assocs. v. Borough of Rutherford, 277 N.J. Super. 347, 352 (App. Div. 1994)). To effectuate this goal, the court held, "[n]ormally, . . . dismissals [for failure to prosecute] should not be invoked in the absence of prejudice and unless the plaintiff's behavior is deliberate and contumacious." VSH Realty, supra, 291 N.J. Super. at 300.
The court rejected the view, however, that "a taxpayer's appeal before a county tax board may never be dismissed for lack of prosecution for anything other than a failure to appear." Id. at 301. The court explained, "[w]here, for instance, there is an appearance but no evidence, much less insufficient evidence, that is the same as not appearing at all and may properly form a basis for a dismissal under N.J.S.A. 54:51A-1c(2)." Id. at 301-02. The court found that the appearance of the taxpayer's counsel was not "a sham," and that his cross-examination of the tax assessor, a presumed expert familiar with real estate values in the relevant community, while ultimately unsuccessful in establishing the value of the subject property, was sufficient to satisfy the "some evidence" standard established in N.J.A.C. 18:12A-1.9(e). Id. at 302.
In Schumar v. Borough of Bernardsville, 347 N.J. Super. 325 (App. Div. 2001), the taxpayer filed a challenge in this court to the assessment on her residence. Prior to trial, the taxpayer mailed to the municipal attorney a notice in lieu of subpoena for production of the tax assessor at trial. The municipality moved to quash the notice in lieu of subpoena, arguing that the borough did not intend to call the assessor at trial and would rely instead on an appraisal expert. Id. at 329. This court granted the motion to quash. Ibid.
The Appellate Division reversed. The court held that the taxpayer
could have used the tax assessor's testimony for various relevant purposes, such as attempting to rebut the presumption of validity that attaches to an assessment by demonstrating it to be either inconsistent with an assessment by appropriate evidential standards or that the assessment was created in an illegal or arbitrary fashion.
We emphasis that the Tax Court, as well as a party, has the power to compel the assessor's appearance. No legitimate reason appears in this record to have precluded the taxpayer from calling the assessor to testify as a witness and identify public records and information related to the property in question. For this purpose, the tax assessor's testimony was both material, relevant, and necessary.
[Id. at 335.]
In support of its decision, the court cited the holding in Wilshire Oil, supra. In that case, a taxpayer's counsel appeared at a county board of taxation hearing with no witnesses. He attempted to call the municipal tax assessor. The county board refused to permit the assessor to testify and dismissed the appeal for lack of prosecution. 17 N.J. Tax at 585. On appeal to this court, the municipality moved to dismiss for want of jurisdiction pursuant to N.J.S.A. 54:51A-1(c). Judge Kuskin denied the motion. He provided a concise explanation of his holding:
[T]he county board's refusal to permit the Township assessor to testify was wholly inappropriate and improper. Under N.J.A.C. 18:12A-1.9(f), assessors are required to attend tax appeal hearings before county boards of taxation. Plaintiff's attorney could have served the assessor with a subpoena when the hearing commenced, thereby requiring the assessor to testify on plaintiff's behalf. See N.J.A.C. 18:12A-1.10. In addition, the county board had inherent authority to require the assessor, who was present in the hearing room, to testify at the request of plaintiff's attorney, even without a subpoena.
* * *
The assessor's testimony may not have supported an assessment reduction. Under the Appellate Division's decision in VSH, however, such testimony could have satisfied the requirement that the taxpayer's appearance before a county board be more than a sham, and, therefore, such testimony, in itself, could have been sufficient to preclude a dismissal for lack of prosecution. A county board of taxation may not create a basis to dismiss for lack of prosecution by improperly denying a taxpayer the right to present testimony which may be adequate to avert such a dismissal.
[17 N.J. Tax at 588-89.]
These unequivocal holdings preclude dismissal of the Complaint here. Without question, plaintiff was entitled to call the municipal tax assessor as a witness at the county board hearing in this matter. The assessor did not have the authority to refuse to testify because he was of the view that his testimony would prevent dismissal of the taxpayer's appeal for lack of prosecution. It is the tax assessor's obligation to ensure that all properties in the taxing district are fairly assessed and to facilitate a taxpayer's exercise of its statutory right to challenge an assessment. Unlike a private party, a municipal tax assessor, like all public officials, is bound by the square corners doctrine when involved in a local property tax appeal. Lowe's Home Centers, Inc. v. City of Millville, 25 N.J. Tax 591, 602 (Tax 2010). He may not act "so as to achieve or preserve any kind of bargaining or litigational advantage over the property owner. [His] primary obligation is to comport [himself] with compunction and integrity, and in doing so [he] may have to forgo the freedom of action that private citizens may employ in dealing with one another." F.M.C. Stores Co. v. Borough of Morris Plains, 100 N.J. 418, 427 (1985). The assessor, having set the assessment on the subject property and quite obviously in possession of material information regarding the assessment, was obliged to serve as a witness when called by the taxpayer. He had no legitimate interest in maneuvering to bring about a dismissal of the taxpayer's appeal for lack of prosecution.
In addition, the actions of the municipal attorney and county board of taxation are puzzling. The legal precedents cited above could hardly be clearer. A Division of Taxation regulation requires the assessor to be present at a county board hearing. One purpose of the regulation is obvious: to ensure that the person responsible for setting the assessment is available to provide the county board with facts, opinions and information necessary for the board to carry out its statutory mission to ensure the accurate and fair taxation of real property. In addition, the courts, including the Appellate Division, have repeatedly held that a taxpayer may require the tax assessor to testify at the county board hearing and that such testimony will preclude dismissal of the taxpayer's appeal for lack of prosecution. The moving papers provide no cogent explanation for why counsel and the county board acted directly contrary to these precedents. As a result, the taxpayer's county board appeal was dismissed, a Tax Court Complaint was filed, and the parties and this court expended time and resources on a motion which is entirely lacking in legal support.
The holding in Austin v. Township of Pemberton, 25 N.J. Tax 362, 373 (Tax 2010), bears repeating:
While this court is cognizant of the high caseload and short statutory time frame for resolving appeals at the County Boards, calendar management cannot trump fair hearings. All facets of the tax administration system, including this court and the County Boards, cannot lose sight of the fact that we exist to provide taxpayers and taxing districts with a meaningful forum for the principled resolution of tax disputes. We fall short of reaching this goal when claims are readily dismissed before taxpayers have even had an opportunity to speak before the tribunal to which they brought their appeals in good faith.
Defendant's motion is denied.
Very truly yours,
/s/ Hon. Patrick DeAlmeida, P.J.T.C.