VSH Realty, Inc. : TAX COURT OF NEW JERSEY
DOCKET NO. 007779-94
Plaintiff, :
v. :
Harding Township :
Defendant :
:
Eunice Conine : TAX COURT OF NEW JERSEY
DOCKET NO. 007769-94
:
Plaintiff, :
v. :
Harding Township, : Opinion
Defendant. :
Decided: November 1, 1994
Robert D. Blau for plaintiffs (Blau & Blau,
attorneys).
Anthony F. Della Pelle for defendant (Schenck,
Price, Smith & King, attorneys).
LASSER, J.T.C.
Harding Township (Taxing District) has moved to dismiss the
complaints filed with the Tax Court in the within matters on the
ground that Taxpayers failed to prosecute appeals before the Morris
County Board of Taxation. Since both cases involve the same
Taxpayers' attorney, the same defendant, and have similar facts,
*
they have been consolidated for this opinion which is in
amplification of the prior ruling of the Court. The issue in these
cases is whether the Morris County Board of Taxation was justified
in dismissing the cases before it for lack of prosecution and,
therefore, whether the Tax Court has jurisdiction to hear these
cases due to the limitation of N.J.S.A. 54:51-1c(2) which provides:
If the Tax Court shall determine that the appeal to
the county board of taxation has been ... dismissed
because of appellant's failure to prosecute the
appeal at a hearing called by the county tax board
... there shall be no review. This provision shall
not preclude a review by the Tax Court in the event
that the appeal was "dismissed without prejudice"
by the county board of taxation.
The subject properties are a gasoline service station located
at Block
32 Lot 9.01 in Harding Township (VSH Realty, Inc.) and a
residence located at Block
32 Lot 4 in the same township (Conine).
For tax year 1994, the subject properties were assessed as follows:
VSH Realty, Inc. Conine
Land $310,000 $321,300
Improvements 144,500 91,500
Total $454,500 $412,800
Taxpayers filed timely petitions with the Morris County Board of Taxation (the Board) pursuant to N.J.S.A. 54:3-21 and, on May 12, 1994, Taxpayers' attorney appeared before the Board on the scheduled hearing date. The procedure in both cases was fundamentally the same: Taxpayers' case consisted solely of calling the tax assessor as a witness. This was objected to by the Taxing District. Before a ruling was made on this objection,
Taxing District's attorney agreed to conduct a direct examination
of the assessor in order to give Taxpayers' attorney an opportunity
to cross examine to "move things along." After a limited direct
examination in which the assessor testified to the correctness of
the assessment, Taxpayers' attorney proceeded to cross examine the
tax assessor. No other testimony was presented on behalf of
Taxpayers. In neither case did Taxpayers' attorney request an
adjournment prior to the hearing.
The information elicited by Taxpayer's attorney from the
examination of the assessor was different in the two cases. In the
Conine case, testimony was elicited from the assessor that the
property had sold for $375,000 six months before the valuation
date. In the VSH Realty, Inc. case, the tax assessor provided only
a description of the property and the assessment. No evidence of
the value of the VSH Realty, Inc. property was presented. In both
cases, the Board dismissed for failure to prosecute based on the
Board's determination that no evidence of value was presented.
Taxpayers argue that a county board of taxation may dismiss
for failure to prosecute only for non-appearance. To support this,
Taxpayers cite N.J.A.C. 18:12A-1.9(e), which states, "A petitioner
shall be prepared to prove his case by completion (sic) 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 for lack of prosecution." Taxpayers assert that since
the last two sentences are separate, they must be read
individually; that is, that dismissal for failure to prosecute is
appropriate only when there is a failure to appear.
This is refuted, however, by the Board's Instructions for
Preparing Petition of Appeal which state in Paragraph 9:
In order to determine the taxable value of
your property, you must demonstrate what the
market value of your property was as of
October 1 of the preceding (pretax) year.
Thus, petitioner should be prepared to present
adequate evidence to support a tax assessment
revision as follows ... [detailed instructions
regarding appraisals, comparable sales, income
producing property and other data follow].
The legislative scheme in New Jersey provides a two-tier
process for review of tax assessments that do not exceed $750,000.
N.J.S.A. 54:3-21 provides that:
A taxpayer feeling aggrieved by the assessed
valuation of his property . . . may on or before
April 1 appeal to the county board of taxation by
filing with it a petition of appeal; provided,
however, that any such taxpayer . . . may on or
before April 1 file a complaint directly with the
tax court, if the assessed valuation of the
property subject to the appeal exceeds $750,000.
N.J.S.A. 54:3-26 provides that the county board of taxation
shall hear and determine all appeals. N.J.S.A. 54:51A-1c(2) states
that the Tax Court shall not review any judgment of the county tax
board if the matter has been "dismissed because of appellant's
failure to prosecute the appeal at a hearing called by the county
tax board[.]" If the county tax board affirms without prejudice,
an appeal is permitted to be heard by the Tax Court.See footnote 1
If the county tax board requires the case to be heard, proof
of value or of the incorrectness of the assessment on substantive
or procedural grounds is necessary. Lack of prosecution is not
limited to non-appearance. The Legislature has not indicated an
intention to permit a bypass of the county tax board procedure
where the assessment does not exceed $750,000.
Taxpayers' attorney appeared but presented no evidence of the
value of the property in the VSH Realty, Inc. case. He sought to
bypass the county tax board procedure by not producing any witness
for the Taxpayer or offering proof of the value of the property,
but by asking questions of the assessor.
Taxpayer's attorney asserts that there was some evidence
presented, i.e., the description of the property and the assessment
(conceded by Taxpayer to be insufficient for the board to determine
the value of the property) in the VHS case and evidence of a recent
sale of the subject in Conine. Taxpayers' attorney argues that
this evidence in and of itself should be sufficient to meet the
prosecution requirement.
Taxpayers suggest that it may merely state that it is
contesting the assessment and the obligation is then on the county
tax board to determine whether or not the assessment is
correct. Taxpayers rely on Pope v. Red Bank,
19 N.J. Misc. 383
(St. Bd. of Tax App. 1940) in support of this proposition. In that
case, an appeal of a motion dismissing a tax appeal for failure to
prosecute, the attorney for the taxpayer appeared with a real
estate expert. There was testimony before the Board of Tax Appeals
that the expert was sworn and testified to the value of the
property. Board of Taxation witnesses testified that the expert
appeared but was unfamiliar with the property. The Board of Tax
Appeals resolved the matter by holding that county tax board
appeals hearings were for the protection of the parties and could
be waived by the party appellant if the party was content to rest
the case before the Board upon a petition, containing appellant's
sworn statement as to the true value of the property under appeal,
together with such other information as to the property as the
county tax board may require. Id. at 385. This holding was no
doubt based on the board's belief that "[c]ounty tax boards are
presumably intimately conversant with local real property
valuations," Id., and do not need any additional proof of the
property value.
The county tax board procedure has changed since 1940. No
longer does the petition provide for the sworn statement of
value.See footnote 2 The county tax board instructions require proof at the
scheduled hearing of the market value of the property as of the
assessing date. The reasoning of the Board of Tax Appeals in Pope
v. Red Bank is not applicable because of the passage of time and
changes in the economy and rules of procedure. More than 50 years
ago there was a greater stability in real property values. In
recent years, the county tax board, acting in its quasi-judicial
function, has been called upon to make determinations of the value
of property, not based solely on its own analysis and appraisal,
but based on the testimony presented at the hearing before it. The
county tax board offers an opportunity for a convenient and speedy
determination of a taxpayer's contest of its assessment. It hears
and disposes of many cases, thus relieving the Tax Court of what
would otherwise be a very substantial burden of cases. This two-tier procedure can only be effective if cases involving assessments
of $750,000 or less, as are the subject cases, are heard in a
meaningful manner by the county tax board.
The purpose of the quasi-judicial function of the county tax
board is to assess the correctness of the valuation. In order to
do this, an appellant must provide some proof of value.
Description of the property and the assessment without any evidence
of value is not prosecution of the case. The Morris County Board
of Taxation was, therefore, justified in dismissing the VSH Realty,
Inc. case for lack of prosecution and the Tax Court is barred by
N.J.S.A. 54:51A-1c from hearing the valuation case on appeal.
In the Conine case, Taxpayer was able to elicit some
information concerning the value of the property i.e., the recent
sale price of the property. The Morris County Board erred in
dismissing the Conine case for lack of prosecution, as there was
evidence of value presented by Taxpayer upon which the Board could
rule.
Taxing District's motion to dismiss the VSH Realty, Inc.
complaint is granted. The dismissal by the county tax board for
lack of prosecution in the Conine case was not justified. Taxing
District's motion to dismiss the Conine case is denied.
Footnote: 1 This Court is informed that the Morris County Tax Board
does affirm without prejudice if a prior year is pending before the
Tax Court. No prior years were pending before the Tax Court for
the subject properties.
Footnote: 2 The petition of appeal to the county tax board requires the
"requested assessment".