Raw Deal by County Tax Board Overturned by Tax Court

by: Anthony F. Della Pelle
22 Jan 2013

In Schaefer v. Borough of Chatham  the Tax Court went on record with its concern that dismissals for lack of prosecution (“LOP”) by county tax boards “occur with much too great frequency” when this power was intended to be wielded sparingly. The County Tax Board rules provide that an appeal may be dismissed LOP where the petitioner fails to appear or appears but fails to provide some evidence of value. If an appeal is dismissed LOP, it provides grounds for the municipality to seek to dismiss a subsequent appeal to the Tax Court.

In denying the motion to dismiss by the Borough of Chatham (the “Borough”) in this case where the Morris County Board Taxation (the “Board”) had dismissed two appeals LOP, the Tax Court found guidance in “A Brief History of County Boards of Taxation, New Jersey Association of County Tax Boards” which quotes then Governor Edward Stokes who asked that “a square deal be given to every taxpayer” especially in light of the fact that “county boards are ‘… dealing with … a most sacred right, namely, that of property.” The Governor also observed that in performing the duties assigned to it requires the “most earnest and conscientious efforts” of each County Board.

In these recent cases, the Tax Court held that the Board’s dismissal “[fell] far short of the ‘square deal” for every taxpayer Governor Stokes had hoped for.” Indeed, a review of the facts here shows that the Board not only failed to give a square deal, but itself acted egregiously in dismissing the appeals.

In these recent cases, the taxpayers appeared before the Board through counsel and appraisers who had prepared valuation reports. The Borough moved to bar the appraisal reports claiming that they were boiler-plate and not prepared for tax appeal purposes. The Board agreed and barred the reports and dismissed the cases for lack of prosecution (“LOP”).

On appeal, the Tax Court denied the Borough’s subsequent motion to dismiss based on the Board’s dismissal for LOP. The Court held that the Board “effectively created a situation where the Taxpayers were precluded from satisfying the evidentiary standard needed to avoid a dismissal for lack of prosecution.”

In reaching its conclusion, the Tax Court relied on previous decisions addressing LOP issues, both of which arose from cases that also originated before the Morris County Board. In the first case, VSH Realty, Inc. v. Township of Harding, 291 N.J. Super. 295 (App. Div. 1996)  the appellate court confirmed that the Tax Court has the authority to review dismissals for LOP by county tax boards. Thereafter, in Wilshire Oil Co. of Texas v. Township of Jefferson, 17 N.J. Tax 583 (Tax 1998) the Tax Court established the legal standard in making the determination of whether a dismissal LOP was warranted. The Court held that the appeal should be dismissed “only in the most egregious circumstances.”

This case reaffirms that in order to preserve the right to appeal to the Tax Court, a taxpayer need only appear at the hearing, personally or through counsel, and be prepared to offer some evidence of value sufficient for the board to render a decision on the merits.  Under these circumstances, if a county board resorts to the draconian LOP dismissal the Tax Court is willing to step in and save the taxpayer from such a raw deal.

McKirdy & Riskin’s Anthony DellaPelle served as special tax appeal counsel to Harding Township in the VSH Realty Case cited above.