Tax Assessors Rejoice! App. Div. Allows Municipal Assessors to Serve as an Experts for Taxpayers Outside Their Municipality
A recent Appellate Division opinion in VNO 1105 State Hwy 36, LLC v. Twp. of Hazlet reversed a N.J. Tax Court order barring Theodore Lamicella, the Wall Township tax assessor, from testifying on behalf of a Hazlet Township property owner in a tax appeal.
Plaintiff-taxpayer owned property in Hazlet Township, New Jersey tax appeals filed challenging the 2013 through 2017 local property tax assessments. Plaintiff retained Lamicella as its expert witness because, in addition to serving as the tax assessor for Wall Township, Lamicella also ran a private appraisal firm. Lamicella’s agreement with Wall Township permitted him to continue his private employment but prohibited any private work in the township and conditioned “outside private employment” on the approval of the township administrator. Hazlet Township moved to bar Lamicella’s testimony, arguing that a municipal tax assessor was barred from assisting in a taxpayer’s appeal of another tax appraiser’s assessment on the grounds that tax assessors allegedly owed a duty of loyalty to each other. Plaintiff opposed, arguing that no statute or regulation expressly precluded Lamicella’s participation. Moreover, plaintiff contended that defendant had presented no evidence of a conflict of interest. The Tax Court granted Hazlet’s motion and ruled that, in an effort to preserve public trust, a tax assessor could only appear on behalf of the government in a tax court proceeding.
The panel agreed that no law or regulation expressly barred a tax assessor from testifying on behalf of a private taxpayer in a tax court matter involving property in another municipality.
On appeal, the Appellate Division reversed. The panel agreed with plaintiff’s argument that no law or regulation expressly barred a tax assessor from testifying on behalf of a private taxpayer in a tax court matter involving property in another municipality. The court also rejected the Tax Court’s determination that the Local Government Ethics Law categorically barred such testimony. Thus, in the absence of evidence that Lamicella’s testimony created a conflict of interest or breached his duties, the Tax Court exceeded its authority in precluding his expert report and testimony. The Appellate Division also noted that a trial court has “inherent authority” to disqualify an expert witness “to prevent unfair prejudice” to a particular party and “to protect the integrity of the adversary process, protect privileges that otherwise may be breached, and promote public confidence in the legal system.” However, the Appellate Division further noted that a court’s inherent authority to exclude an expert is also a “drastic measure that courts should impose only hesitantly, reluctantly, and rarely.”
The VNO 1105 State Hwy 36, LLC v. Twp. of Hazlet decision is noteworthy because it overturned a rather unprecedented and far-reaching ruling by the Tax Court. Tax assessors frequently testify as experts in other tax appeals. Additionally, prior to the Tax Court’s ruling, municipal assessors were rarely disqualified from testifying against other municipalities on behalf of taxpayers. The Appellate Division’s decision now makes it clears that, for an assessor to be disqualified, there must be evidence demonstrating an actual conflict of interest or a breach of an ethical duty. To view the entire VNO 1105 State Hwy 36, LLC v. Twp. of Hazlet decision, click here.