Taxpayer’s Effort to Increase Assessor’s Own Assessment Might be Frivolous and Trigger Sanctions

The New Jersey Tax Court recently issued an opinion regarding the timeliness of an application for sanctions and fees in connection with a property tax appeal filed by a resident who sought to increase the assessment on a home owned by a husband and wife who also are appraisers and local tax assessors.  The tax appeal was the subject of a trial in December, 2016, where the Tax Court dismissed the taxpayer’s case based upon a lack of evidence and failure to overcome the presumption of correction of the assessment.  The Court also stayed the proceeding of a motion to impose frivolous litigation sanctions upon the taxpayer pending exhaustion of taxpayer’s appellate efforts.  In July, 2018, the Appellate Division affirmed the Tax Court’s dismissal and, as a result, motions for sanctions and fees were thereafter filed in the Tax Court.  The taxpayer challenged the timeliness of the sanctions applications but, in January, 2019, the Tax Court determined that the motions were timely filed.

The Tax Court reasoned that the motions were timely because the normal 20-day time limitation for filing such motions (set forth in R. 1:4-8(b)(2)) were tolled by the separate order of the Tax Court, and further held that, if the Court’s tolling order was made in error, the parties should not have been barred to bring such claims due to any error committed by the court.  In its decision, the Tax Court noted that R. 4:38-2(a) gave the court the power to sever any claims or issues within its discretion, and concluded that it would be in the best interest of the parties to defer on any hearing as to sanctions until the underlying claims were resolved on appeal.  The Court clearly advised the parties that the issue was being reserved, and further noted that, even if the Court did not have the power to toll the issues, an unjust result would be produced by barring the consideration of the issues by party’s reliance upon the Court’s ruling.  As a result, the motions were deemed timely.

The ultimate outcome of the motions is unknown.  The case had been the subject of prior coverage in local media.

A copy of the Tax Court’s opinion in Wolosky v. Tp. of Fredon is available here.