On appeal from the Tax Court of New Jersey.
Antell, Dreier and Villanueva. The opinion of the court was delivered by Villanueva, J.s.c. (temporarily assigned).
Plaintiff appeals from the Tax Court's award of counsel fees and costs of $5,245 to defendant Township pursuant to N.J.S.A. 2A:15-59.1, the frivolous-claims statute, after plaintiff withdrew his complaint challenging the Township's assessment of his property. We reverse.
This case presents two issues: (1) whether N.J.S.A. 2A:15-59.1 (the "Act") applies to the Tax Court; and (2) whether the Tax Court Judge properly awarded attorney's fees and costs.
Plaintiff, a real estate investor and attorney, owns property in the Township of Egg Harbor ("Township") improved with a strip mall containing approximately 25,290 square feet of leasable area. Plaintiff filed a petition of appeal with the Atlantic County Board of Taxation challenging the assessment of $1,412,000, allocated land $151,500 and improvements $1,260,500, for the 1989 tax year. The county board affirmed the assessment. On November 29, 1989, plaintiff appealed the judgment by filing a complaint with the Tax Court.
By letter dated February 28, 1990, the Township offered to settle the appeal by increasing the assessment:
I am advised by the Township's appraisal consultant . . . that the subject assessment is so far under value that he cannot understand the logic of the property owner in calling this case to the Township's attention.
[He] has advised me of the results of his preliminary analysis, which resulted in a market value of $2,750,000. This analysis would indicate an assessment of $2,282,500, using the Chapter 123 "average ratio" of 83% for 1989. The current assessment of the subject property of $1,412,000 is well below the common level range, which would dictate a substantial increase in the assessment.
This case is certainly worth the Township's trying to Conclusion . . . . We would, however, be willing to discuss settling this case for an increase less than $870,000, which we will be able to support at trial, if settlement can be accomplished in a timely fashion.
However, the appraisal report of the Township's expert issued six months later could not support this inflated value. The report valued the property at $2,302,000, which is $448,000 less than the Township originally indicated.
Plaintiff refused to settle the matter for any increase and instructed his attorney to continue prosecuting the case. On May 11, 1990, plaintiff's attorney contacted Robert Goldberg, an expert appraiser retained by plaintiff in this matter, requesting Goldberg to prepare an appraisal report for the subject property. He informed Goldberg of the upcoming exhibit exchange and trial dates. According to the case management order, the discovery completion date was April 25, 1990, and the exhibit exchange date was May 23, 1990. Trial was scheduled for June 20, 1990. On April 20, 1990, plaintiff sent his trial information sheet to the Tax Court, in which Goldberg was listed as an expert witness.
Because neither party complied with the exhibit exchange date in the case management order, the trial court granted the Township's request to postpone the trial until September 17, 1990. The exhibit exchange date was adjourned to August 20, 1990. On June 19, 1990, plaintiff's attorney sent a letter to Goldberg in which he again requested an appraisal, and informed Goldberg that the trial had been adjourned until September 17, 1990.
On August 20, 1990, plaintiff received the Township's appraisal report dated June 9, 1990, and forwarded same to Goldberg. After review of the information and analysis in the report, Goldberg advised plaintiff's attorneys that he could not substantiate a value which would entitle the taxpayer to a reduction in the property's assessment. He advised that the case be withdrawn.*fn1
By letter dated September 6, 1990, counsel for plaintiff wrote a letter withdrawing the complaint from the Tax Court. R. 8:3-9. On September 10, 1990, before the letter withdrawing the complaint could be processed for the dismissal of the complaint, the Township filed a motion for an order denying plaintiff the right to withdraw his complaint, or in the alternative, permitting the Township to amend its answer to include a counterclaim for discrimination relief under Chapter 123 of the Laws of 1973. In addition, the Township sought, pursuant to the Act, reimbursement for its legal fees and expenses incurred in defense of this matter.
After the Tax Court heard oral argument on this motion on September 17, 1990, it denied the Township's request to file its counterclaim out-of-time and reserved decision on the other issues. No order was delivered to counsel at that time. By letter dated September 25, 1990, plaintiff supplemented the record with a letter outlining the various efforts made to obtain the appraisal from Goldberg. One and one-half years later, the Tax Court Judge issued a written opinion, dated March 2, 1992, in which he denied the Township's request to prevent plaintiff from withdrawing his complaint, but found that the Township should be awarded reasonable attorneys' fees and costs under N.J.S.A. 2A:15-59.1. Throckmorton v. Egg Harbor Tp., ...