On appeal from Tax Court of New Jersey, 4012-98.
Before Judges Petrella, Kestin and Alley.
The opinion of the court was delivered by: Petrella, P.J.A.D.
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
OPINION CORRECTED 04/15/02
Plaintiff Kathleen Schumar appeals certain rulings of the Tax Court, including an increased assessment of her residential real property in the Borough of Bernardsville (Borough or Bernardsville) which she purchased in December 1997 for $312,000. Subsequent to the sale, the Borough increased the assessment on the property for 1998 to $308,400, consisting of $114,000 for the land and $194,400 for the improvements. All of the increase was attributed to the house.
Schumar owns property at Block 90, Lot 9 on the tax map of Bernardsville, commonly known as 591 Mine Brook Road, containing a one-family-ranch-style dwelling. When Schumar purchased the property, it had an assessed value of $217,000. The prior owner had purchased the property in 1996 for $210,000.
Schumar filed an appeal of the 1998 assessment to the Somerset County Board of Taxation (Tax Board) on its prescribed form indicating, "assessment too high" in Section 1 of the form entitled "Appeal for Real Property Valuation." The Tax Board affirmed the assessment. Schumar then filed a complaint in the Tax Court, appealing the Tax Board's decision. The case was assigned to the small claims division because the amount of the refund sought was under $2,000. The Tax Court complaint was also a pre-printed form supplied by the court.*fn1 The form states that additional allegations (beyond the one line provided) may be attached by a rider. In the pre-printed paragraph 2 of that form complaint the plaintiff contested the Tax Board's action "with respect to the assessment ... on the ground that the assessment(s) is/are in excess of the true or assessable value of the property."
After several delays,*fn2 trial was set for October 13, 1999. On September 30, 1999, Schumar, then pro se, mailed and faxed Bernardsville's attorney a letter notice in lieu of subpoena for production of the tax assessor at trial and of certain documentary evidence.*fn3 On October 5, 1999, the Borough submitted a motion returnable on the trial date to quash the notice in lieu of subpoena. At the morning of trial, Schumar appeared with an attorney and opposed the motion. She also asserted that the assessment was an illegal spot assessment. Bernardsville's attorney, somewhat inaccurately, argued regarding the request for documents that Schumar was seeking reassessment documents going back ten years and correspondence assertedly not "relevant to this small claims appeal." He also argued this was an attempt to circumvent the discovery rules regarding small claims cases and, in any event, was out of time. Further, he stated the municipality did not intend to call the assessor on its case, but rather intended only to present a valuation expert. The tax judge treated the notice to produce as "a subpoena" and quashed it. The judge also limited plaintiff's proofs to valuation only (excluding discrimination), because Schumar had not specifically alleged spot assessments until the day of trial. The trial proceeded that date only on the issue of the property's value. The trial continued on January 5, 2000. Thereafter, the Tax Court upheld Bernardsville's 1998 assessment of $308,400 essentially because the value fell within the Chapter 123 *fn4 corridor of fair market value.
Schumar claims error in the Tax Court's denying her request to amend the complaint to specifically include spot assessment, a form of unconstitutional discrimination, and quashing of the notice in lieu of subpoena. We reverse on both issues.
Schumar alleges that it was error for the Tax Court to prevent her from arguing the revaluation of her property was an illegal spot assessment. It is true that the term spot assessment was not specifically mentioned as an issue until the morning of the trial. Nevertheless, this could hardly have come as a surprise to Bernardsville or its assessor because, on the face of what happened here, that issue should have been obvious to practitioners and assessors familiar with property tax law, if not lay persons, at least after West Milford v. Van Decker, 235 N.J. Super. 1 (App. Div. 1989), aff'd., 120 N.J. 354 (1990).
A spot assessment, or selective assessment, occurs when a taxpayer or a small class of taxpayers is singled out for reassessment while other taxpayers are not reassessed. Id. at 10. Spot assessments violate the uniformity provision of Article VIII, section 1(1)(a) of the New Jersey Constitution*fn5 and the equal protection clause of the Fourteenth Amendment.
A taxpayer wishing to challenge the assessed value of the property may do so on various grounds. One is that the assessment is incorrect and that the property's fair market value is either more or less than the assessed value. FMC Stores Co. v. Borough of Morris Plains, 195 N.J. Super. 373, 385 (App. Div. 1984), aff'd, 100 N.J. 418 (1985). Another ground is that the assessment is discriminatory because there is a disparate ratio between the true value of the property and the common level of assessment in the district. Id. at 385-386. Causes of action based on the second ground are governed by Chapter 123 of the Laws of 1973, codified at N.J.S.A. 54:3-22 and N.J.S.A. 54:51A- 6.*fn6 Yet another ground is that the assessment was due to a spot assessment, a form of unconstitutional discrimination when a property is not uniformly taxed, but is improperly singled out for treatment not accorded all similarly situated properties. Van Decker, supra (120 N.J. at 361). It is impermissible to reassess value solely because the property was sold for an amount in excess of the assessed value. Legitimate reasons to revalue the property ...