On appeal from the Tax Court of New Jersey, Docket No. 8286-2006.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Cuff and Simonelli.
Defendant, Borough of Bergenfield (Borough), appeals from the February 2, 2007 judgment reducing the assessment of property owned by plaintiff, Hyman Mendelsohn (Mendelsohn), located at 47 Norfolk Street (the property).
The Bergen County Board of Taxation (Board) originally assessed the property at $568,500 ($437,800 for the land and $130,700 for the improvements). Mendelsohn filed an appeal with the Board, contending the land assessment was wrong because in determining the property's fair market value, the assessor failed to consider the negative effect of a sinkhole and stream located in the backyard of the property, which rendered a portion of it unusable.*fn1 The Board reduced the assessment to $547,500 ($416,800 for the land and $130,700 for the improvements).
Mendelsohn then filed an appeal with the Tax Court, contending that the land assessment should be no more than $350,000 because of the sinkhole and stream. Mendelsohn's daughter-in-law, Gail Mendelsohn (Gail),*fn2 testified at trial that the original property tax card listed a twenty by twenty-five foot sinkhole in the backyard. Gail also provided the tax card, and pictures depicting the sinkhole and stream, and the pumps used to correct the problem. The Board's attorney did not object to the admission of this evidence.
Gail also testified about comparable sales for six properties, which were smaller than the property; some were updated, two were new, and none had a sinkhole or other condition rendering any portion of them unusable. She also testified that the cost to maintain the property because of the sinkhole was approximately $2500 per year.
The Board's expert, Robert McNerney (McNerney), did not inspect the backyard of the property, and was apparently unaware of the sinkhole. He testified:
But now that I've heard the testimony [the sinkhole] sounds like that's a condition that I would have considered if I would have known.
McNerney concluded that a five percent adjustment in the value of the property was sufficient to account for maintaining the property because of the sinkhole. He based this percentage on his prior experience with sinkholes.
The tax court judge determined that there was a sinkhole on the property, and that McNerney did not adequately account for it. Taking the average of McNerney's comparables the judge arrived at a fair market value of $596,233. The judge then applied a five percent adjustment for the sinkhole and arrived at $566,421. The judge then applied the Borough's ratio of .8949 and arrived at a final assessment of $506,900 ($376,200 for the land and $130,700 for the improvements).
The Borough contends the judge erred in finding that Mendelsohn established a prima facie case to overcome the presumption of correctness of the assessment, and erred in reducing the original assessment because Mendelsohn failed to satisfy his burden of persuasion. We reject these contentions and affirm.
We recognize that "[t]he judges presiding in the Tax Court have special expertise; for that reason their findings will not be disturbed unless they are plainly arbitrary or there is a lack of substantial evidence to support them." First Republic Corp. of Am. v. Borough of E. Newark, 17 N.J. Tax 531, 536 (App. Div. 1998) (quoting Glenpointe Assoc. v. Twp. of Teaneck, 241 N.J. Super. 37, 46 (App. Div.), certif. denied, 122 N.J. 391 (1990)); see also Pine St. Mgmt. Corp. v. City of E. Orange, 15 N.J. Tax 681, 688 (App. Div.), certif. denied, 144 N.J. 172 (1996). "Our scope of review in a case such as this 'is limited to determining whether the findings of fact are supported by substantial credible evidence with due regard to the Tax Court's expertise and ability to judge credibility.'" Ibid. (quoting ...