On appeal from the Tax Court of New Jersey, Docket Nos. 004577-04 & 002825-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Winkelstein, Yannotti and LeWinn.
This is an appeal from an order of the Tax Court dismissing with prejudice plaintiff's complaints challenging defendant's 2004 and 2005 tax assessments upon one of its commercial properties. The dispute giving rise to the dismissal order occurred during the pre-trial discovery period, and related to plaintiff's opposition to defendant's request for production of certain leases.
Plaintiff presents the following issues for our consideration:
POINT I THE TAX COURT JUDGE ERRED IN DISMISSING PLAINTIFF'S COMPLAINT BECAUSE PLAINTIFF FULLY COMPLIED WITH THE TAX COURT'S ORDER OF APRIL 28, 2006
POINT II THE TAX COURT JUDGE ERRED IN FAILING TO FOLLOW THE TWO-STEP PROCESS TO DISMISS WITH PREJUDICE PURSUANT TO R. 4:23-5(a)
POINT III THE INFORMATION SOUGHT WAS PROTECTED BY THE TAXPAYER'S CONSTITUTIONAL RIGHT TO PRIVACY AND AS SUCH SHOULD, AT THE VERY LEAST, HAVE BEEN PROTECTED BY A PROTECTIVE ORDER POINT IV IN THIS CASE, NEW PROVIDENCE HAS FAILED TO TURN SQUARE CORNERS
Having reviewed the entire record, we agree with plaintiff's argument that the Tax Court judge erred in dismissing its complaints with prejudice under Rule 4:23-5(a). Therefore, we reverse, reinstate plaintiff's complaints, and remand for further proceedings.
Plaintiff is the owner and lessor of numerous commercial properties throughout New Jersey. The property that is the subject of this litigation is an 81,600-square foot, multi- tenanted office building located at Block 382, Lot 1, 890 Mountain Road, New Providence, Union County. In 2004 and 2005, defendant assessed that property at $9,079,300. Plaintiff's appraiser valued the property at $8,746,000 in 2004, and at $8,171,000 in 2005.
Plaintiff filed two tax appeals, one in 2004 and the other in 2005. Defendant propounded discovery requests upon plaintiff as to the 2004 assessment on April 19, 2004, and as to the 2005 assessment on May 5, 2005. Both discovery requests sought information and documentation regarding the sales, leasing and construction of office properties owned by plaintiff in Union, Middlesex, Somerset, Morris and Hudson counties. Plaintiff filed responses in May 2004 and May 2005, objecting to those discovery requests as "burdensome and improper."
On March 10, 2006, defendant filed a motion to compel more specific answers to interrogatories, demanding responses to the supplemental interrogatories seeking the disputed lease information. In response, plaintiff asserted that the gathering, copying and transporting of the requested information would be unjustifiably time-consuming and costly. Plaintiff further asserted that defendant should be able to obtain the same information from other data sources. Plaintiff also expressed concern about the use of the requested information for improper purposes and argued that, should defendant's motion be granted, the information provided "should be protected as confidential internal business matters."
Oral argument on defendant's motion to compel discovery occurred via telephone on April 28, 2006. During that argument, the Tax Court judge stated that the requested information was clearly relevant, but also noted that plaintiff had certain "privileges" regarding confidentiality. In an effort to balance the parties' positions, the judge ordered plaintiff to provide a list of the office properties including information regarding sales, leases, size, age and construction of those buildings. The judge further noted that "there may . . . be the need for protective orders or ...