NOT FOR PUBLICATION WITHOUT APPROVAL OF THE TAX COURT COMMITTEE ON OPINIONS _______________________________ DR. MICHAEL T. SHERMAN, : TAX COURT OF NEW JERSEY Plaintiff, : DOCKET NO: 012930-2017 : vs. : : VENTNOR CITY, : Defendant. : _______________________________:
Decided: November 21, 2019.
Daniel J. Gallagher, Esquire for plaintiff (Law Office of Daniel J. Gallagher, Esquire, attorney).
Edward O. Lind, III, Esquire for defendant (Hank N. Rovillard Esquire, L.L.C., attorney).
CIMINO, J.T.C.
I. INTRODUCTION.
Taxpayer, Dr. Michael T. Sherman appealed the assessment of his property in
the City of Ventnor. While the appeal was pending, the property was sold to a third
party. The City wants to inspect the property in preparation for trial, however, the
new owner has rebuffed requests for an inspection. The City has filed a motion to
dismiss for failure to allow discovery. The issue is who had the burden to secure the inspection, and who should suffer the consequences if an inspection cannot be
completed. For the reasons set forth in much greater detail below, the court
determines that the onus in upon the taxpayer to secure the inspection, and failing
the completion of an inspection, the matter must be dismissed.
II. STATEMENT OF FACTS.
The taxpayer, Dr. Michael T. Sherman, was the owner of a premises located
at 6717 – 6719 Atlantic Avenue, in the City of Ventnor, in the County of Atlantic.
The building is a three-story attached structure with both commercial and residential
units. The property is known as Lots 5 and 6 of Block 75 on the City of Ventnor’s
tax maps.
On April 28, 2017 the taxpayer filed an appeal with the Atlantic County Board
of Taxation challenging the revalued assessment of the property for 2017 which was
set at $198,600.00 for Lot 5 and $264,800.00 for Lot 6. The County Tax Board
dismissed without prejudice the appeal of Lots 5 and 6 by issuing judgments on July
28, 2017 and August 8, 2017. A dismissal without prejudice allows the matter to be
appealed to the Tax Court without risk of the matter being dismissed at the Tax Court
for lack of prosecution before the County Tax Board. See N.J.S.A. 54:51A-1(c).
On September 8, 2017, the taxpayer filed his appeal with the Tax Court. The
County Tax Board attempted to revise its judgments in October to reflect that the
dismissal was with prejudice. The court decided on September 13, 2018, that the
-2- time for the County Tax Board to redetermine the appeal had expired. Sherman v.
Ventnor, 2018 N.J. Tax Unpub. LEXIS 58, 2018 WL 4368942 (Tax Sept. 13, 2018).
See also N.J.S.A. 54:3-26 (time limit to hear appeals); Vicari v. Township of
Bethlehem, 8 N.J. Tax 513, 519 (Tax 1986) (same issue).
On October 10, 2018, the City requested an inspection of the property. On
October 11, 2018, the taxpayer sold the property to a third party for $286,000.
It is not disputed that the taxpayer attempted to secure the consent of the new
owner to allow the City to inspect, and that the new owner has refused. The taxpayer
alleges that the new owner refused because he was told by City officials that an
inspection could result in an increased assessment. On the other hand, the City
alleges that it was informed that the new owner was in a dispute with the taxpayer
over repairs to the property. Both allegations are hearsay.
The City filed the instant Motion to Dismiss the taxpayer’s complaint for
failure to provide discovery.
III. LEGAL ANAYLSIS.
All property assessment appeals with tax bills of less then $25,000.00 in the
prior tax year can be filed as a small claims case. 1 N.J.S.A. 2B:13-14; R. 8:3-4(d),
R. 8:11(a)(2). For a small claims action, discovery from the taxpayer is limited to
1 Assessment appeals of residential properties consisting of one through four units also qualify as small claims cases regardless of tax bill amount. -3- inspection of the subject premises, a closing statement if there has been a sale of the
subject premises within three years of the assessing date, the cost of improvements
within three years of the assessing date, income, expense and lease information for
income-producing property and information relating to a claim of damage to the
property occurring between October 1st of the pre-tax year and January 1st of the tax
year. R. 8:6-1(a)(4). Discovery from the municipality is limited to the property
record card. Id.
When one party fails to provide discovery, the other party entitled to the
discovery may move for an order dismissing the complaint. R. 4:23-5(a)(1). In this
case, the City has filed such a motion after attempts to inspect the property were
rebuffed by the new owner.
The first question to be resolved is whether the municipality has the burden to
show a need for the inspection or whether the taxpayer needs to demonstrate that the
inspection is not needed. It goes without saying that parties may obtain relevant
discovery. R. 4:10-2(a). Certainly, the inspection of a premises which is the subject
of a tax appeal is relevant. To be sure, the court rules specifically provide that such
an inspection be allowed. R. 8:6-1(a)(4). Thus, no further showing of necessity by
the municipality is needed.
The taxpayer argues that the assessor had a fair opportunity to inspect during
the revaluation process which was completed for the 2017 tax year. Even if the
-4- property had been previously inspected as part of a revaluation of all properties in
the municipality, that does not diminish the need to inspect. Many times, an appeal
focuses upon a certain characteristic which the taxpayer believes resulted in an
overstated valuation (i.e., quality of facilities, fit and finish of fixtures, usable square
footage, etc.). An inspection allows an assessor to hone in on these issues in
preparation for trial, and more importantly, to be more fully conversant of the
property conditions for settlement discussions. To put it more plainly, if a taxpayer
feels the property is overvalued, the assessor can take another look to see if any
adjustment can be made short of a trial. Even if a settlement is not reached, the
assessor will be fairly prepared for trial which allows the court to more thoroughly
address the taxpayer’s contentions. Regardless of the thoroughness of a revaluation
inspection, the municipality is entitled to inspect the premises again as part of a
taxpayer’s appeal of the assessment.
What the taxpayer wants here is to limit the necessity for an inspection. A
court can enter an order limiting discovery to protect a party from annoyance,
embarrassment, oppression, or undue burden and expense. R. 4:10-3. Taxpayer has
not established good cause for the necessity of such an order. In summary, the
demand of the City to inspect the property is relevant and proper.
The next question is which party should have the onus to procure the
inspection. The City contends that the taxpayer has the onus and the failure to
-5- provide the inspection should result in dismissal. However, the preliminary question
to this is whether an inspection can be compelled. For if it cannot be compelled, the
issue then becomes who bears the detriment of the inspection not occurring.
An inspection is the one of the few types of discovery which a municipality
can pursue under the small claims practice of Tax Court. R. 8:6-1(a)(4). Subject to
the limitations for Tax Court matters as provided in Part VIII of the court rules, the
mechanics for taking discovery are set forth in Part IV of the rules which govern
civil matters. R. 8:6-1(a), R. 4:10-4 through R. 4:18-2, R. 4:22 through R. 4:25.
Entry upon land for inspection and other purposes is governed by R. 4:18-1.
Subsection (a)(2) of R. 4:18-1 pertains to inspection of land or other property “in
possession or control of a party”. Conversely, subsection (d) provides for inspection
of land of non-parties.
In determining whether to compel inspections of third-party premises, the
courts have seemingly taken different approaches depending on whether the
inspector is a governmental agent. For example, in both Davilla v. Cont’l Can Co.,
205 N.J. Super. 205 (App. Div. 1985) and Arcell v. Ashland Chemical Co., 152 N.J.
Super. 471 (Law Div. 1977), our courts have allowed an inspection in a lawsuit
between two private parties in which the inspector was not a governmental agent.
In both Davilla and Arcell, access to the worksites of plaintiff employees was
sought to determine the extent of liability of defendants for providing alleged
-6- dangerous products and substances. Davilla, 205 N.J. Super. at 206. Arcell, 152
N.J. Super. at 505. The employers controlling the worksites were not facing liability
from the employee plaintiffs in the Superior Court actions since the claims against
the employers were within the jurisdiction of the workers’ compensation court.
Davilla, 205 N.J. Super. at 206-07. Arcell, 152 N.J. Super. at 487. In Davilla, entry
was allowed to a representative of the plaintiff employee to determine the
manufacturer of a bandsaw used by plaintiff at the time of injury. Davilla, 205 N.J.
Super. at 207. Likewise, in Arcell, access was permitted to assess plaintiffs’
exposure to toxic substances while at the employer’s worksite. Arcell, 152 N.J.
Super. at 507.
Other courts have allowed inspections of third-party premises by non-
governmental witnesses to gather relevant evidence. For example, the Court of
Special Appeals of Maryland will allow under appropriate circumstances an
inspection of a premises formerly owned by a defendant as part of a suit alleging
exposure to lead. Johnson v. Franklin, 115 A.3d 752, 755, 762 (Md. Ct. Spec. App.
2014). Stokes v. 855 N. Wash. St., 784 A.2d 1142, 1143, 1150 (Md. Ct. Spec. App.
2001). In Investors Mortgage Ins. Co. v. Dykema, 598 F. Supp. 666 (D. Or. 1984),
the United States District Court for the District of Oregon allowed an appraiser to
inspect the home of a third-party to determine fair market value as part of a dispute
-7- between a mortgage lender and mortgage insurer. Id. at 668. The issue was whether
prior appraisals, relied upon at the time of loan origination, were inflated. Id. at 667.
In In re State in the Interest of A.B., 219 N.J. 542 (2014), a juvenile
delinquency proceeding, the defense sought an inspection of a home which was both
the scene of the crime and the home of the victim. Id. at 547-48. The inspection
was not by or for the benefit of the State, but rather by and for the benefit of the
accused to challenge the charge. Ibid. Our Supreme Court determined that the right
of the accused to a fair trial and the right of the purported victim and her family’s
privacy must be balanced. Id. at 547. A fair criminal trial was found to outweigh
the right of the purported victim to privacy. Ibid. Obviously, in a criminal or
juvenile delinquency proceeding, a defendant is facing consequences of magnitude
that can result in incarceration and loss of liberty. This is unlike the case now before
the court in that the taxpayer does not face any consequence of magnitude, but rather
seeks to overcome the presumption of a correct tax assessment. MSGW Real Estate
Fund, LLC v. Borough of Mountain Lakes, 18 N.J. Tax 364, 373 (Tax 1998).
The aforementioned cases involved private parties seeking entry into a
premises. The inspections were sought by private parties for private interests, and
were to be conducted by private parties. Here, regardless of whether the burden of
-8- seeking entry falls upon the taxpayer or the municipality, the outcome sought is an
inspection by a governmental official or agent.2
Even when an inspection is merely for purposes of a tax assessment appeal, a
number of courts in other jurisdictions have recognized, with varying results, that
Fourth Amendment issues arise. See, e.g., Matter of Jacobowitz v. Bd. of Assessors
for Town of Cornwall, 990 N.Y.S.2d 551, 555-57 (N.Y. App. Div. 2014) (inspection
of appealing owner’s property denied on Fourth Amendment grounds); Matter of
Yee v Town of Orangetown, 904 N.Y.S.2d 88, 94-95 (N.Y. App. Div. 2010) (same);
Schlesinger v. Town of Ramapo, 807 N.Y.S.2d 865, 867-68 (N.Y. Sup. Ct. 2006)
(same); Roketenetz v. Bd. of Assessors, 892 N.E.2d 363, 364 (Mass. App. Ct. 2008)
(order permitting inspection of appealing owner’s property not barred by Fourth
Amendment); Smith v. Ayotte, 356 F. Supp. 2d 9, 16-17 (D.N.H. 2005) (unfair to
allow taxpayer to block access on Fourth Amendment grounds and then appeal);
Poddar v. Department of Revenue, 983 P.2d 527, 533 (Or. 1999) (Fourth
Amendment issues overcome when taxpayer put value at issue); Atkinson v. Gurich,
248 P.3d 356, 358-60 (Okla. 2011) (Fourth Amendment along with statute barred
inspection); MacDonald v. Town of Dover, 899 N.W.2d 303, 313-28 (Wis. 2017)
(same). However, none of the decisions cited above address an inspection when the
2 Even if the City hired a private sector appraiser to conduct the inspection, the appraiser is acting as an agent of the government. See State v. Scrotsky, 39 N.J. 410, 415-16 (1963). -9- property has changed hands. Additionally, in some of the jurisdictions, there are
statutes which limit the assessor’s ability to inspect. In any event, the court has to
be more circumspect in considering inspections by governmental agents since Fourth
Amendment issues are implicated.
The Fourth Amendment of the United States Constitution provides that “[t]he
right of the people to be secure in their persons, houses, papers, and effects, against
unreasonable searches and seizures, shall not be violated . . .” U.S. Const. amend
IV. The Fourth Amendment then goes on to provide that “no Warrants shall issue,
but upon probable cause . . .” Id. The New Jersey Constitution has similar
provisions. N.J. Const. art. I, ¶ 7. Upon first glance, looking to the Fourth
Amendment to resolve a tax related dispute seems out of place since most
jurisprudence involving this amendment concerns criminal offenses.
However, the Fourth Amendment has deep roots in taxation. “Vivid in the
memory of the newly independent Americans were those general warrants known as
writs of assistance under which officers of the Crown had so bedeviled the colonists.
The hated writs of assistance had given customs officials blanket authority to search
where they pleased for goods imported in violation of the British tax laws.” Stanford
v. Texas, 379 U.S. 476, 481 (1965). In addition to hatred of the writs, there was
irritation with the underlying laws for which the writs were issued. Marshall v.
Barlow’s, Inc., 436 U.S. 307, 310 (1978). These laws included the Stamp Act of
-10- 1765, the Townshend Revenue Act of 1767, and the tea tax of 1773. Id. at 310, n.
7.
“It is well settled . . . that the Fourth Amendment’s protection extends beyond
the sphere of criminal investigations. . .” Grady v. North Carolina, 135 S. Ct. 1368,
1371 (2015). “[T]he Fourth Amendment applies to searches and seizures in the civil
context and may serve to resolve the legality of these governmental actions without
reference to other constitutional provisions . . . .” United States v. James Daniel
Good Real Prop., 510 U.S. 43, 51 (1993). “If the government intrudes on a person’s
property, the privacy interest suffers whether the government’s motivation is to
investigate violations of criminal laws or breaches of other statutory or regulatory
standards.” Marshall v. Barlow’s, Inc., 436 U.S. at 312-313.
“The basic purpose of this Amendment . . . is to safeguard the privacy and
security of individuals against arbitrary invasions by governmental officials.”
Carpenter v. United States, 138 S. Ct. 2206, 2213 (2018) (citing Camara v. Mun. Ct.
of City and County of S. F., 387 U.S. 523, 528 (1967)). The sanctity of private
dwellings is ordinarily afforded the most stringent Fourth Amendment protection.
N.J. Dep’t of Envtl. Protection v. Huber, 213 N.J. 338, 358 (2012) (quoting United
States v. Martinez-Fuerte, 428 U.S. 543, 561 (1976)). However, the Fourth
Amendment protects commercial buildings as well as private homes. Marshall v.
Barlow’s, Inc., 436 U.S. at 312; see also See v. Seattle, 387 U.S. 541, 543 (1967).
-11- Government inspections were dealt with by our Supreme Court most recently
in Huber. Huber took title to a residential property subject to a recorded deed
restriction that conditioned development on the issuance of a carefully delineated
wetlands permit and transition area waiver. Id., 213 N.J. at 370. As such, Huber
could not claim a full expectation of privacy to such protected lands. Ibid. As part
of the statutory scheme to protect such lands, Huber’s property was subject to
inspection by the Department of Environmental Protection (“DEP”). Ibid. “In
effect, a property owner receives the right to develop restricted land in exchange for
giving the right of reasonable entry to the DEP to inspect. To be sure, this bargained-
for exchange is subject to the reasonableness of the entry and search.” Ibid.
The Court balanced the right of Huber to exclude the DEP against the
bargained-for exchange of receiving the wetlands permit. In other words, if Huber,
or his predecessor in title, did not want the DEP on the land, a permit from the DEP
should not have been sought. However, the Court made clear that it was leaving for
another day whether the inspection law applied to property that was either (1) not
subject to a wetlands permit, (2) consisted of open fields, or (3) entry is sought in
non-residential settings. Id. at 371.
In the case at hand, there is not any bargained-for exchange such as a permit
that governs the relationship between the current owner (or predecessor in title such
as taxpayer) and the municipality when it comes to inspection of the property. This
-12- is in contrast with a redevelopment parcel which is subject to a long-term payment
in lieu of taxes (PILOT) agreement which mandates the inclusion of a right by the
municipality to inspect the property. N.J.S.A. 40A:20-9(e). This is not to say that a
bargained-for exchange concept as expressed in Huber is a necessary prerequisite to
a search, but rather that the bargained-for exchange concept does create a basis for
a governmental inspection in this case.3
The legal foundation for Huber is Camara, the seminal United States Supreme
Court decision pertaining to administrative searches or inspections by governmental
officials. In Camara, the owner refused entry to a housing inspector for a periodic
inspection. The housing inspector insisted upon entry based upon a housing
ordinance. Id., 387 U.S. at 525-26. While a routine inspection of the physical
condition of private property may be a less hostile intrusion than the typical police
officer’s search for contraband, the Fourth Amendment interests at stake were not
merely peripheral. Id. at 530.
3 It must be emphasized that the court is not deciding whether an assessor has the right to inspect the property as part of a revaluation or reassessment of all or a substantial part of the properties in a given municipality. Nor is this court deciding the right of inspection when the taxpayer is still in possession or control of the property (as owner, lessee or lessor) and files a tax appeal. Rather, the court is solely considering the situation of when an appealing taxpayer no longer owns the property, and the current owner rebuffs the municipality’s request to inspect.
-13- The Court in Camara determined the Fourth Amendment standard of probable
cause for allowing a non-criminal administrative inspection is formulated with an
eye towards reasonableness. Id. at 537, 539. However, “there can be no ready test
for determining reasonableness other than by balancing the need to search against
the invasion which the search entails.” Id. at 536-37. An inspector is permitted to
seek entry without a warrant, but if refused, has to obtain a warrant. Id. at 540.
Health and safety considerations can form the reasonable basis for the issuance of a
warrant. Id. at 538. Moreover, the passage of a time without a periodic inspection
may justify the issuance of a warrant. Ibid. Once again, the court is balancing the
privacy interests of citizens against the government’s interests in conducting certain
programs to protect or benefit the citizenry at large.
Moreover, the case here is unlike that confronting our Supreme Court in Dome
Realty, Inc. v. Paterson, 83 N.J. 212 (1980). Paterson required inspection of rental
apartments “immediately prior” to a new tenant moving into the premises. Id. at
240. The Court distinguished the case from Camara in that the apartments were
vacant at the time of inspection, the inspector has no discretion in which dwellings
are searched as the inspection only occurs on the request of the inspector and there
is not a criminal investigation. Id. 240-241. Unlike Dome, the current owner of the
premises is not inviting the inspection, but rather has rebuffed efforts to inspect.
-14- An inspection by a government agent is vastly different from an inspection by
a private individual. A government agent can discover violations of criminal and
civil law which can lead to consequences. A government agent’s inspection can
impact relations and obligations to the government. For example, if upon inspection,
the agent perceives improvements, steps might be available to increase the assessed
value. Twp. of W. Milford v. Van Decker, 120 N.J. 354, 362 (1990). Even if the
government agent is acting in good faith, it does not diminish this real and apparent
concern that accompanies a request for inspection. But for an inspection, it is
unlikely that the current owner’s assessment will change. 4 The exposure which the
current owner has to an increase upon inspection would not be imaginary or trifling.
Arguments that if the current owner has nothing to hide, they should throw
their doors open to inspection are specious. Such arguments gut the Fourth
Amendment for it can be applied in any number of contexts including criminal
warrants. The Constitution, and the Fourth Amendment in particular, serve an
important and vital purpose as a check on governmental power.
To summarize, the common thread which runs through the governmental
administrative inspection cases is balancing the government’s interest in the
inspection versus the property owner’s constitutional right in limiting governmental
4 Of course, construction or destruction of improvements or another municipal-wide revaluation could affect the assessment. -15- intrusion. Camara, 387 U.S. at 536-37. In Camara, the Court indicated that “[t]he
warrant procedure is designed to guarantee that a decision to search private property
is justified by a reasonable governmental interest. But reasonableness is still the
ultimate standard. If a public interest justifies the intrusion contemplated, then there
is probable cause to issue a suitably restricted search warrant”. Id. at 539.
But for the litigation, the City has not expressed any interest in seeking an
inspection of the property. Thus, there is not any public health or welfare concerns,
or broad public policy at stake to justify an inspection. What is left are two private
interests, that of the taxpayer and that of the current owner. The taxpayer has an
interest in seeking a refund of taxes which he believes were overpaid. The taxes on
the property are approximately $14,000 per year. It goes without the saying the
refund would be somewhat smaller than $14,000 if the taxpayer was successful in
establishing that the property was over-assessed. This private interest in a refund is
balanced against the current property owner’s interest as guaranteed by the Fourth
Amendment. This case is unlike A.B. where there were competing constitutional
interests, a fair criminal trial, versus privacy interests. See Id., 219 N.J. at 547. Here,
the current property owner’s Fourth Amendment rights outweigh the taxpayers’
interest in a monetary refund. In other words, the court would not be able to compel
an inspection by virtue of the Fourth Amendment.
-16- A question also arises as to whether the taxpayer has a due process interest in
securing access to the property if such access is necessary for his case to go forward,
and whether this trumps the Fourth Amendment rights of the current owner. The
current owner is laboring under a tax-burden established by the same assessment
which the taxpayer is contesting. The current owner could have appealed the
assessment, but chose not to appeal. Certainly, the current owner has a right not to
sue and be subjected to the costs, expense and also the rigors of discovery including
inspection of the premises. Taxpayer cannot foist upon the current owner the
burdens and risks of litigation which the current owner has not decided to undertake.
The risks of litigation to the current owner may be greater than the taxpayer
risks. Taxpayer seeks a reduction for 2017. Since 2017 was a revaluation year and
no counterclaim was filed, the City generally cannot seek an increase. Campbell
Soup Co. v. City of Camden, 16 N.J. Tax 219, 226 (Tax 1996). However, the
assessment could potentially be increased for upcoming years to reflect any
perceived improvements to the property. Van Decker, 120 N.J. at 362. Thus, there
is not any downside to the taxpayer appealing, but the current owner does have some
risk. It is not the court’s function to evaluate whether this risk is great or small. The
current owner could not be compelled to effectively participate in this litigation by
this court compelling an inspection.
-17- Since an inspection cannot be compelled in this case, the question is which
party should bear the detriment of an inspection not occurring. It must be
remembered that as a practical matter, “local tax officials often cannot know whether
a residence has undergone renovations which have increased its value without
entering the residence itself.” Ayotte, 356 F.Supp.2d at 16. In other words, an
inspection is an important part of the tax appeal process. Without an inspection, it
would not be fair to the City, or to the other taxpayers in the City who would have
to make up any shortfall in tax revenues if a reduction in assessment was determined
based upon limited evidence.
While it is true that an order of dismissal does not have to be entered if there
is good cause for not providing discovery, being unable to compel an inspection does
not constitute good cause when a taxpayer may have other avenues of relief to secure
an inspection. See R. 4:23-5(a)(1) (“Unless good cause for other relief is shown, the
court shall enter an order of dismissal . . .”). Since there are other avenues of relief
available to taxpayer which are explained in greater detail below, the adverse
consequences of not securing an inspection must fall upon taxpayer.
This court has dealt with an analogous situation when addressing the failure
of a prior owner to complete a Chapter 91 request. Under Chapter 91, a commercial
taxpayer is required to provide income and expense information within forty-five
days, or otherwise face a bar to a tax appeal. L. 1979, c. 91 § 1. N.J.S.A. 54:4-34.
-18- The purpose of the provision is to encourage the remittance of financial information
so that the local assessor can arrive at an accurate assessment. In prior cases, the
issue has arisen whether the prohibition of appeal applies to subsequent property
owners when the predecessor in title failed to comply with Chapter 91. This court
has determined that:
[i]t is the obligation of a purchaser to ascertain the facts concerning the property tax and the property tax assessment on the property that it proposes to purchase and to protect itself in its agreement with the seller as to any rights that it may wish to assert with respect to the property tax.
[ADP of New Jersey, Inc. v. Parsippany-Troy Hills Tp., 14 N.J. Tax 372, 378-79 (Tax 1994); 975 Holdings, LLC v. City of Egg Harbor, 30 N.J. Tax 124, 131-32 (Tax 2017).]
Likewise, it is the obligation of a seller to protect itself in an agreement with
a purchaser as to any rights it may wish to assert with regard to inspection of the
property for tax appeal purposes. In other words, the seller can bargain with the
purchaser for inspection of the property. Certainly, such a request may have to be
supported by adequate consideration. There is not any evidence that the current
owner agreed to allow an inspection so that the taxpayer could continue his tax
appeal. Parenthetically, if the court could compel an inspection, it would give the
taxpayer something beyond what was bargained for with the current owner.
-19- There may be a multitude of reasons why the current owner opposes an
inspection. As already stated, he may not agree with the litigation or may be fearful
his assessment will increase. The current property owner may not be satisfied with
the property and may well have asked the taxpayer to address certain concerns.
These are broad unsupported allegations from both sides as to the current owner’s
rationale. Those concerns can certainly be addressed through negotiations to allow
an inspection, but is not for the court to speculate or wander into such negotiations.
It is none of the court’s concern, nor should the court inject itself into such a dispute.
It is better left to the parties to resolve, and to determine the appropriate
consideration for any inspection (i.e., indemnification if assessment increases,
agreement to repair, percentage of any tax refund for 2017, etc.)
Placing the burden on the taxpayer to secure the inspection is appropriate for
one other reason. It prevents mischief of a taxpayer in thwarting an inspection
through a transfer of the property. If the burden was placed on the municipality to
secure the inspection, a taxpayer could easily avoid such inspection by conveying
the property to a related entity and then claiming that the inspection is not possible.
Moreover, even in a legitimate transaction, friendly buyers and sellers may perceive
a litigational advantage in thwarting an inspection to put the municipality at a
disadvantage. Cf., Ayotte, 356 F.Supp.2d at 17 (“Allowing a taxpayer to prevent
an inspection of his or her home absent a warrant during the appraisal process and
-20- then to challenge the result of that process through abatement proceedings would
adversely impact property tax receipts.”). A reduction in prior years may carry
forward and inure to the benefit of a new owner as well. By placing the onus on the
appealing taxpayer with the sanction of dismissal protects against such subterfuge.
The matter is dismissed without prejudice. R. 4:23-5(a)(1). The taxpayer can
arrange an inspection and apply for restoration of the case. Id. Certainly, the
taxpayer can reach out to the current owner and see if he can reach an agreement as
to an inspection. The court is not going to wander in to the thicket of trying to set
the appropriate value or parameters of such entry. The taxpayer and current owner
are free to reach what they consider to be a fair and mutual bargain as to access, or
if the current owner so desires, no access at all.
IV. CONCLUSION.
For the reasons stated in this opinion, Defendant’s Motion to Dismiss
Plaintiff’s Complaint is GRANTED.
-21-