Wolosky v. Fredon Township
| Citation | 472 N.J.Super. 315,277 A.3d 1 |
| Decision Date | 02 June 2022 |
| Docket Number | DOCKET NO. A-2382-19 |
| Parties | Jesse WOLOSKY, Plaintiff-Appellant, v. FREDON TOWNSHIP, and Michael and Penny Holenstein, Defendants-Respondents. |
| Court | New Jersey Superior Court — Appellate Division |
Walter M. Luers argued the cause for appellant (Cohn, Lifland, Pearlman, Herrmann & Knopf, attorneys; Walter M. Luers, on the briefs).
Robert B. McBriar argued the cause for respondent Fredon Township (Schenck, Price, Smith & King, LLP, attorneys; William E. Hinkes, on the brief).
Tara Ann St. Angelo argued the cause for respondents Michael and Penny Holenstein (Gebhardt & Kiefer, PC, attorneys; Kelly A. Lichtenstein and Tara Ann St. Angelo, on the brief).
John R. Lloyd argued the cause for amicus curiae Association of Municipal Assessors of New Jersey (Chiesa Shahinian & Giantomasi, PC, attorneys; John R. Lloyd, on the brief).
Before Judges Hoffman, Whipple and Geiger.
The opinion of the court was delivered by
HOFFMAN, P.J.A.D.
Plaintiff Jesse Wolosky appeals from an order of the Tax Court awarding Green Township, pursuant to the frivolous litigation statute, N.J.S.A. 2A:15-59.1, "$45,589.35 in counsel fees and costs for its defense of [defendant Penny] Holenstein"1 in her official capacity as Municipal Tax Assessor. Wolosky v. Fredon Twp., 31 N.J. Tax 373, 405 (Tax 2019). Because the motion for sanctions was untimely, we vacate the award of sanctions in favor of Green Township.
Plaintiff also appeals from an order denying his motion for counsel fees against defendant Fredon Township. Because the record does not support a finding that Fredon Township acted frivolously, we affirm the denial of plaintiff's motion for sanctions.
As a resident of Sussex County, plaintiff sought to increase the tax assessment of the Holensteins’ single-family residence located in Fredon Township. To bring about this increase, on March 30, 2016, plaintiff filed a petition of appeal with the Sussex County Board of Taxation (the Board), challenging the assessment2 of the Holensteins’ residence for the 2016 tax year. The Board dismissed the appeal without prejudice, citing a perceived conflict presented by the fact that Holenstein served as the Municipal Tax Assessor for three Sussex County municipalities: the Townships of Green, Byram, and Stillwater.
On May 12, 2016, plaintiff timely appealed to the Tax Court, pursuant to N.J.S.A. 54:51A-1, again seeking to increase the assessment on the Holensteins’ residence. In his complaint, plaintiff alleged he was "aggrieved and discriminated against by the assessed valuation of [Holensteins’] property." The Holensteins filed an answer3 asserting six affirmative defenses, including failure to state a claim upon which relief can be granted; in addition, they alleged that plaintiff's complaint was "baseless and asserted solely for improper purposes," warranting the imposition of sanctions.
On June 2, 2016, Holensteins’ counsel sent plaintiff a letter, advising him that his tax appeal was frivolous and filed with an intent to harass. The letter also advised that the Holensteins would seek sanctions and attorneys’ fees if plaintiff did not withdraw the tax appeal within twenty-eight days.
When plaintiff failed to withdraw his appeal, defendants filed a motion to dismiss. During oral argument on the motion, the trial court called plaintiff to the witness stand to give sworn testimony concerning his basis for filing the subject tax appeal. After plaintiff testified, the court ruled the motion premature, explaining the tax appeal would not be frivolous if plaintiff overcomes the presumption of validity,4 "regardless of ...his motivations."
On September 2, 2016, the court denied the Holensteins’ motion to dismiss, without prejudice. Thereafter, the court entered an order permitting plaintiff to inspect the Holensteins’ residence, within certain parameters.
The matter proceeded to trial on December 9, 2016, with plaintiff presenting expert Matthew Nemeth5 as his only witness. We summarized Nemeth's testimony in our opinion denying an earlier appeal filed by plaintiff in this matter, after the trial court dismissed his complaint:
After Nemeth testified, plaintiff rested; at that point, defendants renewed their motion to dismiss, arguing that Nemeth's testimony failed to overcome the presumption of correctness. The trial court granted the motion, ruling that plaintiff failed to overcome the presumption of validity of the challenged assessment and dismissed plaintiff's case with prejudice. Specifically, the court found that Nemeth relied "on multiple listing service as a sole source of data" and failed to "support any of his adjustments with any objective data put before this Court." The court noted that Nemeth presented evidence of a difference of 378-square feet, or "[r]oughly a good size room." However, to accept the value proposed by Nemeth of $535,000 would mean that the "the difference of one good-sized room equates to $100,000 in value," which the court found was "not believable ... not credible."
As for plaintiff's "motives in bringing this suit" and the award of sanctions and costs, the court stated it would need to "schedule a hearing ... in the future to determine whether something like sanctions or costs are appropriate in this case." Importantly, the court advised "both sides to look at the rules that pertain to frivolous suits, to be sure that we comply with those."
Before the hearing ended, the trial court reconsidered its plan to schedule a hearing to address the issue of frivolous litigation sanctions, explaining that "any hearing in that regard" is not "appropriate until the plaintiff decides whether to appeal this decision and the [a]ppellate [c]ourt[s] decide[ ] whether or not they agree or disagree" with the decision to dismiss plaintiff's case. Notably, the court did not address the conflict between its revised plan, which deferred the issue of frivolous litigation sanctions until plaintiff exhausted all appeals, with the mandatory time limitation imposed by Rule 1:4-8(b)(2), which instructs that "[a] motion for sanctions shall be filed with the court no later than [twenty] days following the entry of final judgment."
On December 9, 2016, the court entered judgment dismissing plaintiff's case with prejudice; thereafter, plaintiff filed a timely appeal of the judgment. While the appeal remained pending, plaintiff filed tax appeals challenging the assessment on the Holensteins’ residence for the years 2017 and 2018.6 On July 24, 2018, we affirmed the dismissal of the 2016 complaint based on plaintiff's failure to present sufficient evidence to overcome the presumption of correctness. Wolosky I, slip op. at 10. The issue of sanctions and whether the complaint was frivolous at the time of the filing was not presented in the appeal.
On October 18, 2018, the Holensteins filed a motion for sanctions under Rule 1:4-8(b). Plaintiff filed a cross-motion to disqualify the trial judge and for attorneys’ fees. On October 19, 2018, Fredon Township also filed a motion for sanctions.
On October 19, 2018, the trial court entered two orders7 to reopen the case to address defendants’ motions for post-judgment relief. The order recounted the procedural history of the case, specifically that the matter was dismissed with prejudice by judgment dated December 9, 2016, that the bench opinion "reserve[ed] the future right to seek post[-]judgment relief" after any appeals, that the decision was then affirmed on appeal, and that defendants were given until October 19, 2018, to decide whether to seek post-judgment relief.
On March 18, 2019, the trial court denied plaintiff's disqualification motion. The trial court then scheduled a hearing on the motions for sanctions for August 12, 2019. At the hearing, the court heard testimony from the Holensteins and Cindy Church, the Deputy Clerk of Byram Township, in support of the motions. In opposition, plaintiff presented his own testimony, along with deposition testimony of his former counsel, who no longer lived in New Jersey.
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