Opinion Summaries

In adopting the present Criminal Code in 1978, our Legislature delineated the insanity defense to criminal charges as follows:

A person is not criminally responsible for conduct if at the time of such conduct he was laboring under such a defect of reason, from disease of the mind as not to know the nature and quality of the act he was doing, or if he did know it, that he did not know what he was doing was wrong.

[N.J.S.A. 2C:4-1 (emphasis added).]

As expressed in these terms, the insanity statute codifies the common-law "M'Naghten" test dating back to nineteenth-century English law.  The Legislature has not revised this definition of insanity since Title 2C's enactment over fifty years ago.

The primary legal issue in this appeal is whether criminal defendants in New Jersey invoking N.J.S.A. 2C:4-1 are permitted to testify at trial about their own allegedly insane mental state without accompanying expert testimony from a qualified mental health professional.  The court agrees with the trial judge that such lay testimony, untethered to admissible expert opinion substantiating the defendant's "disease of the mind," is inadmissible under our Rules of Evidence and insufficient to advance an insanity defense under N.J.S.A. 2C:4-1.  This conclusion is supported by the history and text of the statute.  It is also consistent with the case law of most states that have addressed the issue under the M'Naghten test.  

Although policy arguments can be made and have been made to revise the criteria of N.J.S.A. 2C:4-1 and replace the traditional M'Naghten test with modern concepts of mental disorders, the Legislature has not done so.  Nor has our Supreme Court invalidated the statute as unconstitutional or construed the law to allow lay testimony to suffice to establish a defendant's insanity. Consequently, this court holds that defendants must have expert opinion testimony to meet their burden of proving the defense of insanity.  The court affirms the trial court's ruling that disallowed defendant in this case from testifying about his alleged insane state of mind without calling such an expert.

Judge Jacobs has filed an opinion concurring in the result in this case, but asserting that the law should permit defendants, in certain exceptional situations, to testify as lay witnesses in support of an insanity defense without corroboration by an expert witness.

Defendant challenges his extended-term sentence as a persistent offender based on Erlinger v. United States, 602 U.S. 821 (2024), decided on June 21, 2024.  The Erlinger majority held that under the Fifth and Sixth Amendments, a jury—not a sentencing judge—must decide whether the defendant's prior convictions had been committed on separate occasions, which is required to impose an enhanced sentence under the federal Armed Career Criminal Act.  It is undisputed that Erlinger abrogates the New Jersey Supreme Court's decision in State v. Pierce, 188 N.J. 155 (2006), which reached a different conclusion with respect to enhanced punishment as a persistent offender under N.J.S.A. 2C:44-3(a).

The State acknowledges that the Erlinger rule applies retroactively to "pipeline" cases pending direct appeal.  The State also concedes that defendant's Fifth and Sixth Amendment rights under Erlinger were violated when the judge, rather than a jury, decided that he was a persistent offender eligible for an extended term of imprisonment.  

The Attorney General nonetheless contends that the violation in this pipeline case was harmless constitutional error because the factual basis for defendant's extended-term eligibility is "overwhelming" and "uncontested."  The court ultimately rejects that argument.  The court notes that while the harmless constitutional error doctrine is mentioned in a one-paragraph concurring opinion and a dissenting opinion, the majority opinion in Erlinger is conspicuously silent on the topic.  The court declines to speculate on why the majority opinion does not address that doctrine. 

Instead, the court focuses on the portion of the majority opinion that explicitly rejected the argument that a jury verdict is not required when the predicate facts for an enhanced sentence are "so "'straightforward'" that sending it to a jury would be pointlessly inefficient."  602 U.S. at 839.  Stated another way, the majority opinion makes clear that overwhelming evidence does not obviate the need to have the decision made by a jury rather than a judge.  The majority in Erlinger also stressed that "[t]here is no efficiency exception to the Fifth and Sixth Amendments."  Id. at 842. 

The court concludes that applying the harmless constitutional error doctrine in these circumstances would eviscerate the Erlinger rule.  The court therefore vacates defendant's persistent-offender extended-term sentence.

The court rejects defendant's contention the plain language of N.J.S.A. 2C:44-3(a) precludes a jury from determining whether defendant is eligible for an extended term of imprisonment as a persistent offender. The court concludes the Legislature would prefer to have it construe the statute to comply with the Erlinger rule rather than allow the enhanced sentence provision to succumb to its constitutional infirmity.  Accordingly, the court remands to the trial court with instructions on how to remedy the constitutional violation. 

The Appellate Division’s judgment is affirmed substantially for the reasons expressed in Judge Sabatino’s opinion. The Court concurs with the Appellate Division’s guidance and list of non-exclusive factors for trial courts to consider in exercising their discretion, although the Court notes that the concerns raised in the study about intentionality cited by defendants would need to be tested under the standard articulated in State v. Olenowski, 253 N.J. 133 (2023). The Court also agrees with the recommendation that the Model Criminal Jury Charge Committee consider a model charge regarding jury requests to replay video evidence. The Court offers additional comments on why watching a video in slow motion is not beyond the ken of an average juror, and why playing the difficult-to-perceive recording here in slow motion to assist the jury was not an alteration or distortion of the video.

The mayor of Paterson, its public safety director, and its police chief sued the Attorney General and related defendants in the Law Division after the Attorney General superseded the entire Paterson Police Department.  The Attorney General, assumed administrative and operational control on March 27, 2023, transferred the police chief to the Division of Criminal Justice in Trenton, and appointed an Officer-in-Charge of the Paterson Police Department.  The Law Division judge consolidated and transferred the matters to the Appellate Division for review of the Attorney General's final administrative decision.  On appeal, plaintiffs argue, among other things, that neither statutes nor relevant case law support the supersession of the entire Paterson Police Department.

The court held that the Attorney General and related defendants did not have authority, either express or implied, to supersede the daily operations of the Paterson Police Department.  The court directed the Attorney General to: reassign the police chief to Paterson; to relinquish control of the day-to-day operation and administration of the police department to plaintiffs; and issue a report to plaintiffs summarizing all actions and expenditures undertaken by defendants on behalf of the department within twenty-one days.  The 2021 supersession of the Paterson Police Department's Internal Affairs Unit was left undisturbed.    

Here, Hartford has no duty to defend the employer. The employee’s allegations of simple negligence, gross negligence, and recklessness (the negligence-based claims), which are subject to the workers’ compensation exclusivity bar, are not covered under Part One of the insurance policy and are excluded from coverage under Part Two of the policy. Additionally, the employee’s allegations of intentional wrongdoing are excluded under the policy.

The primary issue in this case concerns the interpretation of the New Jersey Motor Vehicle Warranty Act ("the Lemon Law"), N.J.S.A. 56:12-29 to ‑49.  Among other things, the Lemon Law empowers courts to award consumers who timely report manufacturing defects "specific remedies where the uncorrected defect substantially impairs the use, value, or safety of the new motor vehicle."  N.J.S.A. 56:12-29.

The manufacturing defect in this case involves a crack in a new SUV's front windshield that emerged two days after plaintiff acquired the car.  The crack increased in size as time passed, purportedly hindering the driver's view and creating an alleged safety hazard.  Plaintiff promptly reported the crack, a condition covered by the manufacturer's warranty, to the manufacturer and the dealership that sold him the vehicle.  Despite plaintiff's repeated requests to have the windshield repaired or replaced, ten months passed before the defendant manufacturer did so, after plaintiff filed suit.  In the meantime, plaintiff contends he restricted his use of the SUV, avoiding highways and driving it with trepidation at lower speeds as the crack worsened.  The manufacturer refused to provide him with a loaner vehicle.

While the windshield was in its cracked condition, plaintiff filed suit against the manufacturer in the Law Division.  He sought remedies under the Lemon Law and other statutes.  The trial court granted summary judgment to the manufacturer, principally because by that time the manufacturer had replaced the windshield at no cost to plaintiff.

This court reverses the summary judgment dismissal of plaintiff's Lemon Law claim.  Viewing the facts in a light most favorable to plaintiff, a jury could rationally conclude the crack in the front windshield was a "substantial impairment" that was not replaced in a "reasonable amount of time" and entitled plaintiff to recourse.  In addition, New Jersey's motor vehicle code notably declares that motorists should not drive cars with "unduly fractured" windshields.  N.J.S.A. 39:3-75.  The Lemon Law claim is accordingly reinstated and the matter remanded for a jury trial. 

In the unpublished portion of this opinion, the court addresses plaintiff's other claims, most of which survive summary judgment.

There is no support in the governing statutes, the court rules, or New Jersey case law for the fee awards sought in this appeal. The trial court properly exercised its discretion when it denied the fee applications, and the Appellate Division ruled correctly when it affirmed the trial court’s determination.

Defendant challenges his extended-term sentence as a persistent offender based on Erlinger v. United States, 602 U.S. 821 (2024), decided on June 21, 2024.  The Erlinger majority held that under the Fifth and Sixth Amendments, a jury—not a sentencing judge—must decide whether the defendant's prior convictions had been committed on separate occasions, which is required to impose an enhanced sentence under the federal Armed Career Criminal Act.  It is undisputed that Erlinger abrogates the New Jersey Supreme Court's decision in State v. Pierce, 188 N.J. 155 (2006), which reached a different conclusion with respect to enhanced punishment as a persistent offender under N.J.S.A. 2C:44-3(a).

The State acknowledges the Erlinger rule applies retroactively to "pipeline" cases pending direct appeal.  The State also concedes that defendant's Fifth and Sixth Amendment rights under Erlinger were violated when the judge rather than a jury decided that he was a persistent offender eligible for an extended term of imprisonment.  

The Attorney General nonetheless contends that the violation in this pipeline case was harmless constitutional error because the factual basis for defendant's extended-term eligibility is "overwhelming" and "uncontested."  The court ultimately rejects that argument.  The court notes that while the harmless constitutional error doctrine is mentioned in a one-paragraph concurring opinion and a dissenting opinion, the majority opinion in Erlinger is conspicuously silent on the topic.  The court declines to speculate on why the majority opinion does not address that doctrine. 

Instead, the court focuses on the portion of the majority opinion that explicitly rejected the argument that a jury verdict is not required when the predicate facts for an enhanced sentence are so "'straightforward' that sending it to a jury would be pointlessly inefficient."  602 U.S. at 839.  Stated another way, the majority opinion makes clear that overwhelming evidence does not obviate the need to have the decision made by a jury rather than a judge.  The majority in Erlinger also stressed that "[t]here is no efficiency exception to the Fifth and Sixth Amendments."  Id. at 842. 

The court concludes that applying the harmless constitutional error doctrine in these circumstances would eviscerate the Erlinger rule.  The court vacates defendant's persistent-offender extended-term sentence and remands to the trial court with instructions on how to remedy the constitutional violation.

In this appeal, the court addressees an issue of first impression –– whether a school district merged with another school district under N.J.S.A. 18A:8-44 has standing to withdraw from that district to join a newly formed all-purpose regional school district pursuant to N.J.S.A. 18A:13-47.11. 

Oceanport Board of Education and Shore Regional High School District Board of Education appeal from the September 22, 2023 decision of the Commissioner of Education which determined the Borough of Sea Bright had standing to withdraw from their districts and to petition the Commissioner for approval to join the all-purpose Henry Hudson Regional School District pursuant to N.J.S.A. 18A:13-47.11. 

Following the court's review of the record and applicable law, including the legislative history behind the enactment of N.J.S.A. 18A:13-1 to -81, it concluded the Commissioner's decision correctly interpretated N.J.S.A. 18A:13-47.11 because it comported with the statute's plain language and purpose.  The court further concluded N.J.S.A. 18A:13-47.11 was passed as part of a larger statutory scheme following the enactment of N.J.S.A. 40A:65-1 to -35 and N.J.S.A. 18A:8-43 to -51, to provide financial incentives to encourage shared services, financial accountability, and consolidation and regionalization of school districts.  The court affirms the decision of the Commissioner since it was supported by the record and was not arbitrary, capricious, or unreasonable.

         These cases, calendared back-to-back and consolidated for purposes of the court's opinion, present a novel issue:  whether a judge of compensation was conflicted from presiding over a matter involving the application of a statute which the judge previously sponsored as a member of the Legislature.

         The court held that a compensation judge who formerly sponsored a bill enacted into law is not per se disqualified from presiding over cases implicating or interpreting that law.  Rather, the judge must determine whether a reasonable person would doubt the judge's impartiality, given the judge's prior involvement in the legislative proceedings and the issues and facts presented in the case before the judge.

          Here, the court found the compensation judge's decision denying respondent's motion to recuse was not an abuse of discretion.  The court also affirmed the judge's determination that decedent, as a teacher in a public middle school, was an essential employee under N.J.S.A. 34:15-31.11.

Plaintiff has served as the Tax Assessor for defendant Township of Tewksbury for many years.  After a series of disagreements among the parties regarding plaintiff's assessments and her other work duties, Tewksbury attempted to remove plaintiff from her position.

Plaintiff filed a complaint in the Superior Court, alleging that defendants retaliated against her in violation of the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -14, from 2008 to 2019 for objecting to their attempts to unlawfully influence her assessment determinations and operate a "tax scheme." 

Defendants moved for summary judgment, asserting plaintiff could not establish a CEPA cause of action because she was not an "employee" under the statute entitled to CEPA protection.  The trial court granted the motion, relying on Casamasino v. Jersey City, 304 N.J. Super. 226 (App. Div. 1997), rev'd on other grounds, 158 N.J. 333 (1999), and found that, as a tenured and statutorily protected tax assessor, plaintiff is not an "employee" under CEPA. 

After a careful review, we conclude that Casamasino does not establish a bright line rule that all tax assessors are exempt from CEPA protection.  Despite the unique position a tax assessor holds because of the statutory protection from removal from employment, a court determining the applicability of CEPA should still assess the employment relationship under the framework established in Feldman v. Hunterdon Radiological Assocs., 187 N.J. 228 (2006), and D'Annunzio v. Prudential Ins. Co. of Am., 192 N.J. 110 (2007). See also Lippman v. Ethicon, Inc., 222 N.J. 362 (2015).  The court vacated the order granting summary judgment and remanded for the consideration of the factors articulated in Feldman and D'Annunzio and a determination whether plaintiff is an employee entitled to CEPA protection.

This court was asked to decide whether the State of New Jersey, Office of the Attorney General (OAG) was required to defend the Monmouth County Prosecutors Office (MCPO) in an action in lieu of prerogative writs filed against it by the former Township of Marlboro Deputy Police Chief.  The MCPO conducted an internal affairs investigation into allegations against the Deputy Chief pursuant to Attorney General Law Enforcement Directive No. 2022-14 (Directive 2022-14) and the OAG's Internal Affairs Policy & Procedures, November 2022 Version (IAPP).  After the MCPO issued a report of its findings, the Deputy Chief entered into an agreement with the Township and resigned, reserving his rights to challenge the MCPO's determinations.

The former Deputy Police Chief's prerogative writs action sought only injunctive relief against the MCPO, including an order prohibiting the MCPO from following the IAPP and Directive.  The OAG denied the MCPO's request for representation and the MCPO appealed.

The issue before the court was whether the OAG's duty to defend pursuant to the New Jersey Tort Claims Act (TCA), N.J.S.A. 59:1-1 to -12-3, arises when the underlying action demands no monetary damages and seeks only injunctive or equitable relief through an action in lieu of prerogative writs. 

In this case, the State's obligation to defend, if any, would stem solely from sections 10A-1 to -3 of the TCA.  Under N.J.S.A. 59:10A-1, the duty to defend state employees is mandatory only for tort actions demanding monetary damages.  The defense of all other actions is discretionary under N.J.S.A. 59:10A-3, as interpreted by the Court in Wright v. State, 169 N.J. Super. 422 (2001), and its progeny.

Since the action in lieu of prerogative writs at issue here sought no monetary damages, the court affirmed the OAG's discretionary decision denying representation to the MCPO. 

At issue is whether the holding in State v. Jackson, 243 N.J. 52 (2020), that the Sixth Amendment requires a defendant be permitted to cross-examine a cooperating codefendant with respect to their maximum sentencing exposure prior to their entry into a plea agreement, should be given full retroactive application.  The court concludes that Jackson does not apply to convictions for which direct appellate review was complete when the opinion in Jackson was issued. As a result, the court affirmed the denial of post-conviction relief to defendant, whose direct appeal of her convictions for three offenses arising out of a mortgage fraud scheme was completed approximately a month before the Supreme Court issued its opinion in Jackson.

The court was asked to consider whether a defendant, serving sequentially several consecutive periods of driver's license suspensions imposed for various convictions including driving while under the influence (DWI) offenses, can be charged with violating N.J.S.A. 2C:40-26(b) for driving during the suspension period for a non-DWI-related offense while awaiting commencement of a court-imposed DWI license suspension.  The court determined because the effective date of defendant's most recent DWI-related conviction was delayed only due to other consecutively imposed accumulated sentences, defendant violated N.J.S.A. 2C:40-26(b) when he operated his vehicle prior to the conclusion of the suspension for his DWI offense.

The court distinguished State v. Perry, 439 N.J. Super. 514 (App. Div. 2015).  It noted the Perry court determined N.J.S.A. 2C:40-26(b) "punishes those who drive while suspended for violations of the DWI . . . law . . . when they drive during the court-imposed period of suspension," and it was not intended to criminalize "driving during a period of administrative suspension" when driving privileges could have been restored but for the defendant's failure to complete the process for administrative restoration.  Id. at 531-32.  

The court observed defendant was not driving during a period of administrative suspension after having completed his court-ordered suspension.  Rather, he had not yet completed his suspension term for the most recent of his four DWIs.  The court concluded it would be illogical for defendant to avoid a conviction for violating N.J.S.A. 2C:40-26(b), in light of defendant's four prior DWIs, merely because the suspension for his latest DWI had not yet commenced because he incurred multiple other intervening license suspensions.

         The court adopted the rationale of State v. Cuccurullo, 228 N.J. Super. 517, 520 (App. Div. 1998), holding in the context of applying the enhanced penalties under N.J.S.A. 39:3-40 for driving while suspended for DWI, that "[a] person is 'under suspension' from the time that the suspension is imposed even though the period of suspension may not begin until later."  Ibid.

In these back-to-back appeals consolidated for the purpose of issuing a single opinion, the court addressed the statutory receiver requirements for discharge under the New Jersey Business Corporations Act (BCA), N.J.S.A. 14A:14-1 to -27, and New Jersey Court Rules 4:53-1 to -9.  Appellants Mori Restaurant, LLC (Mori), and Lucille Lopez and Robert P. Lopez, Jr. (the Lopezes), appealed from a November 17, 2023 Law Division order denying reconsideration of an October 6, 2023 order, which discharged Alan I. Gould, Esq. as the court-appointed statutory receiver. 

Following the court's review of the record and applicable law, it concluded the Law Division improvidently granted Gould's discharge as the statutory receiver because he failed to comply with mandatory provisions of the BCA, including written notice to creditors within thirty days of appointment, and court rules, requiring an accounting and inventory.  The court reversed and remanded for further proceedings consistent with the opinion.  In the unpublished section of this opinion, the court addressed other discrete matters. 

Plaintiffs in the underlying out-of-state litigation served a subpoena on a non-party, New Jersey resident, seeking his deposition pursuant to Rule 4:11-4(b).  The trial court denied the witness's motion to quash the subpoena and for a protective order.  On appeal, the witness argued the trial court had misapplied the law regarding discovery of non-party witnesses and had failed to recognize that the subpoena was harassing and sought duplicative, irrelevant, and confidential information. 

The court affirmed the order. Acknowledging a court must consider certain factors when addressing a discovery dispute involving a non-party witness, the court held the trial court had not abused its discretion or misapplied the law when it concluded the non-party witness could not avoid being deposed by claiming a lack of relevancy or relying on unsupported, blanket assertions of harassment and confidentiality.   

In this matter, the court considered whether an employee in the Public Employees' Retirement System (PERS) who submits an application for retirement benefits and thereafter, prior to the effective retirement date, begins the process to attain a nomination for a Superior Court judgeship, has violated N.J.A.C. 17:1-17.14(a)(2), which requires a person collecting PERS retirement benefits to complete 180 days severance from their employment prior to any further public employment in New Jersey. Specifically, under the regulation, if the retiree has a "pre-arranged agreement for reemployment" prior to their effective retirement date, the retiree has not satisfied the severance of employment requirement.  N.J.A.C. 17:1-17.14(a)(2)(v).

Appellant was nominated by the governor for a Superior Court judgeship and confirmed by the Senate in the weeks after her retirement date. Prior to taking the judicial oath, the Division of Pensions and Benefits (Division) advised appellant there was no complete termination of the employment relationship because of the "pre-planning that occurred prior to [her] December 1, 2021 retirement and during the 180 days after [her] retirement."  The PERS Board (Board) affirmed the decision.

After a careful review, the court determined that the Board mistakenly applied the regulation to these specific circumstances.  The regulation prohibits a "pre-arranged agreement," not "pre-planning" that may occur prior to a retirement date.  The nature of the judicial selection process precludes any ability to make an "arrangement" for the position as an individual seeking a judgeship has no control over the process.  There also was no "agreement" that appellant would be offered the judgeship until, at the earliest, the date the Senate confirmed the nomination, which did not occur until after her retirement date. 

To date, appellant has not taken the judicial oath, and considerably more than 180 days have passed since she terminated her prior employment.  Therefore, the court found appellant did not violate N.J.A.C. 17:1-17.14(a)(2). Appellant is entitled to accept the judgeship by taking the judicial oath of office without foregoing her PERS pension and benefits.  The court reverses the Board's final administrative decision. 

         Following the demise of the Council On Affordable Housing (“COAH”), and at the direction of the Supreme Court in Mt. Laurel IV, 221 N.J. 1 (2015), New Jersey trial courts assumed responsibility for evaluating municipal compliance with the State’s constitutionally mandated affordable housing obligations.  Although most municipalities obtained certification of their municipal plans through settlements of declaratory judgment actions, Princeton and West Windsor in Mercer County sought certification from the court, requiring it to determine each town’s fair share of low and moderate housing units for 1999 to 2015 (Gap Present Need) and from 2015 through 2025 (Prospective Need). Their applications for certification were opposed by the Fair Share Housing Center, an affordable housing advocacy group.  The parties presented to the trial court competing and very divergent methodologies in support of the number of units each claimed satisfied constitutional requirements.

         After a lengthy trial, the Mercer County Superior Court issued a decision reviewing the methodologies proposed by both sides and adopting a formula that the court then applied to each town to establish its fair share of low and moderate income housing units for the period 1999 through 2025.  In 2024, the New Jersey Legislature subsequently incorporated the court’s formula into the amended Fair Housing Act at N.J.S.A. 52:27D-304.3. 

On leave granted, the court reviewed a Law Division order denying defendant's motion to permit his expert to testify remotely at an evidentiary hearing in this criminal matter without the State's consent and at his jury trial.  The motion was based on the expert's medical condition and desire to remain at home to care for his ill spouse.

At issue were the seemingly conflicting provisions of: (1) Rule 1:2-1(b), which authorizes the trial court to allow testimony in open court by contemporaneous transmission from a different location upon a showing of good cause and with appropriate safeguards; and (2) the October 27, 2022 Order of the Supreme Court which provides that evidentiary hearings in criminal matters shall procced in person, unless all parties consent to proceed virtually, and that criminal jury trials shall proceed in person.

The court held that Rule 1:2-1(b) and the October 27, 2022 Order can be read harmoniously.  While the October 27, 2022 Order establishes a general framework for how the many categories of proceedings heard in our courts will take place in light of the lessening need for the restrictions imposed in response to the COVID-19 emergency, the Order does not limit the authority granted to the trial courts in Rule 1:2-1(b) to permit the remote testimony of individual witnesses at proceedings that will otherwise take place in person.

The trial court, therefore, had the authority to hear motion by defendant to permit his expert to testify remotely in this criminal matter at an evidentiary hearing without the State's consent and at his jury trial.  The factors established in Pathri v. Kakarlamath, 462 N.J. Super. 208, 216 (App. Div. 2020), issued prior to both the adoption of Rule 1:2-1(b) and the issuance of the October 27, 2022 Order, are useful guidelines for deciding "good cause" and "appropriate safeguards" under the Rule.

The court also held that the trial court properly exercised its discretion when it denied defendant's motion, in light of the technical and complicated nature of the expert's expected testimony, the prevalent role video evidence will play at the hearing and trial, the difficulty the State would have in cross-examining defendant's expert during remote testimony, the physical proximity of defendant's expert to the courthouse and his ability to travel, defendant's knowledge of the expert's desire to testify remotely when he retained the expert, and the absence of medical evidence establishing that appropriate safeguards would be insufficient to protect the expert were he to testify in person.

STATE AND LOCAL TAXES – SALES TAX, IMPOSITION OF TAX – ADMINISTRATION & PROCEDURE, ASSESSMENTS – PRESUMPTIONS, REBUTTAL OF PRESUMPTIONS – EVIDENCE – LAY WITNESS TESTIMONY - HEARSAY EXCEPTIONS – BUSINESS RECORDS – PUBLIC RECORDS 

Tax Court:  La Troncal Food Corp. and Vincente Intriago v. Dir., Div. of Taxation; Docket No. 013472-2017, opinion by Nugent, J.T.C., decided October 2, 2024.  For plaintiff – Chinemerem Njoku (C.N. Njoku, LLC, attorney); for defendant – Heather Lynn Anderson, Deputy Attorney General (Matthew J. Platkin, Attorney General of New Jersey, attorney). 

Held:  Where defendant’s auditor did not testify at trial, the court rejected defendant’s proffered lay opinion testimony from the auditor’s supervisor regarding the reasonableness of the auditor’s actions in setting the estimated tax assessment. The court found the witness’s testimony was inadmissible under Evid. R. 701 due to the supervisor’s lack of personal knowledge of the auditor’s examination. The court also rejected defendant’s proffer of the non-testifying auditor’s report and work papers as an exception to hearsay under Evid. R. 803(c)(6) and Evid. R. 803(c)(8) since the data underlying the estimated assessment included information obtained from the wrong business and the auditor’s methodology was unexplained.  The court found the documents untrustworthy and thus, could not conclude that the auditor performed his duty in a “proper, careful and prudent manner” for purposes of Evid. R. 803(c)(8).

 
The court found plaintiff overcame the presumption of correctness that attaches to the tax assessment by production of credible evidence attacking the reasonableness of the methodology and data the auditor utilized.  The court further found the methodology was aberrant given the auditor’s collection and use of unreliable data wholly irrelevant to Taxpayer’s business and unexplained methodology.  Accordingly, the court set the assessment aside. The court determined plaintiff’s expert’s reconciliation of plaintiff’s sales records to be credible, thus, plaintiff met its burden of persuasion that the sales tax and corporate business tax owed should be less than that owed under defendant’s estimated assessment. 

(38 pages)