Subpoenaed Appraisals Quashed by Attorney-Client Privilege

by: Richard De Angelis
24 Nov 2014

During discovery in these tax appeals, the defendant municipality became aware of appraisals prepared by a licensed real estate appraiser on the subject properties close in time to the valuation dates for the then pending appeals for tax years 2012 through 2014.  Plaintiff’s refused to produce the appraisals.  The defendant served a subpoena to produce copies of the appraisal reports.  Plaintiffs moved to quash the subpoena.

The court granted plaintiff’s motion to quash finding that the appraisals were protected by the attorney-client privilege.

The appraisals at issue were prepared for an individual, who is a member of the LLC plaintiffs.  The appraisals were ordered by and delivered to this individual’s attorney to assist the attorney in rendering estate planning advice to his client.  The court found that the appraiser was a “necessary intermediary” for the attorney to provide the requested advice and that it was intended by the client that such advice remain confidential.

The appraisal reports either showed a market value less than that indicated by the assessment or supported the assessment.  If the former, why not turn them over?  Unless of course the indicated value was less than the assessed value, but more that plaintiff’s position asserted in the tax appeal.  Certainly, if the reports supported the assessment, you could understand the plaintiff’s reluctance to disclose them.  Defendant’s attorney seized upon this and argued that it was possible that a review of the reports would confirm that the appeals were frivolous possibly subjecting plaintiffs to sanctions.

It appears that in response to defendant’s concerns, the court ordered in camera review of the reports.  Without addressing the defendants concerns directly, the court concluded simply that while the appraisals were within the scope of permissible discovery, the reports were protected from disclosure by the attorney-client privilege doctrine.

A copy of the court’s opinion in The Bedford Falls Land Co. v. Township of Raritan, may be found here.

For more on municipalities seeking information beyond that required per the court rules, see:

Bad penmanship not “good cause” to compel production of tax returns