Summary Determination May Enhance Tax Appeals Prospects

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Motions for Summary Judgment are common in civil practice. Any party may so move after issue has been joined if no triable issue of fact exists. CPLR 3212. Section 3000.9(c) of the Tax Appeals Tribunal Regulations provides that a motion for “summary determination” is analogous to a summary judgment motion under CPLR 3212.

NYCRR § 3000.9(b)(1) provides that “summary determination” may be granted “if, upon all of the papers and proofs submitted, the administrative law judge finds . . . no material and triable issue of fact is presented and that the . . . judge can, therefore, as a matter of law, issue a determination in favor of any party.”

Why is summary determination appealing in Tax Appeals? The answer lies partly in discovery. While in civil practice, pre-trial discovery is expansive, in tax appeals practice, discovery is limited. Often, the taxpayer may be surprised at hearing with testimony and documentary evidence presented by counsel for the Department. A motion for summary determination forces the Department to “lay bare” its proof at an earlier stage. In that sense, the motion serves as a proxy for discovery. It can also provide an extremely effective means of presenting the case to the ALJ prior to the hearing in a light most favorable to the taxpayer.

While it is true that the Tribunal’s Regulations do provide for typical discovery devices such as requests for admissions, bills of particular, and depositions of adverse parties, their use in Tax Appeals is infrequent. Most evidence, which often consists of auditor’s testimony, his logs and other documentary evidence, is typically presented for the first time at the hearing before the ALJ in Troy (or Manhattan). A motion for summary judgment may eliminate the undesirable element of surprise. Surprise at hearing may derail even the strongest of cases.

Since the motion imposes additional work upon the ALJ, the likelihood of relief should factor into the decision as to whether the motion should be made. Nevertheless, depending upon how the demand for relief is framed, summary determination may be sought with respect to some issues not in dispute, whose seasonable determination would assist the Tribunal, as well as the parties, by narrowing the scope of disputed issues requiring judicial resolution. Even if the motion is denied, the taxpayer may benefit from knowing which issues in the case the tribunal considers problematic.

Once served with a motion for summary determination, the Department must respond by proving the existence of a genuine issue of triable fact. Facts not controverted in opposing papers are deemed admitted. Fair v. Stanley Fuchs, 631 N.Y.S.2d 153 (1st Dept. 1995) held that a party opposing a motion for summary judgment “must produce evidentiary proof in admissible form sufficient to require a trial of material questions of fact . . . mere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient.” Accordingly, affirmations of counsel would be insufficient to defeat the motion. Affidavits by the auditor as well as other evidence in admissible form would seemingly be required to oppose to such a motion.

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