Getting Ready for State Court

If I had to summarize one key to preparing for State Tax Court, it’s “perception versus reality”.  Even the best arguments have to face the “perception” and “market reality” tests.  The appraiser is no longer just talking about his data – he/she has to discuss whatever data the assessor wants to use regardless of whether it’s comparable or not.  This is one reason appraisers like to charge per hour for court preparation.  You can invest a week or more looking into transactions that no appraiser would consider comparable and verifying the data.  When you consider that the data can stretch back five or six years, that’s a lot of data!  That means longer preparation times.

State Court

Attorneys will learn as much as they can about different judges.  For tax appeals, you can expect the judge to understand real estate pretty well.  They may even know about the data in the report and the comparables used from other cases or personal experience.  If so, that’s a plus.  They also have different levels of expectations on the part of the participants.  Some will require more of a “burden of proof” on the part of the taxpayer, others less.  Just like no two people are exactly alike, no two judges are the same and no two cases are guaranteed to get ruled the same way.  It’s a good thing we have rules.

Entering the court room we look around.  Behold… the surprise expert witness or witnesses!  As they say in the marines, “time to improvise, adapt and overcome.”  Sometimes a case is settled very quickly after such surprises but most times you’re there and it’s time for the trial to begin.

The experts take the stand one by one and their qualifications are presented.  Yes, the experts can be cross-examined and attacked on their credentials, but it’s the judge that decides if they qualify.  Fortunately judges recognize experts regardless of whether there are “holes” in the cross-examination of the qualifications.  Unless the witness’s qualifications are just not credible or there is conflict of interest, the expert will be qualified.

Each expert goes up and presents his/her analysis and/or provides testimony on the property or the data (this is referred to as “direct examination” or “direct”, for short).  The surprises don’t end there.  How about surprise exhibits?  Both attorneys will argue about whether it is admissible but remember… it’s the judge that decides.

That’s where the fun ends.  On cross-examination, the opposing attorney will do everything to show data and judgment inconsistencies, factual errors, logic errors and judgment errors by the opposing expert witness.  There is a way of phrasing questions that the expert must be aware of.  Many of the questions will not have black and white answers and that’s the whole point of the questions – to get the expert to commit to a particular fact and begin walking down the opposing attorney’s mental path to a place that causes a logic or factual contradiction.  Watch out!  If it is not a black and white question and the expert does not know the full answer, he/she should only answer the part that they know.  Another way to handle that is to answer it “yes and no” and if the opposing attorney asks for an explanation, give both sides.  This, of course, gives opposing counsel the opportunity to pick a path and walk down it, but the expert witness is still answering the question.  It also gives an opportunity for the expert’s attorney to object [note that I use the term “expert’s attorney” not to show that the expert is an advocate of the attorney but because I can think of no similar or better way to phrase this].  The best a witness can hope for in these situations is that the expert’s attorney will bring the expert witness’s answer up in “redirect” (which occurs after cross-examination) and allow the expert the chance to explain the answer in more detail and/or go down the path in the “yes and no” answer not taken by opposing counsel.

Another way of phrasing questions from opposing counsel is to have the expert answer a series of them and to point out an inconsistency in your “logic”.  They may very well know that it isn’t really inconsistent but they want to trip up the witness.  Their punch line question might be something like “since you didn’t do ‘x’, don’t you see the inconsistency in doing ‘y’?”  If you say something like “no” and then try to explain, you may not get the opportunity because opposing counsel will say “thank you” or something to end your explanation.  So there it sits… opposing counsel’s proposed inconsistency that is not really an inconsistency but the expert hasn’t had a chance to point it out.  Hopefully the expert’s attorney will pick up on that, bring the question up and ask the expert to explain.  It’s the job of the expert’s attorney to bring the question back up in redirect and it is not the expert’s fault if he/she does not do so.

A View from the Stands

So how is the case going?  There are a couple of ways to know.  First pay close attention to what the judge asks the witnesses, which typically occur at the end of their direct or redirect.  What points does he/she need clarification on?  Another way is the most obvious… how interested or bored was he/she during the witness discussions?  What facial expressions were shown?  You can apply the questions equally as well to juries.

Time for the Curtain Call

So when it’s all said and done, the final act follows.  Both Counsels get the chance to make a summation at the end.  They are typically offered the chance to submit a “draft”, which is essentially a written summation.  If both attorneys agree, no summation is necessary (of course, in a jury trial, drafts do not occur… verbal summations are the norm).  If an oral summation is given, in many cases you’ll get to evaluate the arguments and form an opinion on who won and who lost.  Key points and cross-examination problems will be pointed out.  The judge may already have made up his/her mind but the quality of the summation is a clue to the quality of the case.

At this point many judges simply give oral testimony to their conclusions.  The “gavel falls” and the case is over.  Generally, this occurs when the judge has already read all the documents that were submitted as exhibits beforehand (especially the appraisals).  Sometimes the judge writes-up a brief with their findings.  Many times judges submit their briefs within 30 days, but it all depends on their workloads.  It could be many months before a decision is made available.

For some participants, the tax appeal process was fun… for others, it wasn’t.  All court cases must come to an end.  That’s my cue for saying “thanks for reading”.