I got this message again trying to use the align parcels tool. It is extremely unhelpful. I'll try running Repair Geometry, as I recall that might solve the problem, but without knowing exactly what has the null z value that's causing the tool to fail I pretty much have to go individually move ~100 parcels and their associated lines by hand.
Anyone else have any ideas of how to bulk remove null z values? I wish I could just turn off all that. We don't use elevation data at all in my organization.