Massachusetts Institute of Technology v. Board of Assessors of Cambridge

• Decision Date: 12 April 1996
• Citation: 422 Mass. 447,663 N.E.2d 567
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: , 108 Ed. Law Rep. 872 MASSACHUSETTS INSTITUTE OF TECHNOLOGY & another 1 v. BOARD OF ASSESSORS OF CAMBRIDGE.

Page 567

663 N.E.2d 567

422 Mass. 447, 108 Ed. Law Rep. 872

MASSACHUSETTS INSTITUTE OF TECHNOLOGY & another ¹ v. BOARD OF ASSESSORS OF CAMBRIDGE.

Supreme Judicial Court of Massachusetts Suffolk.

Argued March 5, 1996.

Decided April 12, 1996.

APPEAL from a decision of the Appellate Tax Board.

The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court.

Janet Steckel Lundberg (Maria J. Krokidas with her), Boston, for plaintiffs.

Gail S. Gabriel for defendants.

Before WILKINS, LYNCH, GREANEY and FRIED, JJ.

GREANEY, Justice.

This appeal arises from a decision by the Appellate Tax Board (board) dismissing, for lack of jurisdiction, applications for the abatement of real estate taxes for fiscal years 1991 and 1992 filed by the taxpayers, Massachusetts Institute of Technology (M.I.T.) and Kennedy Lofts Associates, a limited partnership (Kennedy Lofts), in connection with a parcel of land in Cambridge. M.I.T. and Kennedy Lofts had filed timely real estate tax abatement applications for fiscal years 1991 and 1992 with the board of assessors of Cambridge (assessors) which denied both applications. M.I.T. and Kennedy Lofts appealed to the board and moved to consolidate their 1991 and 1992 appeals with a pending appeal concerning the denial by the assessors of their fiscal year 1990 application for abatement.

The board conducted hearings on the question of its jurisdiction to hear the appeals from fiscal years 1991 and 1992, and it determined that jurisdiction was lacking under G.L. c. 59, § 64 (1994 ed.). The board entered a decision which ordered that the appeals for fiscal years 1991 and 1992 be dismissed, and it proceeded to hear, and grant, an abatement, on the appeal concerning fiscal year 1990. In connection with its order of dismissal, the board (after a proper request) filed findings of fact and a report and opinion. See G.L. c. 58A, § 13 (1994 ed.), and Rule 32 of the Rules of the Appellate Tax Board (1995). The board denied a request for reconsideration, and M.I.T. and Kennedy Lofts appealed to the Appeals Court. We transferred the case to this court on our own motion, and we now affirm the board's order of dismissal.

The background facts are as follows. The property in issue consists of a 74,571 square foot parcel of land located between Green and Franklin Streets in Cambridge and designated as 96-152 Green Street (subject parcel). The land is owned by M.I.T., but was leased by it to Kennedy Lofts in 1989, for the purpose of renovating an old mill building for residential use. When the lease agreement was made final in May, 1989, the parties recorded a plan in the registry of deeds which designated the subject parcel as a single parcel of land.

Prior to the lease agreement, the subject parcel had been dispersed among five separate (but contiguous) parcels. All five of the parcels were owned by M.I.T., but all of them were taxed separately. Of the five, one parcel contained 71,076 square feet (main parcel). ² The other four parcels were of varying sizes. In reconfiguring the land to accommodate the lease agreement with Kennedy Lofts, M.I.T. took pieces of the other four parcels, amounting to a total of 3,495 square feet, and added that land to the main parcel to create the subject parcel.

When the plan of the newly created subject parcel was recorded, the assessors used it to issue a tax bill which was based on a new assessment of the subject parcel. The first year that taxes were assessed on the subject parcel was fiscal year 1991. ³

We turn now to the merits. In considering whether it had jurisdiction over the appeals by M.I.T. and Kennedy Lofts for fiscal years 1991 and 1992, the board had to construe and apply the portion of G.L. c. 59, § 64, which confers jurisdiction on the board to hear appeals from real estate tax assessments and bills. That portion of § 64 (with the language pertinent to this appeal italicized) reads as follows:

"A person aggrieved by the refusal of assessors to abate a tax ... on a parcel of real estate, may, within three months after the date of the assessors' decision on an application for abatement as provided in section sixty-three, or within three months after the time when the application for abatement is deemed to be denied as hereinafter provided, appeal therefrom by filing a complaint with the clerk of the county commissioners, or of the board authorized to hear and determine such complaints, for the county where the property taxed lies, and if on hearing the board finds that the property has been overrated and that the complainant has complied with all applicable provisions of law, it shall make a reasonable abatement and an order as to cost; provided, that if the tax due for the full fiscal year on a parcel of real estate is more than two thousand dollars, said tax shall not be abated unless the full amount of said tax due has been paid without the incurring of any interest charges on any part of said tax pursuant to section fifty-seven of chapter fifty-nine of the General Laws; and provided further, that for the purposes of this section a sum not less than the average of the tax assessed, reduced by abatements, if any, for the three years next preceding the year of assessment may be deemed to be the tax due, provided that a year in which no tax was due shall not be used in computing such sum and if no tax was due in any of the three next ... preceding years, the sum shall be the full amount of said tax due, but the provisions of said section fifty-seven of said chapter fifty-nine shall apply to the amount of the tax deemed to be due and the payment of said sum without incurring any interest charges on any part thereof shall be deemed to be the payment of the tax."

There is no dispute that M.I.T. and Kennedy Lofts did not pay the full tax amounts due for fiscal years 1991 and 1992. See note 3, supra. M.I.T. and Kennedy Lofts maintained, however, that the board had jurisdiction under the so-called three-year averaging provision (set forth in the last italicized language above) because they had paid an amount equal to the average of the real estate taxes billed for the prior three fiscal years. The board rejected this contention and concluded that the three-year averaging requirement had not been met. The board first pointed out that the portion of § 64 in issue required it to examine the tax assessed on the subject parcel for the three years prior to the last fiscal year that is the subject of the appeal. The board indicated its view that, if there is only a tax due on the subject parcel for one of the three years, the taxpayer had to pay that amount to perfect an appeal. The board also indicated that, if there is no tax due on the subject parcel for any of the three years, then the three-year averaging provision would not apply. According to the board, because the subject parcel did not exist before fiscal year 1991, there was no parcel to which the board could look for determining the average tax over the past three years. The board put its decision in these words: "[T]here was no tax due on the subject parcel for any of the three years prior to fiscal year 1991 since the subject parcel did not exist prior to that fiscal year.... [Therefore,] the three-year-average provision was not available to the taxpayer...." The board reached a similar conclusion as to fiscal year 1992, because, for the purposes of determining the three-year average for that year, the subject parcel only existed for one prior year (1991), and it was clear that M.I.T. and Kennedy Lofts had not paid the full amount of tax assessed for that year.

We conclude that the board acted properly in reaching this result. The board was confronted with the problem whether the three-year averaging provision should be applied to a reconfigured parcel of land at all, and, if so, how this logically could be accomplished. The reconfiguration in this case had resulted in a new parcel which had been assembled by combining one existing large parcel with small parts of four other contiguous parcels. The board could consider that there is nothing in the language of the three-year averaging provision which expressly directed it to apply the provision to a reconfigured parcel of land that had been assessed and taxed as separate parcels in the past. The board also could consider that there is nothing in the language of the provision which instructs it on the methodology to be used in computing the three-year average on reconfigured land like the subject parcel. The computation issue, as the board observed, would be exceedingly difficult to resolve. ⁴

Faced with a problem which did not admit of an efficient and practical solution, and in the absence of any clear legislative direction, the board properly could look to, and literally apply, the statutory language of § 64, which states, in fairly straightforward fashion, that the "tax due" "on a parcel of real estate" is the three-year "average of the tax assessed, reduced by abatements." The board's reasoning, summarized above, explains why the application of this language to the subject parcel does not afford M.I.T. and Kennedy Lofts the jurisdictional benefit of the three-year averaging rule. "In reviewing mixed questions of fact and law, the board's expertise in tax matters must be recognized, and its decisions are due 'some deference.' " Koch v. Commissioner of Revenue, 416 Mass. 540, 555, 624 N.E.2d 91 (1993), quoting McCarthy v. Commissioner of Revenue, 391 Mass. 630, 632, 462 N.E.2d 1357 (1984). French v. Assessors of Boston, 383 Mass. 481, 482, 419 N.E.2d 1372 (1981). In particular, we should respect the board's judgment concerning the feasibility and fairness of alternate proposed methods of property valuation. The board was, of course, correct in observing that jurisdiction is fundamental and cannot be ignored or waived. See Lenson v. Assessors of Brookline, 395 Mass. 178, 179, 478 N.E.2d 954 (1985).

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