W. Beit Olam Cemetery Corp. v. Bd. of Assessors of Wayland

• Decision Date: 07 July 2016
• Docket Number: No. 15–P–128.,15–P–128.
• Citation: 89 Mass.App.Ct. 677,53 N.E.3d 1277
• Parties: WEST BEIT OLAM CEMETERY CORPORATION v. BOARD OF ASSESSORS OF WAYLAND.
• Court: Appeals Court of Massachusetts

89 Mass.App.Ct. 677

53 N.E.3d 1277

WEST BEIT OLAM CEMETERY CORPORATION

v.BOARD OF ASSESSORS OF WAYLAND.

No. 15–P–128.

Appeals Court of Massachusetts, Suffolk.

Argued April 8, 2016.

Decided July 7, 2016.

Sander A. Rikleen, Boston, for the taxpayer.

Mark J. Lanza for board of assessors of Wayland.

Present: KAFKER, C.J., WOLOHOJIAN, & MALDONADO, JJ.

KAFKER

, C.J.

This is an appeal from a decision of the Appellate Tax Board (board) by West Beit Olam Cemetery Corporation (West Beit Olam), a nonprofit corporation organized in accordance with G.L. c. 114.¹ West Beit Olam is the record owner of lot 1A, located at 59 Old Sudbury Road in Wayland (town). In 2012, pursuant to G.L. c. 59, § 5

, Twelfth (Clause Twelfth), West Beit Olam applied to the town's board of assessors (assessors) for a tax abatement for lot 1A.² The assessors denied the application, and West Beit Olam appealed to the board. After an evidentiary hearing, the board determined that a portion of lot 1A, known as parcel A, was exempt under Clause Twelfth, but the rest of the property was taxable. West Beit Olam appeals, claiming that all of lot 1A is exempt from taxation exempt under Clause Twelfth. For the reasons discussed below, we affirm the board's decision. In particular, we conclude that the board properly denied a tax exemption for the large part of lot 1A and a building located on it that were contractually restricted to residential use for seven years, including the tax year in question.

1. Background. We summarize the facts as the board found them, noting that they are essentially undisputed by the parties. In 1998, the Jewish Cemetery Association of Massachusetts, Inc. (JCAM), a nonprofit cemetery corporation, purchased property in the town and created the Beit Olam Cemetery. As part of that purchase, JCAM also secured a right of first refusal on an adjoining parcel, lot 1A, which is the focus of this appeal. Lot 1A is contiguous to the Beit Olam Cemetery's western border and is improved with a single-family residence.

To accommodate the future expansion of the Beit Olam Cemetery, JCAM created West Beit Olam in 2007 for the purpose of acquiring lot 1A. On July 26, 2007, West Beit Olam purchased lot 1A for $1.3 million.³ Although West Beit Olam thought this price well exceeded market value, it was viewed as a necessary expense to ensure that the Beit Olam Cemetery could expand onto adjoining property in the future.

Shortly after purchasing lot 1A, West Beit Olam created a cemetery development plan depicting the intended design of the future cemetery expansion on lot 1A. West Beit Olam also secured statutory approvals required by G.L. c. 114, § 34

, from the town meeting and the board of health to use lot 1A for burials. However, at the time of the board's decision, lot 1A had not been dedicated as a cemetery in accordance with Jewish law and tradition, and no interments had been conducted on the land.

Concomitant with West Beit Olam's purchase of lot 1A, JCAM endeavored to establish a private access road to the East Beit Olam Cemetery, another of its cemeteries located on a noncontiguous parcel to the east of the Beit Olam Cemetery. To this end, JCAM purchased a property at 44 Concord Road, which is adjacent to the East Beit Olam Cemetery and was owned by Janette Howland (Howland) and her husband. In exchange for the Concord Road property, JCAM paid a total purchase price of $410,000, of which $210,000 was paid to Howland “in the form of housing as set forth in the Cemetery Caretaker Agreement.”

The “Cemetery Caretaker Agreement” (caretaker agreement) grants to Howland and her family the right to live for seven years (until October 14, 2017), “rent-free,” in the house located on lot 1A. The caretaker agreement describes the grant of “rent-free” occupation to Howland “as consideration for the sale of the [Howland] Property.”⁴ The caretaker agreement designates Howland as the “on site caretaker for the Beit Olam Cemetery, East Beit Olam Cemetery, and West Beit Olam Cemetery (if such cemetery is developed for burials)” for the duration of the agreement, and mandates two duties: that she continuously “occupy the Premises for residential purposes only,” and “caus [e] the gates at the Cemeteries to be opened and closed on a daily basis.” The Beit Olam Cemetery and the East Beit Olam Cemetery are owned by JCAM.

The caretaker agreement reserves West Beit Olam's right to subdivide a specific area of lot 1A, designated as parcel A, for burial purposes at any time during the term of the agreement.⁵ However, the caretaker agreement does not restrict Howland's ability to use the rest of lot 1A for residential purposes. The caretaker agreement also allows West Beit Olam to install an irrigation well on lot 1A “for the purpose of watering the Beit Olam Cemetery and any future expansion thereof,” so long as the well does not “unreasonably interfere with Howland's occupancy of the Premises.”⁶ West Beit Olam installed an irrigation well on the western-most portion of lot 1A in 2011. The well has the capacity to irrigate the existing Beit Olam Cemetery and a future cemetery on lot 1A. The well has not been used to irrigate lot 1A or otherwise prepare it for burials.

Shortly after executing the caretaker agreement, Howland and her family moved into the house on lot 1A, and she began her caretaking duties of daily opening and closing the cemetery gates at the Beit Olam and East Beit Olam cemeteries. The board found that she also provided additional services to these JCAM cemeteries, but none involved substantial landscaping or maintenance.

077

The board found that the majority of lot 1A and the house were not entitled to the Clause Twelfth exemption. The board concluded that the property and house were used primarily for residential purposes and that Howland performed minimal cemetery-related services. However, the board determined that parcel A was exempt under Clause Twelfth because West Beit Olam specifically reserved it for cemetery purposes throughout the term of the caretaker agreement. Further, the board determined that West Beit Olam sufficiently demonstrated that parcel A was dedicated to the burial of the dead. The board issued a final abatement of $812.38 for the land constituting parcel A.

2. Standard of review. Property tax “[e]xemption statutes are strictly construed, and the burden lies with the party seeking an exemption to demonstrate that it qualifies according to the express terms or the necessary implication of a statute providing the exemption.” New England Forestry Foundation, Inc. v. Assessors of Hawley, 468 Mass. 138, 148, 9 N.E.3d 310 (2014)

(New England Forestry ). Moreover, “[a]ny doubt in the application of an exemption statute operates against the party claiming tax exemption.” Mount Auburn Hosp. v. Assessors of Watertown, 55 Mass.App.Ct. 611, 616, 773 N.E.2d 452 (2002).

In reviewing the board's decision, “we affirm findings of fact ... that are supported by substantial evidence.” Regency Transp., Inc. v. Commissioner of Rev., 473 Mass. 459, 464, 42 N.E.3d 1133 (2016)

. See New Boston Garden Corp. v. Assessors of Boston, 383 Mass. 456, 465, 420 N.E.2d 298 (1981). Substantial evidence is “such evidence as a reasonable mind might accept as adequate to support a conclusion.” Boston Gas Co. v. Assessors of Boston, 458 Mass. 715, 721, 941 N.E.2d 595 (2011), quoting from Tennessee Gas Pipeline Co. v. Assessors of Agawam, 428 Mass. 261, 262, 700 N.E.2d 818 (1998). “We review conclusions of law, including questions of statutory construction, de novo.” New England Forestry,

468 Mass. at 149, 9 N.E.3d 310. However, we accord “some deference to the board's expertise in interpreting the tax laws of the Commonwealth.” Schussel v. Commissioner of Rev., 472 Mass. 83, 87, 32 N.E.3d 1239 (2015) (quotations omitted).

3. Discussion. Clause Twelfth, as appearing in St. 1966, c. 262, exempts from local property taxation “[c]emeteries, tombs and rights of burial, so long as dedicated to the burial of the dead, and buildings owned by religious nonprofit corporations and used exclusively in the administration of such cemeteries, tombs and rights of burial.” The question we must thus answer is whether lot 1A was “dedicated to the burial of the dead” during tax year 2012.⁸ G.L. c. 59, §§ 5

, 11. As the undisputed facts found by the board establish, no burials or interments have taken place on lot 1A. Moreover, the board found that in tax year 2012, lot 1A, with the exception of parcel A, was contractually restricted to the Howlands' residential use “with no interference” by West Beit Olam, thereby precluding burials on most of the property. We conclude that under these circumstances, lot 1A, with the exception of parcel A, is not entitled to a tax exemption for tax year 2012. We so hold even though the property was purchased for future use as a cemetery, the arrangement with the Howlands presently benefits other cemetery parcels owned by a different taxpayer (JCAM), and Howland performs a minimal amount of cemetery-related work for those other properties.

A. Application of Clause Twelfth to lot 1A. Property taxes are assessed on a yearly basis. G.L. c. 59, § 11

. Accordingly, the focus of this tax exemption inquiry pursuant to Clause Twelfth is on the circumstances of the land during the relevant assessment period, although future plans for the land may also be taken into account. Assessors of Sharon v. Knollwood Cemetery, 355 Mass. 584, 590, 246 N.E.2d 660 (1969) (Knollwood ) (“This language of [C]lause Twelfth indicates to us that the statute, as a basis of exemption, looks to the situation at the time of assessment despite the possibility of future change”). See G.L. c. 59, § 5 (date of determination for whether property is exempt from taxation is July 1 of each year). See New England Forestry, 468 Mass. at 149, 9 N.E.3d 310

(whether property is tax exempt depends on owner's use of it “during the relevant tax year”).

The caretaker agreement is critical to our analysis...