Kinney System of Sudbury Street, Inc. v. Board of Assessors of the City of Boston (November 30, 2000)

COMMONWEALTH OF MASSACHUSETTS
APPELLATE TAX BOARD




KINNEY SYSTEM OF SUDBURY		v.	BOARD OF ASSESSORS OF
      STREET, INC.				 THE CITY OF BOSTON

Docket No. F238348				Promulgated:
                                   November 30, 2000 		 

	This is an appeal under the formal procedure pursuant to G.L. c. 59, §§ 64 and 65, from the refusal of the appellee to abate taxes on certain real estate in the City of Boston owned by and assessed to Richard Rubin, Trustee under G.L. c. 59, § 38, for fiscal year 1996.  The appellant alleged that it was a tenant paying rent for the real estate, was under an obligation to pay more than one-half the taxes, and was in possession of and had an interest in the real estate.   
	Former Chairman Gurge heard the appellee's motion to dismiss.  Present Chairman Burns, Commissioners Scharaffa and Gorton, and former Commissioner Lomans, all joined him in allowing the motion to dismiss, dismissing the appeal for want of jurisdiction, and, on this basis, deciding the appeal for the appellee.  
	These findings of fact and report are made pursuant to a request by the appellant under G.L. c. 58A, § 13, and  831 CMR 1.32.

	Peter Antell, Esq. and John M. Lynch, Esq. for the appellant.

	James D. Rose, Esq. and E. Renee Mapa, Esq. for the appellee. 

FINDINGS OF FACT AND REPORT
	This matter came before the Appellate Tax Board ("Board") on the Assessors' motion to dismiss.  The subject property is located at 50 New Sudbury Street in Boston.  It consists of land, the Government Center Garage ("Garage"), and some office space.  The Assessors valued the property at $66,421,000 and assessed to Richard Rubin, Trustee of the Government Center Garage Realty Trust ("Owner"), a tax thereon, at the rate of $42.59 per $1,000, in the amount of $2,828,870.30.  The tax was paid on or before each of the quarterly due dates without incurring interest.  
	On January 26, 1996, Kinney System of Sudbury Street, Inc. ("Kinney") timely applied to the Assessors for an abatement of the tax.  The application identifies Kinney as the applicant in the appropriate section.  The Assessors did not act on Kinney's application for abatement.  Accordingly, the application was deemed denied on April 26, 1996.  Kinney seasonably filed its petition with this Board on July 26, 1996.  On April 13, 1998, the Assessors filed a motion to dismiss this appeal on the ground that Kinney lacked standing to file the relevant application for abatement under G.L. c. 59, § 59, and, therefore, the Board did not have jurisdiction over this appeal.  
At all relevant times, the Owner was the assessed owner of the subject property.  The lessee of the Garage portion of the property was Kinney, the appellant in this appeal.  Under Article IV of the lease between the Owner and Kinney, Kinney was obligated to pay all taxes related to the Garage portion.  Section 4.05 of Article IV further provides that the "[Owner] shall contest [the real estate] assessment . . . , provided [Kinney] has provided [Owner] with a written request to do so at least twenty (20) days prior to the last day for commencing abatement proceedings.  In the event [Owner] fails to so contest . . . , [Kinney] may contest."  In addition, this section of the lease provides that "[Kinney] shall have the right to join with [Owner] in any contest initiated by [Owner]."  Kinney may also remain in any such contest and continue its prosecution even if the Owner elects not to.  
The Assessors valued the Garage portion of the property at $32,487,000 compared to the $66,421,000 assessment of the property as a whole.  The amount of the real estate tax assessed against the Garage portion of the property was less than fifty-percent of the real estate tax assessed against the property as a whole.  There was no evidence, which even tended to show, that Kinney was obligated to pay or, in fact, did pay more than one-half of the tax.  Accordingly, the Board found that Kinney was not obligated to pay more than one-half of the tax in fiscal year 1996.    
In addition, on January 26, 1996, the same day that Kinney filed its application for abatement, the Owner, through his attorney, filed with the Assessors an application for an abatement of the tax assessed against the subject property for fiscal year 1996, the fiscal year at issue in this appeal.  The Assessors denied the Owner's application by reason of inaction.  The Owner then chose not to file a petition with this Board contesting the Assessors' denial of his application for abatement.  Kinney never joined with the Owner in his application and never sought to continue to prosecute the Owner's application alone.  Kinney also never demonstrated that it acted as the Owner's agent when filing its application for abatement on the same day that the Owner filed his.  
On this basis, the Board found that the Owner was not aware of, and did not authorize, the filing of Kinney's application as the Owner's agent.  The Board also found that Kinney did not join in the Owner's application for abatement.  The Board further found that Kinney did not provide the Owner with any "written request . . . at least twenty days prior to the last day for commencing abatement proceedings."    
On this basis, and for the reasons discussed in its Opinion below, the Board found that Kinney did not have legal standing to prosecute this appeal, and accordingly, the Board did not have jurisdiction to hear it.

OPINION
	General Laws, Chapter 59, Section 59, provides in relevant part: "[a] person upon whom a tax has been assessed . . . , if aggrieved by such tax, may . . . apply in writing to the assessors, on a form approved by the commissioner, for an abatement thereof."  Section 59 further provides in relevant part: "[a] tenant of real estate paying rent therefor and under an obligation to pay more than one-half of the taxes thereon may apply for such abatement."  Section 59 goes on to provide in relevant part:
If a person other than the person to whom a tax on real estate is assessed is the owner thereof, or has an interest therein, or is in possession thereof, and pays the tax, he may thereafter prosecute in his own name any application, appeal or action provided by law for the abatement or recovery of such tax, which after the payment thereof shall be deemed for the purposes of such application, appeal or action, to have been assessed to the person so paying the same.  

Id.  The primary issue presented to the Board by the Assessors' motion to dismiss, and Kinney's opposition to it, was whether Kinney had proper standing to prosecute this appeal where it was not a tenant obligated to pay more than one-half of the tax and, in fact, did not pay the tax.  Secondarily, the Board addressed the issue of whether Kinney had received the assessed Owner's authority, at the relevant time, to prosecute this appeal on the Owner's behalf.
	By now, it is a familiar maxim that this Board is without jurisdiction to hear tax appeals unless the appellant has complied with all of the statutory prerequisites.  See Donlon v. Assessors of Holliston, 389 Mass. 848, 853 (1983); Boston Five Cents Savings Bank v. Assessors of Boston, 311 Mass. 415, 416 (1942); Assessors of Boston v. Suffolk Law School, 295 Mass. 489, 492 (1936).  These prerequisites include being one of the persons authorized by statute to bring an appeal, that is a "person aggrieved."  G.L. c. 59, § 59; Donlon v. Assessors of Holliston, 389 Mass. at 854.  For purposes of this appeal, § 59 defines those persons as being either: (1) "[a] person upon whom a tax has been assessed;" (2) "[a] tenant . . . paying rent . . . and under an obligation to pay more than one-half of the taxes;" or (3) "a person other than the person to whom a tax is assessed . . . [who] is the owner, or has an interest therein, or is in possession thereof, and pays the tax."  G.L. c. 59, § 59.  
	With respect to the first definition of a "person aggrieved," the parties agreed and the Board found that Kinney was not assessed the tax.  Therefore, the Board ruled that Kinney did not meet this statutory definition.  With respect to the second definition, the Board found that Kinney was not obligated to pay more than one-half of the tax.  In Cambridge Trust Co. v. Assessors of Cambridge, 1999 Mass. A.T.B. Adv. Sh. 455 (September 28, 1999), the Board ruled that the tax, which a tenant is obligated to pay to be a "person aggrieved" under § 59, is the tax assessed to the entire parcel, not just the portion of the parcel in which the lessee had an interest.   Id. at 463; see also Charles A. Newhall, Trustee, et al v. Assessors of Cambridge, 2 Mass. Bd. of Tax App. 272, 276 (1935).  In the present appeal, the Board found that Kinney was not obligated to pay more than one-half of the tax assessed on the subject parcel, which included not only the garage space leased by Kinney, but also office and other space. The tax, which Kinney was obligated to pay, was less than one-half of the total tax assessed on the subject parcel.  Accordingly, the Board ruled that Kinney did not meet this statutory definition, either.
With respect to the third definition, the Board found that Kinney did not show that it paid "the tax" either to the Collector or the Owner or in a statutorily meaningful amount.  The right to contest the assessment under this definition accrues only upon the payment of the tax.  Morison v. Assessors of Brookline, 313 Mass. 746, 748 (1943); Choate v. Assessors of Boston, 304 Mass. 298, 303 (1939); Boston Five Cents Sav. Bank v. Assessors of Boston, 311 Mass. at 417.  The Board found that Kinney never showed that it paid the tax assessed, which is a prerequisite for bringing an application for abatement under this third definition.  Small Business Administration v. Assessors of Falmouth, 345 Mass. 294, 298 (1963); Keegan v. Assessors of Boston, 334 Mass. 169, 171 (1956); and see Hamilton Manufacturing Co. v. Lowell, 274 Mass. 477, 481 (1931).  Therefore, the Board ruled that Kinney also was not a "person aggrieved" under this definition.
Finally, the Board found that Kinney was not acting as the Owner's agent when it filed its application for abatement.  On the very same day that Kinney filed its application, the Owner filed its own in its own name.  Kinney's application was brought with Kinney as the named applicant.  Kinney never joined with the Owner in its prosecution of its abatement, and never continued the Owner's contest.  Kinney's application for abatement was separate and distinct from the Owner's.  Moreover, there was no evidence that Kinney ever provided the Owner with the twenty-day notice required by the lease for initiating an abatement proceeding.  Under these circumstances, it can not be persuasively argued that Kinney was acting on the Owner's behalf when it filed its application for abatement.
As the Supreme Judicial Court stated in Choate v. Assessors of Boston, 304 Mass. 298: "[t]he existence of the relationship of principal and agent and the authority of the latter to represent the former are questions of fact if there is evidence of an appointment by the principal and a delegation to the agent of duties to be performed by him for the principal, or if the conduct of the parties is such that an inference is warranted that one was acting in behalf of and with the knowledge and consent of another."  Id. at 300.  In the present appeal, the Board found that there was neither an appointment nor a delegation of authority to Kinney by the Owner, either express or implied.  The Board also found that the conduct of Kinney and the Owner clearly indicated that no principal-agent relationship existed with respect to the applications for abatement that they separately filed, unannounced to each other, in fiscal year 1996.  Accordingly, the Board ruled that Kinney was not acting as the Owner's agent when Kinney filed its application for abatement for fiscal year 1996.
	In a last ditch attempt to bootstrap jurisdiction, Kinney brought a motion to amend its petition to this Board to add the Owner as a named party.  The Board denied this motion because the Owner had already brought its own application for abatement before the Assessors and then elected not to pursue his appeal to this Board upon the Assessors' denial of his application.  To grant Kinney's motion, under these circumstances, would be tantamount to giving the Owner another avenue for jurisdiction, after the time within which to appeal the deemed denial of its application for abatement had already expired.  The relevant statutes do not provide for such a second-chance appeal to this Board.  Kinney did not provide any relevant authority for such a proposition and failed to prove that it filed its petition as the agent of the Owner.  Therefore, the Board denied the motion to amend.  
	On this basis, the Board found and ruled that it did not have jurisdiction over this appeal.  Therefore, it granted the Assessors' motion to dismiss, dismissed this appeal, and decided this matter for the Assessors.

							THE APPELLATE TAX BOARD

						By:__________________________
						   Abigail A. Burns, Chairman



A true copy,




Attest:________________________
         Clerk of the Board


                 

ATB 2000-977