West Beit Olam Cemetery Corporation v. Board of Assessors of the Town of Wayland (November 10, 2014)

COMMONWEALTH OF MASSACHUSETTS
APPELLATE TAX BOARD
	
WEST BEIT OLAM CEMETERY   	  v.        BOARD OF ASSESSORS 	
CORPORATION                               OF THE TOWN OF WAYLAND

Docket No. F316811 			       	  Promulgated:
		  					       November 10, 2014

 
	This is an appeal filed under the formal procedure pursuant to G.L. c. 58A, § 7 and G.L. c. 59, §§ 64 and 65 from the refusal of the Board of Assessors of the Town of Wayland ("assessors" or "appellee"), to abate taxes on certain real estate located in the Town of Wayland owned by and assessed to West Beit Olam Cemetery Corporation under G.L. c. 59, §§ 11 and 38 for fiscal year 2012 ("fiscal year at issue").  
	Commissioner Chmielinski heard this appeal.  Chairman Hammond and Commissioners Scharaffa and Rose joined him in a decision for the appellant. 
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.

Sander A. Rikleen, Esq. for the appellant.

Mark J. Lanza, Esq. for the appellee.
  

FINDINGS OF FACT AND REPORT
On the basis of testimony and exhibits offered into evidence at the hearing of this appeal, the Appellate Tax Board ("Board") found the following. 
On July 1, 2011, the relevant qualification date for the fiscal year at issue, the appellant, West Beit Olam Cemetery Corporation ("appellant"), owned a parcel of land improved with a single-family residence ("subject home"), identified on the appellee's Map 18 as Lot 34, with an address of 59 Old Sudbury Road in Wayland ("subject property").  For the fiscal year at issue, the assessors valued the subject property at $469,200 and assessed a tax thereon, at the rate of $19.01 per thousand, in the total amount of $8,919.49.  In accordance with G.L. c. 59, § 57C, the appellant timely paid the tax due without incurring interest.  On January 30, 2012, the appellant timely filed an abatement application with the assessors, which the assessors denied on March 19, 2012.  The appellant seasonably filed its Petition Under Formal Procedure with the Board on June 18, 2012.  On the basis of the preceding facts, the Board found and ruled that it had jurisdiction to hear and decide the instant appeal. 


The appellant's acquisition of the subject property
The subject property is a 1.73-acre parcel of land, improved with a single-family, raised-ranch style residence, which is contiguous to a cemetery in Wayland named Beit Olam Cemetery ("Beit Olam").  The subject property, as well as the adjoining Beit Olam, is owned by the appellant, which is a nonprofit Jewish cemetery corporation organized by Jewish Cemetery Association of Massachusetts ("JCAM").  JCAM was formed in 1984 as a project of Combined Jewish Philanthropies, the Synagogue Council of Massachusetts, a number of Jewish Cemetery Associations, and a number of Synagogues in the Greater Boston area.  JCAM's founding purposes include:
To establish a religious organization in accordance with Jewish religious practices, traditions, and beliefs that functions as a Jewish cemetery association for the Jewish communities of Massachusetts; to function as a Jewish burial society and Jewish association for honoring the dead in accordance with Jewish religious practices, traditions and beliefs; . . . 
     
The appellant was established under G.L. c. 180 and its founding purposes include:  "To develop, maintain, and operate a cemetery in accordance with the provisions of M.G.L. c. 114." 
The only issue in this appeal is whether the subject property qualifies for the exemption from taxation under G.L. c. 59, § 5, cl. Twelfth for "cemeteries . . . dedicated to the burial of the dead, and buildings owned by religious nonprofit corporation and used exclusively in the administration of such cemeteries."  The appellant presented its case-in-chief through the testimony of: Michael Coutu, the President and owner of Sudbury Design Group, a landscape architectural firm that was involved in the creation, design and development of JCAM's cemeteries in Wayland; Stanley Kaplan, the Executive Director of JCAM; and Janette Howland ("Mrs. Howland"), who resided at the subject home.  
Pertinent facts related to the appellant's acquisition of the subject property are as follows.  In 1998, the appellant purchased a property then known as Lot 1B, which became the Beit Olam.  Lot 1B was at that time owned by a Mr. Beckett, who also owned the adjoining subject property, then known as Lot 1A.  When JCAM purchased Lot 1B, it also purchased a right of first refusal on the sale of the subject property.  Sometime in 2000, JCAM became concerned that it would run out of available grave sites at the Beit Olam.  JCAM created the appellant in July of 2007 with the purpose of purchasing the subject property.  On July 26, 2007, the appellant purchased the subject property for $1,300,000.  Mr. Kaplan testified that, in his opinion, the $1,300,000 purchase price exceeded the fair market value of the subject property, but the appellant was willing to expend that sum because the subject property was adjacent to the Beit Olam and the appellant was interested in expanding the cemetery to the abutting subject property. 
Mr. Kaplan testified that, subsequent to its purchase of the subject property, the appellant began to take steps to prepare the subject property for use as a cemetery.  The appellant drew up plans for cemetery plots.  Then, on November 6, 2007, pursuant to G.L. c. 114, § 34, the Wayland Board of Health approved the use of the subject property for burial purposes, and on April 14, 2008, pursuant to G.L. c. 114, § 34, the Wayland Town Meeting voted to grant its permission for the same.  However, at the time of the hearing of this appeal, there was pending before the Appeals Court a zoning suit seeking, inter alia, declaratory relief as to whether the appellant must obtain a special earth-moving permit to expand the adjoining Beit Olam cemetery onto the subject property.  Jewish Cemetery Association of Massachusetts, Inc., East Beit Olam Cemetery Corporation and West Beit Olam Cemetery Corporation v. Board of Appeals of the Town of Wayland, et al., Land Court, Misc. No. 386750, Mass. Appeals Court No. 2011-P-0091.  Also, as of the relevant qualification date of this appeal, the subject property had not been dedicated as a Jewish cemetery for burial purposes in accordance with Jewish law and tradition.  


The Howland's occupation of the subject property
Simultaneously with its search for additional cemetery land, the appellant was also seeking a second road access into another of its cemeteries in Wayland.  At that time, the access into nearby East Beit Olam Cemetery was through a residential neighborhood, whose residents often voiced their disapproval of funeral processions traveling through the neighborhood's streets.  The Howland family owned a residential property at 44 Concord Road, adjacent to the East Beit Olam Cemetery.  By a purchase and sale agreement executed on October 14, 2010, the appellant purchased the Howland's property for a stated consideration of $410,000.  In conjunction with, and as partial consideration for this sale, the appellant granted the Howlands the right to live at the subject home on the subject property, rent-free, as provided in a "Cemetery Caretaker Agreement" ("Caretaker Agreement") signed by the appellant and  Mrs. Howland.  Sometime after purchasing the Howland's property, the appellant demolished the Howland's former residence and converted a portion of the land into an access road into the East Beit Olam Cemetery for funeral and visitation purposes.  
The Caretaker Agreement, which expires on October 14, 2017, provides that, "[a]s an inducement to the sale by Howland of the Concord Road property," the appellant will provide housing at the subject home to Mrs. Howland, at no cost to her, for a period of seven years.  The Caretaker Agreement also calls for Mrs. Howland's performance of certain duties at the appellant's cemeteries.  The only duty specified in the Caretaker Agreement, at Paragraph 1, is "causing the gates at the Cemeteries to be opened and closed on a daily basis." 
Paragraph 9 of the Caretaker Agreement provides that the appellant has the right to subdivide the subject property in accordance with a subdivision plan, attached to the Caretaker Agreement, and to utilize the 11,466-square-foot area depicted as "Parcel A" for cemetery purposes.  
Mrs. Howland testified that, shortly after she executed the Caretaker Agreement with the appellant, the Howland family -- Mrs. Howland and her husband and their two adult daughters -- moved into the subject home and made it their primary residence.  At all relevant times, the Howland family resided at the subject  property pursuant to and in accordance with the Caretaker  Agreement. Moreover, the family automobiles, including Mr. Howland's food preparation truck, were parked at the subject property.  Mr. Howland also stored a kayak at the subject property.  
Upon moving into the subject home, Mrs. Howland began performing some duties for the appellant, but she also continued to work part-time as a receptionist at a nearby veterinary hospital.  Mrs. Howland did not recall how long she continued her outside paid employment, but she testified that sometime within the first year of moving into the subject home, she discontinued her hospital duties and did not seek other employment.  Mrs. Howland testified that, at times, her husband and one of her adult daughters assisted her with some cemetery duties.  
Mrs. Howland testified that she performed the following duties at the cemetery properties:  opening the gates each morning; closing the gates each evening; placing American flags at the gravesites prior to Memorial Day; removing the American flags after Veteran's Day; patrolling the cemeteries during the day, particularly East Beit Olam because, as she explained: "I have to go and drive around there rather than looking out my window" as she can to monitor Beit Olam cemetery; wiping down benches to remove leaf debris and goose droppings; relocating a hose to water areas that have not been irrigated; and contacting Animal Control when neighborhood dogs begin barking and threaten to disrupt a funeral taking place at the cemeteries.  Mrs. Howland testified that she kept a daily log of her cemetery duties and she took pictures of anything out of the ordinary.  She retained all of her notes and pictures in a folder that she submitted monthly to Barry Ostroff, the Director of Field Services for JCAM.  Mrs. Howland cited examples of incidents that she has reported to Mr. Ostroff: a sunken grave; fallen trees; tree debris that her husband could not easily remove himself; and apparent issues with the irrigation system.  
Although Mrs. Howland had some responsibility to address or report minor maintenance and landscaping issues, there was no evidence that she performed any administrative duties in connection with the operation of the appellant's cemeteries; rather, the record indicates that the administration of the cemeteries was the responsibility of Mr. Kaplan and Mr. Ostroff, neither of whom worked at the subject home.
Mrs. Howland testified that her time spent performing her cemetery duties often varied from day to day.  When pressed, she stated that she may spend somewhere in the vicinity of one to four hours daily on her duties, "depend[ing] on what is happening that day and what is going on."  This included time spent waiting at the cemetery for someone to respond to an issue that she had reported.  She testified that she did not take vacations from her duties.  Mrs. Howland admitted, however, that, on the town census forms that she had filled out since living at the subject property, she has never listed her occupation as "cemetery caretaker."  She testified that she most likely listed her occupation as a "homemaker," as she spent much time at home tending to one of her daughters, who required care.  
At all times relevant to this appeal, Mrs. Howland and her family did not perform extensive landscaping duties, such as mowing the cemeteries' lawns or regularly removing large quantities of leaf debris.  Mr. Howland and one of their daughters each held jobs outside of the home.  Mrs. Howland did not dig or otherwise prepare the land for burials.  The appellant contracted with an outside vendor to perform these cemetery preparation and maintenance tasks.  Mrs. Howland testified that, aside from glancing out her window to observe Beit Olam cemetery and using her computer to maintain her cemetery log, she did not perform extensive cemetery caretaker work from her home, and she did not have a certain section of the subject home exclusively dedicated to performing her cemetery duties.  Mrs. Howland also admitted that she had no prior education or experience in cemetery maintenance, landscaping or administration.  
In addition to housing the Howland family, the subject property also contained an irrigation pump and well, which was installed during the summer of 2011 and serviced the adjoining Beit Olam cemetery.  Mr. Coutu testified that the irrigation system was installed with the capacity to provide water not only for the existing Beit Olam cemetery but also for a future cemetery at the subject property, which would be called West Beit Olam.  
The appellant claimed that, at all relevant times, the subject property was being held for future cemetery expansion, contained the home of the cemetery caretaker, and contained an irrigation pump and well for the adjoining Beit Olam cemetery as well as for a future West Beit Olam at the subject property.  For these reasons, the appellant contended that the subject property was exempt as land owned by a religious nonprofit corporation and dedicated to the burial of the dead.  At the very least, the appellant contended, the subject property, including the subject home, was used exclusively in the administration of JCAM's cemeteries in Wayland, Beit Olam and East Beit Olam.
The Board's findings
The Board found that Mrs. Howland had no prior education or experience in cemetery maintenance, landscaping or administration.  Further, she did not perform any extensive maintenance or landscaping tasks and performed no administrative duties aside from notifying Mr. Ostroff of occasional discrete issues for him to resolve.  Her duties, while referred to as "caretaking," consisted of a casual monitoring of the cemeteries and minor incidental duties, with the only duty actually reduced to writing in the Caretaker Agreement being the opening and closing of the cemetery gates.  Moreover, while Mrs. Howland performed these duties routinely, she did not perform them extensively, nor did she use the subject property exclusively to perform these duties.  
Further, as an inducement and in consideration for granting the appellant their former Concord Road property adjacent to East Beit Olam, the Howland family was entitled to use the subject home as its primary residence, rent-free, with no interference by the appellant until the expiration of the Caretaker Agreement in October of 2017.  The Board thus found that, while the appellant was contractually obligated to provide the Howland family a residence at the subject property, and while they made the subject home their residence, the majority of the subject property, exclusive of Parcel A, was primarily used for residential purposes and not exclusively, or even primarily, for the burial of the dead or the administration of a cemetery.  The rent-free use of the subject home by the Howlands, at a substantial value over seven years' duration, was part of the consideration that the appellant paid for the purchase of the Howlands' Concord Road property.  Accordingly, the Board found that the Howland's rent-free use of the subject residence was part of the consideration for a land-swap agreement between the Howlands and the appellant.
However, pursuant to Paragraph 9 of the Caretaker Agreement, the appellant has carved out the 11,466-square-foot Parcel A of the subject property's 75,359 square feet and has reserved the right to use it exclusively for cemetery purposes.  The appellant has also sought and gained approval from the Wayland Board of Health and the Wayland Town Meeting to use the entire subject property for burial purposes and has placed an irrigation pump and well on the subject property that is currently serving Beit Olam and has the capacity to service a future cemetery at the subject property.  While the earth-moving permit issue remained unresolved and the subject property had not been dedicated according to Jewish tradition during the fiscal year at issue, the Board found that the preparations made by the appellant for the expansion of its cemetery onto the subject property, including reserving Parcel A exclusively for cemetery purposes, gaining approval of the Wayland Board of Health and Wayland Town Meeting, and placing an irrigation pump and well on the subject property, were sufficient preparations to demonstrate that the appellant had dedicated Parcel A for use in the burial of the dead during the fiscal year at issue.  The Board thus found that Parcel A qualified for the statutory exemption as land devoted to cemetery use and, therefore, was exempt from property tax.  
The Board, therefore, issued a decision for the appellant granting an exemption of 15.2% of the assessed land value, representing the ratio of the 11,466 square-feet of Parcel A to the subject property's total area of 75,359 square feet.  Accordingly, the Board reduced the assessed value by $42,237.31, resulting in an abatement of $812.38.  

OPINION
All property, real and personal, situated within the Commonwealth is subject to local tax, unless expressly exempt.  G.L. c. 59, § 2.  The exemption applicable in this appeal is   G.L. c. 59, § 5, Twelfth ("Clause Twelfth"), which exempts from taxation all "[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."  (emphasis added).  A taxpayer claiming exemption bears the burden of proving that its ownership and occupation of the subject property comes within the express words of the exemption statute.  See, e.g., New Habitat, Inc. v. Tax Collector of Cambridge, 451 Mass. 729, 731 (2008); Springfield Young Men's Christian Ass'n v. Assessors of Springfield, 284 Mass. 1, 5 (1933); Lasell Village, Inc. v. Assessors of Newton, 67 Mass. App. Ct. 414, 419 (2006) (quoting Boston Chamber of Commerce v. Assessors of Boston, 315 Mass. 712, 716 (1944)).
The appellant cites two cases, both decided after Clause Twelfth was enacted in its current form, which considered the applicability of the statute to land used for cemetery purposes but not for actual burials.  In Assessors of Sharon v. Knollwood Cemetery, 355 Mass. 584 (1969), the Supreme Judicial Court distinguished the facts of that case with those of the then-seminal cemetery exemption case, Woodlawn Cemetery v. Assessors of Everett, 118 Mass. 354 (1875).  In Woodlawn Cemetery, the Supreme Judicial Court held that land could not be deemed exempt from taxation as land dedicated to burial of the dead "which has not been devoted or set apart, and some active measures taken towards preparing the ground, for a burial place. A mere dedication or appropriation on paper is not enough." Id. at 361.  The Knollwood Cemetery Court, however, in finding that "[t]he Woodlawn case [wa]s not controlling," held that: 
Chapter 59, Section 5, Twelfth, cannot reasonably be interpreted as requiring that, to qualify for exemption, all land acquired (with municipal consent) for burial purposes must be developed at one time.  It must be expected that a cemetery corporation, in making land purchases, will anticipate its future needs for a period of time and that it will prudently develop its property in an orderly fashion as the need for doing so arises.  We think that the planning and substantial actual use of parts of a defined area of land for cemetery purposes may properly be found, within the meaning of c. 59, Section 5, Twelfth, to constitute a dedication of the whole of that land to cemetery use . . . .

Knollwood Cemetery, 355 Mass. at 589.  The Court in Knollwood Cemetery found that the sale of 42,566 burial lots over a seventeen-year period constituted ample evidence of "active measures" to dedicate the entire land for burial purposes, and thus found the entire cemetery property to be exempt.  Id.  Relying on Knollwood Cemetery, the appellant here contended that there is no requirement that all cemetery land be developed at one time, and that "a cemetery corporation, in making land purchases, will anticipate its future needs for a period of time and that it will prudently develop its property in an orderly fashion as the need for doing so arises."  Id.  
In the second cemetery-exemption case, Blue Hill Cemetery, Inc. v. Assessors of Braintree, 2 Mass. App. Ct. 602, 604 (1974), the Appeals Court ruled that a twenty-eight acre parcel of land, which was not itself prepared for burial but which housed an administration building, a pump house for cemetery irrigation water, two garages for cemetery vehicles and equipment, a caretaker's house, and a nursery to provide shrubs and flowers for the nearby cemetery, was a sufficient dedication of the land to the burial of the dead.  The parties there stipulated that all but a few portions of the land and buildings "were used for cemetery purposes."  Id. at 603.  Relying on Knollwood Cemetery, the Appeals Court found that, even though no burials would be taking place on the land, the land was nonetheless used "for the operation of the cemetery and to supply services closely connected therewith," and therefore exempt under Clause Twelfth.  Id. at 604, 606.  
Expanding upon Blue Hill Cemetery, the appellant here contends that the subject property, which contained the subject home and the irrigation pump and well for Beit Olam, was supporting Beit Olam and East Beit Olam and therefore was sufficiently dedicated to the burial of the dead.  The appellant further contended that the property in Blue Hill Cemetery, like the subject property, included a caretaker house and that the Appeals Court did not require that the cemetery caretaker live alone.  The appellant thus concludes that the occupation of the subject home by the Howland family did not jeopardize the subject property's tax-exempt status. 
A key distinction, however, between the facts of Blue Hill Cemetery and the instant appeal is the stipulation in that case between the parties that the land and buildings "were used by the appellant for the operation of the cemetery and to supply services closely connected therewith."  By contrast, the parties to the instant appeal dispute the use of the subject property for cemetery use.  The Board ruled that there was insufficient evidence to prove that the subject home was "used exclusively in the administration of" a cemetery, as required by Clause Twelfth.  Rather, the primary use of the subject home was as a family residence, with only minimal cemetery-related activities performed by Mrs. Howland.  Further, Mrs. Howland was not even an employee of the appellant.  Rather, the subject property was an integral part of, indeed an "inducement to" and consideration for, a land-swap agreement between the Howland family and the appellant, the primary purpose of which was to settle a dispute with the appellant's residential neighbors over funeral processions to East Beit Olam.  The cemetery services performed by Mrs. Howland were minimal, as the bulk of the maintenance and administration of the cemeteries were contracted to an outside vendor or performed off the subject property by Mr. Kaplan or Mr. Ostroff.  The Board thus found and ruled that the subject home was not entitled to the Clause Twelfth exemption because it was not used exclusively in the administration of the appellant's cemeteries.
However, pursuant to Paragraph 9 of the Caretaker Agreement, the appellant carved out the 11,466-square-foot Parcel A of the subject property and explicitly reserved the right to use it exclusively for cemetery purposes prior to the expiration of the Caretaker Agreement.  Notwithstanding the lawsuit over the earth-moving permit and the fact that the subject property has not been dedicated for Jewish burials, the appellant sought and gained approval from the Wayland Board of Health and Wayland Town Meeting to use the subject property for burial purposes.  The Board ruled that, in accordance with Blue Hill Cemetery, the preparations made by the appellant for the expansion of its cemetery onto the subject property, including reserving Parcel A exclusively for cemetery purposes, securing the necessary approvals of the Wayland Board of Health and Wayland Town Meeting, and placing the irrigation pump and well on the subject property, were sufficient preparations to demonstrate that the appellant had dedicated Parcel A for use in the burial of the dead during the fiscal year at issue.  The Board thus ruled that Parcel A qualified as cemetery land exempt from real estate taxes for the fiscal year at issue.
 


Accordingly, the Board issued a decision for the appellant granting an abatement of $812.38 based upon the assessed value of the 11,466-square-foot Parcel A, which is equivalent to 15.2% of the subject property's total assessed land value.

    THE APPELLATE TAX BOARD



	By:	_____	   __________________	       
   Thomas W.  Hammond, Jr., Chairman 





A true copy,


Attest:				_____undefinedundefinedundefinedundefined____
	    Clerk of the Board

 This amount is exclusive of the Community Preservation Act ("CPA") surcharge of $105.28.
 The Caretaker Agreement provides that Mrs. Howland is not responsible for any occupancy fees, water charges, or costs for insurance, including property, casualty and liability insurance; Mrs. Howland is responsible for only utilities and telecommunications charges.  
  Paragraph 14 of the Caretaker Agreement defines the "fair rental value" of the subject home to be $2,500 per month; over the seven-year occupancy period, the value of the free occupancy exceeds $200,000.  
 This amount includes the appropriate CPA surcharge.
  This amount includes a prorated portion of the CPA surcharge.

ATB 2014-857