229 Main Street Limited Partnership v. Board of Assessors of the Town of Natick (March 30, 2001)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


229 MAIN STREET			v.	   BOARD OF ASSESSORS OF
LIMITED PARTNERSHIP				   THE TOWN OF NATICK

Docket Nos. F247354, F247555			Promulgated:
		  F254269, F254270			March 30, 2001
		  F256204, F256205


	These are appeals 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 located in the town of Natick owned by and assessed to the appellant in fiscal years 1998, 1999 and 2000.
	Chairman Burns heard the appellee's Motion to Dismiss these appeals for the appellant's failure to comply with an Appellate Tax Board Order and allowed the appellee's motion to dismiss.  Commissioners Egan and Rose joined her in a decision 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.

Arthur Goldstein, Esq., for the appellant.
Brian C. Levey, Esq. and Maura A. Folan, Esq., for the appellee.

FINDINGS OF FACT AND REPORT

	On January 1, 1997, 1998, and 1999, the appellant, 229 Main Street Limited Partnership, was the assessed owner of two parcels of real estate located at 31 Rutledge Road and 229-231 North Main Street (together the "subject properties"), in the town of Natick.  According to the appellant's petitions filed with the Appellate Tax Board ("Board"), the property located at 31 Rutledge Road is a vacant tract of land of approximately 14,462 square feet, and is used by the abutter as a parking lot.  The property located at 229-231 North Main Street is approximately 13,856 square feet in size and is improved with a commercial building.  
	For the fiscal years at issue, the Natick Board of Assessors ("the Assessors") valued the subject properties, and assessed taxes thereon, as follows:
Fiscal Year	Docket Number	Property 
Location	Assessed Value	Tax Rate	Assessed Tax	
1998	F247354	31 Rutledge 	$156,000	$14.53	$2,276.85	
1998	F247555	229-231 N.Main	$541,100	$14.53	$8,443.48	
1999	F254270	31 Rutledge 	$156,900	$15.11	$2,367.59	
1999	F254269	229-231 N.Main	$581,100	$15.11	$9,013.25	
2000	F256204	31 Rutledge 	$156,690	$15.12	$1,794.10	
2000	F256205	229-231 N.Main	$585,000	$15.12	$8,845.20	

The appellant paid all taxes due without incurring interest.  The appellant also timely filed its applications for abatement with the Assessors and subsequent appeals with this Board.
On March 29, 2000, the Assessors filed Interrogatories and Request for Production of Documents by the appellant under G.L. c. 58A, § 8A and G.L. c. 231, §§ 61-70.  In its requests, the Assessors asked that the appellant provide all documents that supported the income approach to valuing the subject properties, including relevant income and expense statements for the years at issue.
In its responses, filed June 22nd and 26th, 2000, the appellant failed to offer any substantive information.  In many of its responses, the appellant objected on the grounds that the information or documents were "privileged, constituted work product and/or were prepared in anticipation of litigation."  The appellant, however, failed to offer an explanation as to how the requested items constituted privileged material.  In its answers, the appellant also repeatedly referred the Assessors to an appraisal report to be prepared at an unspecified future date. 
Shortly after the appellant filed its answers, on August 28, 2000, the Assessors filed a Motion to Compel Further Answers to Interrogatories and Production of Documents.  The Assessors argued that the appellants' initial answers to the requests were inadequate and that the information sought was necessary for the Assessors' expert to complete an appraisal report and for the Assessors to develop their case.  The Assessors also noted that the hearing date for the appeals was set for October 26, 2000, less than sixty days away.    
In turn, the appellant filed an Opposition to the Appellee's Motion to Compel.  The appellant explained that the Town of Natick had previously brought suit against the appellant, under G.L. c. 21E, for potential pollution of town water via underground contaminants located on the subject property.  The appellant alleged that the costs associated with litigating that case were so high that it had filed for relief, under Chapter 11, in the U.S. Bankruptcy Court for the District of Massachusetts, Worcester Division.  
The appellant further explained that applicable bankruptcy law required that all professionals hired by the appellant, and the nature and amount of their fees, first be approved by petition submitted to the Bankruptcy Court.  Although in its Answers to the Interrogatories the appellant continuously referred the Assessors to the appraisal report, the appellant conceded that as of August 31, 2000, an expert had not yet been retained and in fact no request for permission to retain an expert had been filed with the Bankruptcy Court.  At no time did the appellant request a continuance of the present appeals, to either reschedule the hearing date or the date for submission of the supplemental answers, in light of its alleged difficulties in obtaining an expert appraiser.  
Appellant's Motion to Compel was heard on September 6, 2000.  At that time, Chairman Burns, the presiding Member, asked appellant's counsel if the relevant income and expense statements, which had been requested in appellant's Interrogatories and Request for Production of Documents, had been filed with the Assessors.  Chairman Burns explained that the information was clearly relevant since the parties would no doubt be relying on the capitalization of income approach to value.  She further explained that the information was necessary for the Assessors' expert to prepare an appraisal report and that such information should be readily available to the appellant, irrespective of the pending bankruptcy proceeding.  Appellant's counsel responded that the relevant statements were already on file with the Assessors.

  
On the same date, September 6, 2000, the Board entered an Order which read as follows:  
The appellee's Motion to Compel Further Answers to Interrogatories and Production of Documents is ALLOWED.  The parties are hereby ordered to exchange any expert reports, including appraisal reports, which the parties intend to introduce at the hearing of these appeals, on or before October 26, 2000.  A copy of all reports exchanged shall be filed with the Board.

The appellant shall file supplemental answers to interrogatories and responses to document requests on or before October 26, 2000 for each interrogatory and document request which is the subject of appellee's Motion to 
Compel. . . . 

The hearing on the merits will be held on November 27, 2000 at 9:30 a.m.

After the motion hearing, the Assessors' counsel determined, contrary to the assertions of appellant's counsel, that the appellant had not filed the relevant income and expense statements with the Assessors.  In fact, the Assessors determined that the last time the appellant supplied the information was 1996, and that return was incomplete and unresponsive to many of the questions.  The Assessors notified the Board, and appellant's counsel, of these developments via facsimile dated September 6, 2000.  
Subsequently, the Assessors filed a motion requesting the Board to modify its Order of September 6, 2000, to specifically require the appellant to provide the relevant income and expense statements in advance of the October 26, 2000 deadline for exchanging expert reports.  This motion was heard on Tuesday, October 10, 2000.  The Assessors argued to the Board that, contrary to the appellant's counsel's assertions no income and expense statements had been supplied for the relevant time period.  Accordingly, the Assessors requested that the production date for such information be expedited in order for the Assessors to comply with the Board's October 26, 2000 deadline for the exchange of appraisal reports.  
Although appellant's counsel had been informed on numerous occasions, and most recently via facsimile dated September 6, 2000, that the Assessors did not have the necessary income and expense statements, neither the appellant nor its counsel made any attempt to provide this information.  At no time during the motion session did appellant's counsel offer an excuse for appellant's failure to provide the information.
After hearing the parties' arguments, and noting that the appellant was notified of the Assessors' lack of information by letter dated September 6, 2000, Chairman Burns, the  presiding  member, concluded  that an expedited 
production date was appropriate.  As she again explained, the requested information was necessary for the Assessors' expert to prepare an appraisal report and for the Assessors to comply with the Board's prior Order to exchange reports.  Without such information the Assessors were at a serious disadvantage in preparation for trial.  Further, counsel for the appellant could not explain how the pending bankruptcy proceeding, or any other factor, prevented the appellant from providing basic income and expense information to the Assessors which was readily available to the appellant.  Accordingly, Chairman Burns allowed the Assessors' motion and ordered the appellant to provide the income and expense statement on or before October 13, 2000.  The following day, October 11, 2000, the Board issued a written Order of the Board's decision.  
On Monday, October 16, 2000, nearly a week after the appellant was ordered to provide the information on or before October 13, 2000, and three days after the Board imposed due date, the Assessors notified the Board via facsimile that the appellant had not complied with the Board Order dated October 11, 2000.  The Assessors' counsel sent a copy of this letter, via facsimile, to appellant's counsel.  On the same day, October 16, 2000, having not yet heard from appellant's counsel, the Assessors filed a Motion to Dismiss for Failure to Comply with the Board's Order dated October 11, 2000.
During the days leading up to the motion session, at no time did appellant's counsel provide either the required information or proffer an explanation as to why he was precluded from doing so.  In addition, at no time did appellant's counsel request a continuance of the hearing or request that the Board extend the due date for production of the documents.  
The Motion to Dismiss was heard on October 23, 2000.  The Assessors argued to the Board that as of that date, the appellant had yet to provide the required information.  The Assessors again noted that the requested information was necessary and that the appellant's continued failure to provide the information precluded it from developing its case.  The appellant again offered no reasonable explanation for its continued refusal to provide the requested information and its failure to comply with the clear and unambiguous directive of the Board's Order.  Accordingly, the Board allowed the Assessors' motion to dismiss.  
The appellant never moved to expunge the dismissal, but on October 30, 2000, requested a Findings of Fact and Report, which the Board allowed.
Accordingly, the Board found that the appellant failed to sufficiently answer the Assessors' Interrogatories and Requests for Production of Documents.  The Board also found that the appellant failed to comply with the clear and unequivocal Orders of the Board.  The Board further found that the appellant had no legitimate excuse or reason for failing to comply with the statutory requirements of G.L. c. 231, §§ 61-67, 831 CMR 1.25, and the Board's Order.  
Consequently, the Board held that the appellant's failure to comply with its Order, requiring the appellant to supply the requested information and documents by a date certain, was sufficient grounds for the Board, in its discretion, to dismiss these appeals, particularly where the appellant's recalcitrance continued for weeks even in the face of a Motion to Dismiss and Orders of the Board.  Accordingly, on October 23, 2000, the Board allowed the Assessors' Motion to Dismiss, and, therefore, decided these appeals for the appellee.

OPINION
Where, as here, a taxpayer files its appeals under the formal procedure (See G.L. c. 58A, § 7), either party may interrogate the adverse party to discover facts and 
documents to be used at hearing.  Such requests are governed by "[s]ections sixty-one to seventy, inclusive, of chapter two hundred and thirty-one."  G.L. c. 58A, § 8A.  See also 831 CMR 1.25.  "If a party interrogated fails to answer interrogatories, or to amend [] an answer or part of an answer as ordered, the court may make and enter such order, judgment or decree as justice requires."  G.L. c. 231, § 64.  
"In the matter of 'discovery' much must be left to the judgment and discretion of the Appellate Tax Board."  Board of Assessors of Provincetown v. Vara Sorrentino Realty Trust, 369 Mass. 692, 694 (1976); Olympia & York State Street Co. v. Board of Assessors of Boston, 428 Mass. 236, 239 (1998).  It is well settled that the penalty to be imposed for failure to answer interrogatories properly is to be determined by the sound discretion of the trial judge.  Henry L. Sawyer Co. v. Boyajian, 296 Mass. 215, 21 (1936); Gill v. Stretton, 298 Mass. 342, 344 (1937); Nickerson v. Glines, 220 Mass. 333 (1915).
In Gill, as a result of the plaintiff's failure to answer  interrogatories  submitted  by  the defendant, the 
trial court issued an order which read as follows: "'the defendant's motion for further answers allowed, answers to be filed on or before February 15, 1936.'"  Gill v. Stretton, 298 Mass. at 343.  The plaintiff, however, failed to comply with the court's order.  Consequently, the plaintiff was "nonsuited."  Id.  
In upholding the trial court's decision to nonsuit the plaintiff, the Supreme Judicial Court found that '[I]t was the duty of the plaintiff . . . to comply with [the court's] order . . . . Refusal by the plaintiff to obey that order was trifling with the process of justice."  Gill, 298 Mass. at 344.  The Court went on to note that "'the entry of a nonsuit is the appropriate means of dealing with a refusal to comply with such an order as this.'"  Id.
In the present appeal, the appellant failed to adequately answer the defendant's Interrogatories and Production of Documents.  Noting the importance of the information, the Board subsequently issued an Order that the appellant provide supplemental answers on or before October 13, 2000.


The appellant failed to comply or to offer an explanation as to why it was prevented from doing so.  Based on the appellant's inaction, the Assessors filed a Motion to Dismiss.  Pending the motion session, the appellant still refused to provide the ordered discovery. 
As a result of the appellant's blatant disregard of the Board's Order, and its failure to provide or even present a reasonable excuse for its failure to comply, the Board, after hearing, granted the Assessors' Motion to Dismiss.  At no time did the appellant request that the Board expunge or even reconsider its decision.  The Board found and ruled that the appellant's ongoing recalcitrance and its blatant disregard for the Board's Order warranted dismissal of these appeals. 
When the plaintiff declined to comply with the direction of the court . . . it was the duty of the court to proceed further.  If the court does not possess the power to enforce its just order  . . ., it would be impotent in the face of a recalcitrant party.  The making of an order without authority to enforce it would be a vain ceremony.  The entry of a nonsuit is the appropriate means of dealing with a refusal to comply with such an order as this.


Nickerson v. Glines, 220 Mass. 333, 336 (1915).






	Accordingly, in light of the appellant's failure to comply with the Board's Order to furnish supplemental answers by a specified date the Board allowed the Assessors' Motion to Dismiss.

							APPELLATE TAX BOARD

						By:						
						   Abigail A. Burns, Chairman

A true copy,

Attest:					
    Clerk of the Board

 By agreement, the hearing date for these appeals had been rescheduled for December 6, 2000.
 The appellant at no time argued that the income and expense information was not relevant or admissible in the hearing of these appeals and the Board found, and ruled that the requested income and expense information was properly discoverable.

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ATB 2001 - 264