Matthew and Christine Addermann et. al v. Board of Assessors of the Town of Swansea (May 17, 2017)

COMMONWEALTH OF MASSACHUSETTS

APPELLATE TAX BOARD


MATTHEW AND CHRISTINE		v.		BOARD OF ASSESSORS OF 
ADDERMANN							THE TOWN OF SWANSEA
Docket Nos. F325413,
		  F326063	

MARK AND HOLLY CAMARA		v.		BOARD OF ASSESSORS OF
								THE TOWN OF SWANSEA
Docket Nos. F325411,
            F326062

JASON AND JESSICA MATOS		v.		BOARD OF ASSESSORS OF
								THE TOWN OF SWANSEA
Docket Nos. F325410, 
		  F325962

WILLIAM AND JACQUELINE		v.		BOARD OF ASSESSORS OF
FALANDYS							THE TOWN OF SWANSEA
Docket No.  F325412

STEVEN AND MARIA BOUCHARD	v.		BOARD OF ASSESSORS OF
								THE TOWN OF SWANSEA
Docket No.  F325961
				   
								Promulgated:	
								May 17, 2017 
			
These are appeals 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 Swansea ("appellee"), to abate a water district tax imposed upon the above-named property owners (collectively the "appellants") for fiscal years 2014 and 2015.
Commissioner Chmielinski heard these appeals.  Chairman Hammond and Commissioners Scharaffa, Rose and Good joined him in the decisions for the appellants.
	These findings of fact and report are made pursuant to requests by both the appellants and appellee under G.L. c. 58A, § 13 and 831 CMR 1.32.

Paul N. Barbadoro, Esq. for the appellants.

	Edmund J. Brennan, Jr., Esq. for the appellee.
 


FINDINGS OF FACT AND REPORT
At the hearing of these appeals, the parties presented testimony and documentary evidence.  The appellants presented the testimony of appellants Christine Adermannn, Mark Camara, Jason Matos, William Falandys, and Steven Bouchard, who testified on their individual matters.  The appellee presented the testimony of Superintendent Robert Arthur Marquis of the Swansea Water District ("District") and of Peter Burke, the Swansea Fire Chief, who both testified in regards to all of the appeals at issue.  On the basis of all of the evidence, the Appellate Tax Board ("Board") made the following findings of fact.
Pursuant to a Town of Swansea ("Town" or "Swansea") By-Law ("By-Law") and enabling legislation, Chapter 137 of the Acts of the Commonwealth of 1949 ("1949 Act"), the District was incorporated on May 9, 1949.  Among the powers granted to the District is to impose a water district tax, which is at issue in these appeals.
The appellants all own property located in Swansea.  All of the appellants' properties border the neighboring Town of Somerset ("Somerset").  None of the properties had received an assessment of water district tax prior to the assessments for fiscal year 2014.
1.  Jurisdiction
	a.  Jurisdictional facts for fiscal year 2014 appeals
	Swansea bills its real estate taxes on a quarterly basis.  For fiscal year 2014, the first two installments, due on August 1, 2013 and November 1, 2013, were preliminary bills based on the assessed value of the property for the preceding fiscal year.  The actual tax bills for fiscal year 2014 were due in two installments:  February 3, 2014 and May 1, 2014.  
The actual tax bills mailed on December 31, 2013 included information concerning the total tax due for the fiscal year, a notation of the amounts paid by the appellants with their preliminary tax payments, and the amounts remaining due for the remaining two quarters.  The amounts remaining due were evenly divided, within a penny, between the third quarter due on February 3, 2014 and the fourth quarter due on May 1, 2014.
The appellants timely paid their third quarter tax bills and did not file Applications for Abatement by the due date for the payment of the first installment of the actual tax bills.  Notwithstanding the amounts shown as due for the third and fourth quarters on the actual tax bills, the fourth quarter tax bills now showed, for the first time, a "district tax" added to the fourth quarter tax due on May 1, 2014.  Although the fourth quarter tax bills were not labeled as such, the assessors maintained that they included an "omitted assessment" of the district tax under G.L. c. 59, § 75 ("§ 75"). 
	The appellants each filed an appeal with the District.  The District denied each of the appellants' appeals.  The appellants timely filed Applications for Abatement with the assessors and Petitions Under Formal Procedure with the Board as detailed below:
Appellant	Amount of water tax assessment	Application filed with assessors	Application denied by assessors	Petition filed with the Board	
Adermann	$600.92	05/23/2014	06/13/2014	0 09/10/2014	
Camara	$602.26	05/23/2014	06/13/2014	09/10/2014	
Matos	$467.56	05/30/2014	06/13/2014	09/10/2014	
Falandys	$531.31	06/05/2014	06/13/2014	09/10/2014	
Bouchard	----	----	----	----	

On the basis of these facts, the Board found and ruled that it had jurisdiction over the instant appeals for fiscal year 2014.  See G.L. c. 59, § 59.
	b.  Jurisdictional facts for fiscal year 2015 appeals
The Swansea Collector of Taxes mailed the fiscal year 2015 actual tax bills on December 31, 2014.  The fiscal year 2015 actual tax bills included both a real estate tax and the water district tax.  In accordance with G.L. c. 59, § 57C, the appellants each timely paid the taxes assessed without incurring interest.  The appellants timely filed Applications for Abatement with the assessors and Petitions Under Formal Procedure with the Board as detailed below: 
Appellant	Amount of water tax assessment	Application filed with assessors	Application denied by assessors	Petition filed with the Board	
Adermann	$608.67	02/03/2015	03/11/2015	  05/05/2015	
Camara	$613.88	01/29/2015	03/11/2015	04/29/2015	
Matos	$482.76	01/15/2015	03/04/2015	04/24/2015	
Falandys	----	----	----	----	
Bouchard	$396.19	01/22/2015	03/04/2015	04/24/2015	

On the basis of these facts, the Board found and ruled that it had jurisdiction to hear and decide these appeals.


2. Assessment of the water district tax
Superintendent Marquis testified to a change in the Town's assessment of the water district tax at issue.  He testified that the purpose of the By-Law was to create a tax on water used for fire protection.  He then explained that, prior to July of 2012, the Swansea Water District defined a taxable benefit under the 1949 Act and By-Law to include any property located within 1,000 feet of a Swansea fire hydrant.  The Swansea Water District subsequently voted to eliminate the 1,000-foot requirement, effective July 1, 2012, and instead determined that the taxable benefit under the By-Law should extend to any property that the Swansea Water District believed would receive the benefit of fire protection from Swansea.  
Chief Burke was called as a witness on behalf of the appellants.  He testified that the mission of the Swansea Fire Department was "[t]o save life and property in the town of Swansea."  In carrying out that mission, Chief Burke testified that, in the event of a fire, he would use a fire hydrant located closest to a property, including a hydrant that was owned by neighboring Somerset.  Chief Burke testified that Swansea Fire Department equipment has improved since the By-Law first went into effect in 1949, thus enabling the pumping of greater volumes of water over longer distances from fire hydrants.  However, Chief Burke admitted that the Department would still hook up to the closest fire hydrant to the fire, even if that hydrant was outside Swansea in neighboring Somerset.  
Each of the appellants testified that their properties were closer to fire hydrants located in neighboring Somerset than to any hydrants located in Swansea.  
Appellants Christine and Matthew Adermann reside at 200 Millers Lane, which is beyond the 1,000-foot range of the closest Swansea fire hydrant.  At the hearing, Christine Adermann testified that the closest fire hydrant to her property is located across the street, approximately 25 feet from her property, and that this fire hydrant is owned by Somerset.  She testified that the closest Swansea fire hydrant to her property is located at the corner of Bark and Marble Streets, at a distance of about 3,700 feet from her property.
Appellants Mark and Holly Camara reside at 16 Millers Lane, which is beyond the 1,000-foot range of the closest Swansea fire hydrant.  At the hearing, Mark Camara testified that the closest fire hydrant to his property is located across the street on Millers Lane, approximately 40 feet from his property, and that this fire hydrant is owned by Somerset.  He testified that the closest Swansea fire hydrant to his property is located at the corner of Bark and Marble Streets, at a distance of over 1,600 feet from his property.
Appellants Jason and Jessica Matos reside at 32 Wellesley Drive, a property located in a Somerset neighborhood, accessed through Prospect Street in Somerset, and with a Somerset address but actually within the bounds of Swansea.  The Matos' property is beyond the 1,000-foot range of the closest Swansea fire hydrant.  At the hearing, Jason Matos testified that the two closest fire hydrants to his property are each located about 200 feet from his property, one to the east and the other to the west, and that both of these fire hydrants are owned by Somerset.  He testified that the closest Swansea fire hydrant to his property is located at 6 Earl Lane, at a distance of about 1,300 feet from his property and only accessible through a thickly wooded area.
Appellants William and Jacqueline Falandys reside at 26 Red Maple Lane, which is beyond the 1,000-foot range of the closest Swansea fire hydrant.  At the hearing, William Falandys testified that the closest fire hydrant to his property is located across the street on Millers Lane, approximately 40 feet from his property, and that this fire hydrant is owned by Somerset.  He testified that the closest Swansea fire hydrant to his property is located at the corner of Bark and Marble Streets, at a distance of over 1,600 feet from his property.
Appellants Steven and Maria Bouchard reside at 54 Millers Lane, which is beyond the 1,000-foot range of the closest Swansea fire hydrant.  At the hearing, Steven Bouchard testified that the closest fire hydrant to his property is located across the street on Millers Lane, "not even a stone's throw away" from his property, and that this fire hydrant is owned by Somerset.  He testified that the closest Swansea fire hydrant to his property is located down the road, at a distance of at least 2,000 feet from his property.
On the basis of the evidence, the Board found and ruled that the purported "omitted assessment" of the district tax was invalid for fiscal year 2014.  The appellee failed to show that any real or personal property was "unintentionally omitted from the annual assessment of tax" or "unintentionally valued or classified in an incorrect manner."  The district tax was not imposed based on the omission or improper valuation of property in the original assessment.  Rather, the district tax was a separate tax assessed for the first time in the fourth quarter bills because of a "policy change" as described in Superintendent Marquis' testimony.  Accordingly, the district tax assessment for fiscal year 2014 was a considered decision, not the result of an "unintentional" omission or a valuation of property included in the original assessment as required by §§ 75 and 76.     

Moreover, there was no evidence that the assessors returned to the Commissioner of Revenue ("Commissioner") by June 30, 2014 a statement showing the amount of additional taxes assessed by means of an omitted assessment, as required by G.L. c. 59, § 75.  For this additional reason, the Board found and ruled that the fiscal year 2014 district tax was not a valid omitted or revised assessment under §§ 75 or 76.  
Finally, as will be further explained in the Opinion, the 1949 Act provides an exemption for property that "could not be supplied with water from said system in an ordinary or reasonable manner."  As Chief Burke testified, because the Somerset fire department would hook up to the closest hydrant, and because the appellants' properties were located so much closer to a Somerset fire hydrant, the Board found that it would be unreasonable for the Swansea fire hydrants to be used in the event of a fire emergency at any of the subject properties.  Therefore, for the reasons stated in the Opinion, the Board found and ruled that the exception to the water district tax applied to exempt these properties from the water district tax.
Accordingly, the Board issued decisions for the appellants in the instant appeals.



OPINION
At issue in these appeals is the liability of the appellants for the water district tax.  For fiscal year 2014, the Board must first determine whether the assessors, who failed to include the water district tax assessment in the annual assessment of tax for that fiscal year, may properly assess the water district tax in a fourth quarter tax bill.  Although the fourth quarter tax bills were not labeled as such, the assessors maintained that they constituted omitted assessments, and thus were governed by § 75.
	Under certain circumstances and subject to the conditions of § 75, assessors are allowed a second chance during a fiscal year to assess a tax on a "parcel of real property or the personal property of a person" which was "unintentionally omitted from the annual assessment of taxes due to a clerical or data processing error or some other good faith reason" and therefore not assessed during the normal annual assessment of property.  However, the assessors failed to show that any property, real or personal, was omitted from the original tax assessment.  Rather, as Superintended Marquis testified, the district tax reflected a policy decision to assess an entirely new tax on the appellants.  
In a similar appeal before the Board, Sithe New Boston LLC & Boston Edison Co. v. Assessors of Boston, Mass. ATB Findings of Fact and Reports 2001-931, 932-3, the assessors issued to the taxpayer an additional tax bill for so-called "transition payments, which they alleged to be the difference between the taxpayer's assessments in the fiscal year at issue there (1999) and fiscal year 1997, the year the Electric Utility Restructuring Act went into effect.  The Board rejected the assessors' contention that the additional tax bill constituted an omitted assessment, because the failure to include an additional charge in a tax bill "did not amount to an omission of property from the original assessment as required by the applicable statutes."  Id. at 935 (emphasis added). 
	The Board found and ruled in the present appeals that the 2014 district tax did not arise from an omitted or improperly valued property, but from a considered decision to assess a new tax on the appellants.  The tax was assessed without prior notice to the appellants on their fourth quarter tax bills as a new tax, not a revision of the original assessment.  The failure to include the district tax in the original assessment was therefore not "unintentional," nor was the failure due to a "clerical or data processing error or some other good faith reason," as required by § 75; rather, the proposed assessment of the district tax was a intentional decision, which was made too late in the annual assessment process to be valid. 
Furthermore, § 75 requires as a condition precedent to a valid omitted assessment the following: "The assessors shall annually, not later than June 30 of the taxable year . . . return to the commissioner a statement showing the amounts of additional taxes so assessed."  See Sithe New Boston, LLC, Mass. ATB Findings of Fact and Reports at 2001-934.  In United Orthodox Services, Inc. v. Assessors of Brookline, Mass. ATB Findings of Fact and Reports 2004-515, 530-31, the Board ruled that the statutory language of § 75 is "clear and unambiguous" regarding the requirement that the taxing authority submit a statement to the Commissioner. (citing Sithe, Mass. ATB Findings of Fact and Reports at 2001-934).  This submission is "not perfunctory but is meant to 'ensure that the additional amount assessed is not excessive'"; failure to comply with this statutory requirement thus renders a revised assessment invalid."  Wickles v. Assessors of Hatfield, Mass. ATB Findings of Fact and Reports 2013-185, 193 (quoting United Orthodox Services, Mass. ATB Findings of Fact and Report at 2004-531).  In the instant appeals, there was no evidence that the assessors complied with § 75's requirement to return a statement to the Commissioner.  For this additional reason, the water district tax assessments for fiscal year 2014 were not valid.   
For fiscal year 2015, the assessors included the water district tax in the regular tax bills.  In analyzing the substantive merits of the water district tax assessments, the Board referred to Section Seven of the Act, which states in pertinent part: 
[N]o estate shall be subject to any tax assessed on account of the system of water supply under this Act if . . . such estate is so situated that the buildings thereon, or the buildings that might be constructed thereon, could not be supplied with water from said system in an ordinary or reasonable manner.

(emphasis added).  
The uncontroverted facts of these appeals were that each of the appellants' properties was located much closer to neighboring Somerset's fire hydrants than to any Swansea hydrants.  For example, with respect to the Adermanns' property, the difference was 25 feet to the Somerset hydrant versus 3,700 feet to the Swansea hydrant, while with respect to the Matos' property, the difference was 200 feet down the road to the Somerset hydrant versus 1,300 feet through a thickly wooded area to the Swansea hydrant.  Chief Burke testified that in a fire emergency, in the interest of saving life and property, his department would always connect to a fire hydrant located closest to a property, including a fire hydrant owned by neighboring Somerset.  The Board thus found it would be neither ordinary nor reasonable for the Swansea fire hydrants -- located significantly farther away and sometimes only accessible through a thickly wooded area -- to be used in the event of a fire emergency at any of the subject properties.  
"Courts must ascertain the intent of a statute from all its parts and from the subject matter to which it relates, and must interpret the statute so as to render the legislation effective, consonant with sound reason and common sense."  Harvard Crimson, Inc. v. President & Fellows of Harvard College, 445 Mass. 745, 749 (2006).  In the instant appeals, the Board found and ruled that "sound reason and common sense" dictated that the subject properties "could not be supplied with water from said system in an ordinary or reasonable manner" within the meaning of § 7 of the 1949 Act and therefore, they were exempt from the water district tax at issue.
Accordingly, the Board issued decisions for the appellants in these appeals, ordering abatement of the water district tax assessed against the appellants.  

						THE APPELLATE TAX BOARD

					By: ___________________________________
					    Thomas W. Hammond, Jr., Chairman
							
A true copy,
Attest: ___________________________
			Clerk of the Board

 The notice inexplicably references February 1, 2014 as the due date for Applications for Abatement, which was a Saturday.  The due date for Applications for Abatement is the due date of the first installment of the actual tax bill, in this case, February 3, 2014.  See G.L. c. 59, §§ 64, 65.
  Pursuant to G.L. c. 59, § 59, when a taxpayer is assessed pursuant to G.L. c. 59, §§ 75 or 76, the provisions governing omitted or revised assessments, respectively, the taxpayer has three months after the issuance of the omitted/revised assessment to file an appeal with the assessors.  
 February 1, 2015 fell on a Sunday.  Pursuant to G.L. c. 4, § 9, "when the day or last day for the performance of any act . . . falls on Sunday or a legal holiday, the act may . . . be performed on the next succeeding business day."  However, the appellee's office was closed on February 2, 2015 because of a severe snow storm.  Therefore, the application was considered timely, because it was filed on the next business day.

ATB 2017-164