The Town of Natick (plaintiff / Town) seeks to foreclose its tax lien on the premises known and numbered as 5 Presbrey Place in Natick, Massachusetts (Locus / property). The property was taken into Tax Title on May 8, 1998 for non-payment of the fiscal year 1994 real estate taxes and accrued interest in the amount of $3,504.21 (1994 Tax Title). The assessed owner of the property is the defendant herein, Michael W. Dyer, Trustee of Batman Realty Trust (defendant). Subsequent to the taking, the Town applied portions of defendants fiscal year 2000 and 2001 real estate tax payments to the outstanding Tax Title account. As a consequence, the Town asserts that amounts are delinquent not only for fiscal year 1994 but for fiscal years 2000 and 2001 as well. For his part, the defendant denies ever missing a tax payment and seeks a judgment dissolving the lien and dismissing the complaint to foreclose.
For the reasons that follow, this court concludes that defendant remains indebted to the Town of Natick for fiscal year 1994 in the amount of $3,504.21, as represented by the corresponding Tax Title as of May 8, 1998, together with such other amounts, including taxes and statutory interest as will be determined by this court in accordance with the procedure set out below.
Further, this court concludes that the Town improperly allocated certain fiscal year 2000 and 2001 tax payments to the Tax Title account. [Note 1] These amounts should have been applied as intended by the taxpayer toward the fiscal year 2000 and 2001 real estate tax obligations. Consequently, the Town must properly reallocate these payments as originally intended by the taxpayer.
On May 8, 1998, the property was taken for non-payment of real estate taxes by means of an Instrument of Taking recorded at the Middlesex South District Registry of Deeds. [Note 2] On July 21, 2006, the Town of Natick filed a Complaint to foreclose its tax lien on the property at 5 Presbrey Place. On October 23, 2006, Defendant filed an Answer in which he asserted, inter alia, that he had paid the fiscal year 1994 tax obligation in full and that he had no knowledge of the tax taking until he was denied a building permit in 2005.
The case was tried on June 11, 2009. By agreement of the parties, no court reporter was present. The parties introduced various exhibits which were admitted into evidence and incorporated into this decision. Three witnesses testified at trial. The Director of Assessing and Executive Assistant to the Tax Collector testified on behalf of the Town. The defendant testified on his own behalf. Post Trial Briefs were filed on or before July 10, 2009.
On all the testimony, exhibits and other evidence properly introduced at trial or otherwise before me, and the reasonable inferences I draw therefrom, and taking into account the pleadings, memoranda and arguments of the parties, I find as follows:
1. The Locus at 5 Presbrey Place is a parcel of 24,966 square feet in the Town of Natick, Massachusetts. It is identified as Parcel 53F on Natick Assessors Map 60.
2. At all times relevant hereto, the assessed owner of the Locus has been Michael W. Dyer, Trustee of Batman Realty Trust (defendant). The defendant holds title to the Locus pursuant to a deed dated March 5, 1990 and recorded the following day with the Middlesex South District Registry of Deeds at Book 20412, Page 284.
3. Tax abatements were sought by the defendant and granted by the Town for fiscal years 1995, 1996, and 1998. 4. On May 8, 1998, an Instrument of Tax Taking (Instrument) was issued by the Town for non-payment of taxes for the year 1993-1994. [Note 3]
5. The Instrument recites that 1993-1994 taxes remain unpaid in the amount of $2,239.22, together with interest to the date of demand in the amount of $1,264.99. The total sum for which the land is taken is given, therefore, as $3,504.21.
6. The Instrument recites further, that the demand for payment was made upon the defendant on June 30, 1994 and that such amounts were not paid within fourteen days after demand therefore.
7. The Instrument of Taking was recorded on July 2, 1998 at Book 2879, Page 74 with the Middlesex South District Registry of Deeds.
8. Defendant has not retained copies of his fiscal year 1994 checks as he purges his records every seven years.
9. The defendant further testified that the bank [Note 4] in which the relevant checking account was maintained during fiscal year 1994, has not retained copies of checks that defendant may have written at that time.
10. Defendant took deductions for fiscal year 1993 and 1994 real estate taxes on his calendar year 1993 and 1994 federal tax forms.
11. The Town applied defendants 4th Quarter fiscal year 2000 tax payment, the 3rd Quarter fiscal year 2001 tax payment, and the 4th Quarter fiscal year 2001 tax payment, to the outstanding Tax Title account as well as to certain water and sewer liens. As a consequence, the Towns records reflect balances outstanding for fiscal years 2000 and 2001, as well as for fiscal year 1994.
12. At the time these payments were so applied, it was the Towns stated policy not to apply payments received toward amounts owed for a prior year without first securing the taxpayers approval.
13. The Town produced a handwritten receipt reciting that the defendants 4th Quarter fiscal year 2000 tax payment was applied to fiscal year 1994 Tax Title interest [Note 5] and principal. [Note 6] The defendant asserts that he mailed in his payment and that he never received such a receipt.
14. The checks used by the defendant to pay the fiscal year 2000 and 2001 taxes referenced the quarterly payment and either the year or bill due date, e.g. 1st Payment 2000, 3RD PAY / 8/1/01, handwritten in the memo or FOR field.
15. The eight checks used by the defendant to pay his fiscal year 2000 and 2001 quarterly real estate tax bills were drawn on the account of Design Projects, Inc... 5 Presbrey Pl., Natick, MA. 01760.
16. Seven of the eight checks used by the defendant to pay his fiscal year 2000 and 2001 quarterly real estate tax bills were dated well beyond the relevant due dates. [Note 7]
17. On the checks that were late, defendant unilaterally calculated and remitted interest. Such calculations were accepted by the Town.
18. Defendant alleges that he first learned of the unpaid taxes at the end of 2003.
19. In 2005, defendant was denied a building permit by the Town due to the tax delinquency appearing in the municipal record. Defendant asserts that until this time he had been unaware that the Locus was in Tax Title. 20. On July 21, 2006, the Town filed a Complaint to foreclose its tax lien.
21. The Towns computerized records show defendant with outstanding balances for fiscal years 1994, 2000, and 2001. As of June 8, 2009 those amounts are as follows: for fiscal year 1994, $2,298.42 in principal and $2,877.78 in interest; for fiscal year 2000, $1,251.12 in principal and $1,778.26 in interest; and for fiscal year 2001, $2,647.48 in principal and $3,365.90 in interest. The above amounts total $14,218.96, exclusive of additional fees. [Note 8]
As previously observed, the Town of Natick took the subject property into Tax Title pursuant to an Instrument of Taking dated May 8, 1998 and recorded at the Registry on July 2, 1998 at Book 2879, Page 74.
Under the provisions of G.L. c.60, §54, an Instrument of Taking recorded within sixty days of the date of taking shall be prima facie evidence of all facts essential to the validity of the title so taken . . . . In the case at bar, the Instrument of Taking referenced the property at 5 Presbrey Place. It recited that demand had been made for non-payment of taxes upon Batman Realty Trust, Michael Dyer, Trustee on June 30, 1994. It further stipulated that the fiscal 1993-1994 taxes remaining unpaid were in the amount of $2,239.22 with interest to the date of the taking of $1,264.99. Consequently, the total sum for which the property was originally taken, totaled $3,504.21.
As the Instrument was recorded within the sixty day period, this court finds that the Instrument of Taking constitutes prima facie evidence of all facts essential to the validity of the title so taken. Among such facts are those set out in the preceding paragraph.
The case of Horvitz v. Commr of Revenue, 51 Mass. App. Ct. 386 (2001) is of assistance in evaluating such prima facie evidence. [Note 9] In Horvitz, the Commissioner of Revenues determination as to the taxpayers domicile was upheld by the Appellate Tax Board (Board). In reversing the Boards decision, the Court acknowledged that the commissioner was required to produce evidence of a domicile change, upon a prima facie showing by the taxpayer that his domicile originally was elsewhere. [Note 10]
Upon a showing by a taxpayer of an existing domicile, that taxpayer has made out a prima facie case that the domicile has continued; to say that the commissioner then has a burden to produce evidence is to state the obvious, since the commissioner will automatically lose if he remains silent. The burden upon the commissioner under such circumstances is not only to produce, but to persuade. [Note 11] (emphasis added)
So to, in the case at hand, where the Instrument of Taking constitutes prima facie evidence of the relevant facts recited therein, i.e. those necessary for the validity of the tax taking, I conclude that the taxpayer was obliged to produce persuasive evidence demonstrating payment of the fiscal year 1994 tax. It is this courts view that the taxpayer has fallen short in this respect.
The primary non-testimonial evidence produced by the defendant [Note 12] in support of his claim of payment consists of pages purporting to be from his personal 1993 and 1994 calendar year federal tax returns. [Note 13] Included are copies of the front of the first page of defendants 1993 calendar year 1040 Tax Form together with the front of a Schedule A-Itemized Deductions (Schedule A) for that same year. The front of the Schedule A shows a deduction for Real Estate Taxes paid of $1,270. Included, as well, is a copy of a front of a Schedule A-Itemized Deductions form for calendar year 1994. That copy shows a deduction for real estate taxes paid of $5,094. There is attached a copy of the front of a handwritten worksheet page in which the $5,094 is broken down as follows:
$4,811.72 - Batman Realty trust/ 5 Presbrey Place
$282.47 - Tuckernuck Realty Trust/ Mattapoisett
I have given these documents little or no evidentiary weight owing to their seemingly random, incomplete nature. Inexplicably, the taxpayer has elected to submit not the entire tax document or even an entire page, front and rear, but only, as noted, copies of the fronts of certain pages. [Note 14] Even then, they are unaccompanied by corroborating evidence such as checks to the Town that might have been used for payment of the relevant taxes. It goes without saying that these submissions are not official documents, nor do they purport to be so.
As to the payment of the 1994 taxes, this court has taken note of Exhibit 8, a letter dated December 7, 2006 from taxpayers counsel to the town lawyer concerning various tax obligations, including that for fiscal year 1994. In that letter, counsel purports to place the burden of proof upon the Town in the following manner: Unless you can prove otherwise, my client never received any bills from the Town or notice of any kind regarding the outstanding  taxes (including notice of the filing of the Tax Taking in 1998) and only became aware of it when he was denied a building permit in 2005. Although my client believes he paid the taxes back in 1994 (and claimed them as a deduction on his tax returns), he no longer has cancelled checks from twelve years ago as proof of payment. If the Town had simply billed him for the outstanding taxes and/or notified him of the taking in 1998, he would have had an opportunity to either a) provide proof of payment by way of a cancelled check(s) or b) pay the balance way back then with minimal accrued interest. However, since he never knew they [the fiscal 1994 real estate taxes] were outstanding . . . and the outstanding balance was never reflected in any future tax bills since, I question whether it is appropriate and/or legally permissible to now charge interest for the last twelve (12) years, as well as legal fees incurred.
While reciting that the taxpayer believes he paid the taxes back in 1994, much of that paragraph is given over to the Towns alleged failure to (a) notify the taxpayer of the delinquency after it was incurred, and (b) to provide notice of the tax taking. In fact, emphasis is placed solely on words meant to indicate that that the Town was deficient in failing to periodically notify the taxpayer of the asserted delinquency. The last sentence of the paragraph takes issue not with the principal tax obligation, but with the added interest and legal fees.
In any event, taxpayer has directed the court to no statutory provision, nor is this court aware of any, that would require the Town to transmit periodic notice of delinquency to a taxpayer. As to the alleged failure to receive notice of demand, G.L. c. 60, § 16, captioned Demand; statement of amount, provides, in relevant part, as follows:
The collector shall, before selling the land of a resident serve on him a statement of the amount thereof with a demand for payment . . . . Demand shall be made by the collector by mailing the same to the last or usual place of abode, or to the address best known to him, and failure to receive the same shall not invalidate a tax or any proceedings for the enforcement or collection of same.(emphasis added)
As to the § 16 Demand then, there is no statutory requirement that the taxpayer receive that document, only that it be mailed. In any event, there is no convincing evidence on the record that would lead one to conclude that the Demand was not so mailed. Further buttressing this conclusion are the above cited provisions of § 54, which provide a legal mechanism by which this court may satisfy itself that such demand was made.
Moreover, this court is satisfied that notice of the delinquency and proposed taking on May 8, 1998 was duly published in the Natick Bulletin. [Note 15] Further, it is uncontroverted that the Instrument of Taking was properly recorded with the Registry, providing yet another source of constructive notice. [Note 16]
Therefore, notice to the taxpayer of the delinquency and of the taking itself was sufficient.
Consequently, upon presentation by the Town of prima facie evidence under § 54, this court concludes that the defendant has either failed to produce contraverting evidence, or, in those instances where such evidence has been provided, I conclude that the defendant has failed to meet his burden of persuasion.
Therefore, this court finds that as of May 8, 1998, the defendant was indebted to the Town to the extent of $2,239.22 in taxes for the 1993-1994 tax year together with $1,264.99 in interest. Such obligation is secured by a Tax Title on the Locus in the amount of $3,504.21 as of the date of taking, together with such additional amounts as will be addressed below.
The discussion does not end with the fiscal year 1994 tax obligation. The Town allocated to the Tax Title account certain of the defendants quarterly tax payments made in fiscal years 2000 and 2001. As a result, the Town asserts that the there are currently amounts outstanding, not just for 1994, but for 2000 and 2001, as well.
In Commr of Revenue v. Molesworth, 408 Mass. 580 (1990), the court held that tax payments may not be applied contrary to the tax payers express directions in the absence of statutory authorization. Id. at 583. Such statutory authorization has since been enacted. Under G.L. c.60, § 3E, [p]artial payments of bills for taxes . . . shall be applied first to any interest due, then to collection charges . . . . The statute took effect on July 31, 2003 however, and was not applicable at the time the payments in question were made. Furthermore, the Town concedes that even under § 3E, a property owner can probably still direct payment to one particular years obligation over that outstanding for another year. Plaintiffs Post-Trial Brief, p.4 (citing Molesworth, 408 Mass. 580 ).
On all eight of the checks defendant had issued to the Town for taxes in 2000 and 2001, the FOR or Memo line contained written designations. For example, one such designation read, in part, 1st Payment 2000 while another read, in part, 4th Pay 5/1/00. While slightly different, all of these writings contained the quarterly payment number as well as either the tax year or an individual bills due date. When, as was typical, defendant made the payments beyond the due date, [Note 17] he calculated on the face of the bill the interest owed using a per diem. Each check issued matched the recalculated amount due.
Under all the circumstances, I conclude that the taxpayers intentions were made clear, that the payments should have been applied as designated on each check, and that the Town had not secured the taxpayers approval prior to allocating the fiscal year 2000 and 2001 real estate tax payments in the manner that it did. The Town must therefore reallocate the fiscal year 2000 and 2001 payments that were improperly applied to the Tax Title account, and it must recalculate the balances due for fiscal years 1994, 2000, and 2001.
If the payments improperly allocated by the Town were sufficient to satisfy the defendants tax obligations for 2000 and 2001 at the time those payments were received, the defendant will presumably owe no further principle or interest to the Town for those two tax years.
This court has concluded after trial that the fiscal year 1994 Tax Title obligation together with accrued interest and charges remain outstanding to the Town of Natick. It concludes further, that certain fiscal year 2000 and 2001 tax payments were improperly applied by the Town, primarily to Tax Title interest.
Consequently, this court will afford the Town until May 4, 2010 in which to submit a corrected accounting reallocating the payments wrongly applied to the Tax Title account. Thereafter, the defendant will be afforded until June 4, 2010 to file a written objection, if any, to the manner in which the reallocation was accomplished by the Town. To the extent the taxpayer differs with the Towns methodology or its conclusions, it will detail its reasons therefore, proposing an alternative methodology and amount currently due.
Further hearing will be held thereafter, but only to the extent deemed warranted by this court. [Note 18]
Judgment will enter as per this Decision following resolution of the accounting issue.
By the Court (Grossman, J.)
[Note 1] These payments were applied primarily against the Tax Title interest.
[Note 2] The Instrument of Taking was recorded on July 2, 1998 at Book 28797, Page 74.
[Note 3] I.e. fiscal year 1994.
[Note 4] Mr. Dyer testified that the bank has since undergone a number of mergers.
[Note 5] In the amount of $1300.30.
[Note 6] In the amount of $265.00.
[Note 7] Thus, the 1st quarter fiscal year 2000 payment due August 2, 1999, was paid by check dated October 25, 1999. The 2nd quarter fiscal year 2000 payment due November 1, 1999, was paid by check dated December 15, 1999. The 3rd quarter fiscal year payment due February 1, 2000, was paid by check dated February 1, 2000. The 4th quarter fiscal year 2000 payment due May 1, 2000, was paid by check dated July 30, 2000.
The 1st quarter fiscal year 2001 payment due August 1, 2000, was paid by check dated November 1, 2000. The 2nd quarter fiscal year 2001 payment due November 1, 2000, was paid by check dated January 30, 2001. The 3rd quarter fiscal year payment due February 1, 2001, was paid by check dated August 3, 2001. The 4th quarter fiscal year 2001 payment due May 1, 2001, was paid by check dated August 11, 2001.
[Note 8] With attorneys fees and recording fees, the total reaches $15, 233.96 as of June 28, 2009.
[Note 9] The Horvitz court did not explicitly address the situation such as that at bar in which the taxpayer claims to have paid a tax. However, the Court had occasion to discuss the allocation of the burden of proof in cases concerning tax matters, as follows:
[I]n practice the allocation of the burden of proof where a taxpayer seeks relief from imposition of a tax has been far from uniform . . . . What distinguishes one category of case from the other is not apparent.
The court spoke of the principle that the burden falls where general principles of law would naturally and logically cause it to fall. Id. (quoting The New England Trust Co. v. Commr of Corp. and Taxation, 315 Mass. 639 ).
[Note 10] Id, at 391.
[Note 11] Id. at 395.
[Note 12] See Exhibit 2.
[Note 13] See however, Findings of Fact, Para. 8, supra.
[Note 14] Id.
[Note 15] See Exhibit 15. Nothing on the trial record suggest that the Town failed to post notice of the taking in two or more public places as required by G.L. c. 60, § 53.
[Note 16] See too, the public posting requirements as set out in G.L. c. 60, § 53. There is no evidence to suggest that these statutory requirements were not met.
[Note 17] See Note 5, supra.
[Note 18] See Land Court Rule 6.