VARUJAN GULDERIAN and YAKUT YESILTEPE v. CITY OF WALTHAM

In this action Plaintiffs seek a declaration that 240 Temple Road, Waltham (Locus) is free of any claim for a Street Betterment Assessment. Their argument is based on the fact that a municipal lien certificate issued by the Waltham tax collector failed to include a reference to the Street Betterment Assessment. Defendant’s position is that such an assessment is excepted from the provisions of G. L. c. 60, § 23, and therefore, it need not be shown on the municipal lien certificate. On August 16, 2010, Defendant filed a motion to dismiss pursuant to Mass. R. Civ. P. 12(b)(1), and 12(b)(6). A hearing on Defendant’s motion was held on October 4, 2010, at which all parties were heard.

The following material facts are not in dispute:

1. Plaintiffs, Varujan Gulderian and Yakut Yesiltepe, currently own Locus. Defendant City of Waltham is a municipal corporation.

2. On September 28, 2006, an Estimated Betterment Assessment Order of the City of Waltham City Council was recorded with the Middlesex South Registry of Deeds in Book 48411, at Page 233, together with Plan 1352 of 2006. The Estimated Betterment Assessment Order identified Locus as a benefited property and estimated its proportionate share of the resurfacing improvement to be $2,000.

3. At the time the Estimated Betterment Assessment Order was recorded, Locus was owned by Ronald J. Seline, Daniel J. Seline, and Felix E. Seline (Former Owners).

4. The resurfacing improvements on Temple Road were completed on or about May 4, 2007, while the Former Owners still owned Locus.

5. Plaintiffs purchased Locus from the Former Owners on April 30, 2009.

6. Just prior to Plaintiffs’ purchase of Locus, Plaintiffs requested that the Waltham Tax Collector (Tax Collector) issue a Municipal Lien Certificate pursuant to G. L. c. 60, § 23. The certificate, issued April 14, 2009, certified that no taxes, betterments, assessments, or liens were due on Locus and that the Tax Collector had no knowledge of any liens outstanding. The Municipal Lien Certificate was recorded with said Deeds in Book 52683, at Page 117, on April 30, 2009, the day on which Plaintiffs purchased Locus.

7. On January 8, 2010, the Waltham City Council adopted and approved City Council Order 31258, which determined the total value of the street resurfacing of Temple Road. Specifically identifying Plaintiffs, City Council Order 31258 identified Plaintiffs’ proportionate share of assessment to be $2,000.

8. In accordance with the City Council’s Order, on or about February 10, 2010, Plaintiffs received the final Special Betterment Assessment issued by the Tax Collector on February 8, 2010.

9. Four months later, on June 18, 2010, Plaintiff filed this complaint for declaratory relief asking the court to declare that the Street Betterment Assessment is invalid and declare Locus free of any claim in favor of the City under the Special Betterment Assessment.

* * * * * *

As Defendant has challenged this court’s jurisdiction under Mass. R. Civ. P. 12(b)(1), this court must address the factual issues pertaining to jurisdiction. Once jurisdiction has been properly challenged, “a rule 12(b)(1) motion supported by affidavits places the burden on the plaintiff to prove jurisdictional facts.” Callahan v. First Congregational Church of Haverhill, 441 Mass. 699 , 709-10 (2004) (quoting Hiles v. Episcopal Diocese of Massachusetts, 437 Mass. 505 , 516 n.13 (2002)). “Under this factual challenge to the jurisdiction, the plaintiff’s jurisdictional averments in the complaint are entitled to no presumptive weight . . . .” Hiles, 437 Mass. at 516 (quoting Valentin v. Hospital Bella Vista, 254 F.3d 358, 363 (1st Cir. 2001) (internal quotations omitted)). [Note 1]

As a general rule, exhaustion of administrative remedies is a jurisdictional prerequisite to declaratory relief. E.g., Space Bldg. Corp. v. Commissioner of Rev., 413 Mass. 445 , 448 (1992). Specifically for betterment assessments, G. L. c. 80 sets out a comprehensive and uniform statutory scheme of administrative appeals and judicial review of these assessments. Gallo v. Div. of Water Pollution Control, 374 Mass. 278 , 288 (1978). Where an assessment has been committed to a tax collector for collection, the only avenue of relief lies with the administrative remedies provided by G. L. c. 80, by way of abatement filed with city council, with a right of appeal to superior court (§§ 7, 9) or the county commissioners (§ 10). Id. at 288. Under Section 5, the abatement petition must be filed within six months of when the tax collector sent notice of assessment. Statutory abatement procedures are exclusive absent exceptional circumstances to prevent courts from unduly disrupting the orderly collection of taxes. Sydney v. Comm’r of Corps. & Taxation, 371 Mass. 289 , 294 (1976).

Defendant argues that Plaintiffs’ failure to exhaust administrative remedies is a jurisdictional bar to obtaining declaratory relief in this court. Plaintiffs counter that the exhaustion of administrative remedies is not a prerequisite to the prosecution of actions involving the validity of tax liens or assessments. They assert that their arguments under both G. L. c. 80, and G. L. c. 64 have been recognized by courts as proper for declaratory challenges. See Zambernardi v. Bd. of Selectmen of Wilmington, 2 Mass. App. Ct. 873 , 874 (1974) (assessments of betterments not made “within six months after the completion of improvement” as prescribed by G. L. c. 80, § 1 held invalid and properly challenged in Superior Court by a proceeding separate and distinct from abatement before commitment to the tax collector). For the reasons set forth herein, this court disagrees that this case is ripe for declaratory relief for two reasons.

First, in this case, the administrative remedy has not been shown to be “seriously inadequate” which would justify declaratory relief. Demoranville v. Comm’r of Rev., 457 Mass. 30 , 34 (2010) (citing DiStefano v. Comm’r of Rev., 394 Mass. 315 , 320 (1985)). While no comprehensive formula governs the court’s exercise of discretion, factors favoring declaratory relief include “that the issue is important or novel or recurrent [or] that the decision will have public significance, affecting the interests of many besides the immediate litigants. . .” Sydney, 371 Mass. at 295. Declaratory relief when administrative remedies have not been exhausted is an exceptional remedy courts reserve for the most limited instances where broad issues of public policy are implicated. Such facts are not presented here, where Plaintiffs’ chain of title included the Estimated Betterment Assessment Order which was recorded prior to Plaintiffs taking title, and Plaintiffs received actual notice of the Final Betterment Assessment but made a volitional choice not to pursue an abatement in accordance with G. L. c. 80.

Second, Plaintiffs’ rights are constrained by the limitation that declaratory relief in the context of G. L. c. 80 is only available prior to commitment to the tax collector. Zambernardi, 2 Mass. App. Ct. at 874 (holding that before commitment to tax collector, declaratory challenge allowed). Where, as here, the assessment has been committed to the Tax Collector, the property owner is limited to the abatement and appeal procedure set forth in G. L. c. 80. See Gallo v. Division of Water and Pollution Control, 374 Mass. 278 , 288-89 (1978) (holding declaratory relief precluded to challenge sewer assessments for failure to exhaust administrative remedies, although available prior to commitment of assessment); Gudanowski v. Northbridge, 17 Mass. App. Ct. 414 , 421 (1984) (emphasizing where sewer betterment committed to tax collector, taxpayers’ only avenue of relief lay with administrative remedies provided by G. L. c. 80). To prevent undue interference by courts in the collector’s rightful duty to collect taxes, the court will not inquire into the validity of the tax after the assessment has been committed to the tax collector by proceeding in equity. California Vill. Corp. v. Town of East Longmeadow, 4 Mass. App. Ct. 128 , 129 (1976) (explaining that after commitment to collector “assessment becomes in all respects a tax…suit in equity will not lie to restrain a collector from…collecting his tax”).

After the Notice of final Special Betterment Assessment was sent by the Tax Collector on February 8, 2010, Plaintiffs’ only avenues of relief were administrative via the abatement procedures detailed in G. L. c. 80. For reasons not known to the court, and despite knowledge of the six-month time limit for filing abatement petitions, Plaintiffs chose not to pursue their administrative remedies, which are now time barred. As a result, Plaintiffs are foreclosed from pursuing this case.

Accordingly, Defendant’s motion to dismiss pursuant to Mass. R. Civ. P. 12(b)(1), hereby is ALLOWED.

Judgment to issue accordingly.

Karyn F. Scheier

Chief Justice

Dated: March 28, 2011