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11-P-1474                                           Appeals Court

CAPE COD SHELLFISH & SEAFOOD COMPANY, INC., & others 1      vs.   CITY
                      OF BOSTON & another. 2


                            No. 11-P-1474.

         Suffolk.      October 9, 2013. - November 12, 2014.

            Present:   Cypher, Katzmann, & Maldonado, JJ.


Taxation, Exemption, Leased property, Abatement, Real estate
     tax: exemption, abatement. Contract, Lease of real
     estate. Landlord and Tenant, Taxation, Tenancy at
     sufferance, Lease as contract. Real Property,
     Lease. Massachusetts Port Authority. Boston.



     Civil action commenced in the Superior Court Department on
November 9, 2004.

     After review by this court, 74 Mass. App. Ct. 1127 (2009),
the case was heard by Elizabeth M. Fahey, J., on a motion for
summary judgment.



     1
       John Mantia & Sons Co., Inc.; Atlantic Coast Seafood,
Inc.; New England Marketers, Inc.; and Great Eastern Seafood,
Inc.
     2
       Massachusetts Port Authority (Massport). The plaintiffs
and Massport stipulated to dismissal of the plaintiffs' claims
against Massport and Massport's counterclaims. Massport has not
participated in this appeal.
                                                                   2


     Marshall F. Newman for the plaintiffs.
     Adam Cederbaum, Assistant Corporation Counsel, for city of
Boston.


     MALDONADO, J.   The plaintiffs appeal from a Superior Court

judgment in favor of the city of Boston (city) in its effort to

tax the plaintiffs as lessees of property owned by the

Massachusetts Port Authority (Massport), on Boston's Fish Pier.

Although, pursuant to G. L. c. 91 App., § 1-17 (§ 17), as

appearing in St. 1978, c. 332, § 2, Massport and its lessees are

not required to pay real estate taxes on Massport properties, an

exception to the exemption applies to business lessees of

property in the area known as the Commonwealth Flats.    In an

earlier decision pursuant to our rule 1:28, we determined that

the plaintiffs are liable for taxes for their respective lease

terms under that exception. 3   At issue now is whether the



     3
       See Cape Cod Shellfish & Seafood Co. v. Boston, 74 Mass.
App. Ct. 1127 (2009). In that prior appeal, the plaintiffs here
argued that they came within the exception to taxation provided
for in G. L. c. 59, § 2B, third par. We rejected that argument,
relying, inter alia, on the clear language of § 17, the case of
Boston v. U.N.A. Corp., 11 Mass. App. Ct. 298 (1981) (construing
that provision), and the principle of statutory construction
that a specific statute, such as § 17, controls over a general
statute, such as G. L. c. 59. Cf. Beacon S. Station Assocs.,
LSE v. Board of Assessors of Boston, 85 Mass. App. Ct. 301
(2014) (for-profit lessee of Massachusetts Bay Transportation
Authority [MBTA] was exempt from real estate taxation pursuant
to specific exemption for MBTA property provided in G. L.
c. 161A, § 24, and notwithstanding contrary provision in general
tax statute, G. L. c. 59, § 2B); id. at 307, quoting from TBI,
Inc. v. Board of Health of N. Andover, 431 Mass. 9, 18 (2000)
                                                                    3


plaintiffs, all of whom remained on the property after the end

of their lease terms, continue to be liable as lessees for the

taxes assessed during the holdover period.

     Background.   We recount the undisputed facts from the

motion judge's May 20, 2011, memorandum of decision and order on

the city's motion for summary judgment, supplemented also by the

record on appeal as noted.   The plaintiffs, Cape Cod Shellfish &

Seafood Company, Inc.; John Mantia & Sons Co., Inc.; Atlantic

Coast Seafood, Inc.; New England Marketers, Inc.; and Great

Eastern Seafood, Inc., operated wholesale fish and seafood

businesses on the Boston Fish Pier, which is owned by Massport

and situated in the Commonwealth Flats area of South Boston.

The plaintiffs originally occupied the property pursuant to

written leases with Massport.   The relevant leases of the

plaintiffs covered the period of January 1, 1998, to December

31, 2004, and were virtually identical.   All required the

plaintiffs to pay any taxes and fees assessed against the tenant

or landlord in relation to the leased premises.   The city

sporadically billed the plaintiffs for the real estate taxes due

on the leased premises for their respective periods of

occupancy; except for a single payment by New England Marketers,

Inc., the taxes went unpaid.


("It is a basic canon of statutory interpretation that general
statutory language must yield to that which is more specific").
                                                                   4


     Prior to the expiration of their lease terms, the

plaintiffs sought to enter into new leases.   Massport refused,

citing a lease provision that required a letter from the city

indicating that all taxes were current.   The plaintiffs filed a

declaratory judgment action, as permitted by the leases, seeking

a determination that they were not liable for the taxes.

Judgment entered in favor of the city for the taxes owing for

the period covered by the leases, and, as we have noted, see

note 3, supra, this court affirmed.

     In the interim, the plaintiffs continued to occupy and pay

rent for the Massport property beyond their lease terms.   The

city supplemented its counterclaims in the declaratory judgment

action to recover additional unpaid taxes from the plaintiffs

for the time from January 1, 2005, through March 31, 2010, that

they had remained on the property after the expiration of the

lease term.

     The leases contained the following provision concerning the

obligations of the tenants in the event of their holding over: 4

          "If Tenant shall, with the consent of the Landlord,
     hold over after the expiration of the Term, the resulting
     tenancy shall be treated as a month-to-month tenancy.

     4
       The leases for the relevant period were not included in
the record on appeal. We take the text of the holdover
provision, for the leases covering the period from January 1,
1998, through December 31, 2004, from Massport's answer and
counterclaims, to which the parties refer in their briefs on
appeal.
                                                                    5


     Tenant shall pay Base Rent, Additional Rent and any other
     charges due hereunder and shall be bound by the terms of
     the Lease. Any holding over by Tenant after the expiration
     of the Term of this Lease without Landlord's consent shall
     be treated as a tenancy at sufferance at two hundred
     percent (200%) of the rents and other charges herein
     (prorated on a daily basis) and shall otherwise be on the
     terms and conditions set forth in this Lease, as far as
     applicable. Any holding over, even with the consent of the
     Landlord, shall not constitute an extension or renewal of
     this Lease." (Emphasis supplied.)

     The city moved for summary judgment on its supplemented

counterclaims, and the judge allowed the motion. 5   The judge

reasoned that the plaintiffs, as tenants at sufferance following

the expiration of the lease term, continued to operate their

businesses and pay rent to Massport, and continued to have a

leasehold that was recognized by Massachusetts law for purposes

of § 17.   The plaintiffs filed this appeal.

     Discussion.    1.   Applicability of tax exemption after

expiration of lease term.     General Laws c. 91 App., § 1-17, is

part of Massport's enabling act and provides generally for an

exemption from taxation for Massport and its lessees.     Boston

v. U.N.A. Corp., 11 Mass. App. Ct. 298, 299-300 (1981).     The

purpose of the exemption is to assist Massport in the

performance of its essential governmental functions, which are

principally aimed at establishing and maintaining the means of

public travel.     It was anticipated that Massport properties

     5
       We note that the city has not pursued its remaining
counterclaims, which, it acknowledges, are time-barred.
                                                                  6


would be devoted to public use.    Opinion of the Justices, 334

Mass. 721, 733, 739 (1956).

     The exemption in § 17 includes certain qualifications, one

of which is for Massport lands located in the Commonwealth

Flats, which "shall, if leased for business purposes, be taxed

by the city . . . to the lessees thereof, respectively, in the

same manner as the lands and the buildings thereon would be

taxed to such lessees if they were the owners of the fee

. . . ." 6   The plaintiffs maintain that after the lease term

expired and they remained on the property, they could no longer


     6
         Section 17, first par., provides more broadly:

          "The exercise of the powers granted by this act will
     be in all respects for the benefit of the people of the
     commonwealth, for the increase of their commerce and
     prosperity, and for the improvement of their health and
     living conditions, and as the operation and maintenance of
     the projects by the Authority will constitute the
     performance of essential governmental functions, the
     Authority shall not be required to pay any taxes or
     assessments upon any project or any property acquired or
     used by the Authority under the provisions of this act or
     upon the income therefrom . . . and no property of the
     Authority shall be taxed to a lessee thereof under section
     three A of chapter fifty-nine of the General Laws;
     provided, however, that anything herein to the contrary
     notwithstanding, lands of the Authority, except lands
     acquired by the commonwealth under the provisions of
     chapter seven hundred and five of the acts of nineteen
     hundred and fifty-one situated in that part of the city
     called South Boston and constituting a part of the
     Commonwealth Flats, and lands acquired by the Authority
     which were subject to taxation on the assessment date next
     preceding the acquisition thereof, shall, if leased for
     business purposes, be taxed by the city or by any city or
     town in which the said land may be situated to the lessees
                                                                   7


be considered lessees and, therefore, were no longer subject to

taxation under the § 17 exception for business lessees of

Massport's Commonwealth Flats properties.   At that point, they

argue, the property came within Massport's exemption under § 17,

despite the plaintiffs' continued occupancy.

     The express language of the leases persuades us otherwise.

The holdover provision in the leases sets out the conditions of

a continued tenancy after expiration of the lease term, and

expressly states, as well, that any holding over is subject to

the applicable provisions of the lease.   When they signed the

leases, the plaintiffs thereby agreed that they would continue

to be bound by the holdover provision, and other applicable


     thereof, respectively, in the same manner as the lands and
     the buildings thereon would be taxed to such lessees if
     they were the owners of the fee, except that the payment of
     the tax shall not be enforced by any lien upon or sale of
     the lands, but a sale of the leasehold interest therein and
     of the buildings thereon may be made by the collector of
     the city in the manner provided by law in case of
     nonpayment of taxes for selling real estate, for the
     purpose of enforcing the payment of the taxes by such
     lessees to the city or town assessed under the provisions
     hereof."

     We do not consider the parties' arguments, raised for the
first time in their respective reply and surreply brief, whether
§ 17, first par., was amended subsequent to St. 1978,
c. 332, § 2 (the version of the statute relied upon by the judge
below, the parties, and by this court in our earlier decision).
See Pasquale v. Casale, 72 Mass. App. Ct. 729, 738 (2008),
quoting from Assessors of Boston v. Ogden Suffolk Downs, Inc.,
398 Mass. 604, 608 n.3 (1986) ("Any issue raised for the first
time in an appellant's reply brief comes too late, and we do not
consider it").
                                                                   8


lease provisions, in the event their tenancies extended beyond

the lease term.

     It has long been held that where, as here, a lease contains

a provision governing the conditions of the lessee's occupancy

in the event of holding over, the parties' rights continue to be

determined by the applicable provisions in the lease, and

indeed, the holding over is said to be under the lease.

See Warren v. Lyons, 152 Mass. 310, 314-316 (1890)

(distinguishing between holding over under the lease and

occupying under a new agreement).   See also, e.g., Edwards

v. Hale, 9 Allen 462, 464-466 (1864); Rice v. Loomis, 139 Mass.

302, 303-304 (1885).   When the parties to a lease "look to the

contingency of the lessee's holding over for some purpose,"

their agreement in that regard is deemed a "contract to have

effect, provisionally after the expiration of the

term."   Salisbury v. Hale, 12 Pick. 416, 422 (1832).

     Similarly, in cases addressing the amount of rent owing for

occupancy beyond the lease term, we have distinguished between

holdovers governed by a provision in the lease, in which case

the applicable lease provisions control, and holdovers where the

lease lacks such a provision, in which case common-law

principles are applied.   See, e.g., Kobayashi v. Orion Ventures,

Inc., 42 Mass. App. Ct. 492, 502-503 (1997); Lawrence

v. Osuagwu, 57 Mass. App. Ct. 60, 64-65 (2003) (lease provision
                                                                    9


establishing rent due for period beyond lease term controlled,

rather than a reasonable rent, the usual measure of landlord's

damages against holdover tenant).    As such, the holdover

provision contained in the plaintiffs' leases, spelling out

their obligations in the event of their holding over, took

effect upon the expiration of the lease term and governed their

tenancies thereafter.     See Salisbury v. Hale, 12 Pick. at 422.

     The case of Commonwealth v. Goldberg, 319 Mass. 7 (1946),

confirms our view.   At issue was whether the landlord in a

tenancy at will constituted a "lessor" under G. L. c. 186, § 14,

providing for prosecution of lessors who interfere with the

quiet enjoyment of their premises.    In concluding that the

Legislature intended for the statute to cover "landlords who

have let their premises without a lease in writing," id. at 9,

the court reasoned that "the words lease, lessor, and lessee are

nevertheless sufficiently comprehensive to include in

appropriate instances tenancies at will and the parties to such

tenancies."   Id. at 8.    The court noted that tenancies at will

"have been referred to as parol 'leases,' and the landlord has

been called the 'lessor' and the tenant the 'lessee.'     Ibid.

Given the Goldberg court's conclusion that the landlord and

tenant in a tenancy at will, with no written lease, could be

considered to be lessor and lessee, we have no hesitation in

concluding that here, where the plaintiffs agreed to a holdover
                                                                   10


provision in a written lease that was to control their tenancies

beyond the lease term, they may properly be characterized as

lessees occupying the property under a leasehold.

     The case of Corcoran v. Boston, 193 Mass. 586 (1907), cited

by the plaintiffs, is not to the contrary.    That case involved

St. 1904, c. 385, an earlier version of the statutory tax

exemption for lands of the Commonwealth, prior to the creation

of Massport, and an exception to the exemption indistinguishable

from that in § 17 for lands situated in the Commonwealth Flats

that were leased for business purposes.    See Boston v. U.N.A.

Corp., 11 Mass. App. Ct. at 302 & n.4.    The question of tax

liability arose when a purchaser of property in the Commonwealth

Flats took up occupancy, prior to the transfer of ownership,

under a contract for a deed.    Because the purchaser never

actually leased the property, and because the relationship of

landlord and tenant never existed between the purchaser and the

Commonwealth, the court held that the purchaser was not to be

considered a lessee for the period that he occupied the property

pending delivery of the deed.    193 Mass. at 587-588.   The

present case differs in significant respects -- here, the

plaintiffs originally occupied the property pursuant to written

leases, agreed at the outset to a holdover provision, and,

pursuant to that provision, continued to be governed by the

applicable lease terms during the holdover period.
                                                                   11


     We reject the plaintiffs' suggestion that we are to resolve

doubts in interpreting legislative use of the word "lessee" in

§ 17 in the taxpayer's favor.   The plaintiffs rely on a rule of

statutory construction that applies in interpreting the tax

laws.   See, e.g., Massachusetts Assn. of Tobacco Distribs.

v. State Tax Commn., 354 Mass. 85, 89 (1968) (construing G. L.

c. 64C, imposing an excise tax on cigarette sales); Davisson

v. Commissioner of Rev., 18 Mass. App. Ct. 748, 754 (1984)

(construing G. L. c. 65C, to determine whether decedent's

interests in out-of-State gas and oil properties were taxable

under the estate tax statute); Commissioner of Rev. v. Destito,

23 Mass. App. Ct. 977, 978 (1987) (construing G. L. c. 62, to

determine whether New Hampshire resident's income was taxable

under the Massachusetts income tax statute).

     Section 17, however, by its express terms formulates an

exemption from taxation for Massport properties.   Boston

v. U.N.A. Corp., 11 Mass. App. Ct. at 299-300.   See Opinion of

the Justices, 334 Mass. at 730 (court requested to give opinion

as to whether it is "constitutionally competent for the General

Court to grant the tax exemptions provided [in Massport's

enabling act] . . . with respect to the physical property of

[Massport]").   While the Legislature may permit such "reasonable

exemptions based upon various grounds of public policy, . . .

yet taxation is the general rule."   Animal Rescue League of
                                                                    12


Boston v. Bourne's Assessors, 310 Mass. 330, 332 (1941).      "It is

for this reason that statutes granting exemptions from taxation

are strictly construed.   A taxpayer is not entitled to an

exemption unless he shows that he comes within either the

express words or the necessary implication of some statute

conferring this privilege upon him."    Ibid.   See Global Cos.,

LLC v. Commissioner of Rev., 459 Mass. 492, 494 (2011) (citation

omitted) (an exemption is "to be recognized only where the

property falls clearly and unmistakably within the express words

of a legislative command," and it is the taxpayer's burden to

"demonstrate entitlement to the exemption claimed").    See

also AA Transp. Co. v. Commissioner of Rev., 454 Mass. 114, 121

(2009).

     Based on the foregoing, we conclude that the plaintiffs,

upon holding over after the lease term expired, continued to

remain on the property under the applicable provisions of their

leases, and are properly characterized as business lessees, for

purposes of § 17.   Accordingly, the plaintiffs have not

established entitlement to the tax exemption for Massport

properties under that section.   Our conclusion also comports

with the additional principle of statutory construction that we

are to follow "a common sense approach in the interpretation and

application of all statutes."    State Tax Commn. v. John Hancock

Mut. Life Ins. Co., 361 Mass. 125, 131 (1972).    It defies common
                                                                   13


sense to permit the plaintiffs in this case, who agreed to the

leases' holdover provision and who were statutorily and

contractually bound to pay taxes during the lease term, to be

excused from the obligation by virtue of their simply remaining

on the leased property, without Massport's consent, after the

expiration of the lease term.

     2.   Tax amount.   As a final matter, the judge properly

dismissed the plaintiffs' claims that the city calculated their

taxes based on inaccurate square footage measurements.    In

challenging the amount assessed, the plaintiffs did not have the

option, as they suggest, to elect to pursue either an

administrative remedy or, alternatively, a declaratory judgment

action as to that claim.   See Harron Communications Corp.

v. Bourne, 40 Mass. App. Ct. 83, 86 (1996) ("For an excessive

tax, the exclusive remedy is application for abatement and

petition to the Appellate Tax Board").   Compare Massachusetts

Mut. Life Ins. Co. v. Commissioner of Corps. & Taxation, 363

Mass. 685, 688-689 (1973) (taxpayer properly pursued both

administrative remedy and declaratory relief as to proper

construction of taxing statute).   Accord Sydney v. Commissioner

of Corps. & Taxation, 371 Mass. 289, 294 n.10 (1976).

     Also unavailing is the plaintiffs' argument that the March

30, 2005, denial of the city's motion to dismiss for failure to

exhaust administrative remedies permitted the plaintiffs to also
                                                                   14


pursue in these proceedings their challenge to the amount of

taxes assessed as opposed to only permitting them to proceed on

their challenge to the imposition of any tax liability under

§ 17.    From our review of the appellate record, it appears the

issue was neither raised nor decided as part of the motion to

dismiss, and we find no support for the plaintiffs' contention

that the law of the case permitted them to forego the exclusive

statutory remedy for tax abatements. 7

                                          Judgment affirmed.




     7
       The first amended complaint, which was the subject of the
city's motion to dismiss, did not allege that the taxes assessed
were excessive. The judge's decision on the motion to dismiss
addressed only the issue of the plaintiffs' claimed exemption
under § 17, and, because it posed a novel question of law, it
was permitted to go forward as a declaratory judgment action.
Moreover, the judge here observed that the plaintiffs' claims of
excessive taxes were raised for the first time in opposition to
the city's motion for summary judgment, and nothing in the
record before us suggests the contrary.
