Daimlerchrysler v. Exec. Dir., Rev. Servs.

• Decision Date: 22 May 2007
• Docket Number: Docket: Ken-06-503.
• Citation: 2007 ME 62,922 A.2d 465
• Parties: DAIMLERCHRYSLER CORPORATION v. EXECUTIVE DIRECTOR, MAINE REVENUE SERVICES.
• Court: Maine Supreme Court

922 A.2d 465

2007 ME 62

DAIMLERCHRYSLER CORPORATION v. EXECUTIVE DIRECTOR, MAINE REVENUE SERVICES.

Docket: Ken-06-503.

Supreme Judicial Court of Maine.

Argued: February 13, 2007.

Decided: May 22, 2007.

Peter O. Larsen (orally), David E. Otero, Cynthia DeBulia Baines, Akerman, Senterfitt, Jacksonville, FL and John M.R. Paterson, Nelson A. Toner, Bernstein Shur Sawyer & Nelson, P.A., Portland, for plaintiff.

G. Steven Rowe, Attorney General, Thomas A. Knowlton, Asst. Atty. Gen. (orally), Peter Rosenberg, Asst. Atty. Gen., Augusta, for defendant.

Panel: SAUFLEY, C.J., and CLIFFORD, ALEXANDER, CALKINS, LEVY, and SILVER, JJ.

SILVER, J.

[¶ 1] DaimlerChrysler Corporation appeals from a judgment entered in the Superior Court (Kennebec County, Marden, J.) affirming a decision of the Acting Executive Director of the Maine Revenue Service denying DCC's request for a sales tax refund. DCC contends that it is entitled to a refund pursuant to 36 M.R.S. § 2011 (2006), and that MRS's interpretation of section 2011 raises multiple constitutional infirmities when applied in conjunction with the Maine Lemon Law, 10 M.R.S. §§ 1161-1169 (2006). We determine that DCC is not entitled to a refund pursuant to 36 M.R.S. § 2011. We further determine that section 2011 is constitutional when applied in connection with the Maine Lemon Law. Accordingly, we affirm the judgment.

I. BACKGROUND

[¶ 2] The relevant facts are undisputed. DCC is a corporation with its principal place of business in Michigan, and is engaged in the business of manufacturing motor vehicles. DCC does not collect and remit sales tax on the sale or lease of motor vehicles in Maine and does not file a sales and use tax return with the State.

[¶ 3] As a manufacturer of motor vehicles, DCC is subject to the Maine Lemon Law, 10 M.R.S. §§ 1161-1169. Pursuant to the Maine Lemon Law, DCC must repurchase a motor vehicle from a consumer in Maine in two situations: (1) following a Maine Lemon Law arbitration decision, see 10 M.R.S. § 1169, and (2) following a decision of an independent arbitrator issued pursuant to an industry-sponsored arbitration proceeding agreed to by the consumer and DCC, see 10 M.R.S. § 1165. Under both of these situations, DCC may also be required to reimburse the consumer the amount of sales tax that the consumer paid in Maine at the time of the motor vehicle's original purchase. See 10 M.R.S. § 1163(2)(B).

[¶ 4] On December 5, 2003, DCC requested a refund of $50,981.94, the total amount of sales tax it paid to the owners of fifty-eight vehicles DCC either replaced or repurchased from March 20, 1996, through June 3, 2003. On December 19, 2003 MRS denied the request. On January 12, 2004, DCC requested reconsideration of the denial. On April 28, 2004, the Acting Executive Director of MRS upheld the denial.

[¶ 5] On June 1, 2004, pursuant to 36 M.R.S. § 151 (2006) and 5 M.R.S. § 11002 (2006), DCC petitioned the Superior Court to review the Acting Executive Director's final decision. The Superior Court affirmed the decision. This appeal followed.

II. TEXTUAL ANALYSIS

A. The Maine Lemon Law

[¶ 6] The Maine Lemon Law "provides consumers with a statutory right to have the manufacturer . . . make repairs to a new motor vehicle that does not conform to all express warranties." Jolovitz v. Alfa Romeo Distribs. of N. Am., 2000 ME 174, ¶ 7, 760 A.2d 625, 627-28. If, "after a reasonable number of attempts," the manufacturer, its agents, or authorized dealers, are unable to repair a defect that "substantially impairs the use, safety or value of the motor vehicle" the manufacturer shall, at the consumer's option, replace the vehicle, or accept the return of the vehicle and refund the consumer. 10 M.R.S. § 1163(2). The refund consists of:

A. The full purchase price or, if a leased vehicle, the lease payments made to date, including any paid finance charges on the purchased or leased vehicle;

B. All collateral charges, including, but not limited to, sales tax, registration fees and similar government charges; and

C. Reasonable costs incurred by the consumer for towing and storage of the vehicle and for procuring alternative transportation while the vehicle could not be driven because it did not conform to any applicable express warranty.

Id. § 1163(2)(A)-(C). A "reasonable allowance for the use of the vehicle" is subtracted from the refund. Id. § 1163(2).

B. Section 2011, "Overpayment; refunds"

[¶ 7] DCC's request for a refund is governed by 36 M.R.S. § 2011.¹ See Kearns v. State Tax Assessor, 658 A.2d 673, 674 (Me.1995). Pursuant to section 2011, a "taxpayer" must place a written request for a refund with the State Tax Assessor. 36 M.R.S. § 2011. If the assessor determines that a tax has been "erroneously or illegally collected or computed" that amount is credited on any taxes then due. Id. The taxpayer, or the "taxpayer's successor in interest" is given the balance of the refund that exceeds currently due taxes. Id. This refund is disallowed if the written application for the refund is not filed within three years of the date of the overpayment. Id. A taxpayer has the opportunity to appeal the final decision of the assessor to the Superior Court. Id.

[¶ 8] DCC advances three separate contentions that it is entitled to a refund pursuant to section 2011:(1) it is a taxpayer; (2) it is a taxpayer's successor; and (3) it is an agent of the State.

[¶ 9] We review the interpretation of a statute de novo. Yeadon Fabric Domes, Inc. v. Me. Sports Complex, LLC., 2006 ME 85, ¶ 13, 901 A.2d 200, 205. "Our main objective in statutory interpretation is to give effect to the Legislature's intent." City of Bangor v. Penobscot County, 2005 ME 35, ¶ 9, 868 A.2d 177, 180 (quotation marks omitted). To determine the Legislature's intent, we first examine the plain meaning of the statute. Id. "If the statute's meaning is clear, we do not look beyond its words, unless the result is illogical or absurd." S. Portland Police Patrol Ass'n v. City of S. Portland, 2006 ME 55, ¶ 5, 896 A.2d 960, 963 (citing Kapler v. Kapler, 2000 ME 131, ¶ 17, 755 A.2d 502, 508). If the statute is ambiguous, we will then examine extrinsic sources, such as legislative history. City of Bangor, 2005 ME 35, ¶ 9, 868 A.2d at 180.

1. DCC is not a Taxpayer

[¶ 10] "Taxpayer" is defined for all provisions of title 36 of the Maine Revised Statutes, which governs taxation. "`Taxpayer' means any person required to file a return under this Title or to pay, withhold and pay over or collect and pay over any tax imposed by this Title." 36 M.R.S. § 111(7)(2006).

[¶ 11] DCC's contention that it became the "taxpayer" by refunding the consumer the amount he or she paid in sales tax does not meet the definition of taxpayer used throughout the title governing taxation. It is undisputed that DCC does not collect sales taxes in Maine and therefore is not required to "collect and pay over any tax." DCC is not paying a tax to the State, as the definition of taxpayer requires; it is reimbursing the consumer for the tax that the consumer paid to the State.

2. DCC is not the Taxpayer's Successor

[¶ 12] DCC contends that if "successor" is given its plain and everyday meaning—one that succeeds or follows— DCC is the consumer's successor because it refunded the consumer the amount that the consumer paid in sales tax, thereby entitling it to receive a tax refund from the assessor.

[¶ 13] An application of DCC's successor in interest argument demonstrates the inapplicability of its contention. In the present case, the taxpayer, that is, the consumer, is not entitled to any tax refund. There is no refund to which DCC may succeed because the consumer-taxpayer never paid a tax more than once, nor was the consumer-taxpayer subjected to an illegal or erroneous tax. Section 2011 does not grant a successor in interest any refund to which the taxpayer is not entitled.

[¶ 14] The plain language of section 2011 dictates this result. The first sentence of section 2011 governs when a refund is available:

If the State Tax Assessor determines, upon written application by a taxpayer or during the course of an audit, that any tax under this Part has been paid more than once or has been erroneously or illegally collected or computed, the assessor shall certify to the State Controller the amount paid in excess of that legally due.

36 M.R.S. § 2011. However, DCC's contention that it is entitled to a refund does not rely upon that sentence. Rather, DCC relies upon the second sentence of the section, which governs to whom the assessor may grant a refund:

That amount must be credited by the assessor on any taxes then due from the taxpayer and the balance refunded to the taxpayer or the taxpayer's successor in interest . . . .

Id. Section 2011 establishes a taxpayer's successor in interest as a recipient of a taxpayer's refund. DCC's construction of successor is one who refunds a taxpayer for a tax the taxpayer previously paid. DCC misreads the term "taxpayer's successor in interest" as creating a means through which the successor in interest has an independent claim to a tax refund. The language of section 2011 plainly dictates that a successor in interest may only receive a refund to which the taxpayer is entitled.

3. DCC is not an "Agent of the State"

[¶ 15] DCC contends that in refunding the consumer what the consumer paid in sales tax, it is acting on the State's behalf, or as a "conduit" for the State, and is entitled to a refund under section 2011. DCC analogizes its role pursuant to the Maine Lemon Law both to a debtor in bankruptcy and to an ordinary retailer.

[¶ 16] DCC's analogies are ill-fitting. DCC relies on a section of the U.S. Bankruptcy Code, 11 U.S.C.A. § 541 (2004), which defines a debtor's estate, to advance its contention that a debtor handling a tax has no legal title to the tax. DCC contends that it is acting as a "debtor" under the Maine Lemon Law. The U.S. Bankruptcy Code serves completely different...