C & C Oil Co., Inc. v. Indiana Dept. of State Revenue

Decision Date15 April 1991
Docket NumberNo. 49T05-9006-TA-00027,49T05-9006-TA-00027
Citation570 N.E.2d 1376
PartiesC & C OIL CO., INC., Petitioner, v. INDIANA DEPARTMENT OF STATE REVENUE, Respondent.
CourtIndiana Tax Court

Joseph R. Impicciche, N. Kent Smith, Hall Render Killian Heath & Lyman, Indianapolis, for petitioner.

Linley E. Pearson, Atty. Gen. by Lynn A. Francis, Douglas J. Deglopper, Deputy Attys. Gen., Indianapolis, for respondent.

FISHER, Judge.

C & C Oil Co., Inc. (C & C Oil) originally appealed the Indiana Department of State Revenue's (Department) assessment of special fuel tax, interest, and penalties for the years 1984, 1985, 1986, and 1987, and motor carrier fuel use tax, interest, and penalties for the years 1985, 1986, and 1987. The Department's Letter of Findings, issued April 16, 1990, denied C & C Oil's timely protest of the Department's proposed assessments for the years at issue. C & C Oil paid the assessed amount demanded by the Department and simultaneously filed a claim for refund. Prior to any action on the claim, C & C Oil filed its original tax appeal.

This matter is before the court on C & C Oil's "Motion for Partial Summary Judgment" on the issue concerning the special fuel tax assessment, including tax and interest in the sum of $17,902.86 for the years 1984, 1985, 1986, and 1987, on special fuel dispensed through a metered pump labeled "No. 2 Fuel Oil." The parties stipulated to dismiss all other issues included in C & C Oil's original tax appeal.

FACTS

The facts emerge from the affidavits C & C Oil filed and are mirrored in the Department's depositions of three of the affiants. The Department has not filed counter affidavits or other opposing evidence; instead, it attempts to impeach C & C Oil's evidence and witnesses to show the existence of a genuine issue of a material fact.

C & C Oil was an Indiana licensed "special fuel dealer," as defined in IC 6-6-2.1-103(h), engaged in the business of buying and selling petroleum products, including special fuel, at the time of the assessments. C & C Oil owned and operated a service station in Plymouth, Indiana, which was primarily engaged in retail sales of gasoline and special fuel to consumers. The station had four (4) distinct islands, each with metered pumps for dispensing fuel. Three islands exclusively dispensed gasoline. The fourth island was used solely for the sale of special fuel. The special fuel island was close to and visible from the cashier's booth. The three metered pumps on the special fuel island were each individually labeled, color-coded, and electronically controlled from the cashier's booth. The special fuel pumps could only be activated from within the booth by an employee trained in the operation of the equipment. A green pump labeled "diesel fuel" was used by customers who placed special fuel into the fuel tank of motor vehicles. Special fuel tax was paid on purchases from the green pump. The remaining two pumps were chrome colored, one labeled "kerosene" and the other "No. 2 Fuel Oil." Diesel fuel and "No. 2 Fuel Oil" are identical and are drawn from the same underground reservoir. Sales from the diesel fuel pump, however, included special fuel tax, while sales from the chrome colored "No. 2 Fuel Oil" pump, the subject of the instant controversy, did not include special fuel tax.

ISSUES

The issues are:

I. Is there a genuine issue of a material fact as to whether special fuel is dispensed II. As a matter of law, is fuel sold from a color-coded employee controlled fuel pump to customers who do not place the fuel into the fuel tank of motor vehicles taxable under IC 6-6-2.1-201?

from the "No. 2 Fuel Oil" pump into the fuel tanks of motor vehicles?

STANDARD OF REVIEW

Summary judgment is not a substitute for trial to resolve factual disputes, ITT Commercial Fin. Corp. v. Union Bank & Trust Co. (1988), Ind.App., 528 N.E.2d 1149, 1152, and is an inappropriate means to resolve conflicting inferences from undisputed facts. Id. at 1152 (citing Board of Aviation Comm'rs v. Hestor (1985), Ind.App., 473 N.E.2d 151, 153). The court shall grant a motion for summary judgment if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Ind.Rules of Procedure, Trial Rule 56(C). Summary judgment may be granted in favor of either the moving or the nonmoving party. Indianapolis Pub. Transp. Corp. v. Indiana Dep't of State Revenue (1987), Ind.Tax, 512 N.E.2d 906, 907, aff'd, Ind., 550 N.E.2d 1277 (1990).

The moving party bears the burden of proving first, that no genuine issue of material fact exists and second, that the moving party is entitled to judgment as a matter of law. ITT Commercial, 528 N.E.2d at 1151 (citing Creighton v. Caylor-Nickel Hosp., Inc. (1985), Ind.App., 484 N.E.2d 1303, 1305-06). C & C Oil asserts that no genuine issue of material fact exists and the Department's assessment of special fuel tax was erroneous as a matter of law.

I.

"The method of ascertaining whether a material factual issue exists is as follows: Facts alleged in the complaint are taken as true except to the extent that they are negated by other pleadings, depositions, answers to interrogatories, affidavits, or other evidence presented by the moving party." Kahf v. Charleston S. Apartments (1984), Ind.App., 461 N.E.2d 723, 729, transfer denied, (citing Estate of Tanasijevich v. City of Hammond (1978), 178 Ind.App. 669, 383 N.E.2d 1081). C & C Oil presented affidavits from five Plymouth station employees containing substantially the same facts. The affidavits explained the procedural safeguards C & C Oil devised to ensure that special fuel from the "No. 2 Fuel Oil" pump was never placed in the fuel supply tank of motor vehicles, therefore ensuring sales were made exclusively to consumers for off-road uses, i.e., farmers, home heating customers, construction equipment owners, et cetera. These safeguards included color coding of pumps containing different fuel, proximity and visibility of the pumps from the cashier's booth, and exclusive activation of the pumps by trained employees from within the booth.

Taxation of special fuel is authorized only if special fuel is delivered or placed in the fuel tank of a motor vehicle. See IC 6-6-2.1-201; IC 6-6-2.1-103. Whether special fuel from the "No. 2 Fuel Oil" pump goes into the fuel supply of a motor vehicle is a material fact because it may be dispositive of the litigation or a relevant secondary issue. Willsey v. Peoples Fed. Sav. and Loan Ass'n (1988), Ind.App., 529 N.E.2d 1199, 1206 n. 5 (citing Jones v. City of Logansport (1982), Ind.App., 436 N.E.2d 1138), transfer denied. The critical question is whether a genuine issue exists with respect to this material fact.

C & C Oil's pleadings and affidavits demonstrate an absence of a genuine issue of material fact since the affiants averred that they never observed special fuel from the "No. 2 Fuel Oil" pump dispensed into the fuel tank of a motor vehicle. The burden therefore shifts to the Department to show the existence of a genuine issue of material fact by specifically setting forth contrary facts either in affidavits, depositions, testimony, or as otherwise provided in T.R. 56(C). ITT Commercial, 528 N.E.2d at 1151.

The Department deposed three of the affiants in an attempt to impeach statements in the affidavits to show that reasonable minds might disagree as to whether or not special fuel was dispensed into the fuel supply tanks of motor vehicles. The Department's depositions of C & C Oil's president, the Plymouth station manager, and the deli manager/cashier reveal that employees were not watching the fuel pump at all times. The cashier normally did not face the island on which the "No. 2 Fuel Oil" pump was situated. The station manager, Glen Berger, Jr., stated that he trained each cashier, however, to turn and look out the window to see what the special fuel would be dispensed into before activating the electronic part of the pump so the customer could get fuel. Berger Deposition at 11-14. Eleanor Crum, the deli manager and cashier who was employed by C & C Oil for approximately three and a half years, stated in her deposition, "I can remember a time when a man did try to put [fuel from the 'No. 2 Fuel Oil' tank] in his truck, and I shut him off right away and run [sic] out and told him he couldn't use that." Crum Deposition at 25 (emphasis added).

The Department asserts C & C Oil's procedures are inadequate to prevent special fuel from the "No. 2 Fuel Oil" pump from being placed into the fuel tanks of motor vehicles. The Department attempts to show the existence of a genuine issue as to whether special fuel from the "No. 2 Fuel Oil" pump is ever placed in fuel tanks of motor vehicles in two ways.

First, the Department tries to create a genuine issue using the following invention:

Well, as we brought out in the deposition, Your Honor, if the people pulled up there in a vehicle with cans to fill, and they bring the cans out onto the ground in order to fill up those cans, depending on where the vehicle is placed, it is possible that the cashier cannot see over or around that vehicle in order to see the cans that are being filled. Now, they said most of the time they would pull up far enough that they could see. However, he did indicate that certainly if they wanted to[,] there are times where customers could have filled the can and also filled the tank of whatever vehicle that was placed there, because the cashier would have been unable to see the procedure itself.

Record at 42 (emphasis added).

Without more than these suppositional musings, the factual question is not genuine; it is merely hypothetical. See Downing v. Eubanks (1990), Ind.App., 557 N.E.2d 1027, 1030. The Department has not provided one fact showing a customer dispensed special fuel into the tank of a motor vehicle which would raise a genuine issue.

The court must look at the evidence and all reasonable inferences which can be drawn therefrom in...

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