City of Hazelwood v. Peterson
| Decision Date | 29 May 2001 |
| Parties | (Mo.App. S.D. 2001) City of Hazelwood, Respondent, v. Robert H. Peterson, et al., Appellants and Chris Braudis, et al., Respondents, v. Florissant Valley Fire Protection District, et al., Appellants. SC82716 0 |
| Court | Missouri Court of Appeals |
Appeal From: Circuit Court of St. Louis County, Hon. Kenneth M. Romines, Judge
Counsel for Appellant: James E. Mello, Jeffrey T. McPherson and Cynthia Hoemann
Counsel for Respondent: James J. Wilson, Kevin O'Keefe, Corinne N. Darvish and Richard W. Fischer
Opinion Summary: Two individual taxpayers and the City of Hazelwood sought to recover excess taxes paid to the Florissant Valley Fire Protection District. The taxes were paid pursuant to an election later found void. The court ordered the District to return the payments and awarded costs and attorneys' fees as required by the Hancock Amendment.
Court en banc holds: The judgment is reversed as to attorneys' fees to Hazelwood. It is affirmed in all other respects.
(1) The taxpayers are entitled to a refund.
(A) Article X, section 22(a) permits increases only on voter approval. An invalid, void election cannot constitute voter approval. While the District was empowered to begin collecting the new tax after the official election results pursuant to section 115.595.2, RSMo 2000, it could not keep the funds after the court found the increase unconstitutional. The statute must be read consistently with the constitution.
(B) Although Hazelwood has no standing to sue under the Hancock Amendment or section 139.031 as it is not a taxpayer, the amount the District is allowed to charge Hazelwood is controlled by section 321.675, RSMo 1986.
(2) The court did not abuse its discretion in certifying a class of District property taxpayers in 1996. Although Missouri law does not permit class actions for tax refunds, Missouri's statutory procedures do not govern article X, section 23, remedies, which permit class actions where appropriate.
(3) The Hancock Amendment provides prevailing taxpayer with costs and attorneys' fees. But Hazelwood cannot sue under the Hancock Amendment, and the circumstances of this case are not so rare and exceptional to justify attorneys' fees to it.
Stith, J., not participating.
Chris Braudis, Steve Knobbe, and the City of Hazelwood (collectively, Respondents) commenced two lawsuits to recover excess tax payments made to the Florissant Valley Fire Protection District (the District). The Circuit Court of St. Louis County consolidated the cases and granted summary judgment in favor of Respondents. The court concluded that the District collected a certain tax increase in violation of article X, section 22(a) of the Missouri Constitution, part of what is commonly referred to as the Hancock Amendment.
The District and the individually named defendants -- Shannon Duffy, Gary Henke, and Jack Gallagher (collectively, Appellants) -- filed timely notices of appeal to the Court of Appeals, Eastern District. Following opinion by the court of appeals, we ordered the matter transferred. This Court has jurisdiction under article V, section 10 of the Missouri Constitution. The judgment of the circuit court is affirmed in part and reversed in part.
Hazelwood is a charter city organized under article VI, section 19 of the Missouri Constitution. In 1994, Hazelwood annexed a certain portion of St. Louis County known as the "Northwest Area." After the annexation, the Circuit Court of St. Louis County ordered the District to provide fire, emergency, and ambulance services to the Northwest Area in exchange for certain fees to be paid by the city of Hazelwood. Using a statutorily prescribed formula, Hazelwood and the District entered into a "Fire Service Agreement" on April 12, 1995. See section 321.675, RSMo 1986. Under this agreement, the individual taxpayers of the Northwest Area paid property taxes to Hazelwood, which in turn made payments to the District that were equal to the District's tax rate.
At the time of the agreement, the District's tax rate (and consequently the fee under the Fire Service Agreement) was sixty-six cents per one hundred dollars of assessed valuation. On August 6, 1996, the St. Louis County Board of Election Commissioners held an election in which the District asked the voters to approve an increase of ten cents per one hundred dollars of assessed valuation. On August 19, 1996, the official election results showed that the proposed increase passed by a margin of thirteen votes.
Shortly thereafter, certain voters filed an election contest to challenge the validity of the election. While the election contest was still pending, the District levied the tax increase. Acting in accordance with the Fire Service Agreement, Hazelwood submitted the increased payments, but noted that the payments were made "under protest." On February 14, 1997, the trial court entered an order setting aside the election because of an irregularity in the ballots. The court ordered a new election, and the voters failed to approve the tax increase.
On January 3, 1997, the individual plaintiffs in this case filed suit to recover the excess payments made to the District while the election contest was pending in the circuit court. The city of Hazelwood filed a similar claim on February 13, 1997. On June 25, 1997, the circuit court consolidated the cases.
After reviewing the parties' motions for summary judgment, the circuit court entered a single judgment disposing of all claims. The court certified a class consisting of all persons who paid property taxes to the District during 1996 and ordered that the claims of the individual plaintiffs be maintained as a class action. The court found that while the District had the right to treat the tax increase as approved while the election contest was pending, it did so "at its own peril" until the court resolved the claims arising under the election contest. The court ordered the District to return all overpayments made by the individual taxpayers and by the city of Hazelwood. In addition, the court awarded costs and attorneys' fees as required by the Hancock Amendment.
The propriety of summary judgment is purely an issue of law, and appellate review is essentially de novo. ITT Commercial Finance Corp. v. Mid-America Marine, 854 S.W.2d 371, 376 (Mo. banc 1993). This Court reviews the record in the light most favorable to the party against whom summary judgment was entered. Fisher v. State Highway Comm'n, 948 S.W.2d 607, 611 (Mo. banc 1997). Summary judgment is proper when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Id.; Rule 74.04(c).
The District cites five points of error in the judgment of the circuit court. For the sake of convenience, we consider first whether the Hancock Amendment (Mo. Const. art. X, sec. 16, et seq.) mandates a tax refund for taxes collected while the successful election contest was pending (Appellants' points I and II). Next, we consider whether the circuit court properly certified the individual plaintiffs' claims as a class action under Rule 52.08 (Appellants' point III). Finally, we consider whether the circuit court erred in awarding attorneys' fees in favor of Respondents (Appellants' points IV and V).
This case requires us to consider the relationship between the Hancock Amendment and section 115.595, RSMo. The District argues that the Hancock Amendment must be read in conjunction with the state's election laws to determine whether a tax increase is constitutional. To the contrary, we hold that the plain language of the constitutional amendment is controlling.
The constitutional right established in article X, section 22(a) assures taxpayers that they will be free of increases in local taxes unless the voters approve those increases in advance. Ring v. Metropolitan St. Louis Sewer Dist., 969 S.W.2d 716, 718 (Mo. banc 1998). The amendment states, in relevant part:
Counties and other political subdivisions are hereby prohibited from levying any tax, license or fees, not authorized by law, charter or self-enforcing provisions of the constitution when this section is adopted or from increasing the current levy of an existing tax, license or fees, above that current levy authorized by law or charter when this section is adopted without the approval of the required majority of the qualified voters of that county or other political subdivision voting thereon.
Mo. Const. art. X, sec. 22(a).
In this case, the tax increase was never approved by a majority of the qualified voters in St. Louis County. The District argues that a majority of the voters did approve of the increase when the election board initially counted the votes on August 19, 1996. This position, however, is wholly inconsistent with the power of the judiciary to review the election process. See Ring, 969 S.W.2d at 718-19; section 115.526, et seq., RSMo 2000. On February 14, 1997, the circuit court ordered that the election be "set aside and void." An election that is invalid and void cannot constitute voter approval for purposes of article X, section 22(a).
The District relies on section 115.595.2 for the proposition that a tax increase can be valid while an election contest is pending and yet void after the election contest is decided. Section 115.595.2 states as follows:
In each case of a pending election contest on a question, the question shall be deemed approved or disapproved as shown by the official returns of the election until the contest is decided. When the contest is decided, the question shall be deemed approved or disapproved in accordance with the decision as of the day the contest is decided, or as of the day it would otherwise have been deemed approved or disapproved, whichever is later.
Section 115.595.2, RSMo 2000. The District...
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