City of Hot Springs Advertising and Promotion Com'n v. Cole, 93-1390
| Decision Date | 06 June 1994 |
| Docket Number | No. 93-1390,93-1390 |
| Citation | 878 S.W.2d 371,317 Ark. 269 |
| Parties | CITY OF HOT SPRINGS ADVERTISING AND PROMOTION COMMISSION, Appellant, v. Daryn COLE d/b/a Cole Catering, Appellee. |
| Court | Arkansas Supreme Court |
David H. White, Hot Springs, for appellant.
No brief filed for appellee.
In May of 1992, the City of Hot Springs Advertising and Promotion Commission entered into a written contract entitled "Combined Contract for Food and Beverage Services for Mid-American Museum and Hot Springs Convention Auditorium" with Daryn Cole d/b/a Cole Catering. Cole was to provide food and beverages for the Commission's sanctioned events. The Commission purportedly was to receive a commission on those sales from Cole as well as revenues generated by the hotel and restaurant tax. On December 18, 1992, Cole allegedly decided to withdraw from the contract. On December 31, 1992, the Commission sued Cole for breach of contract and prayed for the sum of $15,375.39 which, it alleged, included unpaid commissions and taxes due the Commission under the catering contract. Cole denied the allegations in an answer filed January 25, 1993, and asserted that the Commission was not an independent legal entity which could sue or be sued in its own name. Cole also counterclaimed for equipment and inventory allegedly taken by the Commission and for catering services, all of which Cole valued at $9,458.10.
On May 14, 1993, Cole moved to dismiss the Commission's complaint under Ark.R.Civ.P. 12(b)(6) and urged once again that the Commission had no separate legal standing independent of the City and, thus, could not commence a lawsuit in its own name. The circuit court heard the motion and found that the Commission was not empowered by statute to sue or be sued, which effectively disposed of the actions raised in both the complaint and counterclaim. The court dismissed the Commission's complaint with prejudice. The Commission now appeals that order and has filed its brief. Cole, as appellee, chose not to file a responsive brief.
Some background on advertising and promotion commissions is necessary for an understanding of this case. The City of Hot Springs Advertising and Promotion Commission is an outgrowth of the Advertising and Promotion Commission Act, Act 185 of 1965, now codified at Ark.Code Ann. § 26-75-601, et seq. (1987). That Act authorized a city of the first class to levy by ordinance a gross receipts tax on hotels and restaurants. Ark.Code Ann. § 26-75-602 (1987). The levied tax was to be collected by the city, and the enforcement of that collection was to be by the city through proper city officials. Ark.Code Ann. § 26-75-603 (1987). Act 185 further authorized a city to establish a fund from the collected taxes and to create an advertising and promotion commission to use that fund to promote the city and its surrounding areas. Ark.Code Ann. § 26-75-604, et seq. (1987). With the enactment of Act 626 of 1989, these advertising and promotion commissions were expressly authorized to contract with civic groups and the chamber of commerce to provide "actual services that are connected with tourism events or conventions." Ark.Code Ann. § 26-75-606(c)(3) (Supp.1991).
The sole issue raised by the Commission in this appeal is whether the Commission, separate and apart from the City, could sue to collect the hotel and restaurant tax and to collect commissions from Cole on food and beverages sold under the contract at the time it filed its complaint on December 31, 1992. On that date, no mandate from the General Assembly existed which authorized the Commission to collect the hotel and restaurant taxes or to sue to enforce that collection. Under Ark.Code Ann. § 26-75-603 that authority was expressly vested in the cities. It was only after the complaint was filed in this matter, and specifically on March 4, 1993, when the General Assembly enacted Act 364 with an emergency clause, that the advertising and promotion commissions were authorized to collect the tax and to bring enforcement actions.
Despite the enactment of Act 364, based on the record before us the Commission did not argue the Act to the circuit court as a predicate for its authority to sue; nor did it argue the retroactive application of Act 364 to this matter. Because the circuit court did not have an opportunity to consider the Act 364 arguments, we will not entertain them on appeal. We do not consider arguments for reversal that were not presented to the circuit court for its consideration. See Kolb v. Morgan, 313 Ark. 274, 854 S.W.2d 719 (1993).
The Commission's sole argument to the circuit court was that it had the authority to operate the advertising and promotion fund for the City of Hot Springs and that the power carried with it the concomitant authority to contract. From that power to contract flowed the power to sue Cole for breach, according to the Commission. Cole argued, in support of its motion to dismiss, that the only authority to contract granted the commissions by the General Assembly was a specific authority to contract with civic groups and the chamber of commerce--not with food and beverage vendors. The circuit court concluded that cities were granted the power to sue by the General Assembly, but that a comparable authority had not been vested in the commissions. The court did decide that the Commission had been given the power to contract under Act 626 of 1989, but the court refused to read an authority to sue for breach of contract into Act 626.
The Arkansas General Assembly has deemed cities in Arkansas to be bodies politic and corporations which are capable of suing and being sued. Ark.Code Ann. § 14-54-101(1) (1987); see also Deason v. City of Rogers, 247 Ark. 1061, 449 S.W.2d 410 (1970). This court has also recognized that the General Assembly has extended the right to sue and be sued to various entities, including school districts, housing authorities, improvement districts, levee boards, and drainage districts. See, e.g., Hilton v. Pine Bluff Public Schools, 295 Ark. 397, 748 S.W.2d 648 (1988); City of Ft. Smith v. Housing Auth. of City of Fort Smith, 256 Ark. 254, 506 S.W.2d 534 (1974); Reeme & Rhodes...
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