Henson v. HealthSouth Medical Center, Inc.
Decision Date | 30 April 2004 |
Citation | 891 So.2d 863 |
Parties | Edwin A. HENSON v. HEALTHSOUTH MEDICAL CENTER, INC., et al. |
Court | Alabama Supreme Court |
Don B. Long, Jr., and Keri B. Adams of Johnston Barton Proctor & Powell, LLP, Birmingham, for appellant.
Robert D. Segall and Shannon L. Holliday of Copeland Franco Screws & Gill, PA, Montgomery; Walter Byars of Steiner, Crum & Byars, Montgomery; and Loree J. Skelton, Birmingham, for appellee HealthSouth Medical Center, Inc.
Edwin A. Henson appeals from the trial court's dismissal of his action against HealthSouth Medical Center, Inc. ("HealthSouth"), the Industrial Development Board of the City of Birmingham ("the Board"), and the City of Birmingham.1 We reverse and remand.
HealthSouth, a Delaware corporation, owns and operates hospitals in Alabama; several of these hospitals are in Birmingham. In 2001, HealthSouth proposed to close one of its Birmingham hospitals and construct a new hospital at another location in the City. HealthSouth applied to the Board for a tax abatement pursuant to the Tax Incentive Reform Act of 1992, § 40-9B-1 et seq., Ala.Code 1975 ("TIRA"). The Board granted HealthSouth a tax abatement the total value of which was $30,390,000.
Henson, a taxpayer, sued HealthSouth, the Board, and the City of Birmingham, alleging that the tax abatement had been wrongly granted and requesting that the tax abatement be declared void. HealthSouth filed a motion to dismiss Henson's action for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6), Ala.R.Civ.P. The Board and the City joined in the motion, arguing that Henson did not have standing as a taxpayer to challenge the tax abatement. The trial court granted the motions and dismissed Henson's action against HealthSouth, the Board, and the City. The trial court, citing as authority Doremus v. Business Council of Alabama Workers' Compensation Self-Insurers Fund, 686 So.2d 252 (Ala.1996), reasoned that although a taxpayer has the right to challenge an expenditure of State funds as unconstitutional, a taxpayer cannot sue the State and another taxpayer to collect taxes the other taxpayer allegedly owes the State. Henson appeals.
On appeal, Henson argues that he has standing as a taxpayer because, he says, 1) he has the right to contest the expenditure of public funds; and 2) if the tax abatement is allowed to stand no other agency will be able to replenish the State treasury with the amount represented by the abatement.
Henson asks us to review the dismissal of an action pursuant to Rule 12(b)(6), Ala.R.Civ.P., for the failure to state a claim. The appellate standard of review on a ruling on a motion to dismiss is whether, "when the allegations of the complaint are viewed most strongly in the pleader's favor, it appears that the pleader could prove any set of circumstances that would entitle [the pleader] to relief." Nance v. Matthews, 622 So.2d 297, 299 (Ala.1993); Raley v. Citibanc of Alabama/Andalusia, 474 So.2d 640, 641 (Ala.1985). Furthermore, the United States Supreme Court, dealing with standing at the pleading stage, has stated:
Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). Although Lujan, which interprets the Federal Rules of Civil Procedure, is not binding upon this Court because this proceeding is governed by the Alabama Rules of Civil Procedure, the opinion of the United States Supreme Court is highly persuasive on the issue whether Henson's pleadings set forth allegations sufficient to survive a motion to dismiss pursuant to Rule 12(b)(6). See Ex parte Full Circle Distrib., L.L.C., 883 So.2d 638 (Ala.2003) () .
In Zeigler v. Baker, 344 So.2d 761, 763-64 (Ala.1977), this Court addressed the issue of taxpayer standing:
(Emphasis on word "state" original; other emphasis added.) Henson contends that the effect of granting a tax abatement is the same as expending of public funds; therefore, he argues, he should have standing to contest the granting of the tax abatement. HealthSouth argues that a tax abatement does not qualify as an expenditure of State funds. The trial court dismissed the action because, in its opinion, Henson's action was an attempt by one taxpayer to collect state taxes from another taxpayer — HealthSouth. Henson argues that this case is not analogous to those cases in which this Court has refused to recognize standing of one taxpayer to bring an action against the State and another taxpayer seeking the collection of State taxes allegedly owed by the other taxpayer, even though the State fails to act. See Doremus, 686 So.2d at 253.
In Doremus, this Court noted that "Doremus's complaint alleged that the [Business Council of Alabama Workers' Compensation Self-Insurers Fund (the `BCA Fund')] and other similar funds are `domestic insurers' that, she says, were required to have paid to the State a 1% tax on premiums received before January 1, 1995, but that the State failed to collect that tax." 686 So.2d at 252-53 (footnote omitted). The plaintiff in Doremus unsuccessfully sought to collect taxes allegedly owed the State by another taxpayer. Doremus would be persuasive authority if the facts here involved a claim by one taxpayer against another taxpayer as to whom the plaintiff claimed that the taxing authority was refusing to enforce clearly applicable tax laws. Put another way, Henson is not arguing that HealthSouth owes outstanding taxes that the State refuses to collect. Such facts are not present in this case because the tax abatement authorized by TIRA excuses HealthSouth from liability for the taxes abated. Instead, Henson argues that HealthSouth has been granted an unlawful tax abatement and is seeking to have the abatement declared invalid.
Henson's Brief, pp. 22-23. Therefore, we reject HealthSouth's argument that Doremus requires the dismissal of this action.
Henson also argues that he has standing to challenge the tax abatement because neither the attorney general nor the Department of Revenue has the authority to challenge it. He cites Zeigler, in which this Court, relying on a Florida Supreme Court case, held that a taxpayer had standing to contest the constitutionality of an act when several public officials were charged with defending the act and therefore could not challenge it. 344 So.2d at 764. This Court reasoned that if the taxpayer did not bring the action contesting the constitutionality of the act, then no one else would be able to do so, considering the number of public officials who were affected by the act: "...
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