Hertz Corp. v. Raks Hospitality, Inc.

Decision Date18 April 2006
Docket NumberNo. ED 85454.,ED 85454.
Citation196 S.W.3d 536
PartiesThe HERTZ CORPORATION, Respondent, v. RAKS HOSPITALITY, INC., Appellant.
CourtMissouri Court of Appeals

Appeal from the Circuit Court, St. Louis County, Barbara Wallace, J.,

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Naren Chaganti, Los Angeles, CA, for appellant.

Beth C. Boggs, St. Louis, MO, for respondent.

CLIFFORD H. AHRENS, Judge.

RAKS Hospitality, Inc. ("RAKS") appeals from the judgment of the trial court following a jury verdict in favor of Hertz Corporation ("Hertz") on its claim of unjust enrichment and a directed verdict in favor of Hertz on RAKS's counterclaims for tortious interference and prima facie tort.1

In the late 1990's Hertz purchased a portion of land owned by RAKS, which owned and operated a Days Inn motel franchise at 4545 Woodson Road in St. Louis County, Missouri. In 1999, 2000, and 2001, St. Louis County ("County") sent the property tax bill for the property owned by RAKS at 4545 Woodson Road ("4545 Woodson") to RAKS Hospitality, Inc., c/o The Hertz Corporation, 3609 Smith Barry Road, Arlington, Texas. This is the address of James McElroy, a property tax consultant for Hertz. Hertz paid the real property tax on RAKS's property at 4545 Woodson for the years 1999, 2000, and 2001 to County. RAKS also paid the real property tax on 4545 Woodson in 1999, but did not pay the property tax for 2000 or 2001, and purportedly received no notices or bills for those two years. In 2002, Hertz conducted an internal audit and discovered that it had mistakenly paid the taxes for 4545 Woodson for 1999, 2000, and 2001.

In October 2002, Hertz requested a refund from County. County refunded the payment made by Hertz for the 1999 taxes because of the double payment, but refused to refund the payments for 2000 and 2001.2 County subsequently refunded the 2001 payment to Hertz following an amendment to the statute of limitations which extended the period for which a refund could be claimed from one year to three years.

In December 2003, Hertz filed suit against RAKS. Hertz asserted that it mistakenly paid taxes for 1999 and 2000 to County for 4545 Woodson, which was owned by RAKS, which County refused to refund. Hertz contended that RAKS knew or should have known that it owed real property taxes to County for 4545 Woodson for those years, but made no inquiry regarding why it had not received a tax bill. Hertz averred that RAKS had been unjustly enriched by receiving the benefit of it inadvertently paying RAKS's tax bills for 1999 and 2000, that Hertz had not made those payments gratuitously and would not have made them had it realized that it was paying the taxes owed by RAKS rather than owed by it. Hertz further asserted that despite its demand for payment to RAKS, RAKS has retained the benefit of Hertz's payment of the taxes, which is inequitable. Hertz requested restitution for the amounts that it paid to County for the taxes on the property owned by RAKS. RAKS filed a counterclaim, subsequently amended, asserting that Hertz tortiously interfered with RAKS' business with the Assessor of County, which resulted in increased real property taxes on the property, instead of the reductions in assessments that RAKS routinely obtained by negotiation with County. As part of its amended counterclaim, RAKS also pleaded a cause of action for prima facie tort. Hertz subsequently amended its petition, reducing its claim to the amount that it paid for the year 2000.

A jury trial was held. Both parties moved for directed verdicts. The trial court granted the motion for a directed verdict in favor of Hertz on RAKS' counterclaim, but otherwise denied the motions. The jury returned a verdict in favor of Hertz on its claim in the amount of $43,925.14 and the trial court entered judgment in favor of Hertz for that amount plus costs. RAKS filed post-trial motions for JNOV and for a new trial. The trial court explicitly denied the motion for a new trial, and apparently did not rule on the motion for JNOV, thereby denying it. RAKS now appeals from the judgment of the trial court.

In its first point relied on, RAKS contends that the trial court erred in denying its motions to dismiss for failure to state a claim and for lack of subject matter jurisdiction. RAKS asserts that section 139.031.5 RSMo (2000) provides an administrative remedy that Hertz failed to exhaust before filing suit against it, and further, that the statutory remedy provided is the exclusive remedy available to Hertz. RAKS also argues that to the extent that section 139.031.5 might permit a private action, it is repugnant to the Missouri Constitution.

Dismissal for lack of subject matter jurisdiction is appropriate when it "appears by the preponderance of the evidence that a court is without jurisdiction." Brazilia, L.L.C. v. Collector of St. Louis County, 117 S.W.3d 704, 706 (Mo.App. 2003) (quoting James v. Poppa, 85 S.W.3d 8, 9 (Mo. banc 2002)).Whether or not there is subject matter jurisdiction is a question of fact that is left to the sound discretion of the trial court. Id.

The initial issue is whether the trial court had subject matter jurisdiction. RAKS argues that section 139.031.5 provides the exclusive remedy for Hertz and also requires that Hertz exhaust the administrative remedies provided therein before filing suit in circuit court. The exhaustion of administrative remedies is a jurisdictional requirement. Brazilia, 117 S.W.3d at 706. A circuit court lacks jurisdiction to hear a petition or render a judgment when the administrative remedies available have not been exhausted. Id. However, section 139.031.05 is not directly applicable to Hertz's petition. This was not an action for a refund from County for improperly paid taxes, but rather an unjust enrichment action against a different party, RAKS. Nothing in section 139.031.5 indicates that it would apply to such an action, and the general policy considerations behind the requirement that a party exhaust administrative remedies prior to being able to file suit against a governmental entity are not relevant here. The cases cited by RAKS on this issue involving refunds all deal with suits against governmental agencies or officers, not suits for unjust enrichment directed against a non-government affiliated party. Hertz did not need to exhaust administrative remedies that are not applicable to its claim, and section 139.031.5 does not decree that it is the exclusive method for a party claiming unjust enrichment. The trial court did not lack subject matter jurisdiction. RAKS's contention that permitting Hertz's suit is repugnant to the Missouri Constitution will be addressed in our discussion of RAKS's sixth point relied on.

We turn now to the trial court's denial of RAKS's motion to dismiss for failure to state a claim. "Review of a motion to dismiss for failure to state a claim is solely a test of the adequacy of the plaintiff's petition." State ex rel. Diehl v. Kintz, 162 S.W.3d 152, 155 (Mo.App.2005). It is assumed that all of the averments of the plaintiff are true, and the plaintiff is liberally granted all reasonable inferences therefrom. Id. There is no attempt to weigh any facts alleged as to their credibility or persuasiveness. Nazeri v. Missouri Valley College, 860 S.W.2d 303, 306 (Mo. banc 1993). Rather, the petition is reviewed in almost an academic manner to determine if the facts alleged meet the elements of a recognized cause of action, or of a cause of action that might be adopted in the case. Id.

A claim for unjust enrichment has three elements: a benefit conferred by a plaintiff on a defendant; the defendant's appreciation of the fact of the benefit; and the acceptance and retention of the benefit by the defendant in circumstances that would render that retention inequitable. Mays-Maune & Associates, Inc. v. Werner Bros., Inc., 139 S.W.3d 201, 205 (Mo. App.2004). These elements were met by Hertz's amended petition, which alleged that: it purchased a portion of RAKS' real property at 4545 Woodson Terrace in 1997; County sent tax bills for the property still owned by RAKS to Hertz, which Hertz paid for the 2000 tax year; Hertz paid that tax bill in error, which it realized in 2002; RAKS knew or should have known that it owed real property taxes to County for the 2000 tax year, but failed to inquire as to its failure to receive the tax bill and did not pay it; RAKS has been unjustly enriched by the benefit of Hertz inadvertently paying the 2000 tax bill for RAKS; Hertz did not pay RAKS's tax bills gratuitously, and would not have paid them had it realized that they were for property owned by RAKS; Hertz had demanded repayment from RAKS, which demand RAKS has refused; Hertz conferred a benefit upon RAKS by inadvertently paying its tax bill, which benefit RAKS has accepted, retained and appreciated, and the retention of those benefits without payment to Hertz is inequitable.3 Under our standard of review for a motion to dismiss for failure to state a claim, Hertz has adequately pleaded a claim for unjust enrichment. The trial court did not err in denying RAKS's motion. Point denied.

In its second point relied on, RAKS argues that the trial court erred in denying its motion to dismiss for failure to state a claim because "Hertz had no right to seek restitution or reimbursement from RAKS in that it was a volunteer, with possession of full knowledge of all material facts or it was unencumbered with an unlimited opportunity to so inform itself of all facts and nevertheless paid the monies to the County."

RAKS cites to Ticor Title Insurance Company v. Mundelius, 887 S.W.2d 726, 728 (Mo.App.1994) for the proposition that a person who voluntarily pays money with full knowledge of the facts cannot recover for...

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