P.J. Lumber Co. v. City of Prichard

• Decision Date: 22 September 2017
• Docket Number: 2160627
• Parties: P.J. LUMBER COMPANY, INC. v. CITY OF PRICHARD
• Court: Alabama Court of Civil Appeals

249 So.3d 1135

P.J. LUMBER COMPANY, INC.

v.CITY OF PRICHARD

2160627

Court of Civil Appeals of Alabama.

September 22, 2017

Jerome E. Speegle and Jennifer S. Holifield of Speegle, Hoffman, Holman, and Holifield, LLC, Mobile, for appellant.

W. Warren Butler and Benjamin T. Presley of Starnes Davis Florie LLP, Mobile, for appellee

THOMPSON, Presiding Judge.

P.J. Lumber Company, Inc. ("P.J. Lumber"), appeals from a summary judgment that the Mobile Circuit Court entered upholding a decision of the City of Prichard ("the city") denying P.J. Lumber's request for a partial refund of the amount it had paid for business-license taxes. P.J. Lumber claimed that the city had improperly included P.J. Lumber's gross revenue from international sales when it calculated the amount of the business-license taxes. P.J. Lumber argued that the use of revenue from exported goods in calculating the taxes ran afoul of the Import–Export Clause of the United States Constitution.

The facts in this case are not disputed. The record demonstrates that P.J. Lumber, whose principal place of business is within the geographical limits of the city, sells lumber both within the United States and internationally. From 2009 through 2014, P.J. Lumber paid the city business-license taxes, the amount of which was based on P.J. Lumber's gross revenue, including domestic and foreign sales. On October 21, 2015, P.J. Lumber submitted to the city a request for a refund of the business-license taxes it had paid that had been based on foreign sales. P.J. Lumber calculated that it was owed a refund of $21,855.02 for the years 2009 through 2014. The city did not respond to P.J. Lumber's request. Therefore, the request was deemed denied six months later, on April 21, 2016. § 11–51–191(g)(3), Ala. Code 1975.

P.J. Lumber appealed the city's denial of the refund to the circuit court on May 11, 2016. When the city had not timely responded to P.J. Lumber's appeal, P.J. Lumber filed a motion for a default judgment on July 6, 2016. On July 14, 2016, the circuit court entered a default judgment against the city. On July 28, 2016, the city filed a motion to vacate the default judgment, asserting that the "matter was inadvertently not forwarded from the [city] Clerk's office to the municipal insurance carrier." The circuit court granted the city's motion and vacated the default judgment on August 10, 2016. P.J. Lumber did not file a motion in the circuit court to challenge the decision to vacate the default judgment, and the litigation proceeded.

P.J. Lumber and the city filed competing motions for a summary judgment. On January 16, 2017, the circuit court entered a partial summary judgment in favor of the city finding that P.J. Lumber's request for a refund for the years 2009 through 2012 was time-barred. The circuit court directed the city to brief the issue of whether the amount of business-license taxes assessed against P.J. Lumber could be based at least in part on revenue generated from P.J. Lumber's foreign sales. On May 3, 2017, after considering the arguments of the parties, the circuit court entered a judgment determining that the business-license taxes that the city had levied on P.J. Lumber did not violate the United States Constitution and that P.J. Lumber was not owed a refund. P.J. Lumber timely appealed to the Alabama Supreme Court, which transferred the appeal to this court because original appellate jurisdiction lies with this court. § 12–3–10, Ala. Code 1975.

P.J. Lumber first contends that the circuit court abused its discretion by setting aside the default judgment. The record shows that this issue was never raised before the circuit court and is therefore not preserved for this court's review. " ‘[I]t is a well-settled rule that an appellate court's review is limited to only those issues that were raised before the trial court. Issues raised for the first time on appeal cannot be considered.’ " Neal v. Neal, 856 So.2d 766, 778 (Ala. 2002) (quoting Beavers v. County of Walker, 645 So.2d 1365, 1372 (Ala. 1994) ).

In its reply brief, P.J. Lumber asserts that it first addressed "the issue" when it filed its motion requesting the default judgment. It then states, "[t]here is no implied waiver of the relief that P.J. Lumber already sought (and received)." However, filing a motion to request a default judgment and challenging the circuit court's decision to set aside a default judgment are two separate things occurring at separate steps of the litigation. In Head v. Triangle Construction Co., 274 Ala. 519, 522, 150 So.2d 389, 392 (1963), our supreme court explained the reason for requiring an objection to be raised in the trial court to preserve an issue for appellate review:

"The general rule is that the appellate court will review only questions that are raised by the record. This rule is premised on the doctrine that the trial court should first have the opportunity to rule on all points. The duty of an appellate court is to review the action of the lower court to ascertain whether or not error was committed; it is not to entertain any issue whatsoever that parties wish to raise. All reviewable matters stem solely from the record.

Hamilton Motor Co. v. Cooner, [254 Ala. 422, 47 So.2d 270 (1950) ] ; Southern Cement Co. v. Patterson, 271 Ala. 128, 122 So.2d 386 [ (1960) ] ; McElhaney v. Singleton, 270 Ala. 162, 117 So.2d 375 [ (1960) ]; State v. Moore, 269 Ala. 20, 110 So.2d 635 [ (1959) ]. And it has been stated by this court that it would review a case only on the same theory that was presented to the trial court. Southern Railway Co. v. McCamy, 270 Ala. 510, 120 So.2d 695 [ (1960) ]."

It is axiomatic that "[t]his Court cannot consider arguments raised for the first time on appeal; rather, our review is restricted to the evidence and arguments considered by the trial court." Andrews v. Merritt Oil Co., 612 So.2d 409, 410 (Ala. 1992) ; Shiver v. Butler Cty. Bd. of Educ., 797 So.2d 1086, 1089 (Ala. Civ. App. 2000) (holding that an appellate court will not consider an issue on which the trial court was not given the opportunity to rule). Because "[i]t is well settled that an appellate court may not hold a trial court in error in regard to theories or issues not presented to that court," Allsopp v. Bolding, 86 So.3d 952, 962 (Ala. 2011), we will not reverse the judgment of the circuit court on this ground.

Turning to the merits of the other arguments made in P.J. Lumber's brief on appeal, we note that our standard when reviewing a summary judgment is as follows:

"We review a summary judgment de novo; we apply the same standard as was applied in the trial court. A motion for a summary judgment is to be granted when no genuine issue of material fact exists and the moving party is entitled to a judgment as a matter of law. Rule 56(c)(3), Ala. R. Civ. P. A party moving for a summary judgment must make a prima facie showing ‘that there is no genuine issue as to any material fact and that [it] is entitled to a judgment as a matter of law.’ Rule 56(c)(3) ; see Lee v. City of Gadsden, 592 So.2d 1036, 1038 (Ala. 1992). If the movant meets that burden, ‘the burden then shifts to the nonmovant to rebut the movant's prima facie showing by "substantial evidence." ’ Lee, 592 So.2d at 1038 (footnote omitted). ‘[S]ubstantial evidence is evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved.’ West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala. 1989) ; see Ala. Code 1975, § 12–21–12(d). Furthermore, when reviewing a summary judgment, the appellate court must view all the evidence in a light most favorable to the nonmovant and must entertain all reasonable inferences from the evidence that a jury would be entitled to draw. See Nationwide Prop. & Cas. Co. v. DPF Architects, P.C., 792 So.2d 369, 372 (Ala. 2000) ; and Fuqua v. Ingersoll–Rand Co., 591 So.2d 486, 487 (Ala. 1991).

Bailey v. Jacksonville Health & Rehab. Ctr., 249 So.3d 499, 501 (Ala. Civ. App. 2017). In this matter, the evidence was undisputed. Therefore, we review this matter to determine whether the city was entitled to a judgment as a matter of law.

P.J. Lumber does not challenge the circuit court's ruling that its request for a refund of a portion of the business-license taxes it paid for 2009 through 2012 was barred by the applicable statute of limitations. However, P.J. Lumber says, it still believes it is entitled to a refund in the amount of $5,385.40 for business-license taxes it paid in 2013 and 2014. In requesting the refund from the city, P.J. Lumber asserted that the city had improperly included gross revenues from its export sales to calculate the business-license taxes because, P.J. Lumber said, the Import–Export Clause of the United States Constitution prohibits the city from taxing exports.

In the judgment, the circuit court specifically found that the city's business-license tax was not a prohibited impost or duty. The Import–Export Clause, Art. I, § 10, cl. 2, of the United States Constitution, provides, in pertinent part: "No State shall, without the Consent of Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing its inspection Laws ...."

On appeal, P.J. Lumber contends that the only applicable authority supports its position that, pursuant to the Import–Export Clause, the city could not levy a business-license tax based on the gross receipts of goods that P.J. Lumber exported. In making this argument, P.J. Lumber cites a number of cases decided before 1976, when, in Michelin Tire Corp. v. Wages, 423 U.S. 276, 96 S.Ct. 535, 46 L.Ed.2d 495 (1976), the United States Supreme Court "initiated a different approach to Import–Export Clause cases." Department of Revenue of State of Washington v. Association of Washington Stevedoring Cos., 435 U.S. 734, 752, 98 S.Ct. 1388, 55 L.Ed.2d 682 (1978). With the change in approach...