River Fleets, Inc. v. Creech

• Citation: 36 S.W.3d 809
• Parties: (Mo.App. W.D. 2001) . River Fleets, Inc., Respondent, v. William Creech, Chairman, Board of Trustees, Petroleum Storage Tank Insurance Fund, in his official capacity, and Quentin Wilson, Director, Missouri Department of Revenue, in his official capacity, Appellant. WD58611 Missouri Court of Appeals Western District Handdown Date: 0
• Decision Date: 13 February 2001
• Court: Court of Appeal of Missouri (US)

36 S.W.3d 809 (Mo.App. W.D. 2001)

This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court.

River Fleets, Inc., Respondent, v. William Creech, Chairman, Board of Trustees, Petroleum Storage Tank Insurance Fund, in his official capacity, and Quentin Wilson, Director, Missouri Department of Revenue, in his official capacity, Appellant.

WD58611

Missouri Court of Appeals Western District

Handdown Date: 02/13/2001

Appeal From: Circuit Court of Cole County, Hon. Byron L. Kinder

Counsel for Appellant: Timothy P. Duggan

Counsel for Respondent: James W. Erwin

Opinion Summary: Appellants William H. Creech, III, Chairman of the Board of Trustees of the Petroleum Storage Tank Insurance Fund, and Quentin Wilson, Director of the Missouri Department of Revenue, appeal from a judgment and order entered in the Circuit Court of Cole County awarding attorneys' fees and costs to Respondent River Fleets, Inc. pursuant to section 536.050.¹ The award of attorneys' fees and costs was entered after this Court reversed and remanded the trial court's original judgment in this matter in River Fleets, Inc. v. Carter, 990 S.W.2d 75 (Mo. App. W.D. 1999), and the parties entered into a consent judgment regarding the remaining issues in the case.

REVERSED.

Division II holds: (1) In order to qualify as an action under section 536.050.1 and to be entitled to attorneys' fees and costs under section 536.050.3, a case must involve a declaratory judgment addressing a challenge to either (1) the validity of a regulatory rule or (2) the threatened application thereof.

(2) While River Fleets petition included a claim challenging the application of an agency rule to it, that claim was moot because the Respondents had already acknowledged that the rule had been improperly applied to River Fleets and agreed to return the fees that has already been paid, and therefore, no justicable controversy existed between the parties regarding that claim.

(3) The only actual controversy existing between the parties in the underlying action related to River Fleet's claim of unjust enrichment in which it requested that Appellants be required to pay interest on the fees being returned to it, and that cause of action did not constitute a claim under section 536.050.1.

(4) River Fleet's cannot be deemed to have prevailed on its Section 536.050.1 claim where the issue was moot, and therefore, it cannot properly recover its attorneys' fees and expenses under section 536.050.3.

(5) The trial court lacked statutory authority to enter an award of attorneys' fees and expenses under section 536.050.3 and that award must be reversed.

Opinion Author: Joseph M. Ellis, Judge

Opinion Vote: REVERSED. Smart, Jr., P.J., and Stith, J., concur.

Opinion:

Appellants William H. Creech, III, Chairman of the Board of Trustees of the Petroleum Storage Tank Insurance Fund, and Quentin Wilson, Director of the Missouri Department of Revenue, appeal from a judgment and order entered in the Circuit Court of Cole County awarding attorneys' fees and costs to Respondent River Fleets, Inc. pursuant to section 536.050.¹ The award of attorneys' fees and costs was entered after this Court reversed and remanded the trial court's original judgment in this matter in River Fleets, Inc. v. Carter, 990 S.W.2d 75 (Mo. App. W.D. 1999), and the parties entered into a consent judgment regarding the remaining issues in the case.

In setting forth the facts of this case, both parties rely almost entirely on the facts outlined in this Court's previous decision:

[River Fleets] operates a barge fleeting and midstream refueling facility located on the Mississippi River. All fuel maintained by the company originates from outside Missouri and is received and stored in fuel storage barges which float on the river. Between November, 1991, and September, 1993, [River Fleets] paid $92,216.63 in surcharges imposed by section 319.132.1, RSMo Supp. 1991, for deposit into the underground storage tank insurance fund established by section 319.129, RSMo Supp. 1989. [River Fleets] did not own underground storage tanks and could not participate in the insurance fund during this period. The statute does not provide for paying the surcharges under protest, and [River Fleets] neither paid the surcharges under protest nor protested the surcharges.

On November 22, 1995, [River Fleets] submitted to the Missouri Department of Revenue ("DOR") a request for a refund of the $92,216.63 in fees paid into the fund. The DOR forwarded the refund request to the Missouri Department of Natural Resources ("DNR"). The DNR then requested certain factual information, and [River Fleets] provided that information to DNR by letter dated January 11, 1996.

In 1996, the Missouri General Assembly amended Chapter 319, replacing the underground storage tank insurance fund with the petroleum storage tank insurance fund and creating a board of trustees to manage the new fund. [River Fleets] resubmitted its request for a refund to the new board of trustees in February, 1997. On June 19, 1997 the board approved the refund requested but denied a request for interest on the refunded fees.

[Later that day, River Fleets] filed a declaratory judgment action to recover the refund and interest. Respondent argued in its answer that the refund issue was moot and that the claim for interest was barred by sovereign immunity. [River Fleets] filed a motion for summary judgment, and [the chairman of the board of trustees] answered it. On December 15, 1997, the Circuit Court denied the motion for summary judgment and issued findings of fact, conclusions of law and final judgment and order dismissing the petition. The Circuit Court determined that the claim for the refund was moot and that the claim for interest was barred by sovereign immunity.

Id. at 76. On appeal, this Court found that sovereign immunity did not provide any protection from River Fleets' claim for interest. Id. at 77-78. We reversed and remanded the case for further proceedings consistent with that opinion. Id. at 78.

On remand, the parties agreed to the entry of a consent judgment under which River Fleets would be paid the interest on the $92,216.63 by September 30, 1999. In conjunction with the consent judgment, River Fleets executed a release acknowledging settlement of all its claims, except for any claim for attorneys' fees under section 536.050. The Circuit Court found that it had jurisdiction over the matter and approved the consent judgment.

Subsequently, River Fleets filed an "Application For Award Of Attorneys' Fees And Expenses." River Fleets also requested a declaration that the fees and expenses be paid from the State Legal Expense Fund. Appellants filed suggestions in opposition to an award of attorneys' fees and a motion to dismiss for lack of subject matter jurisdiction. River Fleets then filed a response to the motion to dismiss.

After conducting a hearing on the motions, the Circuit Court denied Appellants' motion to dismiss and granted River Fleets' application for attorneys' fees. The Circuit Court awarded River Fleets $38,782.00 in attorneys' fees and $868.15 in costs and ordered that those fees be paid from the State Legal Expense Fund. Appellants bring three points on appeal.

In their first point, Appellants claim the trial court erred in awarding attorneys' fees to River Fleets under section 536.050 because that statute allows attorneys' fees to be awarded only where a declaratory judgment is obtained relating to the validity of an agency rule or the threatened application thereof. Appellants argue that, because the case never involved a determination related to the validity of any agency rule or the application of such a rule, no award of attorneys' fees was appropriate under that section.

Section 536.050.8 sets forth the standard of review for an appellate court reviewing an award of attorneys' fees and/or expenses under section 536.050. That subsection states that an appellate court "may modify, reverse or reverse and remand the determination of fees and other expenses if the court finds that the award or failure to make an award of fees and other expenses, or the calculation of the amount of the award, was arbitrary and capricious, was unreasonable, was unsupported by competent and substantial evidence, or was made contrary to law or in excess of the court's jurisdiction." Section 536.050.8.

"[A] trial court has no authority to assess attorney's fees against the state in the absence of an express statute." Client Services, Inc. v. Missouri Coordinating Bd. for Higher Educ., 30 S.W.3d 194, 195 (Mo. App. E.D. 2000). River Fleets claims that it was entitled to an award of attorneys' fees under section 536.050.3.

Section 536.050.3 provides that "[a] nonstate party who prevails in an action brought pursuant to subsection 1 of this section shall be awarded reasonable fees and expenses, as defined in section 536.085, incurred by that party in the action." Subsection 1 states that "[t]he power of the courts of this state to render declaratory judgments shall extend to declaratory judgments respecting the validity of rules, or of threatened applications thereof, and such suits may be maintained against agencies whether or not the plaintiff has first requested the agency to pass upon the question presented." Section 536.050.1. Accordingly, in order to qualify as an action under section 536.050.1 and to be entitled to attorneys' fees and costs under section 536.050.3, a case must involve a declaratory judgment addressing a challenge to either (1) the validity of a...