State ex inf. Peach v. Boykins

• Decision Date: 14 November 1989
• Docket Number: No. 71609,71609
• Citation: 779 S.W.2d 236
• Parties: STATE ex inf. George A. PEACH, Circuit Attorney, City of St. Louis, Relator, v. Billie A. BOYKINS, License Collector, City of St. Louis, Respondent.
• Court: Missouri Supreme Court

Page 236

779 S.W.2d 236

STATE ex inf. George A. PEACH, Circuit Attorney, City of St Louis, Relator, v. Billie A. BOYKINS, License Collector, City of St. Louis, Respondent.

No. 71609.

Supreme Court of Missouri En Banc.

Nov. 14, 1989.

Steven R. Ohmer, John F. Garvey, Asst. Circuit Atty., George A. Peach, Circuit Atty., St. Louis, for relator.

Raymond Howard, St. Louis, for respondent.

ORIGINAL PROCEEDING IN QUO WARRANTO

WILLIAM E. TURNAGE, Special Judge.

George Peach, the Circuit Attorney for the City of St. Louis, filed an original proceeding in the nature of quo warranto in this Court to oust Billie A. Boykins from the office of license collector for the City of St. Louis. This Court has jurisdiction pursuant to Article V, § 4 of the Constitution.

Boykins was elected as license collector in November, 1982 and re-elected in November, 1986, for a term ending December 31, 1990. The petition in quo warranto was filed on April 27, 1989, and alleges Boykins was guilty of willful violation and neglect of her official duties during the year 1987 and, by reason thereof, has forfeited her office.

This Court appointed the Honorable Frank Conley as Master to take evidence and make findings of fact and conclusions of law. The Master conducted hearings in St. Louis and filed his report on July 27, 1989, recommending that Boykins be removed from office.

The findings of fact and conclusions made by the Master constitute recommendations to this Court, and this Court makes its own findings and conclusions based on the record. State ex inf. Danforth v. Orton, 465 S.W.2d 618, 620 (Mo. banc 1971). A review of the evidence convinces this Court that the Master has reached the right conclusion and that Boykins should be removed from office.

The license collector of the City of St. Louis is charged by § 82.340, RSMo 1986, ¹ with the issuance of all licenses and receipts for license taxes, except water, dramshop, and boat or wharf licenses. The collector is further required to prevent any person from carrying on any business, object, or calling for which a license, or license tax, is required without having a license, or license receipt, for that purpose. The failure of Boykins to collect license taxes forms the main charge brought by the Circuit Attorney and found by the Master.

The foundation of this ouster proceeding is an audit of the license collector's office performed by the State Auditor. Pursuant to § 29.230, the State Auditor was presented with a petition that called for an audit of the office of the St. Louis license collector. The auditor sent a team to Boykins' office to conduct the audit, which was performed over a period of four months. The auditor found numerous lapses and concluded that the collector had failed to collect between $3,000,000 and $9,000,000 in license taxes together with other violations and neglect of duty.

The Master heard evidence from several of the persons who actually conducted the audit.

At the outset of the hearing Boykins' counsel objected to the admission in evidence of the auditor's report because there was no proof that the petition requesting the audit contained the number of signatures of qualified voters required by § 29.230. Boykins renews that objection and states that the absence of evidence to demonstrate that the required number of qualified voters had signed the petition makes the audit illegal and inadmissible in evidence. Boykins cites no authority for this proposition but simply contends that the audit is illegal and, therefore, inadmissible. It is not necessary to determine the legality of the audit because, even if it be assumed that the audit was unauthorized or illegal because of a paucity of signatures, evidence obtained in an illegal manner is not subject to the exclusionary rule except in criminal cases. In re Littleton, 719 S.W.2d 772, 775 n. 2 (Mo. banc 1986). Thus, there is no reason to exclude the audit from evidence.

FAILURE TO COLLECT LICENSE TAXES

The Master found that Boykins failed to collect $1,583,955 from 1,096 applications that were made for licenses. This was based upon the testimony of Clarence Frederitzi, Supervisor of the Central Business Index in the City Comptroller's office. Frederitzi stated that there were 1,096 applications for licenses sent to Boykins' office with total taxes of $1,583,955. This amount should have been paid in 1987 for licenses that would have expired in 1988. Frederitzi stated he never had a response from the license collector on any of these applications and, so far as he could tell, the tax due was not collected. Further, Frederitzi testified that he did not receive applications from 1,392 businesses requiring licenses for which licenses were issued in 1986. He received no information from the license collector that any of these businesses were no longer functioning.

Auditors who performed the State Auditor's examination testified that it was possible to determine how much money the collector had placed in bank accounts, but there were insufficient records in the collector's office to estimate how much should have been collected in license taxes. Testimony revealed that it would require a prohibitive amount of time to examine each of the records on the approximate 10,000 businesses in the City of St. Louis from which the collector was required to collect a license tax. Therefore, the auditor decided to estimate the amount of uncollected taxes by a statistical sample. The auditor examined all of the available records on 321 businesses, selected as the sample base, to determine whether or not each business purchased a license for the license year ending in 1988. ²

The samples used by the auditor were only of those businesses for which definite records could be obtained to show the status of whether a license had been issued or if no application for a license had been made. The auditor used Missouri Department of Revenue records, with location codes for the City of St. Louis, which gave the nature of the business and the amount of state sales tax remitted by that business, as a guide on the amount of license taxes that should have been collected. Because most license taxes in St. Louis are based upon gross receipts, the sales tax figures were utilized to determine the amount of revenue each of the businesses reported and to calculate the amount of license tax that should have been paid.

The auditor excluded revenues attributable to businesses for which the collector was not authorized to collect the license tax. There was testimony that the statistical sampling was performed in accordance with generally accepted practices and that the samples were selected in a random manner, so that each business had an equal chance of being selected. Testimony indicated that the statistical analysis had a standard deviation, with a 90% degree of confidence. From the sample the auditor projected that Boykins office in 1987 had failed to collect between $3,684,000 and $9,029,000. It was further concluded from the statistical analysis that about one-third of the businesses in St. Louis did not have a license and 28% of the businesses may have under reported their gross receipts.

Kimberly Lauer and David Keithley, two of the auditors performing the audit on behalf of the State Auditor, testified that they were present during the exit interview conducted with Boykins and her chief deputy, Henry Adams, after the auditors had concluded their audit. Lauer and Keithley testified that Adams said that he would be willing to accept that $3,000,000 in revenue had not been collected. Both stated that Boykins did not make any comment relative to Adams' statement. ³

The only evidence offered by Boykins to counter the above evidence of failure to collect license taxes was presented by a CPA who had been contacted by Boykins' counsel the night before he was to testify. This CPA testified that he had spent two hours and forty-five minutes, just prior to testifying, in going over the records of the State Auditor pertaining to the statistical analysis. This CPA made various criticisms of the method employed by the State Auditor. However, he testified that he was not familiar with the state sales tax law and thus was not familiar with the fact that businesses reported gross revenue to the State Director of Revenue for state sales tax purposes. Boykins presented no evidence to show that she did properly perform her duties in collecting licenses and license taxes.

From an examination of the record this Court concludes that in 1987 Boykins failed to collect at least $3,000,000 in license taxes that were due. Although there was some conflict in the evidence relative to the statistical sampling technique used by the State Auditor, this Court may defer to the findings of fact made by the Master based upon conflicting testimony. Orton, 465 S.W.2d at 620. The Master had the opportunity to hear and observe the witnesses relative to the statistical sample conducted by the State Auditor, and this court defers to the finding of the Master in accepting the testimony that the State Auditor's statistical sampling was valid. This Court finds that at least $3,000,000 was...