State ex rel. Slah v. City of Woodson Terrace

• Decision Date: 14 August 2012
• Docket Number: No. SC 91802.,SC 91802.
• Citation: 378 S.W.3d 357
• Parties: STATE of Missouri ex rel. SLAH, L.L.C., Respondent, v. CITY OF WOODSON TERRACE, Missouri, a municipal corporation, et al., Appellants.
• Court: Missouri Supreme Court

378 S.W.3d 357

STATE of Missouri ex rel. SLAH, L.L.C., Respondent,

v.CITY OF WOODSON TERRACE, Missouri, a municipal corporation, et al., Appellants.

No. SC 91802.

Supreme Court of Missouri, En Banc.

Aug. 14, 2012.

Kevin M. O'Keefe and Edward J. Sluys of Curtis, Heinz, Garrett & O'Keefe PC, St. Louis; Frank J. Vatterott of Vatterott, Shaffar & Dolan PC, Maryland Heights, for the city.

David R. Bohm and Laura G. Long of Danna McKittrick PC, St. Louis, for SLAH.

PATRICIA BRECKENRIDGE, Judge.

This case involves a challenge to the imposition of municipal taxes on SLAH, L.L.C., a business entity that owns a hotel located in the city of Woodson Terrace. The city appeals from the declaratory judgment entered against it on SLAH's claim that the city is prohibited by section 94.270.3, RSMo 2010,¹ from imposing a hotel license tax rate in excess of $13.50 per room, per year. The city claims that the judgment should be reversed because the statute is an unconstitutional “special law” under article III, section 40 of the Missouri Constitution. The city also claims that sections 94.270.3 and .6, RSMoSupp.2010, which restrict the amount by which a city can increase its tax rate, violate the uniformity requirement of article IV, section 15 of the Missouri Constitution. Because SLAH has an adequate remedy at law under section 139.031, the trial court erred in entering a declaratory judgment against the city. The judgment is reversed, and the cause is remanded.

Factual and Procedural Background

In January 2004, the city's board of aldermen enacted Ordinance 1606, which imposes a license tax on hotels and motels at a rate of $0.85 per day on each room occupied for a fee by transient guests. Voters approved the ordinance April 14, 2004, and it became effective July 1, 2004. Prior to the enactment of Ordinance 1606, Woodson Terrace's hotel and motel license tax rate was $10 per room, per year.

During the 2004 legislative session, the General Assembly enacted subsection 3 of section 94.270, which became effective August 23, 2004. Section 94.270.3, RSMo Supp.2010, prohibits fourth-class cities—cities with a population between 4,100 and 4,200 inhabitants and located within a charter county with 1 million or more inhabitants—from levying or collecting a hotel or motel license fee in excess of $13.50 per room, per year. Under the statute, if the license tax rate of a city exceeds $13.50 per room, per year, the tax rate automatically is reduced to $13.50 per room, per year. The statute specifically states:

Notwithstanding any other law to the contrary, no city of the fourth classification with more than four thousand one hundred but less than four thousand two hundred inhabitants and located in any county with a charter form of government and with more than one million inhabitants shall levy or collect a license fee on hotels or motels in an amount in excess of thirteen dollars and fifty cents per room per year. No hotel or motel in such city shall be required to pay a license fee in excess of such amount, and any license fee in such city that exceeds the limitation of this subsection shall be automatically reduced to comply with this subsection.

Section 94.270.3, RSMo, Supp.2010. According to the 2000 census data, St. Louis County is the only Missouri county with 1 million inhabitants and Woodson Terrace is the only city within that county to have between 4,100 and 4,200 inhabitants. U.S. Census Bureau, Profile of General Demographic Characteristics: 2000, available at http:// factfinder 2. census. gov/ faces/ tableservices/ jsf/ pages/ productview. xhtml? src= bkmk ² and http:// censtats. census. gov/ data/ MO/ 1602980962. pdf.

During the 2005 legislative session, the General Assembly enacted subsection 6 of section 94.270. By its terms, section 94.270.6, RSMo Supp.2010, provides that no fourth-class city may increase its hotel or motel license tax by more than 5 percent per year and that the total tax levied cannot exceed the greater of either: (1) 0.125 percent of the gross revenue of the hotel or motel; or (2) the license tax rate for the hotel or motel as it existed on May 1, 2005. Section 94.270.6, RSMo Supp.2010, reads:

Any city under subsections 1, 2, and 3 of this section may increase a hotel and motel license tax by five percent per year but the total tax levied under this section shall not exceed the greater of:

(1) One-eighth of one percent of such hotels' or motels' gross revenue; or

(2) The business license tax rate for such hotel or motel on May 1, 2005.

Each year, SLAH has applied for a business license with the city to operate its hotel, the St. Louis Airport Hilton Hotel. For fiscal years 2005 through 2007, the city sent SLAH a business license application, which required payment of $13.50 per room, per year, consistent with section 94.270.3, RSMo Supp.2010. SLAH filled out and submitted the forms along with a payment in the amount of $5,305.50 each year. Each year, SLAH received a business license from the city.³

In 2008, SLAH applied for a business license in the same manner as it had in the past, using the $13.50 per room calculation. The city collector returned the check sent by SLAH and stated that the city sent the wrong application form. The collector enclosed a new application form that set the hotel license tax rate at $0.85 per room, per day, consistent with Ordinance 1606. In later correspondence, the city explained that its increase in the hotel license tax rate was permissible on the ground that sections 94.270.3 and .6, RSMo Supp.2010, both constituted special laws in violation of article III, section 40.

SLAH filed a petition for declaratory judgment, injunction, mandamus, or prohibition to contest the legality of the city's increased hotel license tax rate of $0.85 per room, per day under Ordinance 1606. In response to the suit, the city enacted Ordinance 1719 on December 20, 2007, to reduce the hotel business license tax to $0.32 per occupied room, per day and to permit yearly increases of 5 percent up to the statutory maximum. Notwithstanding the decrease in the hotel license tax rate under Ordinance 1719, the city's hotel license tax still exceeded the maximum rate of $13.50 per room, per year.

A bench trial was held, and the trial court ruled that the city is prohibited by section 94.270.3, RSMo Supp.2010, from charging a hotel license tax rate in excess of $13.50 per room, per year. The trial court also ruled that the city is prohibited by section 94.270.6, RSMo Supp.2010, from charging a tax rate exceeding 0.125 percent of the hotel's gross revenue or increasing the license tax rate by more than 5 percent per year. Under these provisions, the trial court found Ordinance 1719 to be invalid and reduced the tax rate under Ordinance 1606 to $13.50 per room, per year. Furthermore, the trial court issued a writ of mandamus and a writ of prohibition. The writ of mandamus ordered the city to issue SLAH a business license for fiscal years 2008 and 2009, and the writ of prohibition prevented the city from charging SLAH more than $13.50 per room, per year or collecting any penalty or interest from SLAH for late payment of the taxes.

The city filed a motion for a new trial, which the trial court overruled. The city appealed directly to this Court on the ground that sections 94.270.3 and .6, RSMo Supp.2010, are unconstitutional under article III, section 40 and article VI, section 15. This Court ordered the city's appeal transferred to the court of appeals. After opinion by the court of appeals, this Court then granted transfer. Mo. Const. art. V, sec. 10.

Standard of Review

A trial court's determination of authority to hear a case is generally a question of fact that will not be reversed on appeal absent an abuse of discretion. Mo. Soybean Ass'n v. Mo. Clean Water Comm'n, 102 S.W.3d 10, 22 (Mo. banc 2003). In this case, however, because the facts are uncontested, the determination of authority to hear the case is purely a question of law that is reviewed de novo. Id. Furthermore, this Court will avoid deciding a constitutional question if the case can be resolved fully without reaching it. Ross v. State, 335 S.W.3d 479, 480 (Mo. banc 2011); State ex rel. Union Electric Co. v. Pub. Serv. Comm'n, 687 S.W.2d 162, 165 (Mo. banc 1985).

Discussion

The city presents three claims on appeal. First, the city claims that the trial court erred in entering declaratory judgment on SLAH's claims because there is an adequate remedy at law under section 139.031. Next, the city claims that the trial court erred in finding that section 94.270.3, RSMo Supp.2010, prohibits Woodson Terrace from imposing a hotel license tax rate in excess of $13.50 per room, per year because the statute violates the uniformity requirement in article VI, section 15 and is a special law in violation of article III, section 40. Lastly, the city claims that the trial court erred in finding that Ordinance 1719, which reduced the city's hotel license tax rate to $0.32 per occupied room, per day, is void because section 94.270.6, RSMo Supp.2010, violates the uniformity requirement of article VI, section 15. Because there is an adequate remedy at law in this case, this Court does not reach the merits of the city's constitutional challenges to the validity of sections 94.270.3 and .6, RSMo Supp.2010. See Ross, 335 S.W.3d at 480.

Under section 527.010, RSMo 2000, trial courts are authorized to “declare rights, status, and other legal relations whether or not further relief is or could be claimed.” Section 527.020, RSMo 2000, expressly provides that trial courts are authorized to determine the validity of a statute or ordinance in a declaratory judgment action.⁴Tietjens v. City of St. Louis, 359 Mo. 439, 222 S.W.2d 70, 72 (1949). Declaratory judgment actions under these provisions are “designed to supply a deficiency in our remedial proceedings and are not intended to be a substitute for all existing remedies.” Harris v. State Bank &...