Wiley ex rel. Situated v. Daly

• Decision Date: 11 August 2015
• Docket Number: No. ED102019,ED102019
• Parties: GREG WILEY, AND JULIA MITTELSTADT, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, Plaintiffs/Appellants v. GREGORY F.X. DALY, COLLECTOR OF REVENUE FOR THE CITY OF SAINT LOUIS, ET AL, Defendants/Respondents.
• Court: Missouri Court of Appeals

GREG WILEY, AND JULIA MITTELSTADT, INDIVIDUALLY AND
ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, Plaintiffs/Appellants
v.
GREGORY F.X. DALY, COLLECTOR OF REVENUE FOR THE CITY OF
SAINT LOUIS, ET AL, Defendants/Respondents.

No. ED102019

Missouri Court of Appeals Eastern District DIVISION ONE

August 11, 2015

Appeal from the Circuit Court of the City of St. Louis

Honorable David L. Dowd

INTRODUCTION

Greg Wiley and Julia Mittelstadt (collectively "Appellants") appeal the trial court's judgment in favor of Respondents Gregory F.X. Daly as the Collector of Revenue for the City of St. Louis ("Collector") and M. Jane Schweitzer, as the Circuit Clerk for the City of St. Louis ("Circuit Clerk"),¹ on their petition for declaratory relief and reimbursement of "court costs" paid to Collector.

Appellants raise four points. They contend the court erred in: (1) dismissing Mittelstadt based on the voluntary payment doctrine; (2) dismissing Appellants' claim that payment of court

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costs to Respondents violates Article X, Section 22(a) of the Missouri Constitution (the "Hancock Amendment"); and (3) entering summary judgment in favor of Respondents on Wiley's remaining claims for declaratory relief and a "refund" of unlawfully collected court costs. In their fourth point Appellants assert: "[a] class action is a superior method of addressing the thousands of cases in which taxpayers are entitled to refunds under [section] 514.270."² We affirm in part, reverse in part, vacate in part, and remand with instructions.

FACTUAL AND PROCEDURAL BACKGROUND

This case concerns Collector's practice of collecting fees, which Collector denominates "court costs," in relation to suits brought by Collector against residents of the City of St. Louis ("City") for delinquent property taxes. The instant case arose when Collector brought suit against each Appellant for outstanding property taxes.³ In addition to seeking an award of delinquent property taxes, Collector also petitioned the court to assess interest, penalties, attorney's fees and "court costs."⁴

Appellants agree that neither of them entered an appearance nor contested the lawsuit filed against them for delinquent property taxes. Instead, each Appellant tendered the total sum demanded, including fees denominated as "court costs," directly to Collector's office. Wiley submitted his payment of these costs "under protest," Mittelstadt did not pay her costs under protest. Upon receiving payment of the total sum demanded, including "court costs," Collector

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issued a "paid" receipt to Appellants. Collector then forwarded the paid "costs" to Circuit Clerk, who taxed court costs against each Appellant and dismissed "with prejudice" the underlying lawsuits brought against them.

After submitting payment to Collector, Wiley timely filed a class-action petition in the instant trial court. Wiley alleged, in relevant part, that Respondents unlawfully assessed "court costs" against him, and requested declaratory judgment, reimbursement of the "court costs" previously paid to Collector, and certification of a class of similarly situated residents who paid such costs to Collector. Collector and Circuit Clerk filed a motion to dismiss. After a hearing, the court dismissed several of Wiley's claims, and following a subsequent hearing, also denied Wiley's request for class certification.⁵

Following the court's denial of class certification, the court granted Wiley's motion to join Mittelstadt as a new party plaintiff. Appellants then filed a third amended petition, which contained three counts.

Count I, entitled "declaratory judgment," requested "[c]ertification of a class of individuals . . ." who had been sued by Collector for outstanding personal property taxes and who paid "court costs" arising out of such lawsuits. Count I also requested, in relevant part, that the court issue an order: (1) prohibiting Respondents from collecting "court costs" when they file future lawsuits against taxpayers to recover allegedly delinquent personal property taxes; (2) prohibiting Respondents from withholding personal property tax receipts verifying payment of any delinquent tax when payment of the full amount of the delinquent tax is tendered; (3) requiring Respondents to establish a fund to reimburse purported class members who were sued

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for delinquent personal property taxes and who paid Collector "court costs" arising out of such lawsuits, from 2002 up to the present date; and (4) requiring Respondents to refund all interest on "court costs" already collected.

Count II, entitled "Refund of Court Costs Improperly Collected," requested a "refund of court costs improperly collected" under sections 514.260, 514.270, & 488.014. Specifically, Count II alleged that Respondents unlawfully collected "court costs" from Appellants and the putative class, and requested that the court order Respondents:

[1] to refund all Court costs paid by each and every delinquent taxpayer who was sued by [Respondents] after and including the year 2002, . . . [and] [2] pay attorney's fees from and as a percentage of the common fund established to repay [Apppelllants] and the putative class members . . . .

Count III, entitled "Violation of the Hancock Amendment," alleged that Respondents' collection of "court costs" from Appellants amounted to an unlawful tax in violation of the "Hancock Amendment" under Article X, 22(a) of the Missouri Constitution. Count III further requested the court enter a "declaratory judgment" ordering:

[1] certification of a class of individuals . . . who were sued by [Collector] for personal property taxes after and including the years 2002 and who paid [Respondents] 'Court costs' arising out of such lawsuits; [2] that [Respondents] are prohibited from collecti[ng] 'Court costs' when they cause a suit to be filed against taxpayers to recover delinquent personal property tax; [3] That Notice be disseminated to individual class members pursuant to Missouri Law, . . . [4] That [Respondents] pay reasonable attorneys' fees and costs of this litigation . . . .

Respondents moved to dismiss Appellants' third amended petition,⁶ and in the alternative, moved for summary judgment on all three counts. Respondents also submitted a statement of uncontroverted facts with exhibits in support.

In their motion seeking dismissal and summary judgment, Respondents argued, in relevant part, the court should dismiss Appellants' claims against City because the

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uncontroverted facts fail to establish that City participated in any of the actions upon which Appellants base their claims. Respondents also moved to dismiss Appellants' Count I claim for declaratory relief, arguing Appellants failed to state a claim warranting declaratory relief because an adequate remedy at law is available to seek a refund of unlawfully taxed "court costs," by motion to the court that assessed such costs, pursuant to section 514.270.

Additionally, Respondents argued Appellants' Count II statutory claim seeking a refund of court costs and Count III constitutional claim failed as a matter of law. Respondents asserted the voluntary payment doctrine bars Appellants' Count II claim seeking a refund of "court costs," because Appellants failed to pay such costs under protest. Respondents also argued that Appellants' claim for a refund of "court costs" under section 514.270 cannot be asserted in a lawsuit other than the original proceeding in which such costs were incurred. Alternatively, Respondents argued that the uncontroverted facts establish the challenged "court costs" were lawfully imposed. Lastly, Respondents argued Appellants' Count III constitutional claim failed as a matter of law, because the challenged costs do not constitute a tax within the meaning of the Hancock Amendment.

The court held a hearing on Respondents' motion to dismiss and motion for summary judgment. After considering the arguments and exhibits in support, the court entered judgment in favor of Respondents.

The court dismissed all of Mittelstadt's claims, finding she waived her claims under the voluntary payment doctrine, because she failed to tender payment of her "court costs" under protest. Next, the court granted Respondents' motion to dismiss City, holding the petition failed to allege that City had improperly collected or retained any of the "court costs" at issue. The court also dismissed, for failure to state a claim, Appellants' Count III claim alleging

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Respondents' collection of court costs violated the Hancock Amendment. The court found the challenged costs are not a tax within the meaning of the Hancock Amendment.

The court, however, found that Wiley paid his "court costs" under protest. The voluntary payment doctrine, therefore, did not bar his remaining Count I claim for declaratory relief or Count II request for a refund of "court costs." Thus, the court considered the merits of these two remaining claims.

The court observed that, pursuant to section 514.190, costs may be recovered in suits brought by the state or county, "if the plaintiff shall recover any debt or damages." The court reasoned that, because the costs pertained to Collector's claim for outstanding property taxes, which Collector recovered, and because Collector turned over such costs to Circuit Clerk, who then taxed these costs in the underlying action filed by Collector against Wiley, the costs were lawfully collected.⁷ Moreover, the court observed that Wiley "had an opportunity to challenge the assessment of "court costs" within the tax collection case itself pursuant to [section] 514.270 RSMO," yet he did not do so. As a result, the court determined that such "court costs" collected from Wiley "were not unlawful as a matter of law, and . . . [Appellants]' claims fail in Counts I and II." The court ruled that Respondents' "Motion to Dismiss, or in the Alternative, Motion for Summary Judgment is granted."

Appellants timely appealed. During the pendency of this appeal, Respondents...