Woodman v. Director of Revenue

• Decision Date: 30 November 1999
• Citation: 8 S.W.3d 154
• Parties: (Mo.App. W.D. 1999) Dolph Woodman, Appellant, v. Director of Revenue, Respondent. WD56326 Handdown Date:
• Court: Missouri Court of Appeals

8 S.W.3d 154 (Mo.App. W.D. 1999)

Dolph Woodman, Appellant, v. Director of Revenue, Respondent.

WD56326

Handdown Date: 11/30/99

Appeal From: Administrative Review

Counsel for Appellant: Rodney H. Nichols

Counsel for Respondent: Evan J. Buchheim

Opinion Summary: Dolph Woodman appeals the Administrative Hearing Commission's decision holding him liable for taxes and penalties due to his willful failure to collect and pay employer withholding taxes. His motion for reconsideration was dismissed for lack of jurisdiction because the 30-day time for appeal had expired. Woodman appealed.

Court holds: (1) (a) The Commission had the power to hear Woodman's motion for reconsideration. The rules of civil procedure regarding time for filing only apply when authorized by statute, and no statute relates to Rule 44.01(a). Therefore, the period is calculated by the statute's language, which begins on the date of mailing, so the motion was on time, within the 30-day time limit.

(b) There is no statutory language as to the effect of a timely filed motion for reconsideration under section 621.189, to toll the time to file an appeal. Since the Commission did not grant the motion within 30 days after its findings and conclusions, there was no toll on the time limit, and Woodman was required to appeal within 30 days after mailing or delivery of the findings and conclusions. His petition for review was filed out of time, and this court is without jurisdiction to hear it.

(2) Had the appeal been timely filed, it would fail on its merits. Woodman clearly willfully failed to pay withheld taxes under section 143.751.4.

Stith, P.J., and Riederer, J., concur.

Harold L. Lowenstein

Appellant Dolph Woodman appeals the Findings of Fact and Conclusions of Law of the Administrative Hearing Commission (AHC) holding him liable to the respondent for $29,247 in tax and penalties for willfully failing to collect and pay employer withholding tax pursuant to section 143.751.4, RSMo 1994.¹ The respondent is the Missouri Director of Revenue (Director), to whom the withholding tax returns and payments were due. Woodman made this appeal after filing a Motion for Reconsideration with the Administrative Hearing Commission. At issue is whether this appeal was timely filed and if so, whether this court has jurisdiction to entertain the appeal.

Appellant Woodman was the founder, president and sole officer of Woodman Construction, Inc. (hereinafter the "corporation"), a commercial construction business which began operating in the Branson area in February 1991. In December 1991, Woodman hired Betty Kagel as a bookkeeper. Woodman delegated to Kagel responsibility for general office management and all bookkeeping and payroll duties, including filing and paying tax returns.

Woodman terminated the employment of Kagel in August 1994. Sometime later, an accountant audited the corporation's books. The audit disclosed that Kagel had embezzled substantial amounts of money from the corporation, had attempted to conceal this conduct by altering the corporation's books, and had not filed the appropriate state payroll tax returns or paid the payroll taxes.

On September 8, 1994, Director issued an estimated notice of tax deficiency for March 1994, requesting the corporation to submit payment. Similar notices were issued on September 29, 1994, November 3, 1994, and December 8, 1994, for the periods of April 1994, May 1994, and June 1994, respectively. After these notifications of tax delinquencies, Woodman and the corporation continued to work on existing construction contracts, pay wages to employees, pay current accounts payable, and make payments to the IRS for other tax delinquencies.

After giving all appropriate notification to Woodman, the final decisions of the Director were as follows. On January 19, 1996, the Director issued a final decision, citing section 143.241 and 143.751, and assessing Woodman personally responsible for $27,956.42 in unpaid employer withholding tax. On August 29, 1997, the Director issued a final decision assessing Woodman $29,247 in penalties under section 143.751.4.

Woodman appealed the Director's final decisions to the Administrative Hearing Commission (the Commission). The matter was heard on November 25, 1997. On July 2, 1998, the Commission entered its Findings of Fact and Conclusions of Law, holding that Woodman was not a responsible party under section 143.241 but was responsible for the $29,247 assessed under section 143.751. On August 3, 1998, Woodman filed a Motion for Reconsideration with the Commission. On August 6, 1998, the Commission issued a Memorandum and Order stating that it no longer had jurisdiction to consider Woodman's Motion for Reconsideration because the 30-day time period for appeal had expired. On September 8, 1998, Woodman filed a petition for review with this court. On appeal, both parties address the question of the timeliness of this petition for review.

I.

Respondent contends the Commission has no jurisdiction to entertain motions for reconsideration and that Appellant's only course of action would have been to appeal directly to this court within 30 days of the Commission's Findings and Conclusions, an action that Appellant admittedly failed to take. This court now determines that while there is in fact no jurisdiction to entertain this appeal, Respondent's assertions as to Appellant's options for appeal do not comport with the applicable statutes or caselaw.

A.

It is Respondent's first assertion that the Commission has no authority to consider motions for reconsideration. In State ex rel. Marler v. State Bd. of Optometry, 898 S.W.2d 559, 563 (Mo.App. 1994), this court recognized the Western District's inconsistent caselaw on the subject. The court wrote:

This court has issued conflicting opinions concerning an administrative agency's authority to modify its findings of fact and conclusions of law. In Sheets v. Labor and Industrial Relations Commission, 622 S.W.2d 391, 394 (Mo.App. 1981), we held that the agency could not modify its findings and conclusions once "reached and imparted to the litigants[.]" In Eleven Star, Inc. v. Director of Revenue, 764 S.W.2d 521, 522 (Mo.App. 1989), and Dillon, d/b/a Home Satellite Systems v. Director of Revenue, 777 S.W.2d 326 (Mo.App. 1989), we held that an agency could modify its decision within 30 days after entering it.

Id. at 563. This court now follows the decisions in Eleven Star and Dillon. The rationale of Eleven Star has recently been followed by our Supreme Court in Farmer v. Barlow Truck Lines, Inc., 979 S.W.2d 169, 170-171 (Mo. banc 1998).

Eleven Star involved the power of the Commission to set aside an order of dismissal previously entered by it. The court there held that an administrative body has the inherent authority to set aside a dismissal it has entered. Eleven Star, 764 S.W.2d at 522. Additionally, in Dillon, this court held the decision in Eleven Star required the assumption that the Commission has jurisdiction to rule on after-trial motions to reconsider. Dillon, 777 S.W.2d at 329. In light of this caselaw, the Commission here had the power to hear Appellant Woodman's motion for reconsideration.

It next must be determined whether Appellant's motion for reconsideration was timely filed with the AHC. After determining the Commission had the power to set aside dismissals, the Eleven Star court discussed the time limit within which to make such a set aside in light of section 621.189, the statute governing appeals from the Commission to a court of appeals. Section 621.189 requires a petition for review to an appeals court to be filed "within thirty days after the mailing or delivery of the final decision and notice thereof in such a case."² The Eleven Star court wrote that a party filing an after-trial motion with the Commission must do so within the same 30-day time limit set for appeal to this court in section 621.189. Eleven Star, 764 S.W.2d at 522. In other words, Woodman must have filed his motion with the AHC "within thirty days after the mailing or delivery of the final decision."

The AHC issued its Findings and Conclusions on July 2, 1998. Both parties attempt to measure the 30-day time frame thereafter by using the Rules of Civil Procedure, particularly Rule 44.01(a), which would calculate the last day to file as August 3, 1998. However, as this court noted in AT&T Information Systems, Inc. v. Wallemann, 827 S.W.2d 217, 221 (Mo.App. 1992), "[t]he Rules of Civil Procedure, Rules 41 through 101, by their terms do not apply to proceedings in administrative agencies." The rules only apply to administrative proceedings when specifically authorized by statute. No such statute relates to Rule 44.01(a).

Therefore, the period is calculated by the bare language of section 621.189. According to R.B. Indus., Inc. v. Goldberg, 601 S.W.2d 5, 6 (Mo. banc 1980), a case interpreting language nearly identical to section 621.189, the 30 days begins to run on the date of mailing. If the Findings and Conclusions were mailed the same day they were issued by the AHC (July 2, 1998), then Appellant's motion filing on August 3, 1998, would be too late, as the thirtieth day would have fallen on July 31, 1998.

However, nowhere in the record or legal file submitted to this court is located the mailing date of the AHC's Findings and Conclusions. This court cannot simply assume they were mailed on the date they were issued. Regardless, Respondent Director of Revenue in its "Response to Appellant's Response to Respondent's Suggestions in Support of Dismissal of Appeal" admits that Appellant filed his motion with the AHC within 30 days of the decision. Whether this calculation was due to the actual date of mailing, which is unknown to this court, or to a miscalculation derived from using the inapplicable civil Rule 44.01(a) is irrelevant. In the documentation sent to this court, both parties agree the motion for reconsideration was filed with the...