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Hale Fireworks v. Director of Revenue

Court of Appeals of Missouri, Western District, Third Division

May 16, 2017

HALE FIREWORKS, Appellant,
v.
DIRECTOR OF REVENUE, Respondent.

         Appeal from Administrative Hearing Commission

          Before: Anthony Rex Gabbert, Presiding Judge, Victor Howard, Judge, Cynthia L. Martin, Judge

          Anthony Rex Gabbert, Judge

         Introduction

         Hale Fireworks, LLC ("Hale") appeals the Administrative Hearing Commission's ("Commission") grant of summary judgment in favor of the Director of Revenue ("Director") which dismissed Hale's appeal of the Director's final decision finding Hale responsible for a balance of $156, 353.28 in taxes owed for past unreported income. Hale presents two points on appeal. First, Hale argues that the Commission erred in granting summary judgment in favor of the Director based on the untimeliness of Hale's appeal because Missouri Supreme Court Rule 4-4.2 requires parties to communicate through counsel when parties are represented and Hale was in fact represented at the time that he was personally served with the Director's final decision. Second, Hale argues that the Commission erred in granting summary judgment in favor of the Director based on the untimeliness of Hale's appeal under Section 621.050.1[1] because the Commission failed to apply the equitable tolling doctrine. We find no error.

         Factual and Procedural History

         In June of 2016, the Missouri Department of Revenue-Taxation Division made a Final Decision finding that "Hale Fireworks, LLC did not remit withholding tax for unreported income of a family member, fireworks tent operators, the manager of a convenience store and various greenhouse employees. Also tax on commissions have not been reported." This Final Decision was mailed to Hale on June 24, 2016. Within its decision, the Department of Revenue alerted that, "[i]f you are adversely affected by this decision, you may appeal to the Administrative Hearing Commission…[t]o appeal, you must file a petition with the Administrative Hearing Commission within 30 days after the date this decision is mailed or the date it was delivered, whichever date was earlier." The Final Decision was signed by "Dwayne Maples Administrator." Hale concedes that the Final Decision was received via certified mail. A copy of the decision was not mailed to Hale's attorney of record.

         On September 6, 2016, Hale's counsel of record filed an appeal of the Director's Final Decision. On September 20, 2016, the Director filed a motion to dismiss the appeal as untimely. Hale filed a response on September 29, 2016. On October 20, 2016, the Commission granted summary judgment for the Director pursuant to 1 CSR 15-3.446(6)(A).[2] This appeal follows.

         Point I

         First, Hale contends that the Commission erred in granting summary judgment for the Director based on Hale's untimely filing of its appeal because Section 621.050.1 and Section 143.641 conflict with Missouri Supreme Court Rule 4-4.2 requiring parties to communicate through counsel when represented, and, Hale was represented by counsel. Further, because Hale was represented by counsel at the time of service of the Director's Final Decision, Hale asserts that this court is required to exercise its authority under Article V, Section 5 to reverse and remand the matter to the Commission for a hearing.

         Standard of Review

         A reviewing court "will uphold the Commission's decision when it is authorized by law and supported by competent and substantial evidence upon the record as a whole unless clearly contrary to the reasonable expectations of the General Assembly." New Garden Restaurant, Inc. v. Director of Revenue, 471 S.W.3d 314, 317 (Mo. banc 2015) (internal citation omitted). "This [c]ourt reviews the Commission's interpretation of the applicable statutes de novo." BASF Corp. v. Dir. of Revenue, 392 S.W.3d 438, 443-44 (Mo. banc 2012). "The Commission's findings of fact will be upheld if the findings are supported by substantial evidence on the whole record." 801 Skinker Blvd. Corp. v. Director of Revenue, 395 S.W.3d 1, 4 (Mo. banc 2013).

         Hale concedes that it received notice of the Director's Final Decision via certified mail, but claims that service should have been processed on its counsel of record pursuant to Missouri Supreme Court Rule 4-4.2. Rule 4-4.2 states: "[i]n representing a client, a lawyer shall not communicate about the subject of representation with a person the lawyer knows to be represented by another lawyer in the matter…." Here, the Director's Final Decision was not signed by a licensed attorney, but by a lay person ("Dwayne Maples Administrator"). Because Rule 4-4.2 applies exclusively to communication between attorneys, and neither the Administrator nor Hale is an attorney, the act of mailing the Final Decision to Hale Fireworks instead of its counsel of record did not violate Rule 4-4.2. Further, Section 143.641 only requires that notice of the Director's determination "be mailed to the taxpayer by certified or registered mail…." There is no statute requiring that the Final Decision be mailed to the taxpayer's counsel of record.

         "The right to appeal is purely statutory . . . [and] where a statute does not give a right to appeal, no right exists." Farinella v. Croft, 922 S.W.2d 755, 756 (Mo. banc 1996). Section 621.050.1 permits a taxpayer to appeal the Director's Final Decision if the taxpayer files "a petition with the administrative hearing commission within thirty days after the decision of the director is placed in the United States mail or within thirty days after the decision is delivered, whichever is earlier." Hale was made aware of this thirty day window of opportunity to appeal as it was written in plain language within the copy of the Director's Final Decision mailed to and received by Hale. There is no statute permitting an appeal outside of the thirty-day window, and therefore, Hale was not permitted to file an appeal after July 24, 2016. See Springfield Park ...


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