Court of Appeals of Missouri, Southern District, Second Division
FROM THE CIRCUIT COURT OF GREENE COUNTY Honorable Michael J.
Cordonnier, Circuit Judge.
WILLIAM W. FRANCIS, JR., P.J.
Wireless, Inc. ("TracFone") and City of Springfield
("City") have each appealed the trial court's
April 3, 2017 "Second Amended Judgment."
See Rules 81.04(c) and 84.04(i).TracFone's
appeal (SD34937) and City's appeal (SD34948) were
consolidated. TracFone raises one point of alleged trial
court error, and City raises three points of alleged trial
court error. Finding no merit in any of the points, we affirm
the trial court's judgment.
and Procedural History
appeal derives from TracFone's action for declaratory
judgment against City. TracFone filed its petition in Greene
County, Missouri, seeking a judicial declaration that it was
not subject to City's gross receipts license tax
("license tax"), pursuant to Springfield Municipal
Code of Ordinances, Article XI, § 70-452,  and owed no back
taxes thereunder. City filed a counter-claim seeking a
judicial declaration that TracFone was subject to City's
license tax, requesting damages in the form of back taxes
owed by TracFone, that TracFone be enjoined from violating
City's license tax ordinance, and that City be awarded
its costs and attorney's fees.
and City filed competing motions for summary judgment. The
trial court granted City's motion and denied
TracFone's. The trial court found that there was no
genuine issue of material fact that TracFone was subject to
City's license tax, and that the sole issue remaining was
the amount of TracFone's tax liability.
a two-day bench trial, City and TracFone adduced conflicting
evidence regarding the amount of TracFone's liability,
including expert witness testimony from TracFone's
expert, Thomas E. Hilton, and City's expert, Dr. Penny
trial court entered its Second Amended Judgment on April 3,
2017. As relevant to this appeal, the trial court made the
55. The Court finds that TracFone is obligated to pay City 6%
of its gross receipts from customers as measured by credit
card billing addresses within the City of Springfield. Those
amounts are reflected in trial exhibits 212-34 and 571 on a
quarter-by-quarter basis beginning January 2007 and ending
June 2016. That amount totals $585, 278.03.
56. The Court has excluded in the calculation of
TracFone's gross receipts the amount received by TracFone
from customers for internet access for the periods 2013
through 2015. The reason being that while the Court is
satisfied TracFone has the ability to distinguish receipts
for internet access for the entire back tax period, and they
would not then be subject to tax, TracFone did not adequately
respond to City's timely request for this documentation
in advance of trial except for the period 2013-2015.
Therefore, for the periods in which TracFone provided City
records removing internet access receipts, those receipts
will not be subject to tax. For the periods in which TracFone
did not provide City records removing internet access, those
receipts will be included in the gross receipts and subject
to the back tax.
57. The Court finds that TracFone owes back taxes to City,
and that some of those tax obligations date back to January
2007. Therefore the Court will award additional damages to
City as interest at the rate of 9% per annum on the past due
tax obligation, on a quarterly basis for the amounts past due
beginning January 2007 through June 2012 and 3% per annum on
past due tax obligation on a quarterly basis for the amounts
past due beginning June 2012 through June 2016. That amount
totals $95, 048.69. The interest calculation is made on the
telephone access back taxes only, as the taxes included for
internet access is included in the damage award only because
TracFone did not provide City the data in advance of trial.
The same analysis does not apply to interest.
58. The Court finds that TracFone had a reasonable good faith
position that it did not owe a gross receipts tax to City
based on the language of Springfield City Code Sec. 70-452.
Similarly, despite being aware of TracFone's business,
and that TracFone was collecting sales tax within the City of
Springfield, City never made any effort to notify TracFone of
the gross receipts tax, never made any effort to review or
audit TracFone's books or business model, and never
issued any notice of tax due or notice of delinquent tax
obligation before filing a civil lawsuit. Therefore the Court
does not award City additional damages as a penalty for
nonpayment of tax.
59. City has requested that Attorney's fees be assessed
as additional damages against TracFone. Attorney's fees
may only be assessed if allowed by statute, or by contractual
agreement, or if special circumstances exist. "[W]ith
few exceptions, each litigant must bear his own
attorney's fee." Henry v. Farmers Ins. Co.
444 S.W.3d 471 (Mo. App. 2014), citing: David Ranken, Jr.
Tech Inst. V. Boykins, 816 S.W.2d 189, 193 (Mo. banc.
1997). As the Missouri Supreme Court noted, "courts have
rarely found the very unusual circumstances that permit the
award of attorney's fees" in the absence of a
statutory or contractual provision allowing such fees,
Ranken. 816 [S].W.2d at 193.
60. The Court finds no statute, or contract, or special
circumstance apply to this case to support an award of
appeal followed. In one point on appeal, TracFone asserts the
trial court erred in finding that TracFone owed $680, 326.72
in back taxes and interest to City because the trial
court's determination that TracFone is a "home
service provider," under the Mobile Telecommunications
Sourcing Act ("MTSA"),  precludes City from taxing
cross-appeal, City asserts in three points that the trial
court erred: (1) in its interpretation and application of
City's license tax ordinance because the ordinance was
construed to only apply to a portion of TracFone's
receipts (revenue sorted by credit card billing address zip
codes), when the license tax requires that the license tax be
applied to all of TracFone's receipts from providing
telecommunications services within City (revenue sorted by
Activation Zip Codes); (2) in denying City an award of
penalties; and (3) in its application of the Internet Tax
Freedom Act ("ITFA") to TracFone's gross receipts.
affirm the trial court's judgment unless there is no
substantial evidence to support it, the judgment is against
the weight of the evidence, or the judgment erroneously
declares or applies the law. Rule 84.13(d); Murphy v.
Carron, 536 S.W.2d 30, 32 (Mo. banc 1976).
parties correctly assert that several of the matters at issue
are legal, and our review is de novo-but de
novo as to what? De novo as to those matters of
law properly lodged by the parties, pursuant to Rule 84.04,
consistent with attendant principles of appellate review. We
grant relief if an appellant demonstrates-within
these confines-that a different outcome is
required. In other words, an appellant must show:
(1) preserved legal error, and (2) resulting prejudice. If an
appellant fails in either respect, we affirm.
de novo review, we will affirm on any basis
supported by the record. Braughton v. Esurance Insurance
Company, 466 S.W.3d 1, 7-9 (Mo.App. W.D. 2015).
Generally speaking, this means that prejudice will not be
found in a bench-tried case unless an appellant shows that
there was no authorized route by which the trial court could
have arrived at its result. If an outcome-sustaining route is
left unchallenged or undefeated, the judgment must be
affirmed. See STRCUE, INC. v. Potts, 386 S.W.3d 214,
219 (Mo.App. W.D. 2012). "By not challenging [a trial
court's] express and implicit findings" on appeal, a
party "waive[s] any claim" that necessarily runs
counter to those findings. Houston v. Roadway Express,
Inc., 133 S.W.3d 173, 178 (Mo.App. S.D. 2004).
an appellant's burden (as the moving party) to overcome
our presumption that the judgment of the trial court is
correct. "An appellate court's role is to
review specifically challenged trial court rulings, not to
sift through the record to detect possibly valid
arguments." Smith v. City of St. Louis, 395
S.W.3d 20, 29 (Mo. banc 2013). This narrow role
reflects the interwoven policy interests governing appellate
review, including the reviewing court's duty not to act
as advocate for any party; the efficient use of judicial
resources; notice and fairness to the parties; judicial
decision-making based on fully-briefed issues; and the
law's preference for finality of judgments.
review of the arguments put forward by TracFone and City is
in accord with these salient principles.
Point I: Mobile Telecommunications Sourcing Act
argues that the trial court erred in finding that TracFone
owed $680, 326.72 in back license ...