Case Summary for January 8, 2004

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Case Summary for January 8, 2004

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DOCKET SUMMARIES
SUPREME COURT OF MISSOURI

Thursday, January 8, 2004
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SC85234
State ex rel. Corey Ryan Green v. Jim Moore
Boone and Pike counties
Double jeopardy implications in felony murder/armed criminal action case

The Boone County, Missouri, prosecutor charged Corey Ryan Green with second-degree felony murder and armed criminal action in the March 1998 shooting death of Tasha Stewart. The felony murder charge was based on Green's unlawful use of a weapon, and the armed criminal action charge was based on his commission of murder. Green pleaded guilty to both charges, and in September 1998, the court sentenced him to two consecutive 10-year prison sentences. Green did not seek post-conviction relief and now is confined in the Northeast Correctional Center in Bowling Green, Missouri. In January 2003, he sought release through a petition of habeas corpus, which the Pike County Circuit Court denied. He now seeks a writ from this Court.

Green argues he is entitled to a writ releasing him from custody. He contends his armed criminal action conviction violates the double jeopardy clauses of the state and federal constitutions because it ultimately is based on the unlawful use of a weapon, which is the underlying felony upon which his second-degree felony murder conviction is based. He further asserts that section 571.015, RSMo 1994, specifically prohibits a conviction of armed criminal action from being predicated on unlawful use of a weapon.

The state responds that Green's claim is barred procedurally because he failed to raise it in a timely post-conviction relief motion. It argues Green makes no claim of actual innocence or cause and prejudice to overcome the procedural default and, therefore, must prove a jurisdictional defect. The state contends the indictment was proper because the double jeopardy clause's bar against cumulative punishments applies only at sentencing, not at the time of indictment, and because there was only one prosecution, not successive prosecutions. The state responds that Green properly was convicted of armed criminal action and that section 571.015.4 does not exclude second-degree felony murder as a basis for armed criminal action. It argues the felony murder conviction is not completely dependent on Green's unlawful use of a weapon because it also requires the death of a person in the commission of any felony, which is not required to prove armed criminal action. The state further contends that, to the extent Ivy v. State, 81 S. W.3d 199 (Mo. App. 2002), requires that felony murder and armed criminal action charges be based on proof of different facts, it conflicts with Missouri v. Hunter, 459 U.S. 359 (1983), and should be overruled.

SC85556
State of Missouri v. John D. Couts
Jackson County
Double jeopardy implications in felony murder/armed criminal action case

Following a jury trial, John Couts was convicted of second-degree felony murder and armed criminal action for the November 1999 drive-by shooting death of David Beck in Kansas City, Missouri. Both charges were based on the underlying felony of unlawful use of a weapon. In July 2002, the court sentenced Couts as a prior and persistent offender to consecutive life sentences. He appeals.

Couts argues the court plainly erred in instructing the jury, accepting the verdict and sentencing him on both offenses because they both were predicated on unlawful use of a weapon. He contends this violates his rights to due process of law and to be free from double jeopardy. Couts asserts that double jeopardy precludes a conviction for armed criminal action based on felony murder when unlawful use of a weapon underlies the felony murder offense. He argues that in enacting the armed criminal action prohibition in section 571.015, RSMo 2000, the general assembly intended to treat the weapons offenses making up the unlawful use of a weapon statute the same.

The state responds that the court did not commit plain error or violate double jeopardy. It argues the general assembly intended that second-degree felony murder and armed criminal action be punished cumulatively as authorized by section 565.012.2, RSMo 2000. The state contends that the only felonies excluded from the felony murder statute for cumulative punishment are murder and manslaughter and that second-degree murder is not one of the felonies excluded from the armed criminal action statute for cumulative punishment. The state asserts that, to the extent State v. Ivy, 81 S.W.3d 199 (Mo. App. 2002), holds otherwise, it should be overruled.

SC85331
Surreys on the Plaza, Inc. v. Director of Revenue
Jackson County
Sales tax liability for Plaza carriage rides

MJ Surrey's Ltd. began operating a horse-drawn sightseeing carriage ride business in 1982 in the Country Club Plaza in Kansas City, Missouri. It initially did not collect sales tax on its ride sales, but after a sales tax audit, it registered with the state and began filing returns and collecting tax on those sales in 1992. Five years later, MJ Surrey's forfeited the business' assets to the internal revenue service due to tax delinquencies. The stable that boarded its horses also filed liens against the business for outstanding stable fees. During the spring of 1998, Harbour-Wholesale, Inc., paid the liens and purchased the business' assets, renamed the business Surreys on the Plaza, Inc., and began operating the sightseeing carriage rides. Harbour-Wholesale did not register the business with the state or collect tax on ride sales because it did not believe those sales were taxable. Harbour-Wholesale's president, who worked as a carriage driver, testified that the rides were guided tours that were "entertaining" and that customers were "amused" by the rides. In March 2001, Harbour-Wholesale sold at least a portion of Surreys to Charles Allenbrand, who continued to operate the business under the Surreys name. Harbour-Wholesale's president remained on as a bookkeeper for Surreys. Following an audit of the tax period of June 1998 through June 2001, the director of revenue assessed nearly $93,900 in unpaid sales tax, interest and penalties against Surreys for Surreys' own operation of and as a successor to the previous owner of the sales of the horse-drawn carriage rides. Surreys sought review from the administrative hearing commission. The commission found that Surreys was liable as a successor for approximately $11,150 of the previous owner's unpaid tax but that it was not liable for any of the assessments because it did not operate a place of amusement under section 144.020.1(2), RSMo. Both parties appeal.

The director argues the commission's determination that Surreys was not liable for the sales tax assessments was not authorized by law, not supported by competent and substantial evidence on the whole record, and was contrary to the general assembly's reasonable expectations. The director contends Surreys' sales of horse-drawn carriage rides are taxable under the amusement tax statute, section 144.020.1(2), RSMo. She asserts that Surreys operated a "place of amusement" by charging fees for sightseeing rides in its horse-drawn carriages. She further asserts that although Surreys does not control the Plaza in which the carriage rides occur, it does control amusement activity by directing the manner and operation of its carriage rides. In response to Surreys' appeal, the director responds that Surreys became liable as a successor under section 144.150, RSMo, for Harbour-Wholesale's sales tax liability after Surreys purchased all of Harbour-Wholesale's assets. She further responds that Surreys failed to withhold the unpaid tax from the purchase price when it bought the business. In addition, the director responds that, if this Court finds that the carriage-ride sales are subject to sales tax and that Surreys is liable as a successor, then the commission should be directed to consider, on remand, whether penalties or additions to tax should apply in this case.

Surreys responds that neither it nor Harbour-Wholesale incurred any sales tax liability because the payments were not fees paid to a place of amusement or entertainment under chapter 144, RSMo. It argues that the Plaza is not a "place" of amusement and that the director did not demonstrate that Surreys or Harbour-Wholesale used any other place of amusement. Surreys contends the carriage rides are not an amusement or entertainment activity but rather are an educational and commercial advertising activity for the Plaza. Surreys asserts that the director did not prove that Surreys is a successor to Harbour-Wholesale. It argues the director did not offer any evidence that money was not withheld from the purchase prices of the carriages and horses as required by case law. It contends the sale of certain assets to Surreys was not a sale of a business because Harbour-Wholesale's business was not the carriage operation and that the sale did not transfer all or most of Harbour-Wholesale's business to Surreys. Surreys further argues tax penalties are not appropriate because it relied on the director's written statements that the predecessor's operation was not taxable.

SC85428
Hooters of Springfield (Missouri) LLC v. Director of Revenue
Greene County
Sales tax obligation following sale of restaurant

Prior to October 2001, Springfield Wings, Inc., and Hazzard-Burdick Group, Inc., owned a restaurant in Springfield, Missouri. The restaurant filed sales tax returns for April through September 2001 under a tax identification number assigned to Springfield Wings, although the restaurant submitted almost no sales tax for these months. In October 2001, Springfield Wings and Hazzard-Burdick sold "all of the assets of the restaurant," including all the fixtures and equipment as well as all the restaurant's tangible and intangible assets, to Hooters of Springfield. In February 2002, the director of revenue assessed more than $77,650 in unpaid sales tax, additions, interest and penalties against Hooters as successor to Springfield Wings. Hooters sought review of that decision from the administrative hearing commission, which reversed the director's decision in June 2003, finding that the director did not meet her burden of proof. The director appeals.

The director argues the commission erred in holding that Hooters was not liable for unpaid sales tax. She contends she met her burden under section 144.150, RSMo 2000, to establish that Hooters purchased the business of a person legally obligated to remit sales tax. She asserts she showed that Springfield Wings and Hazzard-Burdick incurred the tax in the business of operating a restaurant they owned in Springfield, that Springfield Wings and Hazzard-Burdick were obligated to remit the tax, and that Hooters acquired from these two owners the restaurant business and, with it, its tax obligation.

Hooters did not file a brief in this case.

SC85399
State of Missouri, ex rel. Jeremiah W. (Jay) Nixon, Attorney General v. QuikTrip Corporation
Jefferson County
Validity and application of the Missouri motor fuel marketing act

The Missouri motor fuel-marketing act, section 416.600, RSMo, et seq., prohibits the sale of motor fuel below cost when either the intent or effect of such a sale is to injure competition or to injure competitors unfairly. See section 416.615. QuikTrip Corporation has its principal place of business in Tulsa, Oklahoma, although it sells gasoline and diesel fuel throughout Missouri. During a 33-month period from 1997 to 1999, QuikTrip in Herculaneum, Missouri, sold fuel, mostly diesel, below cost on some days. The owners of competing retailers testified that during that time frame, the Herculaneum QuikTrip usually led the market price down and almost never had prices higher than those of its competitors. In January 1999, the state brought an enforcement action against QuikTrip, seeking injunctive relief and a civil penalty but no damages. Both parties filed summary judgment motions. The court entered partial summary judgment for the state, holding that below-cost sales always violate the act because they always force competitors either to lower their prices or to lose sales, causing them injury. The attorney general dismissed the remaining allegations of violations. QuikTrip appeals.

QuikTrip argues the court erred in entering summary judgment against it and in denying its own motion for summary judgment. It contends the court misinterpreted the act, which QuikTrip asserts requires proof of an unfair effect on competitors beyond the effect of below-cost sales. QuikTrip argues the state neither articulated nor proved any unfair competitive effect. It contends the state lacked a submissible case because there is no evidence to support the court's findings that QuikTrip's pricing policies unfairly injured its competitors. QuikTrip further argues that the act violates due process as applied to its Herculaneum store because increasing the profits of an already healthy business is not a legitimate government purpose and because QuikTrip does not and cannot know its costs with the precision that the act requires.

The state responds that the court correctly interpreted the act as requiring proof of a below-cost sale cost as well as either the effect of unfair trade diversion or of other harm to a competitor. The state contends the practice of selling motor fuel below cost as a "loss leader" specifically is prohibited by the act. It asserts that it proved QuikTrip violated the act when it showed that the retailer's below-cost sales unfairly diverted trade from area competitors and otherwise injured competitors, who testified they had to lower prices to meet QuikTrip's prices or lose business. The state argues that QuikTrip does not claim the act is invalid on its face and that the act does not violate due process as applied because it serves the legitimate state interest of restricting fuel pricing practices to protect both competition and competitors from injury due to below-cost sales. The state further responds that it is not impossible for QuikTrip to comply with the act because QuikTrip cannot show that it is totally impossible for it to comply, no matter how hard it tried. The state contends it is QuikTrip's own peculiar method of collecting cost information that makes it difficult for the retailer to comply with the act.

The Missouri Petroleum Marketers Association argues, as amicus curiae, that the court properly granted the state's motion for summary judgment. It contends the court's interpretation of section 416.615 and conclusions about the constitutional validity of the act, as applied, are consistent with the legislative purpose behind the act of protecting competitors and preserving market structure. The association asserts the court properly concluded that the word "unfairly" in section 416.615.1(2) does not modifying the term "to injure." It argues the statute does not violate substantive due process because its application to QuikTrip's conduct is not irrational and serves a legitimate state interest. The association further contends the undisputed evidence showed that a motor fuel retailer such as QuikTrip adequately could know its costs at the time it posted prices.