Case Summary for November 3-5, 1998

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Case Summary for November 3-5, 1998

THE FOLLOWING DOCKET SUMMARIES ARE PREPARED BY THE COURT'S STAFF FOR THE INTEREST AND CONVENIENCE OF THE READER. THE SUMMARIES MAY NOT INCLUDE ALL ISSUES PENDING BEFORE THE COURT AND DO NOT REFLECT ANY OPINION OF THE COURT ON THE MERITS OF A CASE. COPIES OF ALL BRIEFS FILED WITH THE COURT ARE AVAILABLE AT THE SUPREME COURT BUILDING, COURT EN BANC DIVISION. SUMMARIES ARE UNOFFICIAL AND SHOULD NOT BE QUOTED OR CITED.

TUESDAY, NOVEMBER 3, 1998

80947
Marcia Kasl v. Bristol Care, Inc., et al.
Benton and Cole Counties
Workers' compensation

Marcia Kasl and her husband were resident managers of Bristol Care, Inc. in Lincoln. They lived at the facility to be on call for patients. One evening Kasl got up from a reclining chair in her private quarters to dispense medicine to a patient. Her leg had fallen asleep, and she fell and broke her ankle. The Labor and Industrial Relations Commission confirmed a workers' compensation award.

The employer and insurance company contend the injury did not arise out of her employment. In 1993, the General Assembly changed section 287.020 to narrow the type of accidents covered by workers' compensation, using a more narrow concept of causation. Neither the conditions of Kasl’s workplace nor her work duties were a substantial factor in causing her injury.

Kasl argues work was a substantial factor in the accident. She was waiting to dispense the medication and living on the premises as required when she fell.

80989
Veronica L. Drewes v. Transworld Airlines, Inc.
St. Louis County
Workers' compensation

Veronica Drewes was taking an unpaid lunch break from working as a reservation agent at TWA in the Farm Credit Bank Building in St. Louis. She left TWA's break room for a break room and cafeteria for all the building's tenants. As she was walking out of the common break room, she fell and injured her ankle. The Labor and Industrial Relations Commission confirmed a workers’ compensation award.

TWA contends Drewes did not show that her injury arose out of or in the course of her employment. Her ankle twisted for no known reason off TWA's premises on an unpaid break, and she would have been equally exposed to the risk in non-employment life. No evidence shows she was traveling to or from work or that TWA authorized or controlled the common break to make it incidental to her employment.

Drewes contends a causal relationship existed between her employment and injury. Hers was not an "idiopathic" fall, attributed to her specific condition, but rather a traditional, compensable accident. It was a natural incident of the work; it happened as she was attending to personal needs; and she does not have to prove fault because workers' compensation is a no fault system. The area where her injury occurred had been appropriated for use by TWA.

80456
American Heathcare Management, Inc., et al. v. Director of Revenue
St. Louis and Cole Counties
Sales tax on utility services to residential care facilities

American Healthcare operates residential facilities licensed in whole or in part as nursing homes. It paid sales tax on various utility services. It applied for refunds of the tax on the basis that the utility services were exempt from sales tax under the domestic use exemption provided by section 144.030.2(23). The administrative hearing commission found the tax was owed.

American Healthcare contends that the nursing home facilities are residential apartments under section 144.030.2(23)(a) and entitled to the domestic use exemption. They fit the dictionary definition of apartment and exempting them is consistent with the purpose of easing utility cost burdens for residential users.

American Healthcare also argues: With respect to the 1993 version of that section, use was "domestic" not just "commercial" before August 28, 1994, in part because the manner of the use, not the owners' interests, controls whether use is domestic. Nursing home appellants were exempt under the 1994 version; they used the same means as an accepted facility—a reasonable approximation— to determine what portion of their use was domestic, and they complied with state regulations on allocating domestic versus non-domestic use. The 1994 version applied not only to requesting a refund but also to actual utility use after the statute was amended. Finally, not exempting nursing homes is inconsistent with the legislative purpose and results in an unconstitutional application of the law.

The director counters that nursing homes were not entitled to refunds under the domestic use exemption because they did not purchase utilities for a domestic use, and the nursing homes are not residential apartments as that term is defined in the statute. Individual nursing home residents do not use the utility purchases but, rather, the business uses the utilities in supplying services to the residents.

The director also argues: The commission rightly disallowed refunds before the 1994 effective date of amendment to the law, because the amendment was substantive and not retroactive--it created a new tax exemption for utility purchases through a master or single meter for residential apartments and condominiums and permitted person making such purchases on behalf of the occupants to seek refunds. The tax classifications are not arbitrary or unreasonable, because anyone buying utilities that puts the purchases to a domestic use can apply for a sales tax refund. Finally, the state's taxing power has not been delegated; the statute (not the utility) determines whether a purchase is for domestic use and therefore exempt.

80862
Conservation Federation of Missouri, et al. v. Richard A. Hanson, et al.
Cole County
Hancock amendment refund and conservation commission funds dispute

Pursuant to the Hancock amendment, refunds were due income taxpayers for calendar years 1995 and 1996. To make the refunds, the General Assembly appropriated funds proportionally from the components of total state revenues (TSR), including in excess of $6 million in Missouri Conservation Commission funds. The Conservation Federation o f Missouri and certain individuals sought a declaratory judgment that conservation commission funds could not be used for Hancock refunds. The circuit court determined that the conservation sales tax funds are included in TSR and are available for Hancock refunds.

The conservation federation contends the Missouri Constitution, article IV, section 43(b) restricts the use of conservation money to purposes described in section 43(b), and Hancock refunds are not included in section 43(b). The conservation federation also contends conservation funds should not be included as a part of TSR because such funds are proceeds of a tax voters approved. Paying Hancock refunds from voter-approved conservation money would subsidize the legislature's spending, which the Hancock and conservation amendments sought to control.

State Auditor Margaret Kelly contends the revenues in the conservation commission fund, excluding federal funds, are included in TSR. They come from the conservation sales tax and various fees, permits, and licenses of the conservation commission. They were included in the Governor's budget message for 1980-1981 and, thus, are expressly included in TSR. They were deposited in the state treasury and are subject to appropriation, meeting this Court's test for TSR.

State Treasurer Bob Holden, Richard Hanson and Quentin Willson also argue the conservation funds, except for the federal portion, meet the definition of TSR. They are income of the state, deposited in the state treasury, subject to appropriation, and were included in the Governor's budget message for 1980-1981. They are subject to refunds. Article IV, sections 43(a) and (b) restrict only the use and expenditure of the money, not whether it should be refunded because it exceeds the Hancock Amendment's revenue limit.

WEDNESDAY, NOVEMBER 4, 1998

80958
Michele L. Good v. State of Missouri
Ray and Carroll Counties
Assault, plea agreement

Michelle Good pled guilty in Carroll County to first-degree assault in connection with immersing a one year old girl in boiling water in Ray County. She filed a motion for post-conviction relief under Rule 24.035, which the court denied.

Good contends she should be allowed to withdraw her plea of guilty because, although the sentence recommendation was followed (giving her twenty years from a possible range of ten to thirty years or life), the court decided against the recommendation to call her back after 120 days to consider probation. She contends her counsel was not effective for failing to advise her that the court could impose the sentence without the call-back. She also contends she was not informed on the record at the guilty plea hearing that she would not be allowed to withdraw her plea if the court refused to follow the state’s recommendation on the 120 day callback.

The state argues that Good was repeatedly informed of the non-binding nature of the recommendations and admitted she was aware of it. She expressly stated she understood that she may make an application for probation but that whether she would receive probation was strictly the judge's decision and that recall under the statute was on the court's own motion. She was informed of such at least six times. She proved no prejudice by an allegation that the judge did not address her.

80960
Gregory Sams v. State of Missouri
Randolph County
Securities fraud, speedy trial

Gregory Sams pled guilty to two counts of securities fraud in violation of section 409.101. He sought post-conviction relief pursuant to Rule 24.035. The motion court denied his request.

Sams contends his counsel was ineffective because two days before the speedy trial statute, section 217.460, would have caused dismissal, counsel stipulated to a later trial setting. And, after the 180 days expired, despite that the stipulation was ineffective to waive the speedy trial request, defense counsel failed to move to dismiss. Sams would not have pled guilty, because the court would have lost jurisdiction to take the plea.

The state argues Sams' guilty plea waived his claim; he did not receive ineffective assistance of counsel; and he was not prejudiced. His plea was knowing and voluntary. Sams' attorney acted reasonably in stipulating to a trial date later than 180 days because he needed more time to prepare for such a complicated case. The time the attorney was not ready for trial does not count in the 180 days. The prosecutor could have sought more time for good cause shown. Sams failed to prove that in the absence of a stipulation, the prosecutor and court could not have brought the case to trial before the 180 days expired. Finally, the stipulation tolled the 180 days.

80853
General Motors Corporation and Subsidiaries v. Director of Revenue
Cole County
Consolidated tax returns

General Motors Corporation (GM) and its subsidiaries (GM Group) filed consolidated Missouri tax returns in certain years. GM Group requested refunds. The director of revenue denied claims for refunds and issued a notice of deficiency for underpayment of income tax. The director determined GM did not derive at least 50% of its income from sources within Missouri and, therefore, did not have the right to file a consolidated return in Missouri. The administrative hearing commission upheld the director’s decision.

General Motors contends that the 50% Missouri source income rule (section 143.431.3) is invalid under the U.S. Constitution’s Commerce Clause as it discriminates against interstate commerce. That is, the rule denies GM tax benefits based solely on the geographic location of its business and denies benefits to businesses whose activities in other states are greater than their Missouri activities. It is also facially invalid under the U.S. Constitution’s Equal Protection Clause and the Missouri Constitution’s Uniformity Clause. A group must meet the 50% requirement in the first year, and after that, may file consolidated returns with less than 50% of business in Missouri. Also, groups doing less business in Missouri than GM can file consolidated returns. Thus, the 50% requirement is arbitrary, lacks a rational basis, does not serve a legitimate governmental purpose, and, as applied, denies equal protection.

The director responds that the 50% rule does not discriminate against interstate commerce. The Court has previously decided the same issue and found that Missouri’s apportionment formula is constitutional. The 50% rule means Missouri is more likely to tax income reasonably related to the group’s in-state activities. GM is attempting to offset Missouri taxable income with losses of other subsidiaries having no nexus with Missouri. The director also argues the tax classifications are not arbitrary or unreasonable. The tax was imposed equally on all corporations. The legislature had reasonable grounds to limit the filing of consolidated returns since the state had no reason to treat an affiliated group earning less than 50% of its income from Missouri sources as a single taxpaying entity.

80887
Teri McBee v. Gustaaf Vandecnocke Revocable Trust
Howard and Saline Counties
Real estate sale

The Gustaaf Vandecnocke Revocable Trust owned a piece of property in Howard County. Teri McBee successfully bid for it at auction. The contract provided the seller was to assume the risk of loss until closing. The night before closing, a house on the property burned to the ground. McBee sued for specific performance of the real estate sales contract and credit for insurance proceeds paid to the seller because of the fire. She filed against the trust without naming the trustee as a party, but the trustee was personally served. The trial court ordered specific performance gave her credit for the insurance proceeds reduced by attorney’s fees, rental value, and government payments.

The trust contends: (1) The trustee was an indispensable party to the case and, therefore, the trial court did not have jurisdiction to enter a judgment. (2) Specific performance was improper because McBee failed to prove she tendered performance of the contract. (3) Credit for the entire amount of insurance proceeds should not have been granted because the doctrine of equitable conversion did not apply.

McBee argues: (1) The trial court did not commit reversible error by exercising jurisdiction. The trust’s failure to object to nonjoinder of the trustee or raise its capacity to be sued waives the issue. The trustee was not an indispensable party under rule 52.04(B). The pleadings made the trustee the real party defendant, despite the caption, and both sides understood the parties. The Court can add or substitute parties to remedy any defect. (2) Specific performance was proper. McBee complied with all conditions precedent to the contract and was ready and willing to pay the balance of the purchase price. (3) Credit for insurance proceeds was proper because the contract and case law required it. Since the house was destroyed, equitable conversion required the insurance proceeds for the house be transferred or credited to her instead.

THURSDAY, NOVEMBER 5, 1998

80957
State v. Orval Dwayne Davidson
Jackson County
Second degree murder (2 counts), first degree assault, armed criminal action (3 counts)

Orval Davidson was convicted of driving the car involved in a drive-by shooting. He appeals his convictions and the overruling of his post-conviction motion.

Davidson contends the trial court improperly excluded a witness’s testimony that a boy named Randy Yeager confessed to the shooting, removed shell casings of the same kind of gun used in the shooting from the car Yeager used a half-hour earlier to threaten black men a few blocks away. The confession was admissible as exculpatory evidence of a prior inconsistent statement. The testimony would have shown that Yeager shot the victim while someone other than Davidson was driving.

The state argues the witness's testimony about Yeager was rightly excluded as hearsay, which is not admissible as substantive evidence under section 491.074. Yeager denied making the statements, and the witness admitted making up the story about Yeager. In any event, since the witness's testimony was implausible, and Davidson could present more substantial evidence, the exclusion of the witness's testimony was not prejudicial to Davidson's defense.

80562
Psychcare Management, Inc. v. Department of Social Services, Division of Medical Services.
Cole County
Healthcare

Psychcare Management, Inc. operates a hospital in Windsor. The Department of Social Services (DSS) set the per diem rate for Medicaid reimbursement for fiscal year 1994-1995. Psychcare objected to that rate, contended the hospital was entitled to a Tier 1 designation, and argued certain services should have been included in its allowable costs in determining the rate. The administrative hearing commission (AHC) ruled the hospital should be designated Tier 1 but excluded certain services from allowable costs and set the per diem rate lower than Psychcare requested. The circuit court determined the hospital did not qualify as Tier 1 but otherwise upheld the AHC's decision.

Psychcare contends the hospital qualified as Tier 1 because the hospital had the requisite amount of bad debt (which indicates care for indigent patients). Psychcare also contends costs of certain therapies should have been included because their exclusion was based on provider and procedural manuals that did not present valid rules for various reasons, including that they were not adopted as a rule or regulation in compliance with section 536.021.

The DSS argues there was not competent and substantial evidence to support finding the requisite amount of bad debt; the hospital had a duty to provide legible information. The DSS also argues its regulations, provider manual, and federal and state law provided authority for the disallowance of certain costs from the per diem rate.

The Missouri Hospital Association (MHA) filed an amicus curiae brief. The MHA argues the bad debt evidence could be considered, even if it were submitted to the DSS and/or the AHC after a deadline in regulations. If it could not be considered lower reimbursement to the hospital results, hurting the indigent, and the AHC's authority to conduct contested, de novo review is compromised.

81031
George S. Fowler, Jr. V. Carole St. Mard Fowler
St. Louis County
Family law

When George and Carole Fowler's marriage dissolved, George paid modifiable maintenance to Carole and was required to maintain a life insurance policy. When George's business began declining, he filed a motion to modify to end maintenance and the life insurance requirement. A family court commissioner ruled in George's favor. Carole filed a motion for rehearing and notice of appeal. Six months after the commissioner's order, the presiding judge approved the commissioner's order.

Carole contends: (1) She has not waived her right to challenge the commissioner's order confirmed by the judge. The trial court judge had jurisdiction. (But his order erroneously declared and applied the law.) Until a final judgment had been rendered, jurisdiction never vested in the appellate court. She filed a timely motion for rehearing on the commissioner's order and took all steps to appeal. She did not have to file a second motion for rehearing. The clerk never provided requisite statutory notice. (2) Despite George's reduction in income, the evidence did not support reducing maintenance. The evidence did not support the commissioner's findings regarding Carole's employability and the amount she could expect to earn. (3) George's life insurance obligation was a contract with third-party beneficiaries not parties to the lawsuit (their children) and was non-modifiable.

George argues: (1) The appellate court has no jurisdiction. Carole failed to timely request a rehearing by a family court judge under section 487.030.2 and/or filing an appeal divested the trial court of jurisdiction to enter an order, resulting in no final appealable order. If the court had jurisdiction, Carole waived her right to seek review because she failed to request it from a circuit judge and did not request an opportunity to be heard before the circuit court approved the commissioner's order. She had no right to a full plenary review. (2) The court rightly modified maintenance because, after the divorce, George's income decreased, his business generated less, and Carole could work but failed to seek work for five years. (3) The court rightly terminated George's life insurance obligation because it was decreetal separation agreement maintenance, which the parties did not state was non-modifiable. (4) Substantial evidence demonstrated Carole could pay her own attorney fees and court costs.

81070
In Re the Marriage of Kimberlee David Marshall and Karen L. Marshall
Jackson County
Family law

After about a year of marriage, Kimberlee David Marshall and Karen L. Marshall sought marriage dissolution. The commissioner ordered Kimberlee to produce certain documents related to bank accounts that he did not produce. The commissioner excluded certain testimony related to the bank records as a sanction. The commissioner entered an order dividing property and awarding Karen attorneys fees.

Kimberlee argues: (1) The trial court should have set aside to each spouse non-marital property, as Kimberlee requested in his petition. (2) The trial court should have set aside certain property for Kimberlee. The only evidence was that the property was non-marital. The court found it was non-marital but improperly ordered it sold and divided. (3) The court should not have excluded his testimony as a sanction for thwarting discovery. (4) The court erred in finding that money in his sister's account with his name was marital property because no evidence showed whose the money was or if the account existed at the time of trial. (5) The court should not have awarded Karen attorneys fees as a sanction for Kimberlee's thwarting discovery. (6) The appellate court erred in denying the appeal for lack of jurisdiction under Slay. The law is ambiguous as to when findings and recommendations from a family court commissioner are final and appealable.

Karen contends: (1) The court did set aside non-marital property (paragraphs 5 and 6) then divided the remaining property. (2) Kimberlee failed to carry his burden to show certain property was his separately. The court's written portion governs its oral findings. Even if the trial court should have set aside certain property for Kimberlee, it was of insignificant value. (3) The trial court was within its discretion to enter sanctions excluding testimony linked to, and because of, Kimberlee's continuous effort to evade discovery. (4) The court rightly found the money in two bank accounts was marital and awarded Karen half. Missouri law provides that property received during the marriage is presumed marital, and Kimberlee failed to show it was non-marital. Also, Kimberlee did not preserve this point because he did not make an offer of proof at trial. (5) The court was within its discretion to award attorneys fees. The court has substantial evidence of Kimberlee's marital misconduct, such as violence toward Karen, and continuous efforts to evade discovery, such as his refusal to produce bank records or authorizations for bank records after ordered to do so by the court. (6) The appellate court erred in denying the appeal from the circuit court and finding the court lacked jurisdiction to consider an appeal from the commissioner's findings. This case is different from Slay and York because a request for rehearing was made and denied by order of the court signed by a judge. The law is ambiguous with regard to the finality and appealability of judgments entered by commissioners where a judge has entered an order denying a request for rehearing and, in essence, adopted the commissioner's judgment.