Franklin County is one of three counties in the 20th Judicial Circuit. In its fiscal 2020 budget request to the county, the circuit requested approximately $716,350 for the juvenile division. In the budget it approved in December 2019, the county allocated approximately $333,525 for the juvenile division, which it determined was its statutory responsibility for “maintenance of effort” funding as set forth in section 211.393.6, RSMo. Effective January 1, 2020, the county refused to pay the employees’ salaries and benefits and refused to pay juvenile division expenses – such as the cost of serving a summons – beyond those the county had determined were funds for maintenance of effort. In late January 2020, the circuit court petitioned the appeals court for a writ of mandamus, seeking to compel the county to fund the circuit’s funding requests. In February 2020, the appeals court issued its permanent writ, ordering the county, retroactively, to appropriate and disburse the circuit’s budget request as submitted and to pay the two juvenile division employees’ salaries and benefits. Subsequently, the county filed a petition for review with the judicial finance commission, which dismissed the petition. The commission found the petition was filed untimely and determined it lacked authority over the case, given the appeals court’s decision. The county seeks this Court’s review.

This case presents several questions for this Court about whether the judicial finance commission erred in dismissing the county’s petition for review. One involves whether the county had good cause to file the petition out of time. A related issue includes whether the budget dispute was ripe before January 2020 or whether any lack of awareness of a potential budget dispute constituted good cause for the county’s untimely filing. Another question involves whether the appeals court’s decision in the writ case – issued before the county filed its petition with the commission – deprived the commission of authority to hear the case. Related issues involve whether the appeals court resolved all the county’s legal arguments in the writ proceeding and, if so, whether the county is precluded from relitigating those issues and whether the commission has authority to reconsider the appeals court’s legal conclusions or overturn its directives. An additional question is whether this case can be considered on its merits. If so, related issues include whether the county properly calculated and allocated to the juvenile division only the maintenance of effort funds, whether the county can be compelled to pay funds in excess of that allocation, and whether the state or county is responsible for the two juvenile employees’ salaries and benefits.

Challenge to assessment of unpaid sales tax  

Since February 2007, SEBA LLC has done business in St. Louis as Eddie’s South Town Donuts. From October 2011 through September 2014, SEBA’s sales were approximately 20 percent retail and 80 percent wholesale. Its wholesale sales were to both for-profit and nonprofit entities. It did not keep receipts for cash purchases, and its credit card machine reported only full-day sales rather than individual sales. In October 2014, the department of revenue informed SEBA it would be performing a sales tax audit of the store. The auditor concluded SEBA was missing certain sales receipts and tax-exempt sales certificates, using existing documentation to extrapolate SEBA’s sales, and concluded SEBA had nearly $400,500 in total retail sales for the audit period. Based on the audit, the director of revenue assessed SEBA approximately $34,300 in unpaid sales tax, plus approximately $2,500 in interest and a penalty of approximately $1,700 for a total amount due of approximately $38,500. SEBA sought review from the administrative hearing commission, which affirmed the director’s assessment, finding the methods the auditor used to calculate the amount of sales and tax liability were reasonable. SEBA appeals.

This appeal presents several questions for this Court. One involves whether the commission erred in finding SEBA had nearly $400,500 in taxable total sales during the audit period and was liable for more than $34,300 in additional sales tax. Related issues include whether SEBA had adequate records of its transactions and whether the commission’s ruling was based on speculation and conjecture by the auditor or was unsupported by competent and substantial evidence on the whole record. Another question involves whether the commission erred in determining SEBA failed to prove its sales to two wholesale customers were exempt. Related issues include whether the commission’s decision ignored language in a department of revenue exemption or was unauthorized by the law; whether SEBA failed to prove the two wholesale customers were exempt; and whether the commission’s decision was supported by competent and substantial evidence on the whole record. An additional question involves whether the commission erred in imposing a 5-percent statutory penalty. Related issues include whether the commission’s decision was authorized by law and supported by competent and substantial evidence on the record; whether the testimony of SEBA’s owner and accountant about checking SEBA’s sales tax returns for accuracy was undisputed; and whether SEBA was negligent in reporting its taxable sales to the department.

Listen to the oral argument: SC98443 MP3 file

Attorney discipline  

In 2012, St. Louis County attorney Eric Kayira began representing a decedent’s estate. On behalf of the estate, he sued Bank of America, alleging the bank wrongfully disbursed the decedent’s funds before his death under a purported power of attorney. The estate was under the supervision of the probate division, but Kayira failed to get its authorization before filing or pursuing the lawsuit on the estate’s behalf. In 2013, all without the probate division’s authorization or knowledge, Kayira entered into a confidential settlement agreement with the bank for $12,500, deposited the settlement check – made out to Kayira’s law firm but not the estate —into his operating account, used the funds to pay personal representative expenses related to the bank case, and dismissed the case against the bank. He then petitioned the probate division to convert the estate from a supervised estate to one with independent administration without bond, stating in his petition he still was searching for assets through the lawsuit against the bank. The probate division, unaware Kayira had settled the case and deposited the settlement check, granted his petition. In 2015, Kayira moved to withdraw from representing the estate. At a hearing on his motion, the probate division advised him the settlement check was an asset of the estate and should have been deposited into the estate’s account, not Kayira’s operating account as an earned legal fee, and ordered him to pay $12,500 into the estate’s account. Kayira later canceled his motion to withdraw, and the probate division reported his conduct. The chief disciplinary counsel instituted disciplinary proceedings against Kayira. During the investigation, Kayira remitted two checks to the estate: a $12,500 check drawn on his trust account and a $3,375 check drawn on his operating account, representing interest accrued on the settlement check. He ultimately stated the source of the $12,500 was not the original bank settlement but rather his share of attorney fees from an unrelated case. An audit of Kayira’s accounts showed he had used the bank settlement proceeds in part to pay his landlord. The audit also showed he did not maintain certain trust account records, did not reconcile his trust account, deposited client funds into his operating account, and transferred money from his trust account to his operating account without proper documentation. In addition, the audit revealed issues with how Kayira had handled fees paid by a number of clients and settlement checks he received on their behalf. During a hearing, Kayira did not dispute the investigator’s testimony about his accounts and transactions and admitted he used some of the funds improperly. In mitigation, Kayira testified he was experiencing personal difficulties during the time in question, later sought treatment, had taken a trust accounting class, had incorporated new software in his law office, and was involved in the community. The disciplinary hearing panel found Kayira had violated a number of rules of professional conduct; it found several factors in aggravation of punishment but none sufficient to mitigate punishment. The panel recommended he be disbarred. The chief disciplinary counsel accepted the panel’s decision; Kayira rejects it, asking this Court to find his conduct and evidence of mitigation support imposition of an indefinite suspension.

This case presents two questions for this Court – whether Kayira violated rules of professional conduct and, if so, what discipline, if any, is appropriate.