Case Summary for September 8, 2011

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Case Summary for September 8, 2011

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.

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DOCKET SUMMARIES
SUPREME COURT OF MISSOURI

9 a.m. Thursday, Sept. 8, 2011

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SC91283
Wehrenberg, Inc. v. Director of Revenue
Cole County
Application of reduced tax rate to movie theater concession food
Listen to the oral argument:

Wehrenberg was represented during arguments by Daniel J. Cook of Cook & Riley LLC in St. Louis, and the director was represented by Jeremiah Morgan, deputy state solicitor for the attorney general's office in Jefferson City. Judge Edward Sweeney, a circuit judge from St. Louis, sat in this case by special designation to fill the vacancy on the Court.

At each of the 12 theaters Wehrenberg Inc. operates in Missouri, it sells concession items such as popcorn, candy and fountain drinks. Four of the theaters have expanded menu items including hotdogs, hamburgers and pizza. Wehrenberg requested a tax refund of from the director of revenue for the tax periods February 2006 through December 2008, claiming its food sales should be taxed at the reduced tax rate imposed under section 144.014, RSMo. The director denied the refund, stating that food sold at movie theaters does not qualify for the reduced tax rate. The administrative hearing commission agreed with the director’s decision. Wehrenberg appeals.

Wehrenberg argues the commission erred in ruling that Wehrenberg does not qualify for the reduced tax rate. It contends the commission’s decision is not authorized by law because Wehrenberg’s concession stands are not establishments “separate and apart” from the theaters in which they are housed.

The director responds that the commission’s ruling should be affirmed. She argues that food bought at movie theaters do not qualify for the reduced tax rate because section 144.014 requires that the food purchased must be food stamp-eligible items and must be meant for home consumption. Alternatively, the director contends that Wehrenberg’s concession stands are not “separate and apart” from the theaters in which they are housed.

SC91471
Krispy Kreme Doughnut Corporation v. Director of Revenue
Cole County
Application of reduced tax rate to certain retail food sales
Listen to the oral argument:
Krispy Kreme was represented during arguments by Igor Timofeyev of Paul, Hastings, Janofsky & Walker LLP in Washington, D.C., and the director was represented by Jeremiah Morgan, deputy state solicitor for the attorney general's office in Jefferson City. Judge Edward Sweeney, a circuit judge from St. Louis, sat in this case by special designation to fill the vacancy on the Court.

From April 2003 through December 2005, Krispy Kreme Doughnut Corporation operated five retail stores in Missouri. Kripy Kreme requested a tax refund from the state’s director of revenue during that time, claiming its food sales should have been taxed at the reduced tax rate imposed under section 144.014, RSMo. The director denied the claim. The administrative hearing commission found that while Kripy Kreme’s sales consisted of food stamp-eligible items – as required by section 144.014 – it denied the refund because Krispy Kreme’s stores did not derive at least 20 percent of their total sales from products other than “food prepared for immediate consumption.” Krispy Kreme appeals.

Krispy Kreme argues the commission erred in ruling that Krispy Kreme does not qualify for the reduced tax rate. It contends the commission’s decision is not authorized by law because the commission’s construction of section 144.014 and the phrase “food prepared for immediate consumption” departs from the plain language of the statute, ignores the statute’s purpose, and resolves statutory ambiguity in favor of the taxing authority and against the taxpayer.

The director responds that the lower tax rate in section 144.014 should be construed strictly, not expanded to avoid the general tax rate of section 144.020, RSMo. She argues that doughnuts Krispy Kreme prepares for retail sale are “prepared … for immediate consumption.” She contends the plain language of section 144.014 focuses on how the doughnuts are prepared – ready to be consumed without further preparation – and not when they actually are consumed. Accordingly, she asserts, doughnuts made one hour before sale still are “prepared … for immediate consumption” even if they are taken to other locations or are sold in amounts of a dozen or more. The director further responds that the structure and purpose of the statute further support this conclusion regarding the statute’s plain language.

SC91497
In re: Lisa Dawn Coatney
Scott County
Attorney discipline
Listen to the oral argument:
The chief disciplinary counsel was represented during arguments by Marc Lapp, an attorney from St. Louis, and Coatney was represented by John Allan of Allan & Summary LC in St. Louis. Judge Edward Sweeney, a circuit judge from St. Louis, sat in this case by special designation to fill the vacancy on the Court.

In 2008, 2009 and 2010, Sikeston attorney Lisa Dawn Coatney asked the disciplinary advisory committee to waive her annual bar enrollment fees because of her alleged physical incapacity to practice law. The committee granted the waivers all three years, pursuant to Rule 6.01(h). Unknown to the committee, however, from February 2009 through August 2010, Coatney entered her appearance or made a legal filing on more than 200 occasions in nearly 50 litigation cases throughout southeast Missouri. Between November 2009 and May 2010, Coatney posted several comments on a public Internet forum regarding the integrity of an associate circuit judge. Also in November 2009, Coatney left a voicemail with a prosecuting attorney concerning an upcoming trial the prosecutor had with the associate circuit judge in which she said the judge had engaged in illegal activity. Coatney also made comments about another judge, stated in open court that the judge was denying her client’s right to a jury and said the judge had a history of denying defendants jury trials.

The chief disciplinary counsel began proceedings against Coatney, alleging five counts of violating the rules of professional conduct. During a September 2010 hearing, Coatney represented herself for nearly eight hours with brief recesses, making an opening statement, conducted direct and cross-examination of witnesses, objected to the admission of evidence, and made a closing argument. In December 2010, a regional disciplinary panel recommended that Coatney be reprimanded as to the allegation that she made false or reckless statements of fact concerning the integrity of two judges and that the remaining four charges be dismissed. Following the decision, Coatney sent certain e-mails in which she made allegations and remarks regarding the chief disciplinary counsel and one of the complainants against her, a prosecuting attorney. The chief disciplinary counsel asks this Court to discipline Coatney’s law license.

The chief disciplinary counsel argues the Court should suspend Coatney’s law license. He contends that Coatney made misrepresentations to the advisory committee in seeking a fee waiver, in violation of Rule 4-8.4, and to tribunals with the intent to disrupt proceedings, in violation of Rules 4-3.3, 4-3.5 and 4-8.4. He also asserts that Coatney made false and reckless statements about the integrity of two judges, in violation of Rules 4-8.2 and 4-8.4, and that he improperly communicated with a represented party about he subject matter of the representation, in violation of Rules 4-4.2 and 4-8.4. The chief disciplinary counsel argues that suspension is appropriate here because Coatney knowingly violated duties owed to the legal system, causing harm to the legal system. He contends the ABA standards for imposing lawyer sanctions and this Court’s precedent suggest suspension is the appropriate action, especially for one who refuses to acknowledge the wrongful nature of the misconduct.

Coatney responds that this Court either should dismiss all charges that she violated the rules of professional conduct or accept the hearing panel’s recommendation as to discipline but admonish her behavior. She argues her requests for a fee waiver were appropriate because she still is incapacitated and cannot make a sustainable living in her law practice because of her medical condition. As such, she contends, she did not violate Rule 4-8.4. Coatney contends her statements were constitutionally protected speech and were not knowingly false or made with reckless disregard for the truth and were within the standard of care for lawyers in a similar situation. She asserts statements made to tribunals about filing motions and complaints against judges were not designed to disrupt court proceedings and, therefore, did not violate Rules 4-3.3, 4-4.5 or 4-8.4. Coatney further argues her communication with someone represented by another attorney who was not present did not violate Rules 4-4.2 or 4-8.4 because the communication was not confidential, came at the request of the other person seeking information and was not threatening nor perceived as threatening.