Theresa HOLBROOK, individually and on behalf of a class of all other Arkansans Similarly Situated, Appellant v. HEALTHPORT, INC.; Healthport Technologies, LLC f/k/a Smart Document Solutions, LLC; Healthport Incorporated f/k/a Companion Technologies Corporation; and Richard Weiss, in his Official Capacity As Director, Arkansas Department of Finance and Administration, Appellees.
No. CV-13-828
Supreme Court of Arkansas
April 3, 2014
2014 Ark. 146
Rose Law Firm, Little Rock, by: Kathryn Bennett Perkins, Byron J. Walker,
CLIFF HOOFMAN, Associate Justice.
Appellant Theresa Holbrook, individually and on behalf of a class of all other Arkansans similarly situated, appeals from the Pope County Circuit Court‘s July 17, 2013 amended order granting defendants’ and third-party defendant‘s motion for partial summary judgement and denying plaintiff‘s motion for partial summary judgment in favor of appellees Healthport, Inc.; Healthport Technologies, LLC f/k/a Smart Document Solutions, LLC; Healthport Incorporated f/k/a Companion Technologies Corporation (collectively “Healthport“); and Richard Weiss, in his official capacity as director of the Arkansas Department of Finance and Administration (“DF & A“). This court has jurisdiction pursuant to Arkansas Supreme Court Rule 1-2(a)(7) (2013), as this case is a subsequent appeal following an appeal that has been decided in the supreme court. On appeal, Holbrook contends that (1) the gross-receipts tax does not apply to a patient‘s attempt to obtain a patient‘s own medical information and (2) the Arkansas Access to Medical Records Act exempts a patient‘s attempt to obtain a patient‘s med-ical information from any otherwise applicable tax or charge. We affirm.
This case arose after Holbrook requested her medical records from Millard Henry Clinic located in Russellville, Arkansas. Healthport, a private company that has a contract with Millard Henry Clinic to fulfill such requests, obtained and sold to Holbrook copies of her requested medical records. Healthport sent Holbrook two invoices for the two sets of records, including sales tax, and Holbrook remitted two money orders to Healthport, paying both invoices in full.
Holbrook, both individually and on behalf of all other Arkansans similarly situated, filed a class-action complaint on October 12, 2010, seeking damages and requesting the court (1) to find that Healthport violated the Arkansas Deceptive Trade Practices Act; (2) to declare that Healthport illegally collected sales tax on charges for retrieving and copying her medical records; and (3) to find that Healthport was unjustly enriched. Subsequently, Healthport impleaded DF & A by filing a counterclaim and third-party complaint seeking declaratory judgment as to whether any person, entity, or organization is required to collect a sales tax on charges associated with the production of copies of medical records pursuant to
All parties filed cross-motions for partial summary judgment on the declaratory-judgment claims. The parties also filed a stipulation that allowed the class-certification proceedings to follow the circuit court‘s adjudication of the cross-motions for partial summary judgment. After a hearing, the circuit court entered an order granting defendants’ and third-party defendant‘s motion for partial summary judgment and attached a Rule 54(b) certificate. Holbrook appealed; however, this court dismissed the appeal, holding that this court lacked jurisdiction to review the non-final order when the attached Rule 54(b) certificate failed to comply with the rule. Holbrook v. Healthport, Inc., 2013 Ark. 87, 2013 WL 776240.
Any person, entity or organization providing copies of medical records pursuant to
Ark.Code Ann. § 16-46-106 is required to collect a sales tax on the charges for the production of copies of medical records requested pursuant toArk.Code Ann. § 16-46-106 .
This appeal followed.
Holbrook contends in her first point on appeal that the circuit court erred when it determined that the gross-receipts-tax statute imposed a sales tax on a patient‘s ability to obtain a copy of his or her own medical records for three independent reasons. First, Holbrook contends that the circuit court‘s finding leads to “a legislative absurdity.” She argues that the legislative intent of
This case involves the interpretation and construction of the Arkansas Gross Receipts Act of 1941 (“Gross Receipts Act“),
A statute is considered ambiguous if it is open to more than one construction. Pulaski Cnty. v. Ark. Democrat-Gazette, Inc., 370 Ark. 435, 260 S.W.3d 718 (2007). When a statute is ambiguous, this court must interpret it according to legislative intent and our review becomes an examination of the whole act. Helena-W. Helena Sch. Dist. v. Fluker, 371 Ark. 574, 580, 268 S.W.3d 879, 884 (2007). In reviewing the act in its entirety, this court will reconcile provisions to make them consistent, harmonious, and sensible in an effort to give effect to every part. Williams v. Little Rock Sch. Dist., 347 Ark. 637, 66 S.W.3d 590 (2002). In addition, this court must look at the legislative history, the language, and the subject matter involved. Id. However, when a statute is clear, it is given its plain meaning and this court will not search for legislative intent. Cave City Nursing Home, Inc. v. Ark. Dep‘t of Human Servs., 351 Ark. 13, 89 S.W.3d 884 (2002). This court is very hesitant to interpret a legislative act in a manner that is contrary to its express language, unless it is clear that a drafting error or omission has circumvented legislative intent. Id.
The language in the statutes relevant to this case is clear and unambiguous, and furthermore, the provisions can be read in a consistent, harmonious, and sensible manner, giving effect to every part.
In fact, the Gross Receipts Act generally levies an excise or sales tax on “the gross proceeds or gross receipts derived from all sales to any person of ... tangible personal property.”
As recognized by appellant, there are several expressed exemptions from the taxes levied under the Gross Receipts Act, and the “isolated sales exemption” pursuant to
Second, Holbrook contends that the tax does not apply because reasonable minds have differed as to whether the gross-receipts tax applies to a patient‘s medical-information request.1 Holbrook cites to this court‘s holding in Gaddy v. DLM, Inc., 271 Ark. 311, 609 S.W.2d 6 (1980), as sup-
port for the proposition that the intent of the legislature to impose a tax “must be so clear that no reasonable mind should conclude that the intent was otherwise.” Id. at 318, 609 S.W.2d at 10. Therefore, she argues that a tax should not be imposed under these circumstances because reasonable minds have differed as to this issue, namely the Arkansas Attorney General and DF & A.
We disagree. Holbrook cites to an attorney-general opinion, issued on October 11, 2010, as support for her argument. See Op. Ark. Att‘y Gen. No. 095 (2010) (http://ag.arkansas.gov/opinions/docs/2010-095.pdf). In the opinion, the attorney general opines that a health care facility or entity may not charge sales tax to a patient or a patient‘s attorney who requests copies of a patient‘s medical records pursuant to
It has since come to my attention that the Arkansas Department of Finance and Administration (“DF & A“) has taken a different approach to this issue in nonpublic letter opinions, deeming the provisions of such records subject to sales taxation. Although I still subscribe to the reasoning set forth in my previous opinion, I must acknowledge that DF & A in administering the tax laws is not subject to my opinion on this matter. This office has often noted that
the power to determine issues relating to imposition of taxes is vested in the Revenue Division of the Department of Finance and Administration. See Gross Receipts Tax Rules, GR-75(E) (2008) (“Opinions issued by any other agency, whether formal or informal, are not binding on the Department of Finance and Administration, Revenue Division“). I therefore suggest that any individual or entity with questions relating to this issue submit its concerns to the [Arkansas Department of Finance and Administration.]
Id. No. 095A (http://ag.arkansas.gov/opinions/docs/2010-095A.html). Therefore, the attorney general in essence retracted his previous opinion and referred the addressee to DF & A for any questions.
This court has held that while a statutory interpretation by the agency responsible for its execution is not conclusive, it is highly persuasive and should not be reversed unless it is clearly wrong. Citifinancial Retail Servs. Div. of Citicorp Trust Bank, FSB v. Weiss, 372 Ark. 128, 271 S.W.3d 494 (2008). Pursuant to
Third, Holbrook contends that a sales tax does not apply because there was no exchange of “valuable consideration” as required in the legislature‘s definition of “sale.”
Holbrook contends in her second point on appeal that