*1 SHELTER MUTUAL INSURANCE
COMPANY, Respondent, REVENUE, Appellant.
DIRECTOR OF
No. SC 84617. Missouri,
Supreme Court of
En Banc.
May
920 employees
and drinks to Shelter and au- visitors escorted to the cafeteria thorized by employee. patrons All a Shelter charged beverages purchased for food and However, at the cafeteria. Shelter subsi- operation of the cafeteria and the dizes the patrons charged amount to cafeteria does operating running costs of not cover the cafeteria. Buchheim, Attorney Evan J. Generals issue, During the tax Shelter Office, City, appellant. for Jefferson sales tax on its did not LLP, Downey, Bryan F. Cave Edward food, suppliеs. drink or other restaurant Keller, P. City, Juan D. John
Jefferson Rather, exemption issued tax cer- Shelter Rose, LLP, Barrie, Bryan B. Derek Cave on the that it suppliers tificates to its basis Louis, respondent. for St. purchasing the items for resale. Shel- fact, did, in and remit to the ter collect PRICE, JR., Judge. RAY WILLIAM its sales of meals and Director sales tax on in the amount of drinks the cafeteria I. $110,053.97 period. during the of Revenue seeks review of The Director of that amount sought thereafter a refund Hearing the decision of the Administrative is not a the cafeteria on the basis (“AHC”) that Commission Shelter Mutual regularly sells meals and drinks place that Company’s sales were Insurance cafeteria Director denied Shel- 144.020.1(6), under section taxable sought claim. Shelter review ter’s 2000.1 decision of the Adminis- RSMo AHC, is affirmed. which or- Hearing trative Commission Director’s decision dered the refund.
II.
mutual
insurance
Shelter is a
benefit
III.
company
corporate
its main office and
jurisdiction pur
“This Court has
Columbia,
Missouri.
headquarters
Const,
V,
art.
section 3 and
suant to Mo.
large office
limits access to the
of reve
interpretation
reviews
AHC’s
heаdquarters by use of a
building at its
Bell v.
nue law de novo.” Southwestern
Only
key
system
receptionist.
card
Dir.
key cards.
employees are issued
omitted).
2002) (citations
“This
building
Authorized
enter
if
seeing
receptionist and
decision
uphold
after first
the AHC’s
Court will
employee signs
then
after a Shelter
supported
com
authorized
law and
through
the visitor and escorts the visitor
upon the
evidence
petent and substantial
building.
(internal quotations
record.”
whole
omitted)
621.193, RSMo
(citing section
operates
a cafeteria-
Shelter owns
2000;
Reve
Bell v. Dir.
Southwestern
facility within its office build-
style dining
2002)
nue,
of its officers
ing for the convenience
omitted)).
(citations
serves meals
employees. The cafeteria
unless otherwise stated.
statutory references are to RSMo
1. All
decided,
part,
Vending
J.B.
was also
IV.
any special relation-
upon
based
a láck of
144.020.1(6)
Section
levies a tax on
ship
Co. and those
between
all ...
charges
“the amount of sales or
J.B. ar-
that it served
its cafeterias.
*3
hotel,
any
drinks
at
meals and
furnished
employees
served
gued
motel,
tavern,
inn,
restaurant,
eating
thus,
public.
regularly
did not
serve
cаbin,
house,
car,
drugstore, dining
tourist
However,
Vending,
J.B.
lated that Greenbriar did not serve meals determining for public, and drinks to the Another related criteria taxpayer] ... guests. taxability [the and their invited Id. at is “whether members public of the ...” J.B. special relationship 38. Because of the invited the trade (citing ex Vending, and their at 187 State between co-owners or members Witthaus, association, there no sales “to the rel. Anderson v. Mo. (Mo 1937)). Indeed, public.”2 among questionable ing expenses the co-owners of It is that Greenbriar involved Rather, might sale at all. the transaction country club. account- appropriately more be viewed as an however, here, for which- decision no less Court’s Vending to this test referred J.B. cor- times, example, “public” of the term noting, meaning ever than four ready rect, being out not hold that Vending “holds itself did J.B. for cafeteria services public contract would a member of subset company that hires its services.” impose provide a sufficient basis 189,184,187. here, where, buyer have a the seller relationship and the seller does special Club, Country unlike J.B.
Greenbriar public. For this the trade of invite ready to not hold itself out as Vending, did reason, on J.B. Rather, the Director’s reliance contract with misplacеd. Vending is only its members and served Greenbriar *4 Greenbriar, 935 guests. invited their D. stipu- Director at 37. Even the not serve the did
lated Greenbriar Wellesley College, and As Greenbriar at 38. public. Id. there exists a Vending, and unlike J.B. special between College pri- its decision Wellesley based cafeteria. Shelter’s it its those serves determining that it In marily on test. merely “typical” restau- not employees are college not en- “plain that was was by a to Shelter patrons, rant but are bound serving regularly of gaged the business Thus, to the extent relationship. Wellesley spеcial public”, food to the meals or and drinks the court said: sells meals College, 49 N.E.2d at clearly regularly is not employees, it own comparatively Furnishing food to a Further, de serving public. Shelter’s period of tenants for a short group small to authorized public directly serving food to the minimus sales of time is not the tax- meaning the statute. The should not invoke of escorted within 144.020.1(6). college at accommodations of section dining ing provisions They are to the open public. are not not that Shelter has It also clear is ” small, num- to a well dеfined restricted public.... “invited the trade of which of classes to the members ber as at 187. Just Vending, 54 S.W.3d maintenance of available. The they are caf- not maintain its Wellesley College did as a com- dining rooms is not conducted enterprise”, a commercial eterias “as inde- separate and enterprise, mercial nei- Wellesley College, 49 N.E.2d of of other activities pendent the various dining services its provide did ther as [college], but is conducted Id., of its independent”, “separate and if necessary undertaking but incidental Like of insurance. primary business function as to continue to college is meals offered Wellesley College, Shelter institution.... an educational inciden- “as an employees its and drinks to Id., undertaking”, necessary tal but fact, Shelter insurance business. C. to the so vital service deemed its cafeteria based in J.B. also majority employ- itsof productivity convenience decision, part, on a determination their oper- the cafeteria’s it ees that subsidized as used section “public” that the word and drinks costs; the meals offering ating 144.020.1(6) public not limitеd insufficient prices employees at whole, to subsets of also referred as a operations. cafeteria cover disagreed with public. judges Two those relationship with special Shelter’s public. interpretation of word not does fact that Shelter and the serves disagreement is irrelevant That “If tax was stipulation ment. The stated: public clearly invite the trade of the estab- meal and on serve due lish that Shelter does drink in- such, components, Shelter would have meals or drinks to the As $50,456 in Missouri and local sales curred taxing prоvisions section through 144.020.1(6) periods October apply. cannot (“Tax Periods”).” This state- March 1999 V. possi- stipulated only ment the amount of due”, that such tax was “[i]f ble argues Director re owing. amount was due and Shel- by the fund due Shelter should be offset to this specifically agree ter did not unpaid amount of tax due.3 See Westwood offset, con- amount as an nor does Shelter Country Club Dir. that it had no defenses or other affir- cede However, 887-88 such assessment. mative avoidance 144.250,4 under section when there is an fact, stipulation was made after the tаxes, alleged failure to remit the Director statute of limitations had applicable required make an assessment of the run. See section 144.220. delinquent give tax and notice of the esti *5 mated assessment. This assessment must may “The statute of limitations any made can before refund be credited suspended only by specific or tolled Nobel, unpaid Dyno toward the tax. Inc. exceptions by the disabilities or enacted Revenue, v. Dir. 243-44 of empow Legislature and the courts are (Mo. 2002). Further, banc the director exceptions.” Cooper ered to extend those only years any has three to make addition Minor, v. al of assessment tax.5 2000). excep Section 144.220has one running
The Director
tion
of
contends
to the
the statute
stipulation
a possible
apply
of
tax amount re-
could
in this case:
fraudulent
“[A]
neglect
lieved her from the
or
to make a
require-
assessment
return or
refusal
[ ]
provides:
payable by
delinquent;
3. Section 144.190.2
the tax
such
may
peri-
estimate
be reconstructed for that
any
erroneously
paid
If
tax ... has
...
been
may
od of time for which the tax
be collect-
... such stun shall be credited on
taxes
prescribed
ed as
law.
person legally obligated
due
then
from the
thereafter,
balance,
5.Promptly
the director of rev-
to remit the tax ... and the
with
give
person
delinquent
interest ...
shall
to the
written
shall be refunded to the
enue
assessment,
legally obligated to remit
but no
notice of such estimated
such
or
personally
credit
refund shall be allowed un-
notice to be served
or
certi-
duplicate copies
less
of a claim for refund
registered
fied or
mail at his or its last
years
are filed within three
datе of
known address.
overpayment.
5. Section 144.220 states:
provides:
4. Section 144.250
1. In the case of a fraudulent return or of
evasion,
Except
4.
in cases of
or
if a
fraud
neglect or refusal to make a return with
neglects
person
or refuses to make a return
respect
chapter,
tax under this
there
payment
required
as
sections
144.525,
period
on the
of time the
is no limitation
of revenue
144.010 to
the director
has to assess.
director
upon any
shall make an estimate based
possession
information in his
or that
cases, every noticе of addition-
3.
In other
possession
of
come into his
of the amount
proposed
under
al amount
to be assessed
gross receipts
delinquent
of
for the
chapter shall be mailed to the
period
respect
to which he failed to make
years
filed
upon
within three
after the return was
payment,
return and
the basis of
required
compute and assess
or
to be filed.
said estimated amount
agree
1.
with Shelter’s contention
a tax return is
return....”
Id. “Whether
“place in
that its cafeteria is not a
by consid-
fraudulent is to be determined
regu-
which ... meals or drinks
ering all the facts and circumstances
larly
public.”
Section
served
The elements of fraud include
each case.
144.020.1(6).
principal opinion’s
deceit or subtle de-
positive,
intentional
supported by the fact
Odorite,
conclusion is
tax.”
Inc.
escape
vice to
the sales
prices
its food so low
Dir.
the cafeteria at a
operates
misrepresentation
“A
employees.
loss as a service
not fraud. And the
question
to a
of law is
Thus,
trying
to attract
Shelter is
a ...
‘sale for
question of what constitutes
from the
business fоr its cafeteria
question
is a
resale’ or ‘sale at retail’
obviously it
public
large
did not file a fraudulent
law.” Id. Shelter
the cost
has no intent to underwrite
a return. No
or refuse to make
return
of meals for
ap-
of limitation
exception to the statute
passed
limitations
had
plies. The
principal opinion’s
2.
I dissent from the
stipulation.
when Shelter entered
has
conclusion that the state
waived
$50,456in
right
not raise the
to an offset
The Director did
issue
pur-
on its
taxes that Shelter owes
pleadings
an offset in its
AHC.
of food for the cafeteria.
рresented was Shelter’s refund
chases
issue
Director raised
claim.6 At the time the
a refund of
a seller receives
When
possi-
stipulated to a
this issue and Shelter
from customers—
sales tax collected
amount,
three-year
limitations
ble tax
obligation
no
*6
refusal to
passed.
had
The AHC’s
to its customers—the
amounts back
request for an off-
consider the Director’s
unjustly en-
“taxpayer” is
seller
“authorized
set of
refund was
I
Ordinarily
riched.
believe
and sub-
supported by competent
and
law
impose a constructive
Court should
”
Bell,
evidence....
Southwestern
stantial
trust,
in
of the customers
favor
dissents in Serving Public —Section 144.020.1(6) WOLFF, Judge, A. MICHAEL part. in part dissenting in concurring “country Relying part on so-called cases, princi- only” part, as club” or “member part I concur in and dissent sold at opinion concludes that meals pal follows: Revenue, IBM v. Dir. rize an offset. See claim for refund does not list 6. The offset, 1989). ground concerning therefore sec- 612-13 n. 5 autho- 144.190.2 and 144.190.3 do not tions employee guest, employ- were under If the has Shelter’s cafeteria not taxable 144.010.1(6) Other- guest’s food. “special rela- ee should his section because a wise, building say, is in anyone who employ- its tionship” between — at supplies buy a meal to deliver sells ees exists such when Shelter —can so, If that then the cafete- cafeteria. employees, regu- food to its own it is not place meals are where public. non- ria would larly serving the Sales to This would public. regularly served escorted employees—authorized Vending where seem no different than J.B. found to minimus so be de —were eating noted those the court taxation. not to invoke the ven- had no cafeterias “country the so-called believe dor, typical makes them more like which taxing exception contrary club” is patrons. Co. v. restaurant concept of fair statute and offensive Revenue, 54 S.W.3d Director of Country taxation. See Greenbriar Hills 2001). (Mo. banc Club v. Director So, how is Shelter’s cafeteria different according- On this point, different, Vending? per- from J.B. It is an, ly, I concur the result use but would in this unusual haps, case because Shelter analysis that alternate focuses on Shelter’s of the portion underwrites a cost lack public. of intent to sell meals to the employees. food providing 144.020.1(6) imposes Section a tax on principal opinion properly notes Shel- “places ... in which meals pub- “invited ter has not the trade public.” served to the meals are When too prices lic” where it offers meals at low non-employee served to a cafe- disposi- operation costs. That cover teria, directly collects money tive of its intention not to serve patron. arrangement is different obviously interest at- has no country from that at the club clubs where outside, tracting customers from the be- money collects for meals to mеm- served cause it loses on the meals. For directly bers’ guests from its members. reason, I concur in on the result this *7 special light of this be- point. members, country tween a club and its a 2. The Be Allowed to State Should
“country exception club” was fashioned— Keep the Owes Amount Shelter in inappropriately, my opinion exclude —to by country taxation of meals served a club dissent, however, majority’s from the guests. member and Usu- members’ that Shelter’s refund should not conclusion ally guest— the the club member —and not by unpaid the tax due. be offset amount pays guest, Otherwise who is the bill. food, purchased its drink Because Shelter club, logically not a of the member would resale, supplies gave it and restaurant for be a of the member sales suppliers exemption an tax its that be grounds the food would sold on a same is true Shelter. When at retail and tax would collected patron employee’s cafeteria at the is an did in- customers. Shelter from Shelter’s in guest person happens or a to be collect from its customers sales taxes deed delivering supplies, person is building that $110,053.97, it in the amоunt of which re- and, thus, not a mem- employee an is mitted to the director. If ber “club”. Shelter wants to use exception, refund of that country sought club it should sell Shelter then a pro- $110,053.97 brought amount employees. refund, ceeding. seeking stip- result, a a Shelter As Shelter receives more than $110,000 ulated in this in proceeding tax was the form of a refund even “[i]f purchases though money paid due on none of the tax Shelter’s meal and came out pocket. of Shelter’s The state components, drink in- Shelter would have $50,046 tax; entitled in $50,456 stipu- Shelter curred Missouri and local sales lated to that fact. state has periods. tax” for the relevant $110,053.97 keep and should be entitled to stipulation by is an admission Shelter that $50,046 agrees that Shelter any refund received should be offset owes. taxes due on its of meal and components.
drink This admission indi- Unjust That Refunds Create Enrich- liability. cates of its tax knew ments Be Avoided Should argues director failed to Whether Shelter receives refund of notify liability it of the tax within the $110,053.97 $60,000 or the difference be- three-year statute of limitations Section tween what the director receivеd and what claiming 144.220.3 in this offset owed, Shelter will receive a wind- proceeding. fall. Its charged customers were for the amount of the tax. prevail point. Shelter should not on this First, owed, Only this rare situation is stipulating as to tax Shel- such sense, acceptable. windfall and with ter waived the statute of limitations de- help, A Court’s Shelter will return the fense. statute of limitations money to the “clear, customers because Shelter waived if there is a unequivocal and thereby oper- sells its food below cost and party showing decisive act of the such ates the cafeteria at a loss. purpose.” Schwab Brotherhood Am. Yeomen, 305 Mo. 264 S.W. situations, however, In most the vendor (1924); Darling, Dice v. refund, customers, pocket will and its (Mo.App.1998). parties who are the actual interest be- they charged cause for the sales Second, the director should not be re- nothing. will receive quired plead contrary an offset that is law, early Ever since the common legal theory. pleading to her is principle unjust enrichment has been refund; the director’s answer is that one constant: “Whenever has re- Shelter is not entitled to a It refund. person, ceived to which another makes require no sense to the director to justice conscience, entitled, good plead contrary the alternative and *8 —in implies promise by law creates or a the legal theory prevails, her if Shelter —that Benja- pay former to it to the latter....” By the state is entitled to an offset.1 Shipman, min J. Handbook of Common-Law requiring an alternative and inconsistent Pleading (3d ed.1923). 162 pleading, give this to Court allows Shelter suppliers exemption a tax on the cases, bаsis The factual situation sales tax that the tax will be collected at retail and where the seller receives a refund of customers, paid then seek a full refund of the taxes actually charged amounts employee-customers. certainly unjust retail be enrichment. would party party Rules allow a to to do 1. 55.06 and 55.10 so. plead require in the alternative but do not a
927 employee that the so the receives a benefit at the ex favor of treasurer The seller occurs, by collect- pense unjustly of the customer. When this not еnriched be would that these customers well money seems from sources for the same ing two class the seek bring against a action seller constructive injury. Cole thus holds a requiring vendor ing restitution the though even the trust is warranted any refund received a hold constructive nothing unjustly enriched did was who for the benefit of the customers. trust wrong legal in a sense. See Restatement remedy granted This an Illinois (1937). sec. 160 (FiRst) of Restitution Cf. Co., L. 17 court in Cohon v. Oscar Paris Co., Bowling v. Green 360 Straube Gas (1958). 21, 149 472 Ill.App.2d N.E.2d (1950). 666, 132, 227 Mo. S.W.2d 670-71 Cohort,, a class brought customers option prevent A would be to second a against seller of wall-to-wall car- action deny taxes the overpayment of future the re- peting after seller received a tax unless the first entirely refund vendor $130,000 fund of more than the pass along refund agrees to subject to the seller was found to not be option, money customers. With occupation retailers’ tax. at 473. or be would either remain with the state court “in money equity found the tax thereby given tax-paying customers good belong conscience” did eliminating unjust This enrichment. paid it” seller but “customers who had option mаy appropriate though be even and ordered the seller to hold the refund statute authorizes the vendor —the in the form of a constructive trust for obligated one to remit the tax—to seek of its Id. at benefit customers. 475. 144.190.2 refund. Section Morris, Court’s decision Cole v. state courts have denied refund Some (Mo.1966), 668 instructive. they did requests from vendors because There, injured employee collected bene- thus, and, not the injury fits from the second fund as a result parties real interest.3 Cook v. Sears- job. of an auto accident while on He Co., Supreme Roebuck & Court subsequently recovered from a damages request for a re- Arkansas denied Sears’ third-party tortfeasor. While the statutes taxes paid fund of customers because recognize subrogation right did not “disregard treasurer, allowing such a refund would the state custodian of the sec- fund, un- against doctrine injury paid completely the entire ond to recover worker, 308, injured just 212 Ark. 206 this Court held enrichment.” (1947). 20, imposed constructive trust The court noted that Sears would "person unwilling law the customer provides Missouri unable or locate legally оbligated to remit the state actually Jersey tax” to the paid the New enacted who meaning can purchaser the seller and not the requiring persons seeking a refund a statute Galamet, 144.190; seek a refund. Section prove they party are the to first v. Director Inc. (2003); paid the tax. NJ.S.A. 54:32B-20 While customers Co., Refrigeration & Inc. Fixture Commercial standing request would lack on their own to Director, N.J.Super. 2 N.J.Tax refund, they precluded should not (1981). Taking slightly differ- 446 A.2d *9 bringing against an action the seller for resti- requires approach, ent Minnesota’s statute where tutiоn that seller has received a refund agree pur- to to the the vendor either refund from the state. crediting the vendor chaser via amounts due returning purchaser. to or the amount the legislation governing 3. Other states have 289A.50, (2002). subd. 2 M.S.A. prevent rights to such To the seller refunds. obtaining in he is from a windfall the event plans had no to money supplies return the owes on its of food customers and the cafeteria. entitled to a refund unless and until it could from remove itself tax Sales refunds should benefit those unjust the rule enrichment. On the paid money In the for the tax. cases enrichment, unjust avoiding basis of where a refund would result a windfall Kentucky court refused to refund a sales seller, director, the the administra- per quart tax of seven cents of ice cream hearing tive commission this Court that the seller had collected from cus- should not in the of facilitating be business sought tomers. The seller a refund on the unjust enrichment. ground that the sales tax had been de- given Refunds should be unless the clared unconstitutional. Shannon agrees seller to refund those amounts to Co., Hughes Ky. & 109 S.W.2d paid the customers who them. Where (App.1937). refund, prеvails seller in an action for
Similarly, though even the Missouri stat- bringing costs in the action seller’s should ute authorizes the seller to seek a customers, passed along in much refund, deny this Court could refund —to the' same fashion as members of a class countenancing unjust avoid enrich- pay attorney’s fees from a common fund. agrees pass ment —unless the seller to Hotel, Inc., Mayfair Jesser v. money on to ability its customers. The to seller, dispute resolve the one case rather than refund, though keep not entitled to refund, grant two—one to and the bеnefits from the case the declaration provide second a class action to return of subject that its sales in the future are not money tax to the customers —makes cases, to sales tax. some where there option judicially more economical. purchases, usually large records readily purchases, the customers can be said, being That I in allowing concur cases, identified. In other the seller windfall this unusual situation. Shelter plan should have a to benefit its future refund, operates will receive a it but next-best class. customers —the employees’ cafeteria at a loss for its bene- event, if person obligated keep money fit. Shelter will refund of money refunded— remit the wants that did not come out of Shelter’s to a addition declaration nonliabil- here, pocket. There is an enrichment ity tax—the should for sales unjust appears it is not prepared to return those who ultimately employ- refund will benefit the provided expect it rather than to to be ee-customers, whose meals are subsidized. unjustly enriched. Conclusion I concur in the conclusion that Shelter’s place
cafeteria is not a which meals are served to the dissent requiring the director refund $50,046 clearly
shelter