In the Missouri Court of Appeals Eastern District DIVISION FIVE
CITY OF COLUMBIA, et al., ) No. ED109769 ) Respondents, ) Appeal from the Circuit Court ) of St. Louis County v. ) ) Cause No. 14SL-CC04026 SPECTRA COMMUNICATIONS ) GROUP, LLC, et al., ) Honorable Ellen H. Ribaudo ) Appellants. ) Filed: July 19, 2022
Introduction
Respondents City of Columbia and City of Joplin (“Cities”) sued Appellants Spectra
Communications Group, LLC, Embarq Missouri, Inc., CenturyLink Communications, LLC, and
CenturyLink, Inc. (collectively, “CenturyLink”) in the Circuit Court of St. Louis County for
alleged violations of the Cities’ license tax ordinances. The circuit court granted partial summary
judgment to the Cities on liability on all counts, ordered CenturyLink to provide a full accounting
of its revenues and tax liability in each city, and assessed attorneys’ fees and expenses. After
lengthy discovery disputes, the circuit court struck CenturyLink’s pleadings related to damages as
a sanction for CenturyLink’s failure to comply with the court’s orders. The circuit court’s judgment
awarded damages, interest, penalties, attorneys’ fees, and expenses of $53,802,060.70 to
Columbia, and $1,153,678.23 to Joplin. CenturyLink raises nine points on appeal. In Points I and II, CenturyLink argues the circuit
court erred in granting partial summary judgment to the Cities because (1) the plain language of
the license tax ordinances imposes a tax on revenue from only “local exchange service” from
“telephones located within the city limits” of Columbia, and on receipts from only “exchange
telephone service” sold to “consumers” within Joplin, rather than all revenue and receipts received
by CenturyLink in each city; and (2) the Cities, by failing to show that all disputed revenues were
taxable under the ordinances, did not demonstrate the absence of a genuine issue of material fact.
CenturyLink argues in Points III, IV, and V that the circuit court erred in awarding damages
to the Cities because (1) the judgment erroneously declared that all revenue and receipts were
taxable; (2) substantial evidence did not support the award because the Cities did not present
evidence that their damages calculations complied with the terms of the ordinances; and (3)
damages for unpaid taxes incurred before November 20, 2009 fell outside the applicable five-year
statute of limitations and the statute was not tolled.
In Point VI, CenturyLink argues the circuit court abused its discretion in sanctioning
CenturyLink because it engaged in good-faith attempts to comply with overbroad discovery
requests, its actions did not prejudice the Cities, and the sanctions were extreme.
Finally, CenturyLink argues in Points VII, VIII, and IX that the circuit court abused its
discretion in awarding the Cities attorneys’ fees and expenses because (1) the circuit court
erroneously determined that CenturyLink’s interpretation of the ordinances was unjustifiable; (2)
the Cities lacked standing under Section 392.350; 1 and (3) the award was unnecessary for purposes
of discovery.
1 All Section references are to the Revised Statutes of Missouri (2000), as supplemented, unless otherwise indicated.
2 We affirm the judgment of the circuit court in part, reverse in part, and remand the case for
further proceedings consistent with this opinion.
Facts and Procedural Background
License Tax Ordinances
The Cities’ license tax ordinances impose a tax on certain telephone services provided in
the Cities. CenturyLink is a telephone company operating in the Cities and subject to the license
taxes.
Columbia Code § 26-121(a) states:
Every person engaged in the business of supplying telephone service in the city for compensation for any purpose shall pay to the city a license tax in an amount equal to seven (7) per cent of the annual gross revenue received by such person for local exchange service from telephones located within the city limits.
Joplin City Code § 30-143 states:
In addition to any other taxes, payments or requirements required by law, a quarter- annual license fee of six percent of the gross receipts of each public utility from the sale of its services to consumers within the present or future boundaries of the city shall be paid.
Joplin’s ordinance defines a “public utility” as “any person furnishing exchange telephone
service.” Id. at § 30-141.
O’Fallon Class Action Lawsuit and Aurora Decision
Two years before the Cities filed their petition, a separate class action lawsuit against
CenturyLink was filed on May 10, 2012. See City of O’Fallon v. CenturyLink, Inc., 491 S.W.3d
276, 278 (Mo. App. E.D. 2016). The lawsuit was brought on behalf of Missouri municipalities
whose license taxes allegedly were not fully paid by CenturyLink. Id. Columbia and Joplin were
putative class members until they requested exclusion from the lawsuit.
3 A similar lawsuit, City of Aurora v. Spectra Comms. Grp., LLC, also was brought in 2012
and culminated in a published opinion of the Supreme Court of Missouri. 592 S.W.3d 764 (Mo.
banc 2019). The Aurora decision was published after the circuit court in the present case granted
partial summary judgment to the Cities. In light of Aurora, CenturyLink moved to set aside the
partial summary judgment and for reconsideration of discovery sanctions. The circuit court denied
the motions.
Petition and Counterclaims
The Cities filed their eight-count petition on November 20, 2014. Counts I and II sought a
declaratory judgment that CenturyLink failed to report and pay license taxes due under the
ordinances and to enjoin CenturyLink from violating the ordinances. Counts III and IV sought an
accounting to determine the nature and extent of gross revenue and receipts CenturyLink excluded
from the license taxes. Counts V and VI sought damages in the amount of CenturyLink’s
underpayment of the license taxes. Counts VII and VIII sought damages and attorneys’ fees under
Section 392.350 for CenturyLink’s willful dereliction to pay license taxes.
CenturyLink filed an answer, affirmative defenses, and two counterclaims, one seeking a
declaratory judgment that the Cities could not adopt an interpretation of their ordinances to tax
CenturyLink’s non-taxable revenue streams, and the other seeking attorneys’ fees.
Partial Summary Judgment
On June 30, 2016, the Cities moved for partial summary judgment on liability as to all
counts. The Cities argued there was no genuine issue of material fact and it was well settled
Missouri law that, in the context of a license tax, gross receipts mean all receipts, without
exception. The Cities also argued that CenturyLink’s violation of the ordinances was willful,
warranting attorneys’ fees under Section 392.350. They noted that the Aurora circuit court
4 previously had found that CenturyLink willfully excluded revenue from its calculations of other
municipal license taxes.
CenturyLink filed a cross-motion for partial summary judgment. It argued the Cities’
claims were barred by the statute of limitations, which was not tolled by the Cities’ status as
putative class members in O’Fallon. CenturyLink also argued the Cities were not entitled to
attorneys’ fees because they could not establish willfulness as a matter of law, and the Cities lacked
standing because they are not “persons” or “corporations” under Section 392.350.
The motions were extensively briefed, including CenturyLink’s notice of supplemental
authority of the Aurora circuit court’s entry of judgment. CenturyLink argued the Aurora judgment
rejected the Cities’ theory of liability.
In an order of June 8, 2017, the circuit court granted partial summary judgment on liability
to the Cities on Counts I, II, III, IV, V, and VI. In its order, the circuit court held that the Cities’
ordinances required CenturyLink to pay license taxes on all gross revenue and receipts attributable
to its business in the Cities. The court rejected CenturyLink’s position that the license taxes and
the gross revenue and receipts taxed were limited to “local exchange service” and “exchange
telephone service.” The court held that the Cities’ ordinances “tax, without exception, all of the
gross receipts Defendants receive from providing telephone service in each city.” The court further
concluded that the applicable statute of limitations is five years, and that the Cities were entitled
to sue despite that they were not “persons” or “corporations.” The circuit court held that
CenturyLink’s withholding certain revenue and receipts when computing the license taxes was
willful and the Cities were entitled to partial summary judgment on Counts VII and VIII.
For the same reasons, the court denied CenturyLink’s motion for partial summary
judgment. The court ordered CenturyLink to provide the Cities a full accounting of revenue
5 received in each city, and of the license taxes paid, and ordered CenturyLink to pay the Cities their
costs, including attorneys’ fees, pursuant to Sections 392.350, 488.472, and 527.100.
Discovery Disputes
The Cities filed a motion to enforce accounting shortly after the circuit court granted them
partial summary judgment. CenturyLink opposed the Cities’ motion, arguing it already produced
all relevant data and the pendency of Aurora required a stay of all proceedings.
On October 10, 2017, the circuit court granted the Cities’ motion. The court ordered
CenturyLink to disclose the amount and source of all revenue attributable to its business in each
of the Cities in a usable form that enabled the court and the parties to understand the data. The
court also ordered CenturyLink to disclose all revenue that it had excluded from reporting and
payment of taxes. The court enumerated revenue categories for which CenturyLink must provide
data. The court also ordered CenturyLink to disclose revenue received from each of its customers,
a list of customers, and the amount of tax it paid and did not pay on attributable revenue in each
city.
One month after the October 10, 2017 order, CenturyLink moved for an extension of time.
The Cities opposed the motion, arguing CenturyLink continuously delayed and refused to provide
data. The court granted CenturyLink until January 17, 2018 to comply with the order. On April
13, 2018, the Cities filed a motion for contempt for CenturyLink’s failure to comply with the
court’s orders. On May 22, 2018, the circuit court named a special master pursuant to Rule 68.01
to resolve the Cities’ motion for contempt. 2
After extensive briefing of the contempt motion, the special master entered a preliminary
report on August 20, 2018, finding that CenturyLink did not comply with the circuit court’s order
2 The Honorable Stephen N. Limbaugh, Sr. served as the special master. All Rule references are to the Missouri Supreme Court Rules (2014), as supplemented, unless otherwise indicated.
6 requiring CenturyLink to disclose attributable revenue in a usable and understandable form. The
special master noted that CenturyLink consistently referred to the manner in which revenue data
was parsed in Aurora, and found that the data in Aurora did not meet the requirements of the
court’s order. The special master concluded that CenturyLink must produce a “roadmap” of the
data to comply with the order.
CenturyLink objected to the special master’s preliminary report, arguing that the Cities had
all the information needed to compute damages, and that the Cities should have asked CenturyLink
to create a roadmap instead of filing a contempt motion. After receiving briefs, the court adopted
the special master’s preliminary report in its entirety. The court agreed that CenturyLink’s failure
to comply with the court’s order could not be cured by reference to the data produced in Aurora.
On May 20, 2019, the special master ordered CenturyLink to comply with the court’s
October 10, 2017 order. The circuit court adopted the order on June 18. On July 3, CenturyLink
filed a memorandum purporting to outline its compliance with the special master’s order and
continuing to cite the procedures followed in Aurora.
The Cities filed a motion for sanctions pursuant to Rule 61 on September 4, 2019. The
Cities argued that CenturyLink repeated already-rejected arguments, did not comply with the
court’s orders, and consistently violated the orders for years. CenturyLink opposed the motion,
and the matter was argued to the circuit court. On December 27, the court entered an order finding
that the only sanction warranted under this “extreme set of circumstances” was to strike
CenturyLink’s pleadings and affirmative defenses as related to damages, and thus to prohibit
CenturyLink from offering evidence at the damages hearing on October 6, 2020.
On March 4, 2020, the Cities filed another motion pursuant to Rule 61 for attorneys’ fees
and costs they incurred in the lengthy discovery disputes. CenturyLink opposed the motion,
7 arguing that deposition testimony established that the data disclosed by CenturyLink was used by
the Cities’ accounting expert to calculate damages. CenturyLink again invoked Aurora as a basis
to deny the Cities’ motion. On June 23, 2020, the court denied the motion on the basis that the
previously imposed sanctions were sufficient.
Judgment
The circuit court entered its final order and judgment on June 3, 2021. The court took
judicial notice of its file, including all of the court’s previous orders, the special master’s orders,
and the numerous discovery motions. The court repeated that the license tax ordinances tax,
without exception, all of the gross receipts CenturyLink receives from providing telephone service
in each city and held, “Defendants must pay a license tax on all of their gross receipts attributable
to Defendants’ business in the Cities.” The court found that CenturyLink unjustifiably excluded
certain revenue categories when calculating and paying license taxes. The Cities’ license taxes
were self-reporting, meaning the information necessary to calculate them was solely in
CenturyLink’s control. The court concluded that CenturyLink failed to satisfactorily comply with
any of the court’s orders to disclose data related to its gross revenue and receipts.
The court also observed that the ability of the Cities’ accounting expert to calculate
damages with data provided by CenturyLink did not excuse CenturyLink’s non-compliance and
did not mean the Cities were not prejudiced. The court determined that the damages period began
in 2007 and that the Cities’ status as putative class members in O’Fallon tolled the statute of
limitations for their claims against CenturyLink. The court imposed a penalty on CenturyLink
under Section 144.250 for its willful refusal to pay the taxes owed under the ordinances.
The court awarded damages to Columbia and Joplin in unpaid license taxes; pre-judgment
interest; post-judgment interest pursuant to Section 408.040; a five percent penalty under Sections
8 71.625 and 144.250; and a total of $813,085.92 in attorneys’ fees, costs, and expenses to the Cities
pursuant to Sections 392.350 and 527.100, and Rule 61. Judgment was entered for Columbia in
the amount of $53,802,060.70, and for Joplin in the amount of $1,153,678.23, for unpaid license
taxes, interest, penalties, attorneys’ fees, and expenses. The court incorporated all of its previous
rulings and dispositive orders into the judgment. This appeal follows.
Discussion
CenturyLink raises nine points on appeal, many of which we consider in combination.
Points I-V: Summary Judgment and Damages
In Points I and II, CenturyLink argues the circuit court erred in granting partial summary
judgment to the Cities because (1) the plain language of the license tax ordinances imposes a tax
on gross revenue for “local exchange service” from “telephones located within the city limits” of
Columbia, and on gross receipts for “exchange telephone service” sold to “consumers within the
present or future boundaries” of Joplin, as opposed to all revenue and receipts received by
CenturyLink in each city; and (2) the Cities, by failing to show that all disputed revenues were
taxable under the ordinances, did not demonstrate the absence of a genuine issue of material fact.
CenturyLink argues in Points III, IV, and V that the circuit court erred in awarding damages
to the Cities. Points III and IV repeat substantially the same arguments raised in Points I and II.
Point V avers that damages for unpaid taxes incurred before November 20, 2009 fell outside the
applicable five-year statute of limitations and the statute was not tolled.
A. Standard of Review
We review summary judgment de novo. Kroner Invs., LLC v. Dann, 583 S.W.3d 126, 128
(Mo. App. E.D. 2019). A circuit court’s order granting summary judgment will be affirmed on
9 appeal if there is no genuine issue of material fact and the moving party is entitled to judgment as
a matter of law. Id. We review the record in the light most favorable to the non-moving party. Id.
B. Discussion
The interpretation of a municipal ordinance is a question of law that is reviewed de novo,
and questions of law are matters for the independent judgment of the reviewing court. See Aurora,
592 S.W.3d at 784; HHC Med. Grp., P.C. v. City of Creve Coeur Bd. of Adjustment, 99 S.W.3d
68, 71 (Mo. App. E.D. 2003). We use the same rules governing statutory interpretation to interpret
a city ordinance. City of St. Peters v. Roeder, 466 S.W.3d 538, 543 (Mo. banc 2015); New Life
Evangelistic Ctr. v. City of St. Louis, 564 S.W.3d 665, 685 (Mo. App. E.D. 2018). “The primary
rule of statutory interpretation is to give effect to legislative intent as reflected in the plain language
of the statute.” Kehlenbrinks v. Dir. of Revenue, 577 S.W.3d 798, 800 (Mo. banc 2019) (quoting
State ex rel. Young v. Wood, 254 S.W.3d 871, 872-73 (Mo. banc 2008)). Words contained in an
ordinance should be given their plain and ordinary meaning. HHC, 99 S.W.3d at 71.
CenturyLink argues that the partial summary judgment on liability ignores the plain
language of the license tax ordinances and erroneously expands the Cities’ tax bases. CenturyLink
further argues that the circuit court’s order conflicts with Supreme Court precedent in Aurora by
disregarding qualifying language in both ordinances that limits taxable revenue and receipts.
In Aurora, our Supreme Court analyzed whether CenturyLink’s carrier access revenue and
revenue derived from interstate telephone calls were taxable under the license tax ordinances of
the cities of Aurora, Cameron, Oak Grove, and Wentzville. 592 S.W.3d at 795-96. As in this case,
the cities in Aurora argued that the phrase “gross receipts” includes all receipts without deduction.
Id. at 795. The Supreme Court rejected that argument as ignoring the qualifying language of the
ordinances. Id. Aurora’s and Cameron’s license tax ordinances included the qualifying phrase
10 “derived from the furnishing of such service within said City.” Id. at 796. Similarly, the Oak Grove
and Wentzville license tax ordinances were qualified by the phrases “in the City” and “from such
business.” Id. The Supreme Court concluded that the Aurora circuit court properly accounted for
the qualifying language, heard evidence as to where the revenue was derived, and determined
certain revenue sources were not taxable. Id. at 797. In doing so, the Supreme Court reminded us
to give meaning to “all words, clauses, and phrases” of an ordinance. 592 S.W.3d at 796 (citing
Barry Simon Dev., Inc. v. Hale, 210 S.W.3d 312, 317 (Mo. App. E.D. 2006)).
To the extent the Cities acknowledge the qualifying language, they effectively urge us to
ignore it by construing the ordinances to render all revenue, derived from any business not entirely
outside the Cities, taxable. But this Court’s role is to interpret the law, not to amend it. See Li Lin
v. Ellis, 594 S.W.3d 238, 244 (Mo. banc 2020) (“[T]his Court, under the guise of discerning
legislative intent, cannot rewrite the statute . . ..” (internal quotation omitted)); State ex rel.
Vandenboom v. Bd. of Zoning Adjustment of Kansas City, 633 S.W.3d 446, 458 (Mo. App. W.D.
2021) (“In interpreting laws, we are not authorized to re-write them in contravention of the plain
language effected by the legislative body in enacting them.”). The Cities, by contrast, generally
are free to amend their own ordinances.
Like the ordinances in Aurora, the Cities’ ordinances contain qualifying language that must
be given meaning, and not all gross revenue and receipts in each city are taxable. The plain and
ordinary meaning of Columbia’s ordinance is that revenue only from “local exchange service from
telephones located within the city limits” is taxable. Columbia Code § 26-121(a). In Joplin, receipts
only from the sale of “services to consumers within the present or future boundaries of the city”
11 are taxable. 3 Joplin City Code § 30-143. Thus, the Cities are not entitled to judgment as a matter
of law.
Given our conclusion that not all of CenturyLink’s gross revenue and receipts in each city
are taxable pursuant to the ordinances, the Cities bore the burden on summary judgment to show
there was no genuine issue of material fact regarding which of CenturyLink’s revenue and receipts
were taxable. See Green v. Fotoohighiam, 606 S.W.3d 113, 116 (Mo. banc 2020) (stating that,
under Rule 74.04, the party moving for summary judgment must establish there is no genuine
dispute as to those material facts on which it would have the burden of persuasion at trial). Because
the Cities’ position was that all of CenturyLink’s gross revenue and receipts were taxable, they
presented no evidence regarding the taxability of any particular category of revenue or receipts.
Therefore, various genuine issues of material fact persist regarding CenturyLink’s taxable
gross revenue and receipts. Examples include the issues of which of CenturyLink’s services were
local exchange service and which were not, which services were from telephones located within
the Columbia city limits, which services were sold to consumers within the boundaries of Joplin,
and ultimately the mixed question of which of CenturyLink’s gross revenue and receipts are
taxable. These are genuine issues of material fact for determination on remand.
Points I and II are granted. The partial summary judgment in favor of the Cities is reversed.
Accordingly, we must also reverse the resulting judgment awarding damages, interest, and
penalties in favor of the Cities, rendering CenturyLink’s damages arguments in Points III and IV
3 CenturyLink further would have us hold that receipts only from “exchange telephone service” are taxable under Joplin’s ordinance. In this respect, CenturyLink is guilty of ignoring the plain language of the ordinance. Joplin City Code § 30-143 refers generally to “services.” The phrase “exchange telephone service” does not appear in § 30-143 and therefore does not qualify the receipts taxable under that section. Instead, the phrase appears in § 30-141, which defines a “public utility” as “any person furnishing exchange telephone service.” CenturyLink undisputedly furnishes exchange telephone service and is a public utility subject to taxation pursuant to the terms of § 30-143, but that does not limit the taxable “services” under § 30-143 to “exchange telephone service.”
12 moot. See Morgan v. State Farm Fire and Cas. Co., 344 S.W.3d 771, 781 (Mo. App. S.D. 2011).
Points III and IV are denied as moot.
In Point V, CenturyLink additionally challenges the judgment awarding damages on the
basis that the Cities’ putative membership in the O’Fallon class action did not toll the statute of
limitations. Though this point likewise is moot, we choose to address CenturyLink’s argument
because it likely will come up again on remand if any damages are to be assessed. See Morgan,
344 S.W.3d at 781-82 (stating we address only moot points that present a recurring unsettled legal
issue or that are likely to come up again on remand).
CenturyLink’s argument is refuted by controlling caselaw. Putative membership in a
Missouri class action lawsuit tolls the statute of limitations. See Rolwing v. Nestle Holdings, Inc.,
437 S.W.3d 180, 184 (Mo. banc 2014) (“The only recognized equitable tolling principles apply
when the plaintiff was prevented from timely filing suit by . . . other pending litigation.”); Hyatt
Corp. v. Occidental Fire & Cas. Co. of N.C., 801 S.W.2d 382, 389 (Mo. App. W.D. 1990) (“These
class action complaints tolled the statute of limitations on behalf of all putative [class members],
including those who subsequently filed their own actions or settled individual claims during the
pendency of the . . . class action.” (emphasis in original)). CenturyLink’s reliance on Rolwing is
misplaced, as that case dealt with a pending class action lawsuit in a different jurisdiction, which
is not a basis for tolling under Missouri law. 437 S.W.3d at 184. Point V is denied.
We reverse the partial summary judgment and the judgment awarding damages, interest,
and penalties. We remand the case to the circuit court for further proceedings consistent with this
opinion, so that the parties may fully litigate all genuine issues of material fact, any unpaid license
tax, and the remedy therefore.
Point VI: Sanctions
13 In Point VI, CenturyLink argues the circuit court abused its discretion in striking
CenturyLink’s pleadings, including affirmative defenses, related to damages and prohibiting
CenturyLink from presenting evidence at the damages hearing. CenturyLink maintains that it
engaged in good-faith attempts to comply with overbroad discovery orders, the Cities were not
prejudiced, and the sanctions were extreme.
Circuit courts have broad discretion in controlling discovery, including the choice of
sanctions for non-disclosure of discovery. Carmed 45, LLC v. Huff, 630 S.W.3d 842, 856 (Mo.
App. E.D. 2021). A circuit court’s imposition of sanctions is reviewed for abuse of discretion. Id.
We defer to the circuit court’s factual findings. Hoock v. SLB Acquisitions, LLC, 620 S.W.3d 292,
301 (Mo. App. E.D. 2021).
While circuit courts have broad discretion in sanctioning discovery violations, a limiting
principle is that sanctions should be constrained to those required to accomplish the purposes of
discovery. Carmed 45, 630 S.W.3d at 856 (citing Dorsch v. Family Med., Inc., 159 S.W.3d 424,
439 (Mo. App. W.D. 2005)). Rule 61.01(d)(2) provides that a circuit court may strike a non-
compliant party’s pleadings, though Missouri courts generally consider that a harsh sanction.
Frontenac Bank v. GB Invs., LLC, 528 S.W.3d 381, 390 (Mo. App. E.D. 2017). Striking a party’s
pleadings is not an abuse of discretion when (1) the party engaged in a pattern of repeated disregard
of the obligation to comply with discovery rules, “i.e., the party has demonstrated a contumacious
and deliberate disregard for authority of the trial court;” and (2) the other party was prejudiced. Id.
In its December 27, 2019, sanctions order, the circuit court found that CenturyLink’s
failure to provide discovery required by the court and the special master, continuous objections to
14 the court’s rulings, and dubious representations that it had complied with the court’s orders were
“willful and wanton.” CenturyLink’s conduct delayed the proceedings by necessitating numerous
motions to compel, motions for sanctions, and rulings by the circuit court and the special master
ordering CenturyLink to comply with discovery orders. The court further found that the Cities
were prejudiced by this conduct by CenturyLink. The court sanctioned CenturyLink under this
“extreme set of circumstances,” pursuant to Rule 61. In its final judgment of June 3, 2021, the
circuit court recalled that CenturyLink’s “recalcitrance” necessitated the court’s appointment of
the special master and the Cities’ engagement of an expert witness to calculate CenturyLink’s tax
liability, despite that the court ordered CenturyLink to disclose its revenue and calculate its tax
liability in its October 10, 2017 order. The court’s factual findings regarding CenturyLink’s
conduct and the resulting prejudice to the Cities are entitled to our deference. See Hoock, 620
S.W.3d at 301.
On a cautionary note, CenturyLink’s failures to comply with the circuit court’s discovery
orders are not excused by our conclusions that the circuit courts’ interpretation of the ordinances
was overbroad and that, as a consequence, its discovery orders required CenturyLink to disclose
revenue and receipts not taxable. It should go without saying that a party may not refuse to comply
with a circuit court’s discovery order because it is convinced the order is objectionable, even if
upon later review the order proves to have been objectionable. See Rule 61.01(a) (“Any failure to
act described in this Rule 61 may not be excused on the ground that the discovery sought is
objectionable unless the party failing to act has served timely objections to the discovery request .
. ..”); Carmed 45, 630 S.W.3d at 857 (observing that, after appellant resisted providing discovery,
moved to stay discovery, and argued the requests were overbroad, “Rule 61.01(a) provided that
15 [appellant’s] failures to respond may not be excused on the ground that discovery sought was
objectionable.”). These sanctions, though harsh, were not an abuse of the circuit court’s discretion.
Point VI is denied. The circuit court’s order imposing sanctions striking CenturyLink’s
previous pleadings, including affirmative defenses, related to damages and prohibiting
CenturyLink from offering evidence at the damages hearing is affirmed. Those sanctions were
constrained to past pleadings and the damages hearing of October 6, 2020, and will not inhibit
future pleadings or proceedings on remand. Our sense is that no further sanction for CenturyLink’s
previous non-compliance with the circuit court’s discovery orders is required to accomplish the
purposes of discovery. Whether some other sanction becomes necessary to redress any future non-
compliance by CenturyLink remains within the broad discretion of the circuit court. See Carmed
45, 630 S.W.3d at 856.
Points VII-IX: Attorneys’ Fees and Expenses
Finally, CenturyLink argues in Points VII, VIII, and IX that the circuit court abused its
discretion in awarding the Cities attorneys’ fees and expenses. CenturyLink argues in Point VII
that the circuit court erroneously determined that CenturyLink’s interpretation of the ordinances
was unjustifiable, in Point VIII that the Cities lacked standing in that they are not “persons” or
“corporations” under Section 392.350, and in Point IX that the imposition of additional Rule 61
sanctions in the form of attorneys’ fees was unnecessary to accomplish the purposes of discovery.
We review the circuit court’s award of attorneys’ fees and expenses for abuse of discretion.
Selleck v. Keith M. Evans Ins., Inc., 535 S.W.3d 799, 783 (Mo. App. E.D. 2017).
16 In its order granting partial summary judgment, the circuit court found that CenturyLink’s
underreporting and underpaying of license taxes was willful in violation of Section 392.350. The
court ordered CenturyLink to pay attorneys’ fees and expenses to the Cities pursuant to Sections
392.350, 488.472, and 527.100. Thereafter, the Cities moved pursuant to Rule 61 for an award of
attorneys’ fees as an additional sanction for CenturyLink’s discovery intransigence. The court
denied the Rule 61 motion because the previously imposed sanctions of striking CenturyLink’s
pleadings and prohibiting it from presenting evidence at the damages hearing were sufficient. In
its final judgment, the court nonetheless awarded attorneys’ fees, costs, and expenses under
Sections 392.350 and 527.100, and as a further sanction under Rule 61.
CenturyLink argues in Point VII that the circuit court incorrectly determined that
CenturyLink’s interpretation of the ordinances was unjustifiable because the court wrongly
interpreted the ordinances to tax all gross revenue and receipts. Section 392.350 provides that a
circuit court may impose attorneys’ fees on a telecommunications company that commits any
unlawful act or omits to do any act required by Chapter 392 if such an act or omission was
“willful.” Section 488.472 contains substantially the same “willful” standard, and Section 527.100
permits a circuit court to award costs “as may seem equitable and just.”
Missouri courts follow the American rule that each party generally bears the costs of its
own attorneys’ fees. Aurora, 592 S.W.3d at 790 (citing Tupper v. City of St. Louis, 468 S.W.3d
360, 374 (Mo. banc 2015)). The term “willful” is not defined in either Section 392.350 or 488.472,
but Missouri courts have interpreted the term for purposes of Section 392.350 as “intentionally
acting, knowing it was incorrect, or acting without any reasonable basis.” Aurora, 592 S.W.3d at
790; see Overman v. Sw. Bell Tel. Co., 706 S.W.2d 244, 257 (Mo. App. 1986).
17 In Aurora, as here, the cities asserted that attorneys’ fees awarded pursuant to Sections
392.350, 488.472, and 527.100 were necessary because CenturyLink intentionally underpaid and
underreported license taxes knowing that doing so was unlawful. 592 S.W.3d at 790. There, and
here, that assertion was based on the mistaken premise that no category of revenue was excludable
from the gross revenue and receipts used to calculate license taxes. Id. at 790-91. Because that
premise was incorrect, the Aurora court reversed the award of attorneys’ fees. Id. at 791-92. We
likewise are compelled to reverse the award of attorneys’ fees and expenses pursuant to Sections
392.350, 488.472, and 527.100. Point VII is granted. 4
Finally, in Point IX, CenturyLink argues the circuit court abused its discretion in awarding
attorneys’ fees, costs, and expenses as a sanction pursuant to Rule 61 in its final judgment. We
already have held that the sanctions of striking CenturyLink’s damages pleadings, including its
affirmative defenses, and prohibiting it from presenting evidence at the October 6, 2020 damages
hearing, though harsh, were not an abuse of discretion. Regarding the increased sanctions of
attorneys’ fees, costs, and expenses pursuant to Rule 61, the circuit court was right the first time
in denying the Cities’ motion. In its June 23, 2020 order, the court explained that it previously
awarded sanctions for the same issues raised in the Cities’ motion and found those sanctions
sufficient. The later award of attorneys’ fees, costs, and expenses in the circuit court’s final
judgment was not directed at any additional, distinct discovery violation and, at that late stage, was
not required to accomplish the purposes of discovery. See Carmed 45, 630 S.W.3d at 856; Rule
61.01(d)(4). Point IX is granted.
4 CenturyLink raises an alternative standing theory in Point VIII for reversing the circuit court’s award of attorneys’ fees in the partial summary judgment order. Because we reverse the award of attorneys’ fees on the grounds raised in Point VII, we need not address CenturyLink’s alternative theory in Point VIII. See generally Clippard v. Clippard, 642 S.W.3d 761, 765-66 (Mo. App. S.D. 2022) (citing O’Hare v. Permenter, 113 S.W.3d 287, 289 n.2 (Mo. App. E.D. 2003)).
18 The judgment of the circuit court awarding attorneys’ fees, costs, and expenses to the Cities
is reversed. 5
Conclusion
The partial summary judgment on liability in favor of the Cities and the resulting judgment
awarding damages, interest, and penalties in favor of the Cities are reversed. In addition, the orders
awarding attorneys’ fees, costs, and expenses are reversed. The case is remanded to the circuit
court so that the parties may fully litigate all genuine issues of material fact, any unpaid license
The circuit court’s discrete order sanctioning CenturyLink by striking solely its past
pleadings, including affirmative defenses, related to damages and prohibiting CenturyLink from
offering evidence at only the October 6, 2020 damages hearing is affirmed. Those sanctions were
constrained to past pleadings and the damages hearing of October 6, 2020, and will not inhibit
future pleadings or proceedings on remand.
We affirm the judgment of the circuit court in part, reverse in part, and remand the case for
Cristian M. Stevens, J.
Sherri B. Sullivan, P.J., and Kurt S. Odenwald,J.,concur.
5 The Cities filed a motion for attorneys’ fees on appeal for the same reasons the circuit court awarded attorneys’ fees. We took the motion with the case. Because we reverse the circuit court’s award of attorneys’ fees, we also deny the Cities’ motion for attorneys’ fees on appeal. See Aurora, 592 S.W.3d at 801 (quoting Vogt v. Emmons, 181 S.W.3d 87, 97 (Mo. App. E.D. 2005), for proposition that “the entitlement to attorneys’ fees on appeal stands upon the same ground as that at the trial court level”).