Lafayette Parish School Board v. Reginald Simmons

• Court: Louisiana Court of Appeal
• Decided: March 17, 2010
• Docket: CA-0009-0926
• Status: Unknown

Opinion

STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT

09-926

LAFAYETTE PARISH SCHOOL BOARD

VERSUS

REGINALD SIMMONS, ET AL.

********** APPEAL FROM THE FIFTEENTH JUDICIAL DISTRICT COURT PARISH OF LAFAYETTE, NO. C-20085682 HONORABLE PATRICK L. MICHOT, PRESIDING **********

SYLVIA R. COOKS JUDGE

**********

Court composed of Sylvia R. Cooks, Marc T. Amy, and Elizabeth A. Pickett, Judges.

Amy, J., concurs in the result.

Pickett, J., concurs in the judgment.

REVERSED.

J. Michael Wooderson Cassie L. Willis 903 West University Avenue P.O. Box 53516 Lafayette, LA 70505-3516 (337) 234-5919 COUNSEL FOR PLAINTIFF/APPELLEE: Lafayette Parish School Board

Raymond Simmons 1606 Scenic Highway Baton Rouge, LA 70802 (225) 383-3675 COUNSEL FOR DEFENDANT-APPELLANT: Reginald Simmons COOKS, Judge.

Defendant, Reginald Simmons, appeals the judgment of the trial court finding

him personally liable for a failure to pay taxes and casting him in judgment for

$12,468.52, along with penalties, interest, and ten percent attorney fees. For the

following reasons, we reverse the trial court’s judgment.

FACTS AND PROCEDURAL HISTORY

Defendants, Reginald Simmons and A.J.S. Investments, LLC opened up the

restaurant, the Original Italian Pie in the Parish of Lafayette, Louisiana. According

to the Lafayette Parish School Board (hereafter School Board), defendants failed to

pay taxes for the months of October 2007 through April 2008. After April 2008, the

Original Italian Pie was no longer in business. The record reflects that AJS

Investments filed for bankruptcy on February 22, 2008.

When taxes for the Original Italian Pie were not reported or remitted, the

School Board’s Sales and Use Tax Collection Division issued a Notice of Assessment

in accordance with La.R.S. 47:337.51, which required action on the part of the

defendants within sixty days. A failure to act within the sixty day period results in

a final enforceable assessment. Mr. Simmons refused to accept the Notice of

Assessment.

Following defendants failure to act after receipt of the Notice of Assessment,

in accordance with the Lafayette Parish School Board Sales and Use Tax Ordinance

the School Board filed a petition to collect after assessing defendants for the

delinquent period. The amount of taxes due was estimated in excess of $12,000.00,

in addition to a five (5%) percent penalty for each thirty days in delinquency, not to

exceed twenty-five (25%) percent in aggregate of the tax due. Although the petition

listed both Mr. Simmons and AJS Investments as defendants, at the hearing the

-1- School Board sought judgment solely against Mr. Simmons personally.

A hearing on the matter was held. After considering the arguments of the

respective parties, the trial court rendered judgment against “Defendants, Reginald

Simmons d/b/a The Original Italian Pie” for the sum of $12,468.52, along with

penalties and interest as provided by law, and ten percent attorney fees. Mr. Simmons

perfected an appeal to this court, and contends any judgment against the business and

corporation does not automatically amount to personal liability of the corporate

officer, without proof of collection of the taxes and a willful failure to remit same.

For the following reasons, we reverse the trial court’s judgment.

ANALYSIS

The issue in this appeal is whether the trial court properly applied La. R.S.

47:336.46 which provides as follows:

A. Notwithstanding any other provision of law to the contrary, if any corporation, limited liability company, or limited partnership fails to file returns or to remit the sales and use taxes collected from purchasers or consumers under the local ordinance and this Chapter, the collector is authorized, as an alternative means of enforcing collection, to hold those officers or directors, or those managers or members as defined in R.S. 12:1301(A)(12) and (13), having direct control or supervision of such taxes or charged with the responsibility of filing such returns and remitting such taxes and who willfully fail to remit or account for such taxes collected, personally liable for the total amount of such taxes collected, and not accounted for or not remitted, together with any interest, penalties, and fees accruing thereon. Collection of the total amount due may be made from any one or any combination of such officers or directors, or managers or members as defined in R.S. 12:1301(A)(12) and (13) who willfully fail to remit or account for such taxes collected, by use of any of the alternative remedies for the collection of taxes as provided in R.S. 47:337.45.

B. A corporation, limited liability company, or limited partnership by resolution of the board of directors or members may designate an officer or director, or a manager or member as defined in R.S. 12:1301(A)(12) and (13) having direct control or supervision of such taxes or charged with the responsibility of filing such returns and remitting such taxes, and such resolution shall be filed with the secretary

-2- of state.

To prevail under La.R.S. 47:337.46(A), the School Board had to prove by a

preponderance of the evidence two essential elements of its cause of action: (1) That

the taxes were in fact “collected” and, (2) the defendant “willfully” failed to remit the

taxes. See Bergeron v. Albert, 02-1955 (La.App. 1 Cir.11/21/03), 861 So.2d 269, writ

denied, 04-206 (La. 3/26/04), 871 So.2d 351. We are satisfied the evidence in this

record is insufficient to prove the essential elements needed to shackle Mr. Simmons

with personal responsibility for the business failure to file and remit the claimed sales

and use taxes. It is a well-settled premise that taxing statutes must be strictly

construed against the taxing authority. Goudchaux/Maison Blanche, Inc. v.

Broussard, 590 So.2d 1159 (La.1991).

Patrick Lewis, an auditor for the School Board, testified specifically that taxes

due from October 2007 through April, 2008 were not paid. However, there was no

testimony from Mr. Lewis as to whether taxes were actually collected at the Original

Italian Pie; and, if they were, for what periods of time. Mr. Simmons testified the

restaurant was out of business by February, 2008; thus, no taxes could have been

collected from that point. The School Board presented nothing to contradict that

testimony.

The cases cited by the School Board below in support of its position are

factually distinguishable from the present case. In Bergeron, 861 So.2d 269, there

was no question that the taxes had in fact been collected. Second, the majority found

the willfullness component was satisfied because rather than delivering the taxes to

the State, Mr. Albert, the defendant corporate officer, diverted those funds to a sister

corporation by way of a “refund.” The majority noted that the trial court specifically

set forth in its reasons for judgment that the taxes in question “were collected” and

-3- “failed to be remitted willfully.” Thus, the appellate court found there was “a

reasonable factual basis for the finding of the trial court.” Here the trial judge did not

provide any reasons to support its ruling in favor of the Board either in the judgment

or at the hearing on the matter.

The School Board also cited State v. DeJesus, 94-261 (La.9/16/94), 642 So.2d

854, 857. In that case, the supreme court noted the State can proceed against

“officers or directors who possessed significant responsibility for the tax-making

decisions of that business entity.” Id. at 857. The court also noted that to impose

personal liability on an officer or director, he or she must willfully fail to remit such

collected taxes. There was no question the Defendant corporate officer in DeJesus

collected taxes and willfully failed to pay them. His home was raided and over

$135,000.00 in cash was seized from his home. DeJesus also is factually

distinguishable from the instant case. The record is devoid of any evidence that Mr.

Simmons actually collected taxes and willfully failed to remit them.

Considering that taxing statutes are strictly construed against the taxing

authority, we do not find, under the facts of this case, that the School Board met its

burden of showing the taxes were collected and willfully not remitted. Therefore, the

trial court’s judgment in favor of the School Board is reversed.

DECREE

For the following reasons, the judgment of the trial court is reversed. All costs

of this appeal are assessed against Plaintiff-Appellee, the Lafayette Parish School

Board.

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