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Normand v. Mr. Mudbug, Inc.

Court of Appeals of Louisiana, Fifth Circuit

December 30, 2019

NEWELL NORMAND, SHERIFF AND EX-OFFICIO TAX COLLECTOR FOR THE PARISH OF JEFFERSON
v.
MR. MUDBUG, INC. AND MICHAEL J. MAENZA

          ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH OF JEFFERSON, STATE OF LOUISIANA NO. 742-546, DIVISION "C" HONORABLE JUNE B. DARENSBURG, JUDGE PRESIDING

          COUNSEL FOR PLAINTIFF/APPELLEE, JOSEPH P. LOPINTO, III, SHERIFF AND EX-OFFICIO TAX COLLECTOR FOR THE PARISH OF JEFFERSON, SUCCESSOR IN OFFICE TO FORMER JEFFERSON PARISH SHERIFF NEWELL NORMAND KENNETH C. FONTE

          COUNSEL FOR DEFENDANT/APPELLANT, MR. MUDBUG, INC. CHARLES V. CUSIMANO, III MICHAEL G. GAFFNEY CHRISTOPHER M. GAFFNEY

          Panel composed of Judges Fredericka Homberg Wicker, Jude G. Gravois, and Robert A. Chaisson

          JUDE G. GRAVOIS JUDGE

         JGG

         FHW

         RAC

         Appellant, Mr. Mudbug, Inc. ("Mr. Mudbug"), a business operating in Jefferson Parish, appeals a January 28, 2019 trial court judgment in favor of Newell Normand, Sheriff and Ex-Officio Tax Collector for the Parish of Jefferson ("Collector"), finding Mr. Mudbug liable to the Collector for use taxes for the tax periods January 2007 through June 2009.[1] On appeal, Mr. Mudbug argues that the trial court erred in ruling that Mr. Mudbug was precluded from asserting any defenses to the Collector's Rule for Taxes at the trial on the merits of the matter. Mr. Mudbug asks that the judgment under review be reversed and the matter be remanded for a trial on the merits of the matter wherein it may assert its affirmative defenses to the Collector's Rule for Taxes.

         For the following reasons, after benefit of review of the full appellate record and a previous writ application filed with this Court, we find merit to Mr. Mudbug's arguments on appeal. Accordingly, the trial court's January 28, 2019 judgment is hereby vacated and the matter is remanded to the trial court for further proceedings consistent with this opinion.

         PROCEDURAL HISTORY

         On June 16, 2014, the Collector sent Mr. Mudbug a Notice of Delinquent Taxes and Civil Enforcement. On June 26, 2014, Mr. Mudbug responded to the Notice, claiming that the taxes in question had prescribed. On September 17, 2014, the Collector filed in the Twenty-fourth Judicial District Court a Rule for Taxes, a summary proceeding, against Mr. Mudbug and Michael J. Maenza, [2] as authorized by La. R.S. 47:337.61. Therein, the Collector alleged that Mr. Mudbug had failed to remit use taxes during the monthly tax periods from January 2006 through June 2009, inclusive. The Rule additionally claimed that Mr. Mudbug was liable to the Collector for statutory interest, penalties, attorney's fees, and costs. The petition attached a two-page "Case Summary" showing a total balance due of $99, 289.79, as well as an affidavit from the Collector's Office as required by La. R.S. 47:337.61.

         As per the requirements of La. R.S. 47:337.61(2), Mr. Mudbug filed Exceptions of Vagueness and Prescription and Answer/Opposition to Rule with Affirmative Defenses, detailing ten affirmative defenses to the Rule.[3] The exception of prescription argued that the taxes sought had all prescribed under the three-year prescriptive periods of La. Const. art. VII, §16 and La. R.S. 33:2718.4, again claiming that the taxpayers "have not heard from the Parish on this matter in almost 4 years."

         The events of "almost 4 years" ago referred to by Mr. Mudbug in its Answer began when the Collector sent Mr. Mudbug a proposed use tax assessment on September 22, 2010. On October 11, 2010, Mr. Mudbug protested the proposed assessment and requested a hearing before the Collector. According to the pleadings, a hearing on the protest was held on October 28, 2010. On October 29, 2010, a Notice of Delinquent Taxes - Formal Assessment was issued to Mr. Mudbug by the Collector under La. R.S. 47:337.51, which was delivered to Mr. Mudbug on November 1, 2010. The Notice of Delinquent Taxes - Formal Assessment, which complied with statutory requirements in effect at the time, informed Mr. Mudbug that it had three options, one of which must be exercised within 60 calendar days: pay the assessment in full, request a hearing with the Collector, or pay the assessment under protest in accordance with La. R.S. 47:337.63. The record indicates that the parties were in contact in November of 2010 several times, conducting further business regarding the formal assessment.[4]

         On December 28, 2010, Mr. Mudbug hand delivered its request for a hearing, as per the October 29, 2019 notice of formal assessment, to the Collector. The Collector's records contain a letter to Mr. Mudbug's counsel dated January 4, 2011, stating that it found Mr. Mudbug's request for a hearing untimely, but that it would schedule a meeting between the parties on January 26, 2011. However, Mr. Mudbug has since maintained, in both its correspondence to the Collector after receiving the Notice of Delinquent Taxes in June of 2014, and after being served with the Rule for Taxes in September of 2014, and in its answer and exceptions to the Rule for Taxes, that it had not received any further communication from the Collector after it hand delivered its request for a hearing on December 28, 2010.[5]Both Ms. Jeannine Theriot's testimony at a later hearing on the exception of prescription and the Collector's records confirm that Mr. Mudbug did not appear for the January 26, 2011 meeting offered in the January 4, 2011 letter, nor did Mr. Mudbug contact the Collector's Office in any way regarding the proposed meeting, despite earlier regular correspondence between the parties from the date of the proposed assessment (September 22, 2010). The record as a whole indicates that there was no further contact between the parties until June of 2014, "almost 4 years" later, when Mr. Mudbug received the Collector's Notice of Delinquent Taxes and Civil Enforcement, prior to the Rule for Taxes being filed on September 17, 2014, as previously stated.[6]

         On June 28, 2016, almost two years after the Rule for Taxes was filed, the Collector filed a Motion to Set Hearing on the Rule for Taxes, in accordance with La. R.S. 47:337.61.[7] By joint order, the exceptions of vagueness and prescription were bifurcated from the issues raised in the answer and affirmative defenses, and the matter was set for a hearing on August 1, 2016. However, on that date, the parties held a status conference instead, and the matter was set for trial on the merits on September 20, 2016.[8] On joint motion of the parties, Mr. Mudbug's exceptions of vagueness and prescription were set for hearing on September 9, 2016. The Collector filed an opposition to the exceptions.

         Mr. Mudbug withdrew its exception of vagueness prior to the hearing. The parties appeared for a hearing on September 9, 2016 solely on the exception of prescription. The court allowed the parties to file post-hearing memoranda. The trial court rendered judgment on October 26, 2016, denying Mr. Mudbug's exception of prescription.

         Mr. Mudbug thereafter filed an application for supervisory writs with this Court seeking this Court's supervisory review of the trial court's denial of its exception of prescription. On April 4, 2017, this Court granted the writ in part and denied the writ in part, finding that the taxes from 2006 were prescribed, but that the taxes from January 2007 through June 2009 were not prescribed. Normand v. Mr. Mudbug, Inc. et al, 16-742 (La.App. 5 Cir. 4/4/17) (unpublished writ decision). Thereafter, the record shows no activity took place in this case for approximately fifteen months until July 26, 2018, when the Collector filed a Motion to Set for Hearing on its Rule for Taxes. The Rule was heard on January 28, 2019, with the trial court rendering judgment in favor of the Collector, specifically ...


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