Title: PETER KIEWIT SONS v DEPT OF REVE

State: montana

Issuer: Montana Supreme Court

Document:

No. 12754 I N T H E S U P R E M E C O U R T O F THE STATE O F M O N T A N A 1974 PETER KIEWIT S O N S ' CO. , a Corporation, P l a i n t i f f and Appellant, D E P A R T M E N T O F REVENUE and t h e T A X APPEAL BOARD O F T H E STATE O F M O N T A N A , J. M O R L E Y COOPER, Chairman, H E L E N PETERSON and R A Y J. WAYRYNEN, a s members thereof, Defendants and Respondents. Appeal from: D i s t r i c t Court of the F i r s t J u d i c i a l D i s t r i c t , Honorable Peter G. Meloy, Judge presiding. Counsel of Record : For Appellant : Garlington, Lohn and Robinson, Missoula , Montana Lawrence F. Daly argued and Sherman V. Lohn appeared, Missoula, Montana. For Respondents : Terence B. Cosgrove argued, Helena, Montana Poore, McKenzie & Roth, Butte, Montana Robert A. Poore argued, Butte, Montana Submitted: September 11, 1974 Decided: fEB 2 1 1975 Filed : e&B 2 1 1975 !&.Justice Wesley Castles delivered t h e Opinion of t h e Court. This is a n appeal by p l a i n t i f f from a summary judgment f o r defendant granted a f t e r a hearing. On January 10, 1973, t h i s Court decided cause No. 12199, Peter K i e w i t Sons' Co. v. S t a t e Board of Equalization, e t a l . , 161 Mont. 140, 505 P.2d 102, where we upheld t h e v a l i d i t y of Chapter 35, T i t l e 84, R.C.M. 1947, a s amended. O n J u l y 18, 1973, p l a i n t i f f - a p p e l l a n t , h e r e i n a f t e r re- f e r r e d t o a s K i e w i t , f i l e d a complaint i n L e w i s and Clark County d i s t r i c t c o u r t , i d e n t i c a l t o t h e complaint i n cause No. 12199, d i f f e r i n g only i n amounts of taxes paid a t d i f f e r e n t t i m e s . K i e w i t sought a recovery of t a x e s paid and a d e c l a r a t i o n of unconstitu- t i o n a l i t y of Chap. 35, T i t l e 84, R.C.M. 1947, a s amended. Defendants-respondents, h e r e i n a f t e r r e f e r r e d t o a s t h e Department of Revenue, moved t o dismiss t h e complaint on t h e grounds of res a d j u d i c a t a , i n t h a t t h e o r i g i n a l K i e w i t c a s e con- - t r o l l e d . The motion t o dismiss was l a t e r graduated under Rule 1 2 ( b ) , M.R.Civ.P., t o a motion f o r summary judgment. K i e w i t ' s p o s i t i o n is t h a t t h i s Court declared t h e law t o be v a l i d only i f enforced i n a c e r t a i n manner. Then, K i e w i t reasons, s i x months l a t e r , i n J u l y of 1973, it could demonstrate t h a t t h e law was i n v a l i d because t h e manner of enforcement d i d n o t follow guidelines l a i d o u t by t h i s Court. ~ i e w i t engages i n a r a t h e r t o r t u o u s reasoning: The d e c i s i o n of t h i s Court i n up- holding t h e v a l i d i t y of t h e public c o n t r a c t o r s t gross r e c e i p t s t a x was conditional. These conditions w e r e , according t o ~ i e w i t , (1) t h a t public contractorsr w e r e exempt from competency require- ments of t h e A c t , and ( 2 ) t h a t t h e l a w could n o t r e s u l t i n revenue being r a i s e d . Then K i e w i t argues: (1) The Department of Revenue current- l y enforces t h e e n t i r e law a g a i n s t public and p r i v a t e c o n t r a c t o r s a l i k e and ( 2 ) t h e s t a t e c o l l e c t s money i n excess of c r e d i t s and refunds and t h u s i n s t e a d of being a revenue enforcing measure, it i s a c t u a l l y a revenue r a i s i n g measure. - 2 - A s t o K i e w i t ' s f i r s t contention, i f t h e r e be a problem it i s s t r i c t l y an administrative one and does not, i n our view, approach a c o n s t i t u t i o n a l problem. Kiewit charges t h e r e has been i n t e r f e r e n c e with f e d e r a l highway administration procurement a c t i v i t i e s . This may be so, but we a r e unable t o see where a f e d e r a l - s t a t e c o n f l i c t a t t h e administrative l e v e l makes a s t a t e law unconstitutional. A s t o K i e w i t ' s second point, it may be t h a t K i e w i t would be e n t i t l e d t o a refund o r some o t h e r administrative remedy, but it i s obvious t h a t Kiewit seeks but one thing--a d e c l a r a t i o n of u n c o n s t i t u t i o n a l i t y . Judge Meloy found t h e o r i g i n a l K i e w i t decision res adjudicata on t h e i s s u e of c o n s t i t u t i o n a l i t y and we affirm. K i e w i t i n s i s t s t h a t t h e only b a s i s f o r t h i s C o u r t ' s con- clusion t h a t t h e Act was not discriminatory a s t o public contrac- t o r s was t h a t i f t h e Act were properly enforced, it would r e s u l t i n a "washout"; t h a t i s , refunds of personal property taxes and c o n t r a c t o r s ' income taxes would o f f s e t t h e 1% gross r e c e i p t s t a x . Kiewit reads our opinion much too narrowly. W e held t h e r e t h a t a reasonable c l a s s i f i c a t i o n f o r t a x purposes l a y between p r i v a t e and public contractors. The o r i g i n a l Kiewit case involved proceeds from an Army Corps of Engineers c o n t r a c t dated October 9 , 1970. A t t h a t time, a s pointed out i n t h e o r i g i n a l Kiewit opinion, provision # 5 8 ( f ) prohibited t h e contractor from taking advantage of c r e d i t s a v a i l - a b l e under t h e provisions of section 84-3514, R.C.M. 1947. Be- cause of t h a t provision and because of ignorance and indifference, many contractors were not applying f o r c r e d i t s they were e n t i t l e d t o . The Army Corps of Engineers c o n t r a c t dated May 2 8 , 1971, had a similar provision, #66, which prohibited c o n t r a c t o r s from taking advantage of c r e d i t s . However, on December 15, 1971, t h e Corps n o t i f i e d K i e w i t t o obtain a l l refunds and c r e d i t s a v a i l a b l e under t h e Montana law and t o ignore general pro- v i s i o n #66. So, now, K i e w i t is seeking a l l c r e d i t s and refunds. The i n s t a n t case concerns gross r e c e i p t taxes paid over and above any c r e d i t s and refunds. Kiewit c i t e s S t a t e ex rel. Schultz-Lindsay Construction Company v. S t a t e Board of Equalization, 145 Mont. 380, 403 P.2d 635, f o r t h e proposition t h a t a gross r e c e i p t t a x on nonresident c o n t r a c t o r s is a r b i t r a r y and unreasonable. I n t h e o r i g i n a l Kiewit case w e discussed Schultz-Lindsay and distinguished it and w e w i l l not repeat t h e discussion here. I n Garrett F r e i g h t l i n e s , Inc. v. Montana Railroad and Public Service Cornmln, 1 6 1 Mont. 482, 491, 507 P.2d 1 0 4 0 , de- cided March 15, 1973, j u s t two months a f t e r t h e o r i g i n a l Kiewit case, t h i s Court i n a 3 t o 2 decision held a s t a t u t e , assessing .575 of 1 percent of gross operating revenue on licensed public c a r r i e r s while e ~ e m p t i n g ~ d i r e c t l y competing p r i v a t e c a r r i e r s and exempt c a r r i e r s , t o be unconstitutionally a r b i t r a r y and d i s - criminatory. There t h e Court said: " A l l t h i s goes t o show t h e v a s t d i f f e r e n c e i n f a c t s i t u a t i o n here from t h a t i n Peter Kiewit Sons' Co. v. S t a t e Board of Equalization, 161 Mont. 1 4 0 , 505 P.2d 102. I n t h a t case a complaint was r a i s e d a s t o t h e public c o n t r a c t o r s 1 l i c e n s e a c t being un- c o n s t i t u t i o n a l because t h e levy w a s not uniform and was discriminatory. W e t h e r e held t h a t s i n c e it appeared t h a t a l l public c o n t r a c t o r s had t o pay t h e t a x , t h a t a l l members of t h e c l a s s were t r e a t e d a l i k e . Under t h e f a c t s t h e r e we a l s o held t h a t a d i s t i n c t i o n between public and p r i v a t e contractors was not a r b i t r a r y and capricious; it being c l e a r from t h e record t h a t t h e public c o n t r a c t o r s ' li- cense a c t w a s intended t o operate a s a revenue enforcing measure a s pointed o u t i n t h e opinion and a l i k e s i t u a t i o n d i d not appear a s t o p r i v a t e contractors." I n G a r r e t t t h e unfairness of t h e t a x a s between competing businesses was shown. I n t h e i n s t a n t case t h e r e i s no unfairness a s between competing contractors. A l l public c o n t r a c t o r s are treated alike. We have discussed the position of Kiewit on the merits. The original Kiewit decision is res adjudicata since the parties, issues, and facts are all the same in their relevant particulars. The trial court concluded that the only factual differences were inconsequential against the impact of the doctrines of res adjudicata, collateral estoppel or stare decisis. We agree. We affirm the judgment of the district court. We concur: , Justices /