State of Alabama Department of Transportation v. Joe Keenum Excavation and Construction Co., Inc. (Appeal from Colbert Circuit Court: CV-10-900115)

Annotate this Case

Download PDF

REL: 6/22/12 Notice: T h i s o p i n i o n i s s u b j e c t t o f o r m a l r e v i s i o n b e f o r e p u b l i c a t i o n i n t h e advance s h e e t s o f Southern R e p o r t e r . R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e Reporter of Decisions, Alabama A p p e l l a t e C o u r t s , 300 D e x t e r A v e n u e , M o n t g o m e r y , A l a b a m a 3 6 1 0 4 - 3 7 4 1 ((334) 2 2 9 - 0 6 4 9 ) , o f a n y t y p o g r a p h i c a l o r o t h e r e r r o r s , i n o r d e r t h a t c o r r e c t i o n s may be made b e f o r e t h e o p i n i o n i s p r i n t e d i n Southern R e p o r t e r . ALABAMA COURT OF CIVIL APPEALS OCTOBER TERM, 2011-2012 2101223 State o f Alabama Department o f T r a n s p o r t a t i o n v. Joe Keenum Excavation and C o n s t r u c t i o n Co., Inc. 2101230 State o f Alabama Department o f Revenue v. Joe Keenum Excavation and C o n s t r u c t i o n Co., Inc. Appeals from C o l b e r t C i r c u i t (CV-10-900115) Court 2101223; 2101230 BRYAN, J u d g e . The A l a b a m a D e p a r t m e n t o f T r a n s p o r t a t i o n Department judgment of Revenue entered in separately favor of appeal Joe and t h e A l a b a m a from Keenum a summary Excavation C o n s t r u c t i o n Co., I n c . ("Keenum"), i n a t a x - a s s e s s m e n t We reverse and 2000 ( " t h e 2000 A c t " ) . exempted from s a l e s property Among o t h e r sold to a contractor be incorporated appeal. remand. I n 2000, t h e l e g i s l a t u r e e n a c t e d A c t No. Acts and t a x and u s e into t h i n g s , t h e 2000 A c t t a x any tangible i f the personal realty pursuant 2000-684, A l a . to personal property a was t o contract with v a r i o u s g o v e r n m e n t a l e n t i t i e s , i n c l u d i n g t h e S t a t e of Alabama. The t a x e x e m p t i o n e s t a b l i s h e d b y t h e 2000 A c t was c o d i f i e d a t § 40-9-33, A l a . Code 1975. Act 2004-638, A l a . A c t s I n 2004, t h e l e g i s l a t u r e e n a c t e d 2004 ( " t h e 2004 A c t " ) , w h i c h repealed § 40-9-33, and t h u s t h e t a x e x e m p t i o n , e f f e c t i v e J u l y 1, 2004. The 2004 Act also distribute a greater amended portion the S t a t e G e n e r a l Fund." § 40-23-2, of sales A l a . Code t a x on a u t o m o b i l e s t o P r e a m b l e t o 2004 A c t . That p a r t of t h e 2004 A c t amending § 40-23-2 s t a t e d t h a t " [ t ] h e of this amendatory a c t s h a l l terminate 2 1975, " t o provisions on O c t o b e r 1, 2006." 2101223; 2101230 T h a t p r o v i s i o n i n t h e 2004 A c t has c a u s e d c o n f u s i o n among some taxpayers. Keenum is a business engaged in construction and excavation. I n June 2004, Keenum c o n t a c t e d t h e D e p a r t m e n t o f Revenue verify to that the 2004 Act repealed the e x e m p t i o n , w h i c h t h e D e p a r t m e n t o f Revenue c o n f i r m e d . time, the At t h a t D e p a r t m e n t o f Revenue a l s o gave Keenum a document entitled " n o t i c e to provides that " i t s provisions shall 2006." tax Various contractors" stating other taxpayers t h a t the terminate questioned 2004 Act on O c t o b e r whether the 1, 2004 A c t p e r m a n e n t l y r e p e a l e d § 40-9-33, and i t s t a x e x e m p t i o n , o r whether the repeal of the tax exemption would O c t o b e r 1, 2006, t h u s r e v i v i n g t h e t a x e x e m p t i o n . 2004, t h e A t t o r n e y G e n e r a l the expire on On June 24, i s s u e d an o p i n i o n c o n c l u d i n g t h a t 2004 A c t p e r m a n e n t l y r e p e a l e d § 40-9-33, i . e . , t h a t the t a x e x e m p t i o n p r e s c r i b e d by § 40-9-33 w o u l d n o t be r e v i v e d on O c t o b e r 1, 2006. Op. A t t ' y Gen. No. 2004-170 ( J u n e 30, In o t h e r words, the A t t o r n e y G e n e r a l opined t h a t the p l a c e b e f o r e t h e 2000 A c t w o u l d c o n t i n u e t o be i n p l a c e O c t o b e r 1, The 2004). tax i n after 2006. D e p a r t m e n t o f Revenue n e v e r n o t i f i e d 3 Keenum o f the 2101223; 2101230 Attorney General's opinion. of the notice October Based on Keenum's u n d e r s t a n d i n g g i v e n t o i t b y t h e D e p a r t m e n t o f Revenue, on 1, 2006, Keenum s t o p p e d p a y i n g s a l e s t a x a n d u s e t a x on m a t e r i a l s t h a t h a d b e e n e x e m p t e d u n d e r § 40-9-33. Keenum read October t h e 2004 A c t as r e v i v i n g That i s , the t a x exemption on 1, 2006. The D e p a r t m e n t o f Revenue l a t e r a s s e s s e d Keenum f o r s a l e s tax and use t a x on government c o n t r a c t s the assessment Law D i v i s i o n , law judge materials that a f t e r October Keenum 1, 2006. had Keenum t o t h e Department o f Revenue's used in appealed Administrative a n d t h e a p p e a l was h e a r d b y an a d m i n i s t r a t i v e ("ALJ"). See § 40-2A-7(b)(5), A l a . Code 1975. B e f o r e t h e A L J , Keenum a r g u e d t h a t i t s h o u l d n o t be l i a b l e f o r the d i s p u t e d t a x because, i tsaid, t h e D e p a r t m e n t o f Revenue h a d m i s i n f o r m e d Keenum t h a t t h e t a x e x e m p t i o n 33 w o u l d be r e v i v e d on O c t o b e r 1, 2006. f o u n d i n § 40-9¬ Keenum a l s o argued t h a t i t s h o u l d be e x c u s e d f r o m t h e t a x b e c a u s e t h e D e p a r t m e n t o f Revenue h a d n e v e r i n f o r m e d Keenum a b o u t Attorney General O p i n i o n No. 2004-170. The A L J u p h e l d t h e t a x assessment amount o f $105,907. The A L J , c i t i n g 4 against Keenum i n t h e S t a t e v. Maddox Tractor 2101223; 2101230 & Equipment that Co. , 260 A l a . 136, 69 So. 2d 426 the Department assessing o f Revenue a tax that misleading advice "could i s legally concerning due (1953), n o t be based concluded estopped on from erroneous the t a x from" t h a t or department. The A L J f u r t h e r s t a t e d , i n p a r t : "I sympathize w i t h [Keenum] i n t h i s case. If [ K e e n u m ] h a d b e e n n o t i f i e d t h a t t h e e x e m p t i o n was n o t r e v i v e d on O c t o b e r 1, 2006, i t c o u l d have i n c l u d e d t a x i n i t s c o n t r a c t b i d amounts a f t e r t h a t d a t e , and t h u s p a s s e d t h a t c o s t [ o n t o ] t h e v a r i o u s governmental e n t i t i e s . I t p r e s u m a b l y d i d n o t do s o , and t h u s must now b e a r t h e e c o n o m i c b u r d e n f o r t h e taxes. ... U n f o r t u n a t e l y f o r [ K e e n u m ] , A l a b a m a l a w i s c l e a r t h a t t h e S t a t e c a n n o t be e s t o p p e d f r o m c o l l e c t i n g t h e t a x due i n s u c h c a s e s . " Keenum a p p e a l e d t h e A L J ' s d e c i s i o n t o t h e c i r c u i t court f o r a t r i a l de novo, p u r s u a n t t o § 4 0 - 2 A - 9 ( g ) , A l a . Code Before the restated circuit complaint" Transportation underbid court, as Keenum naming the a defendant. construction filed an Alabama "amended and Department of Keenum a l l e g e d t h a t contracts with the 1975. i t had Department of T r a n s p o r t a t i o n b a s e d on Keenum's b e l i e f t h a t t h e t a x e x e m p t i o n found Keenum in § 40-9-33 essentially Transportation against was Keenum. the in effect sought burden In to shift f o r the i t s "amended 5 after to October the disputed and 1, 2006. Department taxes restated of assessed complaint," 2 1 0 1 2 2 3 ; 2101230 Keenum made various Transportation, claims against the Department i n c l u d i n g two c l a i m s s e e k i n g the reformation o f c o n t r a c t s made w i t h t h e D e p a r t m e n t o f T r a n s p o r t a t i o n . Department dismiss, of Transportation noting that proceedings before that i t had not filed been a to State immunity. the motion t o dismiss. "amended c o m p l a i n t " Keenum party i n the things, The c i r c u i t later The a motion t o t h e A L J a n d a s s e r t i n g , among o t h e r i t i s entitled denied subsequently of filed court another p u r p o r t i n g t o name a s d e f e n d a n t s J o h n R. C o o p e r , t h e d i r e c t o r o f t h e D e p a r t m e n t o f T r a n s p o r t a t i o n , and J u l i e P. Magee, t h e c o m m i s s i o n e r o f t h e D e p a r t m e n t o f R e v e n u e , in their individual and o f f i c i a l c a p a c i t i e s . However, Cooper and Magee were n e v e r s e r v e d ; t h e o n l y d e f e n d a n t s i n t h i s c a s e are t h e Department of Transportation and t h e D e p a r t m e n t o f Revenue. Keenum filed a motion claims seeking t o reform Transportation. for a summary judgment i t s c o n t r a c t s w i t h t h e Department of The D e p a r t m e n t of Transportation r e s p o n s e t o t h e summary-judgment m o t i o n , a r g u i n g was not e n t i t l e d on i t s to a reformation D e p a r t m e n t o f Revenue d i d n o t f i l e 6 filed a t h a t Keenum of the contracts. The a r e s p o n s e t o t h e summary- 2101223; 2101230 judgment m o t i o n , w h i c h d i d not appear to contain arguments d i r e c t l y addressed at the Department of Revenue. The c i r c u i t c o u r t e n t e r e d a summary j u d g m e n t i n f a v o r o f Keenum. I n p e r t i n e n t p a r t , t h e summary j u d g m e n t stated: "[T]he Court orders that (1) [Keenum's] c o n t r a c t s w i t h [the Department of T r a n s p o r t a t i o n ] p e r f o r m e d d u r i n g F e b r u a r y , 2006 t h r o u g h D e c e m b e r , 2008, a r e r e f o r m e d t o o f f s e t and c o v e r t h e t a x e s due t o be p a i d u n d e r t h e c o n t r a c t s ; and (2) t h e t a x e s , i n t e r e s t , p e n a l t i e s , f e e s and c o s t s a s s e s s e d t o [Keenum] i n t h e ' F i n a l O r d e r ' o f t h e [ALJ] on May 26, 2010, a r e i n v a l i d , a c c o u n t e d f o r , and o f f s e t i n the reformed contracts [Keenum] h a d with [the Department of T r a n s p o r t a t i o n ] . Defendants are d i r e c t e d t o t a k e a l l a c t i o n s [ t h e y ] deem[] n e c e s s a r y t o a s s u r e t h a t [Keenum] i s f u l l y r e l e a s e d f r o m t h e t a x e s , i n t e r e s t , p e n a l t i e s , f e e s and c o s t s a s s e s s e d t o [Keenum] i n t h e F i n a l O r d e r . " P u r s u a n t t o R u l e 5 6 ( d ) , [ A l a . R. C i v . P.,] t h e Court has reviewed the remaining Counts of [Keenum's] Amended and R e s t a t e d C o m p l a i n t n o t t h e s u b j e c t o f t h e M o t i o n f o r Summary J u d g m e n t , w h i c h are Unjust Enrichment (Count I ) , Goods S o l d and D e l i v e r e d (Count I I I ) , P r o m i s s o r y E s t o p p e l (Count V) and F r a u d (Count V I ) . The r e q u e s t e d r e l i e f f o r e a c h Count i s d u p l i c a t i v e o f the r e l i e f r e q u e s t e d i n Count[] i . e . , the c l a i m s e e k i n g r e f o r m a t i o n of the c o n t r a c t s , ] and upon w h i c h t h e M o t i o n f o r Summary Judgment i s b a s e d . The a d d i t i o n a l r e l i e f requested of compensatory damages and punitive damages has been withdrawn by [Keenum]. A c c o r d i n g l y , the Court determines t h a t t h i s r u l i n g d i s p o s e s of the e n t i r e case between the p a r t i e s . T h i s O r d e r c o n s t i t u t e s a f i n a l j u d g m e n t as t o t h e c l a i m s and p r o c e e d i n g s a s s e r t e d a g a i n s t o r r e l a t e d to the p a r t i e s . " 7 2101223; 2101230 Both t h e Department of o f T r a n s p o r t a t i o n and t h e Department Revenue a p p e a l e d t o t h i s court, a n d we c o n s o l i d a t e d t h e appeals. We first contention address that jurisdiction t h e Department the c i r c u i t over i t because, Transportation of court lacked i t says, i s not a proper Transportation's subject-matter (1) t h e D e p a r t m e n t party a p p e a l brought under t h e Taxpayers' B i l l in a of tax-assessment o f R i g h t s , § 40-2A-1 e t s e q . , A l a . Code 1975 ("the TBOR"), a n d (2) t h e D e p a r t m e n t of T r a n s p o r t a t i o n i s e n t i t l e d t o S t a t e immunity under A r t . I , § 14, A l a . C o n s t . 1 9 0 1 , a l s o known as s o v e r e i g n parte Tirey, conclude that jurisdiction basis the over of State circuit the 977 So. 2d 469, 470 court circuit immunity, also lacked ( A l a . 2007). court t h e Department we do i m m u n i t y , Ex lacked Because subject-matter of Transportation not consider subject-matter on t h e whether jurisdiction TBOR. " S e c t i o n 14, A l a . C o n s t . 1901, p r o v i d e s : ' [ T ] h e S t a t e o f A l a b a m a s h a l l n e v e r be made a d e f e n d a n t i n any c o u r t o f l a w o r e q u i t y . ' (Emphasis added.) 'The w a l l o f i m m u n i t y e r e c t e d b y § 14 i s n e a r l y impregnable.' P a t t e r s o n v. G l a d w i n C o r p . , 835 So. 2d 137, 142 ( A l a . 2 0 0 2 ) . Indeed, as r e g a r d s t h e S t a t e o f Alabama and i t s a g e n c i e s , t h e w a l l i s a b s o l u t e l y impregnable. Ex p a r t e A l a b a m a Dep't o f 8 we the under 2101223; 2101230 Human Res., 999 So. 2d 891, 895 ( A l a . 2008) ( ' S e c t i o n 14 a f f o r d s a b s o l u t e i m m u n i t y t o b o t h t h e S t a t e and S t a t e a g e n c i e s . ' ) ; Ex p a r t e J a c k s o n C o u n t y Bd. o f E d u c . , 4 So. 3d 1099, 1102 ( A l a . 2008) (same); A t k i n s o n v. S t a t e , 986 So. 2d 408, 410-11 (Ala. 2007) (same); [Ex p a r t e A l a b a m a Dep't o f T r a n s p . ( I n r e : Good Hope C o n t r a c t i n g Co. v. A l a b a m a Dep't o f T r a n s p . ) , 978 So. 2d 17 ( A l a . 2007)] (same); Ex p a r t e A l a b a m a Dep't o f T r a n s p . , 764 So. 2d 1263, 1268 ( A l a . 2000) (same); M i t c h e l l v. D a v i s , 598 So. 2d 801, 806 ( A l a . 1992) (same). 'Absolute i m m u n i t y ' means j u s t t h a t -- t h e S t a t e and i t s a g e n c i e s a r e n o t s u b j e c t t o s u i t u n d e r any t h e o r y . " ' T h i s i m m u n i t y may n o t be w a i v e d . ' Patterson, 835 So. 2d at 142. Sovereign immunity i s , therefore, not an affirmative defense, but a ' j u r i s d i c t i o n a l bar.' Ex p a r t e A l a b a m a Dep't o f T r a n s p . , 985 So. 2d 892, 894 ( A l a . 2007). The j u r i s d i c t i o n a l b a r o f § 14 s i m p l y ' p r e c l u d [ e s ] a c o u r t from e x e r c i s i n g s u b j e c t - m a t t e r jurisdiction' over the S t a t e or a S t a t e agency. L y o n s v. R i v e r Road C o n s t r . , I n c . , 858 So. 2d 257, 261 (Ala. 2003). " A l a b a m a Dep't C o r r . v. Montgomery C n t y . Comm'n, 11 So. 3d 191-92 (Ala. 2008). immunity challenges court[,] ... i t may Because the So. In 2d 408, the subject-matter assertion of jurisdiction State of be r a i s e d a t any t i m e by t h e p a r t i e s o r a c o u r t ex mero motu." 986 "[t]he 189, 411 circuit Ex p a r t e State ( A t k i n s o n v. the by State), ( A l a . 2007). court, Keenum filed an "amended and r e s t a t e d c o m p l a i n t " n a m i n g t h e D e p a r t m e n t o f T r a n s p o r t a t i o n as a defendant. Because the Department of T r a n s p o r t a t i o n i s a 9 2101223; 2101230 State agency, Keenum argues Transportation i t i s a b s o l u t e l y immune f r o m s u i t u n d e r that i t s claims are not b a r r e d by against State the § 14. Department of immunity, citing o f t e n - c i t e d c a t e g o r i e s of a c t i o n s t h a t are not considered be actions against the State f o r § 14 p u r p o s e s . 1 the to However, I n A l a b a m a D e p a r t m e n t o f T r a n s p o r t a t i o n v. H a r b e r t I n t ' l , I n c . , 990 So. 2d 831, 840 ( A l a . 2 0 0 8 ) , t h e supreme c o u r t r e c i t e d t h e c a u s e s o f a c t i o n t h a t a r e n o t b a r r e d by § 14: 1 "'"There are f o u r g e n e r a l c a t e g o r i e s o f a c t i o n s w h i c h i n A l a n d v. Graham, 287 A l a . 226, 250 So. 2d 677 ( 1 9 7 1 ) , we s t a t e d do n o t come w i t h i n t h e p r o h i b i t i o n o f § 14: (1) actions brought to compel State o f f i c i a l s to perform t h e i r l e g a l duties; (2) actions brought to enjoin State officials from enforcing an u n c o n s t i t u t i o n a l l a w ; (3) a c t i o n s t o compel State officials to perform ministerial a c t s ; and (4) a c t i o n s b r o u g h t u n d e r t h e Declaratory Judgments Act ... seeking construction of a statute and its a p p l i c a t i o n i n a g i v e n s i t u a t i o n . 287 A l a . a t 229-230, 250 So. 2d 677. O t h e r a c t i o n s w h i c h a r e n o t p r o h i b i t e d by § 14 a r e : (5) v a l i d i n v e r s e condemnation a c t i o n s brought against State officials in their r e p r e s e n t a t i v e c a p a c i t y ; and (6) a c t i o n s f o r i n j u n c t i o n o r damages b r o u g h t a g a i n s t State o f f i c i a l s in their representative c a p a c i t y and i n d i v i d u a l l y where i t was a l l e g e d t h a t t h e y had a c t e d f r a u d u l e n t l y , i n bad f a i t h , beyond t h e i r a u t h o r i t y or i n a m i s t a k e n i n t e r p r e t a t i o n of law. W a l l a c e v. B o a r d o f E d u c a t i o n o f Montgomery C o u n t y , ... 280 A l a . [635] a t 639, 197 So. 2d 428 10 2101223; 2101230 those categories of a c t i o n s t h a t are "relevant as officials only they relate in their official not to claims capacities, the S t a t e agency or the S t a t e i t s e l f . " v. Montgomery C n t y . Comm'n, 11 So. barred by § 14 against are State n o t as t h e y r e l a t e to A l a b a m a Dep't o f C o r r . 3d a t 194. I n m o v i n g f o r a summary j u d g m e n t , Keenum a r g u e d t h a t i t s contracts with the Department reformed to account pay. f o r the of Transportation should be failed to t a x e s t h a t Keenum had Keenum b a s i c a l l y a r g u e d t h a t i t w o u l d have p a s s e d the c o s t o f t h e t a x e s on t o t h e D e p a r t m e n t o f T r a n s p o r t a t i o n had Keenum for known about the tax obligation. Thus, Keenum, p u r p o s e s o f i t s summary-judgment m o t i o n , e s s e n t i a l l y assumed that the tax a s s e s s m e n t was proper, but Department of T r a n s p o r t a t i o n u l t i m a t e l y f o r the t a x e s . basing its The i t argued t h a t s h o u l d be the responsible c i r c u i t c o u r t a g r e e d w i t h Keenum, s q u a r e l y summary judgment on the reformation of the c o n t r a c t s b e t w e e n Keenum and t h e D e p a r t m e n t o f T r a n s p o r t a t i o n . [(1967)] "' "Drummond Co. v. A l a b a m a Dep't o f T r a n s p . , 937 So. 2d 56, 58 ( A l a . 2006) ( q u o t i n g [Ex p a r t e ] C a r t e r , 395 So. 2d [65,] 68 [(Ala. 1980)]) (emphasis omitted)." 11 2101223; 2101230 However, the c i r c u i t jurisdiction assessment squarely against instructions asserted against which has S t a t e immunity. directly subject-matter Keenum was Keenum's court, that the improper, has n o t been resolved. with claims n o t have on a p p e a l t o t h e c i r c u i t A c c o r d i n g l y , we r e v e r s e case does over t h e Department o f T r a n s p o r t a t i o n . o r i g i n a l contention tax court determine that t h e j u d g m e n t , a n d we remand t h e the c i r c u i t t h e Department court of dismiss the Transportation, On remand, t h e c i r c u i t c o u r t the issue i n the appeal from should the ALJ's d e c i s i o n , i . e . , w h e t h e r t h e t a x a s s e s s m e n t a g a i n s t Keenum was proper. 2101223 REVERSED AND REMANDED WITH INSTRUCTIONS. 2101230 REVERSED AND REMANDED WITH INSTRUCTIONS. Thompson, concur. P . J . , and P i t t m a n , 12 Thomas, a n d Moore, JJ.,

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.