State ex rel. Danforth v. European Health Spa, Inc. ( 1980 )

TURNAGE, Presiding Judge.

In 1968 the Attorney General filed an action seeking to enjoin Plaza Club, Inc. from engaging in certain merchandising and advertising practices prohibited by §§ 407.010 to 407.130, RSMo 1978.¹ After a temporary restraining order was issued, the Attorney General and Plaza entered into an assurance of voluntary compliance pursuant to § 407.030. The court approved the agreement of voluntary compliance and dissolved the temporary restraining order. European Health Spa purchased Plaza Club, Inc. and another agreement of voluntary compliance was entered into between the Attorney General and the Health Spa in 1969. That agreement, also approved by the court, provided that the Health Spa would comply with the law and that the Attorney General could institute proceedings under Chapter 407 or any applicable law including a petition for civil penalty under § 407.110. (The agreement did not state whether or not such further proceedings were for violations of the agreement.)

In March, 1978, the Attorney General filed a petition for civil penalties alleging that the Health Spa² had committed certain acts in violation of the assurance of voluntary compliance and sought civil penalties totalling $1,430,000, together with costs and a prayer for the appointment of a receiver pursuant to § 407.105. The trial court sustained a motion filed by the Health Spa and dismissed the Attorney General’s petition for civil penalties, costs and the appointment of a receiver. The Attorney General has appealed and contends the petition stated a cause of action. Affirmed.

There is no dispute that an assurance of voluntary compliance was approved by the court and the petition of the Attorney General seeking civil penalties relies only on acts alleged to be in violation of that assurance. The State relies on the last sentence of § 407.030 and § 407.110, referred to in such sentence, as its authority for seeking civil penalties for the alleged violation of the assurance of voluntary compliance.

The Sections which require examination are §§ 407.030, 407.100 and 407.110. Those Sections provide as follows:

407.030: In the administration of sections 407.010 to 407.130, the attorney general may accept an assurance of voluntary compliance with respect to any method, act or practice deemed to be violative of sections 407.010 to 407.130 from any person who is or has engaged in such a method, act or practice. The assurance shall be in writing and be filed with and subject to the approval of the circuit court of the county in which the alleged violator resides or has his principal place of business, or the circuit court of Cole county. Such assurance of voluntary compliance shall not be considered an admission of violation for any purpose. Matters thus closed may at any time be reopened by the attorney general for further proceedings in the public interest, pursuant to section 407.110.

407.100: Whenever it appears to the attorney general that a person has engaged in or is engaging in any method, act, or practice declared to be unlawful by sections 407.010 to 407.130, he may, after notice to such person, if such notice can be given in the manner provided in section 407.040, seek and obtain in an action in a circuit court an injunction prohibiting such person from continuing such methods, acts or practices or engaging therein or doing anything in furtherance thereof. The notice shall state generally the relief sought and be served in accordance with section 407.050 at least three days prior to the institution of such action. If the court finds that the person has engaged in or is engaging in any method, act, or practice declared to be unlawful by sections 407.010 to 407.130, it may make such orders of judgments as may be necessary, including but not limited to the appointment of a receiver to prevent the use of employment by such person of any prohibited methods, acts or practices, or which may be necessary to restore to any person who has suffered any ascertainable loss by reason of the use of employment of such prohibited methods, acts, or practices any moneys or property, real or personal, which may have been acquired by means of any method, act, or practice in sections 407.-010 to 407.130 declared to be unlawful.

407.110: Any person who violates the terms of an injunction issued under section 407.100 shall forfeit and pay to the state a civil penalty of not more than five thousand dollars per violation. For the purposes of this section, the circuit court of a county issuing an injunction shall retain jurisdiction, and the cause shall be continued, and in such cases the attorney general acting in the name of the state may petition for recovery of civil penalties.

The Attorney General contends that under the last sentence of § 407,030 he is authorized to proceed directly to seek civil penalties for the violation of any assurance of voluntary compliance. This argument proceeds that the last sentence provides that matters closed by an assurance of voluntary compliance may be reopened for further proceedings pursuant to § 407.110. Section 407.110 provides for civil penalties for the violation of an injunction issued under § 407.100. The Attorney General would substitute in § 407.110 the words “assurance of voluntary compliance” for the word “injunction” and would add to either § 407.030 or § 407.110 that civil penalties could be obtained for a violation of the assurance. The Attorney General concedes there is no express provision in §§ 407.010 to 407.130 prohibiting the violation of the assurance of voluntary compliance or providing for the assessment of civil penalties for the violation of such assurances. The only authority relied upon is the proposed construction of §§ 407.030 and 407.110.

In Rixke v. Western Union Tel. Co., 96 Mo.App. 406, 70 S.W. 265, 266 (1902) this court stated:

This is a penal statute, and as such it is not to be regarded as including anything which is not clearly and intelligently described in its very words, as well as manifestly intended by the legislature. And the rule is that, where there is a doubt, such a statute ought not to be construed to inflict a penalty which the legislature may not have intended.

The same rule was stated by the St. Louis District in Nicholas v. Kelley, 159 Mo.App. 20, 139 S.W. 248, 251[4] (1911) when the court stated:

A uniform rule of decision prevails to the effect that a court may not create a penalty by construction, but, on the contrary, must avoid it unless it appears to be clearly intended by the Legislature.

In City of Charleston v. McCutcheon, 277 S.W.2d 736, 788[1, 2] (Mo. banc 1950) the court stated:

In an action brought to recover a statutory penalty the statute must be strictly and literally construed. State ex rel. Ashby v. Cairo Bridge & Terminal Co., 340 Mo. 190, 100 S.W.2d 441. Penal provisions of a statute, or of a statute penal in nature are always strictly construed, and can be given no broader application than is warranted by its plain and unambiguous terms. McClaren v. G. S. Robins & Co., 349 Mo. 653, 162 S.W.2d 856. Certainly an unambiguous statute, penal in nature, neither by implication nor otherwise, can be construed to be something other than it was written to be.

In McCutcheon the court stated that it did not have the power to delete and substitute words in a statute in order to construe the statute to impose a penalty.

Prom these rules applicable to penal statutes, there can be no doubt that a penal statute must be strictly construed and that a penalty may not be created by the construction of a statute but the penalty must clearly appear to have been intended to be created by the Legislature. Applying the applicable rules to the statutes in question, it is apparent that to sustain the argument of the Attorney General it is necessary to find authority for a penalty for violation of an assurance by a construction of § 407.110 and to rewrite such Section. Under the applicable rules this court may not rewrite statutes passed by the Legislature and certainly may not impose a penalty when the Legislature has not in fact provided by a clear expression of intent for a penalty.

The best evidence of the Legislature’s intent is the original roll of the enactment of §§ 407.010 to 407.130. Protection Mutual Insurance Co. v. Kansas City, 504 S.W.2d 127, 130[4] (Mo.1974). To do that this court obtained a copy of the original of H.B. 19, 74th General Assembly from the Secretary of State. Brannock v. St. Louis M. & S. E. R. Co., 200 Mo. 561, 98 S.W. 604, 606 (1906). The original shows the Bill finally adopted was Senate Committee Substitute for House Committee Substitute for H.B. 19.

The original Bill was in typewritten form, with sections numbered 1 to 15. Section 407.030 first appeared in Senate Committee Substitute for House Committee Substitute for H.B. 19 as Section 3. The last sentence of Section 3 reads: “Matters thus closed may at any time be reopened by the Attorney General for further proceedings in the public interest, pursuant to Section 11.” In the Bill, as originally typed, Section 11 is the same as § 407.100 which allows the Attorney General to seek an injunction to prohibit a person from continuing in practices prohibited by the Bill. Section 12, as originally typed, is the same as § 407.110 which provides civil penalties for violation of an injunction. Thus, it is apparent that in the Bill, as originally typed, “further proceedings” in Section 3, § 407.030, refers to an action to obtain an injunction and not an action to obtain civil penalties.

However, before the Bill was actually adopted, it apparently was discovered that the Bill contained only 14 sections, not 15 sections. There appears to have been a typographical error in the sequential numbering in that no Section 5 appeared. The sections were numbered sequentially from 1 to 4; the next section appears as Section 6, and the sections continue thereafter in consecutive number to Section 15.

To remedy this error, someone renumbered the sections after Section 4, by marking through the number with a pen and inserting the correct sequential numbering. Thus, the final version adopted by the Legislature contained 14 sequentially numbered sections.

When the sections were renumbered, however, the section originally typed as Section 11 was renumbered by pen to be Section 10. The section originally typed as Section 12 was renumbered by pen to be Section 11. The last sentence of Section 3, or 407.030, which refers to Section 11, remained unchanged, and, because of the new numbering, Section 3 now referred to the section on civil penalties, § 407.110, instead of the section pertaining to injunctions, § 407.100.

This Bill, as corrected by pen, was the version adopted by the Legislature with the result that Laws 1967, p. 607, ¶ 3, in the last sentence, refers to Section 11 as it read in the final renumbered version of the Bill.

In the original, typed, incorrectly numbered version of the Bill, it is clear that the Legislature intended that Section 3, or § 407.030, refer to the original Section 11, or § 407.100, with the result that the attorney general was given authority to seek an injunction under § 407.100 as to matters closed by the assurance of voluntary compliance rather than to immediately seek civil penalties for an alleged violation of an assurance. It is obvious the substantive law was changed by the renumbering, not on purpose, but simply to bring the section numbers into sequential unity.³

This court is, therefore, unable to find that the Legislature by merely renumbering the Bill sections to correct a typographical error, intended to change the substantive law of the Bill and to impose civil penalties for the violation of an assurance of voluntary compliance.

Civil penalties can only be allowed in this case by ignoring the rules above stated pertaining to penalties. It is apparent the Legislature did not clearly express an intent to impose penalties for a violation of an assurance of voluntary compliance. Authority to assess a penalty can only be found by resort to a construction of the statutes and by rewriting the law which courts may not do. When the legislative intent is clearly shown by the original roll not to impose civil penalties for violating the assurance, the conclusion necessarily follows that the trial court was correct in dismissing the petition.

The judgment is affirmed.

All concur.

1 . All statutory references are to RSMo 1978, unless otherwise specified.

2 . Health Spa changed its name to K. C. Fitness Centers, Inc. after the petition was filed and that name was added to the petition for civil penalties.

3 . The assurance of voluntary compliance made no mention of § 407.110 or civil penalties for a violation of the assurance, but did provide the Attorney General could proceed under § 407.-100. It appears the parties did not contemplate civil penalties when they entered into the agreement, but did agree further proceedings would be to obtain an injunction.