Alan Enterprizes LLC v. Mac's Convenience Stores LLC , 810 S.E.2d 61 ( 2018 )

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
January 2018 Term
FILED
February 7, 2018
No. 17-0087 released at 3:00 p.m.
EDYTHE NASH GAISER, CLERK
SUPREME COURT OF APPEALS
OF WEST VIRGINIA
ALAN ENTERPRIZES LLC,
Plaintiff Below, Petitioner
V.
MAC’S CONVENIENCE STORES LLC, D/B/A CIRCLE K;
JOYCE SAMMON; AND LOUIS DIAB,
Defendants Below, Respondents
Appeal from the Circuit Court of Harrison County, Business Court Division
Honorable Joanna I. Tabit, Judge
Civil Action No. 14-C-503-2
AFFIRMED
Submitted: January 10, 2018
Filed: February 7, 2018
John C. Palmer IV Michael Bonasso
Keith J. George Flaherty Sensabaugh Bonasso PLLC
Devan K. Flahive Charleston, West Virginia
Elizabeth T. Schindzielorz Zach Chaffee-McClure, pro hac vice
Robinson & McElwee PLLC Shook, Hardy & Bacon LLP
Charleston, West Virginia Kansas City, Missouri
Attorneys for the Petitioner Attorneys for the Respondents
JUSTICE DAVIS delivered the Opinion of the Court.
SYLLABUS BY THE COURT
1. “Interpreting a statute or an administrative rule or regulation presents
a purely legal question subject to de novo review.” Syllabus point 1, Appalachian Power Co.
v. State Tax Department of West Virginia, 195 W. Va. 573, 466 S.E.2d 424 (1995).
2. “A circuit court’s entry of summary judgment is reviewed de novo.”
Syllabus point 1, Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755 (1994).
3. “The primary object in construing a statute is to ascertain and give effect
to the intent of the Legislature.” Syllabus point 1, Smith v. State Workmen’s Compensation
Commissioner, 159 W. Va. 108, 219 S.E.2d 361 (1975).
4. “Where the language of a statute is plain and unambiguous, there is no
basis for application of rules of statutory construction; but courts must apply the statute
according to the legislative intent plainly expressed therein.” Syllabus point 1, Dunlap v.
State Compensation Director, 149 W. Va. 266, 140 S.E.2d 448 (1965).
5. “It is not for this Court arbitrarily to read into a statute that which it does
not say. Just as courts are not to eliminate through judicial interpretation words that were
i
purposely included, we are obliged not to add to statutes something the Legislature purposely
omitted.” Syllabus point 11, Brooke B. v. Ray, 230 W. Va. 355, 738 S.E.2d 21 (2013).
ii
Davis, Justice:
The petitioner herein and plaintiff below, Alan Enterprizes LLC (“Alan”),
appeals from an order entered January 3, 2017, by the Circuit Court of Harrison County,
Business Court Division. By that order, the court granted summary judgment to the
respondents herein and defendants below, Mac’s Convenience Stores LLC, d/b/a Circle K;
Joyce Sammon; and Louis Diab (collectively, “Mac’s”), ruling that W. Va. Code § 47-11A­
6(a) (1983) (Repl. Vol. 2015)1 does not include taxes in the calculation of a retailer’s cost
under the West Virginia Unfair Practices Act, W. Va. Code § 47-11A-1 et seq. On appeal
to this Court, Alan assigns error to the circuit court’s ruling contending that it should have
been permitted to include taxes in its calculation of cost. Upon a review of the parties’
arguments, the appendix record, and the pertinent authorities, we find that the circuit court
correctly determined that the calculation of a retailer’s cost under W. Va. Code § 47-11A­
6(a) does not include taxes. Accordingly, we affirm the January 3, 2017, order of the Circuit
Court of Harrison County, Business Court Division.
1
The Legislature amended W. Va. Code § 47-11A-6(a) (1983) (Repl. Vol.
2015) in 2016. See W. Va. Code § 47-11A-6(a) (2016) (Supp. 2017). Because the events
at issue herein occurred before 2016, we apply the version of the statute in effect at that time.
For further treatment of both versions of W. Va. Code § 47-11A-6(a), see Section III, infra.
1
I.
FACTUAL AND PROCEDURAL HISTORY
Alan is a West Virginia limited liability company that operates three gas
stations and convenience stores in Bridgeport, West Virginia. Mac’s is a part of an
international conglomerate of gas stations and convenience stores and operates one gas
station and convenience store in Bridgeport, West Virginia. It is undisputed that both Alan
and Mac’s are retailers and that they are direct competitors in the Bridgeport gas station and
convenience store market. In November 2014, Alan filed suit against Mac’s2 alleging that
Mac’s had violated the West Virginia Unfair Practices Act, W. Va. Code § 47-11A-1 et seq.
(“the Act”), by selling gasoline below cost. See W. Va. Code § 47-11A-2 (1939) (Repl. Vol.
2015) (“It shall be unlawful for any person, . . . corporation, . . . or other association engaged
in business as a retailer . . . within this State, to sell, offer for sale or advertise for sale any
article, product or item of merchandise at less than the cost thereof to the vendor . . . for the
purposes of unfairly diverting trade from or otherwise injuring one or more competitors, and
destroying competition.”).3 But see W. Va. Code § 47-11A-8(d) (1939) (Repl. Vol. 2015)
(“The provisions of this article shall not apply to any sale made: . . . In an endeavor in good
2
Alan named as defendants the retail gas station and convenience store, itself,
Mac’s Convenience Stores LLC, d/b/a Circle K; Joyce Sammon, manager of the Bridgeport,
West Virginia, Circle K gas station and convenience store; and Louis Diab, Fuel Director for
the company’s Great Lakes Region, of which the Bridgeport gas station and convenience
store is a part.
3
W. Va. Code § 47-11A-2 (1939) (Repl. Vol. 2015) also has been amended.
See W. Va. Code § 47-11A-2 (2016) (Supp. 2017). See also note 1, supra.
2
faith to meet the legal prices of a competitor as herein defined selling the same article,
product or item of merchandise, in the same locality or trade area[.]”).4 Mac’s filed an
answer denying such allegations or that it had violated the Act, and, by joint motion, the
parties moved to refer the action to the Business Court Division, which motion we granted
by Administrative Order entered November 9, 2015.
Thereafter, both parties moved for summary judgment seeking a determination
as to whether W. Va. Code § 47-11A-6(a) includes taxes within the calculation of a retailer’s
cost. By order entered January 3, 2017, the circuit court concluded that the calculation of a
retailer’s cost does not include tax:
The Court interprets the Act to provide that a retailer’s
taxes are not included in the calculation of its cost for purposes
of the Act. W. Va. Code § 47-11A-6 (1983) directs that
calculating cost for a wholesaler includes “the invoice cost of
the merchandise to the wholesaler plus applicable taxes . . . .”,
whereas cost for a retailer omits any mention of “applicable
taxes.” This difference falls within the maxim expressio unius
est exclusio alterius. Applying principles of statutory
construction, the statute’s silence as to “applicable taxes’ [sic]
in the retailer context evidences that the Legislature did not
intend for those “taxes” to be included as a retailer’s costs. The
Court appreciates the Plaintiff’s argument that this interpretation
thwarts legislative intent by rendering the Act moot in the
context of retail gasoline sales due to “cost” being so low;
however, this, perhaps unintended, collateral effect should be
resolved, if at all, legislatively. Furthermore, the Court
4
The Legislature also has amended W. Va. Code § 47-11A-8 (1939) (Repl. Vol.
2015). See W. Va. Code § 47-11A-8 (2016) (Supp. 2017). See also note 1, supra.
3
determines that the Legislature did not build a structure within
the Unfair Practice[s] Act to determine the inclusion or
exclusion of taxes within the cost calculation, depending on
when and how taxes are assessed in a particular industry or
when assessed by an individual business.
The circuit court then awarded summary judgment to Mac’s. From this adverse ruling, Alan
appeals to this Court.
II.
STANDARD OF REVIEW
Before this Court, Alan contends that the circuit court erred in its interpretation
of W. Va. Code § 47-11A-6(a) and by granting summary judgment to Mac’s. We previously
have held that “[i]nterpreting a statute or an administrative rule or regulation presents a
purely legal question subject to de novo review.” Syl. pt. 1, Appalachian Power Co. v. State
Tax Dep’t of West Virginia, 195 W. Va. 573, 466 S.E.2d 424 (1995). Accord Syl. pt. 1,
Chrystal R.M. v. Charlie A.L., 194 W. Va. 138, 459 S.E.2d 415 (1995) (“Where the issue on
an appeal from the circuit court is clearly a question of law or involving an interpretation of
a statute, we apply a de novo standard of review.”).
With regard to the circuit court’s summary judgment ruling, summary judgment
is appropriate if “there is no genuine issue as to any material fact and . . . the moving party
is entitled to a judgment as a matter of law.” W. Va. R. Civ. P. 56(c). Accord Syl. pt. 5,
4
Wilkinson v. Searls, 155 W. Va. 475, 184 S.E.2d 735 (1971) (“A motion for summary
judgment should be granted if the pleadings, exhibits and discovery depositions upon which
the motion is submitted for decision disclose that the case involves no genuine issue as to any
material fact and that the party who made the motion is entitled to a judgment as a matter of
law.”). In other words, “[t]he circuit court’s function at the summary judgment stage is not
to weigh the evidence and determine the truth of the matter, but is to determine whether there
is a genuine issue for trial.” Syl. pt. 3, Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755(1994). Thus, “[a] motion for summary judgment should be granted only when it is clear that
there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable
to clarify the application of the law.” Syl. pt. 3, Aetna Cas. & Sur. Co. v. Federal Ins. Co.
of New York, 148 W. Va. 160, 133 S.E.2d 770 (1963). Finally, as with our review of a circuit
court’s decision of a question of law, we also review anew a circuit court’s award of
summary judgment. “A circuit court’s entry of summary judgment is reviewed de novo.”
Syl. pt. 1, Painter, 192 W. Va. 189, 451 S.E.2d 755. In view of these standards, we consider
the circuit court’s order and the parties’ arguments with respect thereto.
5
III.
DISCUSSION
At issue herein is whether W. Va. Code § 47-11A-6(a) includes within the
calculation of a retailer’s cost taxes that the retailer pays upon the acquisition of goods it
purchases for resale, such as the motor fuel taxes on gasoline at issue herein, for purposes
of determining whether the retailer is selling said item below cost in violation of the Unfair
Practices Act. The circuit court determined that taxes are not included in the calculation of
a retailer’s cost, and Mac’s agrees with this conclusion. Alan rejects this reasoning and urges
a statutory construction to include such taxes when calculating a retailer’s cost.
The subject statute, W. Va. Code § 47-11A-6(a) (1983) (Repl. Vol. 2015),5
provides as follows:
(a) The term “cost” when applicable to the business of
retailer shall mean bona fide cost and shall mean (i) the invoice
cost of the article, product or item of merchandise to the retailer
or the replacement cost thereof to the retailer within thirty days
prior to the date of sale, offer for sale or advertisement for sale,
as the case may be, in the quantity last purchased, whichever is
lower, from either of which there shall be deducted all trade
discounts, except customary discounts for cash, and (ii) to either
of which there shall be added the following items of expense:
(1) Freight charges not otherwise included
in the cost of the article, product or item of
merchandise, but which freight charges shall not
5
See supra note 1.
6
be construed as including cartage to retail outlet if
done or paid for by the retailer;
(2) A markup to cover, in part, the cost of
doing business, which markup in the absence of
proof of a lesser cost, shall be seven percent of
the aggregate of invoice cost or replacement cost
(whichever is used), less trade discounts as
aforesaid, and plus said freight charges.
The question we must answer, then, is whether this formula for the calculation of a retailer’s
cost includes taxes. We conclude that it does not.
When faced with a matter of statutory interpretation, we first must consider the
Legislature’s intent in enacting the promulgation at issue. “The primary object in construing
a statute is to ascertain and give effect to the intent of the Legislature.” Syl. pt. 1, Smith v.
State Workmen’s Comp. Comm’r, 159 W. Va. 108, 219 S.E.2d 361 (1975). In other words,
“[i]n our review of a statutory provision, it is essential to afford the enactment an
interpretation that comports with the intent of the Legislature.” Lowe v. Richards, 234
W. Va. 48, 55, 763 S.E.2d 64, 71 (2014). Thus, “if the legislative intent is clearly expressed
in the statute, this Court is not at liberty to construe the statutory provision, but is obligated
to apply its plain language.” Dan’s Carworld, LLC v. Serian, 223 W. Va. 478, 484, 677
S.E.2d 914, 920 (2009). Therefore, “[w]here the language of a statute is plain and
unambiguous, there is no basis for application of rules of statutory construction; but courts
must apply the statute according to the legislative intent plainly expressed therein.” Syl. pt.
7
1, Dunlap v. State Comp. Dir., 149 W. Va. 266, 140 S.E.2d 448 (1965).
In reading the plain language of W. Va. Code § 47-11A-6(a) quoted above, it
is apparent that the Legislature does not reference or mention taxes in the calculation of a
retailer’s cost. By contrast, W. Va. Code § 47-11A-6(b) (1983) (Repl. Vol. 2015)6
specifically references and includes taxes in the calculation of a wholesaler’s cost:
(b) The term “cost” when applicable to the business of a
wholesaler shall mean bona fide cost and shall mean (i) the
invoice cost of the merchandise to the wholesaler plus
applicable taxes, or the replacement cost of the merchandise to
the wholesaler within thirty days prior to the date of sale, offer
for sale or advertisement for sale, as the case may be, in the
quantity last purchased, whichever is lower, from either of
which there shall be deducted all trade discounts except
customary discounts for cash and (ii) to either of which there
shall be added the following items of expense:
(1) Freight charges not otherwise included
in the cost of the article, product or item of
merchandise, but which freight charges shall not
be construed as including cartage to the retail
outlet if done or paid for by the wholesaler;
(2) A markup to cover, in part, the cost of
doing business, which markup in the absence of
proof of a lesser cost, shall be four percent of the
aggregate of invoice cost or replacement cost
(whichever is used), less trade discounts as
aforesaid, and plus said freight charges.
(Emphasis added).
6
See note 1, supra.
8
The Legislature’s intention not to include taxes in the calculation of a retailer’s
cost is further evidenced by the recent statutory amendments to W. Va. Code § 47-11A-6(a):
(a) The term “cost” when applicable to the business of
retailer shall mean bona fide cost and shall mean: (i) The invoice
cost of the product or item of merchandise to the retailer or the
replacement cost thereof to the retailer within thirty days prior
to the date of sale, offer for sale or advertisement for sale, as the
case may be, in the quantity last purchased, whichever is lower,
from either of which there shall be deducted all trade discounts,
except customary discounts for cash; and (ii) to either of which
there shall be added the following items of expense:
(1) Freight charges not otherwise included
in the cost of the article, product or item of
merchandise, but which freight charges shall not
be construed as including cartage to retail outlet if
done or paid for by the retailer;
(2) A markup to cover, in part, the cost of
doing business, which markup, in the absence of
proof of a lesser cost, shall be seven percent of
the aggregate of invoice cost or replacement cost
(whichever is used), less trade discounts as
aforesaid, and plus said freight charges: Provided,
That such a markup to cover the cost of doing
business as provided for in this subdivision shall
be exclusive of any federal and state motor fuel
taxes.
W. Va. Code § 47-11A-6(a) (2016) (Supp. 2017)7 (emphasis added). There is simply no
indication that the Legislature intended to include taxes within the calculation of a retailer’s
cost pursuant to W. Va. Code § 47-11A-6(a). Rather, the recent amendments to this section
7
See supra note 1.
9
suggest quite the contrary: taxes are not included in the calculation of a retailer’s cost
pursuant to W. Va. Code § 47-11A-6(a). “Courts are not free to read into the language what
is not there but rather should apply the statute as written.” State ex rel. Frazier v. Meadows,
193 W. Va. 20, 24, 454 S.E.2d 65, 69 (1994). Furthermore, “[i]t is not for this Court
arbitrarily to read into a statute that which it does not say. Just as courts are not to eliminate
through judicial interpretation words that were purposely included, we are obliged not to add
to statutes something the Legislature purposely omitted.” Syl. pt. 11, Brooke B. v. Ray, 230
W. Va. 355, 738 S.E.2d 21 (2013).
Finally, to the extent that the facts of this case present a unique scenario given
that the retailers herein sell gasoline, which is subject to state and federal motor fuel taxes,
we concur with the circuit court’s suggestion that such policy decisions are better suited for
legislative consideration and decision. See Syl. pt. 2, Huffman v. Goals Coal Co., 223
W. Va. 724, 679 S.E.2d 323 (2009) (“This Court does not sit as a superlegislature,
commissioned to pass upon the political, social, economic or scientific merits of statutes
pertaining to proper subjects of legislation. It is the duty of the Legislature to consider facts,
establish policy, and embody that policy in legislation. It is the duty of this Court to enforce
legislation unless it runs afoul of the State or Federal Constitutions.”).
10
Accordingly, we conclude that W. Va. Code § 47-11A-6(a) (1983) (Repl. Vol.
2015) does not include taxes in the calculation of a retailer’s cost, and we affirm the circuit
court’s ruling in this regard.
IV.
CONCLUSION
For the foregoing reasons, the January 3, 2017, order of the Circuit Court of
Harrison County, Business Court Division, is hereby affirmed.
Affirmed.
11