Schojan et al v. Papa John's International, Inc. et al
Filing
34
ORDER denying 15 Motion to Dismiss or to Stay Action. Papa John's response to the Complaint shall be filed on or before July 30, 2014. See Order for details. Signed by Judge Virginia M. Hernandez Covington on 7/23/2014. (KAK)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
BRUCE SCHOJAN, et al.,
Plaintiffs,
v.
Case No. 8:14-cv-1218-T-33MAP
PAPA JOHN’S INTERNATIONAL INC.
and PAPA JOHN’S USA, INC.,
Defendants.
________________________________/
ORDER
This cause comes before the Court pursuant to Papa John’s
International,
Inc.
and
Papa
John’s
USA,
Inc.’s
(“Papa
John’s”) Motion to Dismiss or to Stay Action (Doc. # 15) which
was filed on June 13, 2014. Bruce Schojan, Sean Timmons, and
Christopher Tollerton (“Plaintiffs”) filed their Response
(Doc. # 21) on June 30, 2014. The Court held oral argument on
July 16, 2014. For the reasons that follow and the reasons
stated at the hearing on July 16, 2014, the Court denies the
Motion to Dismiss.
I.
Background
Plaintiffs filed this putative class action in state
court on March 28, 2014, alleging that Papa John’s negligently
misrepresented a sales tax for food delivered to customers
that included a sales tax on Papa John’s delivery fee. (Doc.
# 2 at ¶ 40). Furthermore, Plaintiffs claim that Papa John’s
charged and collected excess sales tax on delivery fees
charged to its customers in violation of Florida law. (Id.).
Specifically, Plaintiffs allege that Papa John’s included in
the base amount upon which the tax was calculated a $3.00
delivery fee that Plaintiffs claim is exempt from taxation
under Florida law because it is not “part of the [relevant
pizza] sale[s].” (Doc. # 15 at 2).
Papa John’s removed the case to this Court on May 22,
2014, under the Class Action Fairness Act. (Doc. # 1). Papa
John’s
now
asks
the
Court
to
dismiss
the
case,
or
alternatively, to stay the case.
II.
Legal Standard
On a motion to dismiss, this Court accepts as true all
the allegations in the complaint and construes them in the
light most favorable to the plaintiff.
Jackson v. Bellsouth
Telecomms., 372 F.3d 1250, 1262 (11th Cir. 2004).
this
Court
favors
the
plaintiff
with
all
inferences from the allegations in the complaint.
Further,
reasonable
Stephens
v. Dep’t of Health & Human Servs., 901 F.2d 1571, 1573 (11th
Cir. 1990) (“On a motion to dismiss, the facts stated in [the]
complaint and all reasonable inferences therefrom are taken
as true.”). However, in Twombly, the Supreme Court cautioned:
While a complaint attacked by a Rule 12(b)(6)
motion to dismiss does not need detailed factual
allegations, a plaintiff’s obligation to provide
2
the grounds of his entitlement to relief requires
more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action
will not do. Factual allegations must be enough to
raise a right to relief above the speculative
level.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)(internal
citations omitted).
Courts
conclusion
are
not
couched
as
“bound
a
to
factual
accept
as
true
allegation.”
a
legal
Papasan
v.
Allain, 478 U.S. 265, 286 (1986). Furthermore, “Threadbare
recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice.” Ashcroft v.
Iqbal, 556 U.S. 662 (2009).
III. Analysis
A. Florida Statutes
Papa John’s claims that Florida law precludes a direct
purchaser
action
against
a
retailer
to
recover
alleged
overpayments that have been remitted to the State. (Doc. # 15
at 4). Papa John’s cites to Florida Statutes § 212.07(1)(a)
and
§
212.18,
retailer,
alleging
vendor,
or
that
dealer
under
Florida
collects
sales
law,
when
a
tax
from
a
purchaser, it does so as an involuntary agent of the State,
and any sums collected as taxes from purchasers must be
remitted to the Florida Department of Revenue. (Id.). Papa
John’s
further
contends
that
3
Florida
Statute
§
213.756
expressly bars the purchaser from recovering from a retailer
alleged overpayments that have been remitted to the Florida
Department of Revenue. (Id. at 6).
Florida Statute § 213.756, provides in relevant part:
(2)(a) In any action by a purchaser against a
retailer, dealer, or vendor to obtain a refund of
or to otherwise recover taxes, fees, or surcharges
collected by the retailer, dealer, or vendor from
the purchaser:
2. The sole remedy in the action is damages
measured by the difference between what the
retailer, dealer, or vendor collected as a
tax, fee, or surcharge and what the retailer,
dealer, or vendor paid to the taxing authority
plus any discount or collection allowance
authorized by law and taken by the retailer,
dealer, or vendor; and
3. It is an affirmative defense to the action
when the retailer, dealer, or vendor remitted
the amount collected from the purchaser to the
appropriate
taxing
authority,
less
any
discount or collection allowance authorized by
law.
Papa John’s claims that under § 213.756(2)(a)(2), even
if Papa John’s wrongfully collects a sales tax on delivery,
Plaintiffs have no remedy against Papa John’s unless Papa
John’s failed to remit the resulting overcharges (less the
authorized collection allowance) to the Florida Department of
Revenue. (Doc. # 15 at 8). Papa John’s contends that because
Plaintiffs have not alleged that Papa John’s retained any
portion of the taxes it collected, the complaint does not
state a plausible claim to relief under Rule 8(a), Fed. R.
4
Civ. P. and should be dismissed under Rule 12(b)(6), Fed. R.
Civ. P. (Id.). According to Papa John’s, the Plaintiffs’
remedy lies with the Florida Department of Revenue. (Id. at
10).
Plaintiffs claim that Papa John’s improperly moves to
dismiss based on an affirmative defense -- Florida Statute §
213.756 -- not found on the face of the complaint. (Doc. # 21
at 5). Plaintiffs assert that the factual matters relative to
Papa John’s affirmative defenses have no bearing on whether
Plaintiffs have properly pled a claim for negligence or
injunctive relief arising out of Papa John’s practice of
charging and collecting sales tax on delivery fees. (Id. at
6).
Plaintiffs
contend
that
they
are
not
required
to
anticipate affirmative defenses in pleading their complaint.
(Id.); see La Grasta v. First Union Sec., 358 F.3d 840, 845
(11th Cir. 2004)(“plaintiffs [are] not required to negate an
affirmative
defense
in
[their]
complaint”);
Quiller
v.
Barclays Am./Credit, Inc., 727 F.2d 1067, 1069 (11th Cir.
1984) vacated on petition for rehearing, reinstated by 764
F.2d 1400 (11th Cir. 1985)(a complaint may only be dismissed
based on an affirmative defense “when [the complaint’s] own
allegations
indicate
the
existence
defense”).
5
of
an
affirmative
Furthermore, Plaintiffs claim that Florida Statute §
213.756 has limited applicability in this case and cannot
entirely eliminate Plaintiffs’ claims. (Doc. # 21 at 8).
According to Plaintiffs, § 213.756 is not a bar to a suit,
but rather in a claim by a purchaser against a “retailer,
vendor, or dealer” who has “collected” taxes improperly, that
single defendant has “an affirmative defense” when it proves
that it has “remitted the amount collected” to the Florida
Department of Revenue. (Id.). Plaintiffs contend that the
statute does not indicate that a purchaser’s refund claim
against
a
retailer
should
be
dismissed
under
any
circumstances. (Id.). Furthermore, Plaintiffs claim that the
statute does not prohibit injunctive relief to stop the
unlawful charging and collection of what they allege is an
illegal sales tax. (Id. at 10).
This Court agrees that Plaintiffs are not required to
anticipate affirmative defenses in pleading their complaint.
See La Grasta, 358 F.3d at 845. Therefore, the Court declines
to consider Papa John’s affirmative defenses under Florida
Statute § 213.756 at this early juncture. Under Rule 12(b)(6),
Fed. R. Civ. P., the Court may only dismiss a complaint based
on an affirmative defense when “the defense clearly appears
on the face of the complaint,” which it does not in this
particular case. See Quiller 727 F.2d at 1069. Under Rule 8,
6
Fed. R. Civ. P., a plaintiff must only provide a “short and
plain statement of the claim showing that the pleader is
entitled to relief.” Fed. R. Civ. P. 8(a)(2). The amended
complaint states,
40. Papa John’s was negligent and breached its duty of
reasonable care in the following respects:
a. Papa John’s negligently misrepresented a sales
tax for food delivered to customers that
included a sales tax to Defendant’s delivery
fee.
b. Papa John’s charged and collected sales tax on
delivery fees charged to its customers in
violation of Florida law.
41. As a direct and proximate result of Papa John’s
negligence, Plaintiffs, and all other similarly
situated, paid sales tax on non-taxable services.
(Doc. # 2 at ¶¶ 40, 41). The Court agrees that Plaintiffs
have adequately pled a claim for negligence and do not need
to
anticipate
affirmative
defenses
in
pleading
their
complaint. Therefore, the Motion to Dismiss is denied in this
regard.
B. Voluntary Payment Doctrine
Papa
dismissed
John’s
claims
because,
under
that
the
complaint
Florida’s
should
voluntary
be
payment
doctrine, money voluntarily paid under a claim of right, with
full knowledge of the material facts, cannot be recovered
merely because the paying party, at the time of the payment,
mistook the law as to his liability to pay. See Hassen v.
7
MediaOne of Greater Fla., Inc., 751 So. 2d 1289, 1290 (Fla.
1st DCA 2000)(“It does not matter that the payment may have
been made upon a mistaken belief as to the enforceability of
the demand, or liability under the law, as long as payment is
made with knowledge of the factual circumstances”); Sanchez
v. Time Warner, Inc., No. 98-211-CIV-T-26A, 1998 WL 834345,
at *3-4 (M.D. Fla. Nov. 4, 1998)(granting the defendant’s
motion to dismiss because the plaintiff’s claims were barred
by the voluntary payment doctrine). Papa John’s alleges that
Plaintiffs paid sales tax on delivery fees with knowledge of
the facts, including both the amount of the sales tax charged
and
the
base
amount
upon
which
it
was
calculated,
and
therefore their claims are barred. (Id. at 13).
Plaintiffs contend that the application of the voluntary
payment doctrine involves a fact-intensive examination that
cannot be resolved on a motion to dismiss. (Doc. # 21 at 11).
Plaintiffs cite to numerous cases to support their claim that
courts routinely hold that it is inappropriate to dismiss a
complaint in reliance upon the voluntary payment doctrine
because it is an affirmative defense that “often entails a
fact-based inquiry and is not suited for resolution at the
dismissal stage.” Cableview Comm’ns of Jacksonville, Inc. v.
Time Warner Cable SE LLC, No. 3:13-cv-306-J-34JRK, 2014 WL
1268584, at *20 (M.D. Fla. March 27, 2014) (internal citation
8
omitted); Taylor, Bean & Whitaker Mort. Corp. v. GMAC Mort.
Corp., No. 5:05-cv-260-Oc-GRJ, 2007 WL 1114045 (M.D. Fla.
April 12, 2007). Plaintiffs assert that Papa John’s statement
that Plaintiffs voluntarily paid the allegedly illegal sales
tax “with full knowledge of the facts” (Doc. # 15 at 11) is
a conclusory statement that finds no support in the complaint
itself. (Doc. # 21 at 12).
Furthermore,
Plaintiffs
claim
that
there
is
no
enforceable obligation to pay a tax that is not permitted to
be levied under Florida law. (Id. at 14). Plaintiffs cite to
Florida Statute § 725.04, which provides:
When a suit is instituted by a party to a contract
to recover a payment made pursuant to the contract
and by the terms of the contract there was no
enforceable obligation to make the payment or the
making of the payment was excused, the defense of
voluntary payment may not be interposed by the
person receiving payment to defeat recovery of the
payment.
Therefore,
Plaintiffs
assert
that
the
voluntary
payment
doctrine is inapplicable to their claims. (Doc. # 21 at 14).
Plaintiffs
doctrine
is
also
available
argue
only
that
to
the
the
voluntary
specific
payment
entity
that
collected the excess payment and from whom relief is sought.
(Id. at 15). Therefore, the doctrine does not preclude a suit
by one who pays a bill because of another’s negligence, as
Plaintiffs allege here. (Id.). Finally, Plaintiffs contend
9
that discovery on the nature of the payments made and the
relationship between the parties is required to determine if
the voluntary payment doctrine applies and whether one or
more
of
the
many
exceptions
to
the
rule
preclude
its
application. (Id. at 16).
Plaintiffs
rely
on
numerous
cases
to
support
their
assertion that, under Florida law, if a tax is collected
illegally and payment is involuntary, the payer of that tax
may bring a cause of action against the entity collecting the
tax regardless of the common-law rule cited by Papa John’s.
See., e.g., Broward Cnty. v. Mattel, 397 So. 2d 457, 460 (Fla.
4th DCA 1981)(“under the common law if the payment of a tax
is deemed involuntary, a tax which is unlawfully collected
may be recovered back by appropriate action.”); Bill Stroop
Roofing, Inc. v. Metro. Dade Cnty., 788 So. 2d 365, 368 (Fla.
3d DCA 2001)(finding that an illegal fee was required to be
paid with other, legitimate fees, and return of the illegal
fees was justified).
This
Court
agrees
with
Plaintiffs
that
it
is
inappropriate to dismiss this case based on the voluntary
payment doctrine at this preliminary juncture. See Cableview
Comm’ns of Jacksonville, Inc., 2014 WL 1268584, at *20 (“the
voluntary payment doctrine does not warrant dismissal at this
motion to dismiss stage of the proceedings”); Taylor, Bean &
10
Whitaker Mort. Corp., 2007 WL 1114045, at *6 (“the voluntary
payment doctrine is an affirmative defense that normally
should not be considered on a motion to dismiss”). Whether or
not the Plaintiffs paid the sales tax with full knowledge of
the situation is a question of fact that the Court cannot
reconcile on a motion to dismiss.
C. Administrative Remedies
Papa
John’s
contends
that
Plaintiffs
are
seeking
a
refund of taxes paid to the State and must first pursue a
refund claim under § 215.26, Florida Statutes. (Id. at 15).
According to Papa John’s, Florida law allows a taxpayer to
seek a refund of tax payments made in error by filing an
application for refund with the Florida Department of Revenue
within three years. (Id.). Therefore, Papa John’s asserts
that the taxpayer must seek an administrative remedy from the
Florida Department of Revenue before contesting the legality
of a refund denial or tax assessment in court. (Id.). Papa
John’s contends that each member of the putative class must
file and be denied a refund of the taxes at issue in this
case before seeking to recover them in court. See In P.R.
Mktg. Grp., Inc. v. GTE Fla., Inc., 747 So. 2d 962, 964 (Fla.
2d DCA 1999)(determining that each member of the proposed
class who had been charged an allegedly improper tax was
11
required to file an individual refund claim before he could
be included in any plaintiff class).
Plaintiffs
counter
that
they
do
not
have
an
administrative remedy to recover the allegedly illegal sales
tax paid on delivery fees. (Doc. # 21 at 16). According to
the
Plaintiffs,
the
Florida
Administrative
Code
and
the
Department of Revenue expressly prohibit the Plaintiffs from
seeking a refund from the Florida Department of Revenue. (Id.
at 18). Plaintiffs cite to Chapter 12-26 of the Florida
Administrative Code, which requires the submission of Form
DR-26S to obtain any refund claimed for sales tax. The form
permits only a “business or individual who has made a payment
directly to the Florida Department of Revenue . . . [to] apply
for a refund.” (Id.). Furthermore, Plaintiffs point to Rule
12A-1.014(4)
of
the
Florida
Administrative
Code
which
provides: “a taxpayer who has overpaid tax to a dealer, or
who has paid tax to a dealer when no tax is due, must secure
a
refund
of
the
tax
from
the
Department of Revenue.” (Id.)
Plaintiffs,
a
refund
from
the
dealer
and
not
from
the
Therefore, according to the
Department
of
Revenue
is
available only to company-owned restaurants and franchised
Papa John’s that collected the allegedly illegal tax and paid
to
the
Florida
Department
of
Revenue,
and
there
administrative remedy for the Plaintiffs. (Id. at 19).
12
is
no
Papa John’s has not convinced the Court that dismissal
is warranted due to the presence of an administrative remedy.
Plaintiffs are not a “business or individual who ha[ve] made
a payment directly to the Florida Department of Revenue.”
Therefore, they do not fall into the category required by
Chapter 12-26 of the Florida Administrative Code to submit
the
form
to
obtain
any
refund
claimed
for
sales
tax.
Furthermore, according to Florida Administrative Code Rule
12A-1.014(4), Plaintiffs must seek a refund directly from the
dealer, not the Florida Department of Revenue. See Fla. Admin.
Code R. 12A-1.014(4). Therefore, the Court agrees that the
Plaintiffs have no administrative remedy and the Motion to
Dismiss is denied in this regard.
D. Primary Jurisdiction of the Department of Revenue
Papa John’s requests that, if the Court declines to
dismiss the complaint, then the Court should stay the case
until
the
Florida
Department
of
Revenue
first
makes
a
determination as to whether the delivery fees are taxable.
(Doc. # 15 at 17). Papa John’s argues that Plaintiffs’ claims
are based on a specialized area of law whose interpretation
and
enforcement
have
been
specifically
assigned
by
the
Florida legislature to the Florida Department of Revenue, and
the agency should make its determination on the propriety of
the taxes before the Court weighs in on the matter. (Id.).
13
See Boyes v. Shell Oil Prods., Inc., 199 F.3d 1260, 1265 (11th
Cir. 2000)(“The main justifications for the rule of primary
jurisdiction are the expertise of the agency deferred to and
the
need
for
a
uniform
interpretation
of
a
statute
or
regulation”). Papa John’s claims that the issue of whether
delivery fees are taxable lies squarely within the special
competence
of
the
Florida
Department
of
Revenue,
and
deference is required to preserve the integrity of Florida’s
administrative scheme for sales taxes and uniformity in an
unusually complex and important area of the law. (Id.).
Plaintiffs contend that there is no reason to stay this
action to seek guidance from the Florida Department of Revenue
as to whether separately invoiced, avoidable sales taxes on
delivery fees are taxable, because this practice is clearly
illegal. (Doc. # 21 at 19). Plaintiffs rely on Florida
Department of Revenue v. B & L Concepts, Inc., 612 So. 2d
720, 721 (Fla. 5th DCA 1993), where the court held that, with
respect to the propriety of taxing delivery fees, that:
If such service charges or fees are separately
itemized and applied at the sole option or election
of the vendee or lessee, or can be avoided by
decision or action on the part of the vendee or
lessee alone, then those charges and fees are only
incidental to the sale, are not part of the “sales
price” and are not subject to sales tax.
14
Plaintiffs also cite to the Florida Administrative Code,
in a binding rule of law promulgated by the Florida Department
of Revenue, which provides that:
The charge for transportation services is not
subject to tax when both of the following
conditions have been met:
1. The charge is separately stated on an invoice
or bill of sale; and
2. The charge can be avoided by a decision or
action solely on the part of the purchaser.
Fla. Admin. Code R. 12A-1.045(4)(a)(Effective October 17,
1994).
Therefore,
Plaintiffs
argue
that
the
charge
and
collection of sales tax on a Papa John’s pizza delivery fee
is patently illegal, and the Court needs no further input
from the Department of Revenue. (Doc. # 21 at 19).
This Court agrees with the Plaintiffs that a stay of the
case is not necessary pending a determination from the Florida
Department
of
Revenue.
The
Florida
Administrative
Code
provides that the charge for transportation services is not
subject to tax when the charge is separately stated on an
invoice or bill of sale and the charge can be avoided by a
decision or action on the part of the purchaser. See Fla.
Admin.
Code
R.
12A-1.045(4)(a).
15
Therefore,
the
Court
declines to stay this action and the Motion to Dismiss is
denied.1
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
(1)
Defendant Papa John’s Motion to Dismiss or to Stay
Action (Doc. # 15) is DENIED.
(2)
Papa John’s response to the complaint shall be filed
on or before July 30, 2014.
DONE and ORDERED in Chambers, in Tampa, Florida this
23rd day of July, 2014.
Copies: All Counsel of Record
1 The Court also declines to convert the present Motion into
a motion for summary judgment.
16
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