                                                                             Oct 09 2013, 6:05 am

FOR PUBLICATION

ATTORNEYS FOR APPELLANTS:                    ATTORNEY FOR APPELLEES:

JOHN C. THEISEN                              SETH B. LEWIS
NATHANIEL O. HUBLEY                          Seth B. Lewis Law Office, LLC
Theisen Bowers & Associates, LLC             Danville, Indiana
Fort Wayne, Indiana

                             IN THE
                   COURT OF APPEALS OF INDIANA

CUSTOM RADIO CORP.,                          )
CUSTOM MANAGEMENT                            )
GROUP, INC., RICHARD                         )
YARGER and ROBERT                            )
O’BRIEN,                                     )
                                             )
      Appellants-Plaintiffs,                 )
                                             )
             vs.                             )       No. 32A01-1303-CC-143
                                             )
ACTUARIES & BENEFIT                          )
CONSULTANTS, INC., and                       )
JOHN M. FOGLE,                               )
                                             )
      Appellees-Defendants.                  )

                   APPEAL FROM THE HENDRICKS SUPERIOR COURT
                         The Honorable David H. Coleman, Judge
                             Cause No. 32D02-1010-CC-266

                                   October 9, 2013
                             OPINION - FOR PUBLICATION

BRADFORD, Judge

                                    CASE SUMMARY

       Appellants-Plaintiffs Custom Radio Corp.; Custom Management Group, Inc.; Richard

Yarger; and Robert O’Brien appeal the trial court’s grant of summary judgment in favor of

Appellees-Defendants Actuaries & Benefit Consultants, Inc. and John Fogle. From 1995 to

2004, Appellees provided consulting services to Appellants with respect to certain Welfare

Benefit Plans investing in cash value life insurance. The plans were designed to comply with

26 U.S.C. § 419(A)(f)(6) so that Appellants’ contributions thereto would be tax-deductible.

In July of 2003, however, the Internal Revenue Service (“IRS”) issued final regulations with

regard to subsection 419(A)(f)(6), which rendered Appellants’ plans non-compliant and their

contributions retroactively taxable. A subsequent IRS audit revealed that Appellants owed

nearly $750,000 in back taxes, penalties, and interest, but, on October 20, 2008, Appellants

entered into a settlement agreement with the IRS, whereby the tax penalties were waived.

       On October 19, 2010, Appellants filed suit against Appellees, claiming negligent

provision of consulting services and breach of oral contract. Appellees moved for summary

judgment on the basis that the statutes of limitation had expired. The trial court determined

that Appellants’ causes of action accrued and their respective statutes of limitation began to

run on April 30, 2004, by which date Appellants allegedly knew that their Welfare Benefit

                                              2
Plans were non-compliant with 26 U.S.C. § 419(A)(f)(6). On appeal, Appellants argue that

their causes of action did not accrue until October 20, 2008, the date on which they reached

their settlement agreement with the IRS and thereby discovered their damages.

        We conclude that Appellants’ causes of action accrued and the statutes of limitation

began to run on the date Appellants knew or, through ordinary diligence, could have

discovered that their Welfare Benefit Plans were non-compliant with subsection 419(A)(f)(6)

and that their plan contributions were retroactively taxable. But finding a genuine issue of

fact as to whether Appellants knew or could have known this information by April 30, 2004,

we hold that summary judgment is inappropriate. The judgment of the trial court is reversed

and remanded.

                          FACTS AND PROCEDURAL HISTORY1

        Yarger and O’Brien are the owners and operators of Custom Radio Corp. (“Custom

Radio”), a company that supplies the truck and bus market with audio and video systems.

Fogle is the President of and a consultant with Actuaries & Benefit Consultants, Inc.

(“ABC”), a company that specializes in designing, installing, and administering retirement

plans. From 1995 to 2006, ABC and Fogle provided consulting services to Yarger and

O’Brien with respect to Custom Radio. Throughout the course of this business relationship,

Yarger was the point of contact at Custom Radio, and O’Brien was relatively uninvolved.

        In late 1995, Fogle discussed with Yarger the purchase of cash value life insurance to

        1
          On July 29, 2013, Appellants filed a motion to strike certain portions of Appellees’ Appendix and
Appellees’ Brief. We have reviewed the complained of material and, finding it to have no bearing on our
decision in this matter, deny Appellants’ motion as moot.
                                                    3
fund a buy-sell agreement between Yarger and O’Brien with respect to Custom Radio. Fogle

advised that using a Welfare Benefit Plan in compliance with 26 U.S.C. § 419(A)(f)(6)

would enable Yarger and O’Brien to claim tax deductions for their plan contributions (i.e.,

their life insurance premiums). Fogle further advised Yarger and O’Brien to establish a

management company for Custom Radio, such that only a select few employees could benefit

from the Welfare Benefit Plan. Yarger and O’Brien established Custom Management Group,

Inc. (“Custom Management”) for this purpose and named themselves as the company’s only

employees.

       In January of 1996, Custom Management enrolled in a Welfare Benefit Plan known as

the Prime Financial Multiple Employer Welfare Benefit Fund (the “Prime Plan”). At the

time, the IRS had issued no regulations regarding 26 U.S.C. § 419(A)(f)(6), but the sponsor

of the Prime Plan believed that it complied with that subsection. In June of 1997, however,

the United States Tax Court issue its decision in Booth v. Commissioner, 108 T.C. 524

(1997), striking down the Prime Plan as non-compliant with subsection 419(A)(f)(6).

       In February of 1998, in response to the Booth decision, Fogle recommended that

Custom Management switch to a different Welfare Benefit Plan, the National Benefit Plan

and Trust (the “National Plan”). At the time, the IRS still had issued no regulations

regarding 26 U.S.C § 419(A)(f)(6), but, like with the Prime Plan, the sponsor of the National

Plan believed it to comply with that subsection. On July 17, 2003, however, the IRS issued

final regulations declaring Welfare Benefit Plans investing in cash value life insurance—like

the Prime and National Plans—to be non-compliant with subsection 419(A)(f)(6).

                                             4
        The final regulations included the following provision regarding their effective date:

        Except as explained below, these regulations—which generally clarify existing
        law—are effective for contributions paid or incurred in taxable years of an
        employer beginning on or after July 11, 2002. For contributions made before
        this effective date, the IRS will continue applying existing law, including the
        analysis set forth in Notice 95-34 and relevant case law. Thus, taxpayers
        should not infer that a contribution that would be nondeductible under the
        regulations would be deductible if made before that date. In this regard,
        taxpayers are reminded that the IRS has already identified transactions that are
        the same as or substantially similar to the transactions described in Notice 95-
        34 as listed transactions for purposes of Sec. 1.6011-4T(b)(2) of the
        Temporary Income Tax Regulations and Sec. 301.6011-2T(b)(2) of the
        Temporary Procedure and Administration Regulations[.]

Appellants’ App. p. 61 (emphasis in original). As a result, Yarger’s and O’Brien’s

contributions to the National Plan were retroactively taxable.2 (Appellants’ App. 43-44, 46).

        In February of 2004, in response to the IRS’s final regulations, Fogle recommended

that Custom Management switch to a single employer plan under 26 U.S.C. § 419(E).

Custom Radio’s CPA agreed with Fogle’s recommendation, and Yarger decided to have the

CPA handle the transaction. In April of 2004, Yarger informed Fogle that his services with

respect to Custom Management’s Welfare Benefit Plan were no longer needed.

        In early 2007, the IRS notified Yarger and O’Brien that it would be conducting an

audit of Custom Management’s taxes. In March of 2008, the IRS completed its audit and

reported to Yarger and O’Brien that they owed $291,578.82 and $441,023.76, respectively, in

back taxes, penalties, and interest. Yarger and O’Brien, however, were able to negotiate

        2
          It is unclear from the record whether this retroactivity reached all of Yarger’s and O’Brien’s
contributions to the National Plan and whether it reached any of their contributions to the Prime Plan. The
absence of this information, however, has no bearing on our decision in this matter.

                                                    5
settlements with the IRS, whereby the tax penalties were waived in exchange for their

payment of the back taxes and interest. The IRS prepared settlement agreements reflecting

these terms on September 25, 2008, which agreements O’Brien and Yarger signed on

October 19 and 20, 2008, respectively.

        On October 19, 2010, Yarger and O’Brien3 filed a complaint against ABC and Fogle,

claiming negligent provision of consulting services and breach of oral contract. ABC and

Fogle answered the complaint, asserting the affirmative defense that both claims were barred

by their respective statutes of limitation.4 On November 15, 2012, ABC and Fogle moved for

partial summary judgment with respect to their statute of limitation defense. Specifically,

ABC and Fogle argued that Yarger and O’Brien’s causes of action accrued as early as July

17, 2003, the date on which the IRS issued its final regulations with regard to 26 U.S.C. §

419(A)(f)(6), and, at the latest, on April 30, 2004, the date by which Yarger and O’Brien

allegedly knew that their Welfare Benefit Plans were non-compliant with that subsection.

Yarger and O’Brien responded in opposition to summary judgment, arguing that their causes

of action accrued on October 20, 2008, the date on which they entered into their settlement

agreements with the IRS.

        The trial court heard argument on ABC and Fogle’s motion on January 28, 2013, and,

on March 1, 2013, granted summary judgment in their favor. In its order, the court

        3
            We refer to Appellants collectively as “Yarger and O’Brien” for the remainder of this opinion.
        4
          Indiana Code section 34-11-2-4 requires Yarger and O’Brien’s negligence claim to have been
commenced within two years after that cause of action accrued. Indiana Code section 34-11-2-7 requires their
breach of oral contract claim to have been commenced within six years of its accrual.
                                                       6
specifically found as follows:

              10. In the instant case, while it is perhaps arguable whether the Statutes
       of Limitations applicable to this case began to run on July 17, 2003, it is
       beyond doubt that Yarger and O’Brien knew that Section 419(A)(f)(6) Welfare
       Benefit Plans had been rendered “experience rated” and had become “listed
       transactions” because by April 30, 2004, they had been told of those facts by
       Fogle himself during a meeting or meetings with at least one of their
       accountants, and had acted independently to adopt a Single-Employer Plan (the
       Arrowhead Trust), without bothering to inform Fogle.
              11. The Court, therefore, finds that each of the applicable Statutes of
       Limitations in this case began to run on April 30, 2004, and thus expired as a
       matter of law on April 30, 2006[,] as to Plaintiffs’ negligence claim and on
       April 30, 2010[,] as to Plaintiffs’ breach of oral contract claim.

Appellants’ App. p. 19. Where appropriate, additional facts will be supplied below.

                             DISCUSSION AND DECISION

       Yarger and O’Brien challenge the trial court’s grant of summary judgment in favor of

ABC and Fogle. The standard of appellate review of a summary judgment ruling is the same

as that used in the trial court. Boggs v. Tri-State Radiology, Inc., 730 N.E.2d 692, 695 (Ind.

2000). Summary judgment is appropriate only when there are no genuine issues of material

fact and the moving party is entitled to a judgment as a matter of law. Ind. Trial Rule 56(C);

First Farmers Bank & Trust Co. v. Whorley, 891 N.E.2d 604, 607 (Ind. Ct. App. 2008). In

reviewing the designated evidence, we construe all facts and reasonable inferences drawn

therefrom in favor of the nonmoving party. Boggs, 730 N.E.2d at 695. And where, as here,

the trial court enters findings of fact and conclusions of law in support of its judgment, such

special findings are not binding on appeal. Whorley, 891 N.E.2d at 608.

I. Whether Appellants’ Causes of Action Accrued When They Knew or Could Have
        Discovered that Their Welfare Benefit Plans Were Non-Compliant

                                              7
       Yarger and O’Brien argue that the trial court erred in determining that their causes of

action accrued on the date by which they allegedly knew that their Welfare Benefit Plans

were non-compliant with 26 U.S.C. § 419(A)(f)(6). Under Indiana’s discovery rule, “a cause

of action accrues and the statute of limitations begins to run when the plaintiff knew or, in

the exercise of ordinary diligence, could have discovered that an injury had been sustained as

a result of the tortious act of another.” Wehling v. Citizens Nat. Bank, 586 N.E.2d 840, 843

(Ind. 1992). “In other words, a cause of action accrues … when the resultant damage of a

negligent act is susceptible of ascertainment.” Page v. Hines, 594 N.E.2d 485, 487 (Ind. Ct.

App. 1992). This rule applies to both tort and contract claims. Del Vecchio v. Conseco, Inc.,

788 N.E.2d 446, 449 (Ind. Ct. App. 2003).

       Yarger and O’Brien claim their causes of action did not accrue until they reached their

respective settlement agreements with the IRS. Prior to that date, Yarger and O’Brien

contend, their damages were not ascertainable. Yarger and O’Brien, however, confuse

“damage,” a requisite element of any tort, with “damages,” a measure of compensation. See

Shideler v. Dwyer, 417 N.E.2d 281, 289 (Ind. 1981). “For a wrongful act to give rise to a

cause of action and thus to commence the running of the statute of limitations, it is not

necessary that the extent of the damage be known or ascertainable but only that damage has

occurred.” Id. at 281-87 (holding devisee’s damage from a negligently drafted will, if any,

occurred at the moment testator died rather than upon probate court’s decree that the devise

was void); see Filip v. Block, 879 N.E.2d 1076, 1082 (Ind. 2008) (holding insureds’ claim

against insurance agent for negligent procurement of coverage accrued on the date insureds

                                              8
could have discovered they were underinsured rather than the date that fire destroyed their

property).

       Here, the damage resulting from ABC and Fogle’s alleged negligent provision of

consulting services and their breach of oral contract, if any, was Yarger’s and O’Brien’s

retroactive tax liability for unauthorized deductions associated with their Welfare Benefit

Plans. This liability arose on the date the IRS published its final regulations regarding 26

U.S.C. § 419(A)(f)(6), declaring Welfare Benefit Plans investing in cash value life insurance

non-compliant with that subsection. Therefore, we hold that Yarger and O’Brien’s causes of

action accrued and the statutes of limitation began to run on the date they knew or, through

the exercise of ordinary diligence, could have discovered that their Welfare Benefit Plans

were non-compliant with subsection 419(A)(f)(6) and that their plan contributions were

retroactively taxable. See Whorley, 891 N.E.2d at 610 (holding heir’s breach of fiduciary

duty claim against estate’s court appointed guardian, who never informed heir about estate’s

ineligibility for Special Use Valuation and its corresponding favorable tax regime, accrued on

the date the IRS notified heir that estate’s farmland had been denied Special Use Valuation

and incurred increased tax liabilities).

II. Whether Appellants Knew or Could Have Discovered that Their Welfare Benefit
                  Plans Were Non-Compliant by April 30, 2008

       Yarger and O’Brien argue that there is a genuine issue of material fact as to whether

they knew or could have discovered by April 30, 2004, that their Welfare Benefit Plans were

non-compliant with 26 U.S.C. § 419(A)(f)(6). Based on our review of the designated

evidence, we agree. During his deposition, Fogle testified that, in February of 2004, he told
                                            9
Yarger that the IRS had issued final regulations with respect to subsection 419(A)(f)(6) that

had rendered the National Plan “experience rated” and contributions to it “listed

transactions.” Appellants’ App. p. 47. Yarger, however, testified in his deposition that he

was unaware that the IRS had issued final regulations with respect to subsection

419(A)(f)(6), and that the terms “experience rated” and “listed transactions” did not mean

anything to him until Custom Management was audited in 2007. The parties also dispute

whether Fogle told Yarger there would be no adverse tax consequences if Custom

Management switched to a single employer plan.

       From this evidence, we conclude there is a genuine issue of material fact as to whether

Yarger and O’Brien knew or, through ordinary diligence, could have discovered by April 30,

2004, that their Welfare Benefit Plans were non-compliant with 26 U.S.C. § 419(A)(f)(6) and

their contributions thereto, retroactively taxable. When application of a statute of limitation

rests on questions of fact, it is generally an issue for a jury to decide. Wehling, 586 N.E.2d at

843. Therefore, summary judgment premised on the running of the statute of limitations is

inappropriate.

       The judgment of the trial court is reversed and remanded.

BAILEY, J., and MAY, J., concur.

                                               10


111 Ga. App. 358 (1965)
141 S.E.2d 790
CARD
v.
CHICHESTER'S BACONSFIELD PHARMACY, INC.
41057.
Court of Appeals of Georgia.
Decided March 16, 1965.
Adams, O'Neal, Steele, Thornton & Hemingway, H. T. O'Neal, Jr., for plaintiff in error.
Jones, Sparks, Benton & Cork, Frank C. Jones, contra.
PER CURIAM.
This case is controlled adversely to the plaintiff in error by the case of Gibson v. Consolidated Credit Corp., 110 Ga. App. 170 (138 SE2d 77). In Division 2 of the opinion in Gibson, the principal holding is that the petition did not state a cause of action against the defendant for negligence since nothing was alleged which, if proved, would be sufficient to show negligence. That holding at least in the badly split decision received the unquestioned concurrence of five judges, a majority of the court. See Judge Hall's special concurrence in which he agreed fully with Judge Eberhardt's view on this point.
The petition here in all material aspects has such a resemblance to the petition in Gibson as to be essentially the same. It follows that the holding in Gibson is applicable here and requires affirmance of the trial court's judgment in sustaining the defendant's general demurrer and dismissing the plaintiff's petition.
Judgment affirmed. Bell, P. J., Frankum and Hall, JJ., concur.


                       T.C. Memo. 1996-332

                     UNITED STATES TAX COURT

                PATRICIA E. IETTO, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent

     Docket No. 21265-94.                      Filed July 24, 1996.

     Patricia E. Ietto, pro se.

     Brendan G. King, for respondent.

             MEMORANDUM FINDINGS OF FACT AND OPINION

     POWELL, Special Trial Judge:   This case was assigned

pursuant to the provisions of section 7443A(b)(3) and Rules 180,

181, and 182.1

     1
         Section references are to the Internal Revenue Code in
effect for the year in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure.
                                   2

     Respondent determined a deficiency in petitioner's Federal

income tax for the taxable year 1991 in the amount of $172.

Respondent further determined that petitioner owed employment

taxes pursuant to the Federal Insurance Contributions Act (FICA

taxes) in the amount of $1,209.        At the time of filing the

petition, petitioner resided in Fair Lawn, New Jersey.

     The issues are:   (1) Whether this Court has jurisdiction to

review respondent's determination with respect to FICA taxes; and

(2) whether petitioner underreported the amount of commission

income she received during 1991.

                         FINDINGS OF FACT

     The facts may be summarized as follows.        During 1991,

petitioner was employed by the New York Partnership Exchange,

Inc. (NYPE).2   NYPE facilitated the sale of partnership

interests.   Petitioner received commissions for successfully

matching buyers and sellers.   On her 1991 Federal income tax

return petitioner reported commission income in the amount of

$14,684.   Petitioner prepared this return without the benefit of

a Form 1099, which she received after April 15, 1992.        When the

Form 1099 finally arrived, it indicated that petitioner received

commission income in the amount of $15,813 for 1991.        Petitioner

computed her 1991 commission income by adding the individual

     2
         Although initially the subject of some dispute, the
parties agree that petitioner served as an employee, and not as
an independent contractor.
                                   3

commission checks she received during 1991.     Petitioner

introduced copies of the checks into evidence.     The sum of these

commission checks exceeded $15,813.

     In the notice of deficiency, respondent determined that

petitioner underreported her 1991 commission income by $1,129,

resulting in a deficiency in income tax of $172.     Respondent

further asserted that petitioner was liable for the employee's

share of FICA taxes in the amount of $1,209 for 1991.       See sec.

3101.

     Petitioner filed the petition seeking a redetermination of

these adjustments.     Respondent filed a motion to dismiss for lack

of jurisdiction with respect to the employment taxes contained in

the petition.

                                OPINION

FICA Taxes

        The United States Tax Court is a court of limited

jurisdiction.     See sec. 7442; Wilt v. Commissioner, 60 T.C. 977,

978 (1973).     Generally, this jurisdiction is limited to income,

estate, gift, and certain excise taxes which are subject to the

deficiency notice requirements of sections 6212(a) and 6213(a).

Rule 13; Enochs v. Green, 270 F.2d 558 (5th Cir. 1959); Judd v.

Commissioner, 74 T.C. 651, 653 (1980).     This Court has no

jurisdiction over FICA taxes imposed on an employee.        Chatterji

v. Commissioner, 54 T.C. 1402, 1405 (1970).     Accordingly,
                                  4

respondent's motion to dismiss for lack of jurisdiction as to the

portion of the petition relating to FICA taxes is granted.

Income Tax

     Respondent's determination is presumed correct and

petitioner bears the burden of proving that the determination is

erroneous.    Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115

(1933).   Gross income means all income from whatever source

derived including commissions received for services.    Sec.

61(a)(1).    Taxpayers are taxed on the amount of income they

receive, and the extent to which other parties may fail to comply

with the various reporting provisions of the Internal Revenue

Code has no bearing on a taxpayer's gross income.    See Vaughn v.

Commissioner, T.C. Memo 1992-317, affd. without published opinion

15 F.3d 1095 (9th Cir. 1993).

     Petitioner calculated her 1991 commission income by adding

the individual commission checks she received during 1991.

Petitioner admitted that she may have erred in her addition.     The

Form 1099 received by petitioner supports respondent's

determination as does the sum of petitioner's commission checks.

NYPE's delay in issuing the Form 1099 to petitioner has no

bearing on her gross income.    Accordingly, respondent's

determination with respect to the deficiency in Federal income

tax is sustained.

                                      An appropriate Order and

                                Decision will be entered.


471 F.2d 654
Miclauv.Lehman
72-1329
UNITED STATES COURT OF APPEALS Sixth Circuit
11/8/72
N.D.Ohio
AFFIRMED


285 So.2d 77 (1973)
Sarah L. Rodda JACKSON
v.
J. H. RODDA, Sr.
SC 255.
Supreme Court of Alabama.
November 8, 1973.
Corretti, Newsom, Rogers, May & Calton, Birmingham, for appellant.
Bishop, Carlton & Sweeney, Birmingham, for appellee.
MERRILL, Justice.
This appeal is from a decree ordering the respondent-appellant, Sarah Rodda Jackson, to reconvey to complainant-appellee, her father, J. H. Rodda, Sr., certain real property which he had previously conveyed to her by four warranty deeds all dated and executed January 13, 1966 and recorded the next day.
The bill of complaint, filed in August, 1971, charged mental incompetency to convey and undue influence, and also alleged that Rodda had demanded that his daughter reconvey the property to him but she had refused.
The court's decree stated in part:
"This real property had previously been conveyed by the father to the daughter by warranty deed. There was no monetary consideration for the execution of the deed from the father to daughter.
"The Court has heard extended oral testimony and has reviewed the exhibits in the file and has been furnished with memoranda of authorities accompanied by arguments of counsel in their respective briefs.
"From all the evidence and pleadings in this cause this Court can, under principles of equity and good conscience and upon allied authorities of the cases of Groover vs. Darden, 259 Ala. 607, 68 So.2d 28, Tipton vs. Tipton, 249 Ala. 537, 32 So.2d 32, and Jones vs. Booth [Boothe] 270 Ala. 420, 119 So.2d 203, conclude and find that, at the time of the execution of the deed by Complainant to Respondent Complainant was not mentally capable of understanding the consequences of his actions and was not mentally competent to convey said property to Respondent and that the conveyance was executed solely as the result of *78 the insistence of Respondent that Complainant execute the deed.
"Accordingly, it is CONSIDERED, ORDERED, ADJUDGED and DECREED by the Court as follows:
"ONE: Respondent is commanded to execute a warranty deed to Complainant which will convey the above described real property to him, free from all encumbrances.
"TWO: Respondent is not required to account to Complainant' for rents and profits arising out of the use and rental of the said properties, these said emoluments being hereby awarded to her for her services to Complainant to date."
The motion for rehearing was denied.
The argued assignments of error charge that there is no evidence to support the conclusion that Rodda was mentally incompetent when the deeds were executed or that there was any undue influence on the part of the daughter.
In a similar case, Chrisman v. Brooks, 291 Ala. 237, 279 So.2d 500, this court said:
"Where evidence is heard orally before the trial court, the finding of the court has the effect of a jury's verdict and will not be disturbed on appeal, unless plainly erroneous, whether in law or equity. And we must affirm the trial court's decree, if fairly supported by credible evidence under any reasonable aspect, regardless of what might be our view of the evidence. Patterson v. Brooks, 285 Ala. 349, 232 So.2d 598. This rule has been applied in the following recent cases where the deed was set aside because of the incompetency of the grantors, or undue influence or both: (Citations omitted.)"
In view of the argued assignments of error, it is only necessary that we list evidence which supports the decree of the court although there was credible evidence presented by the appellant.
Rodda, who was 68 years of age when he testified at the trial, worked for Southern Railway Company. In May, 1964, appellant's seven-year-old son accidently shot and killed Rodda's wife. Rodda suffered a nervous breakdown and was ill for some time. The railroad would not rehire him in his former position. His daughter was looking after him, nursing him during his illness, paying his bills and advised him in his personal affairs. One of Rodda's sons testified that his father depended upon appellant for advice after his wife's death because appellant had obtained a better education than the other eleven brothers and sisters. During the period, May, 1964 and January 12, 1966, Rodda opened a joint checking account of $5,000.00 with his daughter.
Just prior to the execution of the deeds in January, 1966, there had been an explosion in a house he was renting and one or more of the tenants was injured. Appellant was called and she "insisted" that all the property he owned, including his home, be deeded to her. He testified that she said she would see that each of the children would "get an equal part." He told her where the deeds were and she took him to the home of an attorney and friend where the deeds were prepared and executed.
Three of Rodda's children, other than appellant, testified and at the request of the trial court, others who would have testified "substantially the same thing," were not called. The effect of that testimony was that on or about January 12 or 13, 1966, Rodda was emotionally unstable from the loss of his wife, sick, disturbed and would not have known or understood what he was doing in making a conveyance of all his property to appellant for no consideration.
Appellant testified that the property was conveyed to her as a gift because she had been a dutiful daughter in taking care of him. She admitted to the trial court that her father had told her, when he executed the deeds, "that he knew that you would do *79 the right thing by the other children." But when her father requested the property back, she refused to reconvey it. The court asked her what she thought was "the right thing to do about this property." Her reply was, "At my daddy's death, after his funeral expenses and his burial we will negotiate and we will do the right thing." Finally, she stated to the court that she would respect her father's will in handling his affairs, but she would do so at her own time and convenience.
In Groover v. Darden, 259 Ala. 607, 68 So.2d 28, the court said:
"A conveyance of land obtained for a grossly inadequate consideration by unfair advantage taken of great mental weakness, though not amounting to absolute incapacity of the grantor, will in equity be set aside on equitable terms when application therefor is made seasonably by the grantor, his representatives or heirs. Walling v. Thomas, 133 Ala. 426, 31 So. 982. Gross inadequacy of consideration, when coupled with other facts strongly tending to show fraud or undue advantage, is a suspicious circumstance. Burke v. Taylor, 94 Ala. 530, 10 So. 129."
The relationship of parent and child is confidential. Jones v. Boothe, 270 Ala. 420, 119 So.2d 203; Tipton v. Tipton, 249 Ala. 537, 32 So.2d 32.
"In transactions inter vivos, where the parties stand in confidential relations, and the grantee, who is the beneficiary, is the dominant spirit in the transaction, the law raises a presumption of undue influence and casts upon the opposite party the burden of repelling such presumption by satisfactory evidence whenever the transaction is assailed. * * *" Jones v. Boothe, 270 Ala. 420, 119 So.2d 203, and cases there cited.
While the trial court did not use the words "dominant spirit" in its opinion, still we think it clear that the court did consider appellant to be "the dominant spirit in the transaction" and there was evidence to support such a finding. It is evident that the trial court did not conclude that appellant had successfully met the burden of the presumption of undue influence cast upon her.
The authorities cited in this opinion support the decree of the trial court.
Affirmed.
HEFLIN, C. J., and HARWOOD, MADDOX and FAULKNER, JJ., concur.


150 S.W.3d 314 (2004)
Lee Kraft STICKLER and Terry Stickler, Plaintiffs-Respondents,
v.
FOREMOST SIGNATURE INSURANCE CO., Defendant-Appellant.
No. 25627.
Missouri Court of Appeals, Southern District, Division Two.
August 24, 2004.
Motion for Rehearing or Transfer Denied October 4, 2004.
*315 Russell F. Watters, T. Michael Ward, Brown & James, P.C., St. Louis, James B. James, Brown & James, P.C., Springfield, for defendant-appellant.
Michael T. Pivac, Thomas H. Hearne, Hearne & Pivac, Springfield, for plaintiffs-respondents.
Motion for Rehearing or Transfer to Supreme Court Denied October 4, 2004.
JOHN E. PARRISH, Presiding Judge.
Foremost Signature Insurance Co. (Signature) appeals a judgment rendered in favor of Lee Kraft Stickler and Terry Stickler (collectively referred to as plaintiffs) in an action for breach of contract. The contract in question is an insurance policy issued by Signature. This court affirms.
Signature issued a "Mobile Home Insurance Policy" to plaintiffs.[1] It was a renewal policy. The policy period was "[f]rom 09/09/00 To [sic] 09/09/01 12:01 A.M. STANDARD TIME." Plaintiffs made quarterly premium payments. The last premium payment plaintiffs paid was in March 2001. The property the policy covered was destroyed by fire July 24, 2001.
Ms. Stickler testified that no cancellation notice had been received from Signature during May or June of 2001. After the fire, Ms. Stickler asked for copies of any cancellation notice and for records regarding whether a cancellation notice had been mailed to her. None were provided.
Plaintiffs reported their loss to their insurance agent. Their agent told them the policy had been cancelled. Plaintiffs then contacted the Signature home office and were told "that it appeared that the policy had been cancelled for nonpayment, and that there may not be coverage." Plaintiffs later received a letter denying their loss claim. Plaintiffs brought this action *316 seeking the amounts of coverage provided by the terms of the policy plus interest, attorney fees, and costs. Signature alleged, as an affirmative defense, that the policy of insurance issued to plaintiffs had been cancelled for nonpayment of premium prior to the date of the claimed loss. The case proceeded to jury trial. The jury instructions included Instruction No. 6 that told the jury it was to find for Signature if it believed Signature had cancelled the policy of insurance pursuant to the cancellation provision of the policy.[2]
Verdict was returned for Signature. The trial court initially entered judgment in accordance with the verdict, but later granted plaintiffs' motion for judgment n.o.v. and entered judgment for plaintiffs for $59,500 "on the contract of insurance" and $8,289.24 prejudgment interest.
Signature raises two points on appeal, both directed to whether the policy of insurance had been cancelled by Signature. Both contend the trial court erred in granting plaintiffs' motion for judgment n.o.v.; that the policy of insurance gave Signature the right to cancel the policy and that the steps required for cancellation were met. Point I contends "the jury found that [Signature] mailed a cancellation notice to Plaintiffs in compliance with the cancellation provision." Point II asserts the cancellation notice was sufficient. It states several specifics that Signature argues were means by which it was permitted to unilaterally cancel the policy. Signature contends a notice was sent; that the notice "strictly complied with the policy's cancellation provision, although the notice was mailed on [Signature's] behalf by Foremost Insurance Company; there is no prohibition in the policy against a third party sending the notice[.]"
As this court perceives point I, Signature contends the policy terms were unambiguous regarding its right to unilaterally cancel plaintiffs' insurance policy; that it complied with those terms in that a notice of cancellation was mailed to plaintiffs.
Insurance policies are contracts. Central Surety and Ins. Corp. v. New Amsterdam Casualty Co., 359 Mo. 430, 222 S.W.2d 76, 78 (banc 1949). The rules of contract construction govern insurance policies. Peters v. Employers Mutual Casualty Co., 853 S.W.2d 300, 301-02 (Mo.banc 1993)....
Absent an equitable ground, an insurance policy may be cancelled only: 1) by mutual assent of the parties or, 2) under the terms of the policy. MFA Mutual Ins. Co. v. Southwest Baptist College, Inc., 381 S.W.2d 797, 801 (Mo.1964)....
Blair by Snider v. Perry County Mut. Ins. Co., 118 S.W.3d 605, 606-07 (Mo. banc 2003).
Here, as in Blair, there was no mutual assent to cancellation; neither is there a claim of an equitable ground for cancellation by Signature. The policy Signature issued to plaintiffs provides with respect to Signature's right to unilaterally cancel the policy:
We [i.e., Signature] may cancel this policy for any reason during the first 60 days we insure you. After the first 60 days we may cancel it if:
a. The risk has changed substantially since the policy was issued; or
b. If you or your representative:
...
(4) Have not paid the premium.

*317 We will mail a cancellation notice to you at least 30 days (10 days if you have not paid the premium) before this policy is cancelled. We will mail a cancellation notice to your last address known to us or your insurance representative. We will also give the same notice to your lienholder.
...
An exhibit was admitted in evidence, plaintiffs' exhibit No. 40, that was represented as being a certificate of mailing. It identified names and addresses of persons to whom material was mailed on May 29, 2001, by Foremost Insurance Company (Foremost) from Grand Rapids, Michigan.[3] The certificate of mailing lists an item that was addressed to "MARGIE KRAFT STICKLER, TERRY 22899 ELM SPRINGS RD HUGHESVILLE MO 65334."
The required act in order for Signature to cancel the policy of insurance issued plaintiffs for nonpayment of premium was for Signature to mail a cancellation notice at least 10 days before the date of cancellation. The policy language in this case is similar to that in Blair that was found unambiguous. See also Hudson v. State Security Ins. Co., 555 S.W.2d 859, 861 (Mo.App.1977); McGarrah v. Stockton, 425 S.W.2d 223, 228 (Mo.App.1968). This court holds that the policy language is unambiguous with respect to the act necessary to cancel the policy of insurance issued plaintiffs for nonpayment of premium. The argument in Point I directed to whether Signature complied with the stated requirements for canceling plaintiffs' policy of insurance will be considered with Point II.
Point II asserts six bases, denominated as subparagraphs A through F, for Signature's claim that the trial court erred in granting judgment n.o.v. because Signature had complied with the policy terms that permitted it to cancel the policy. Subparagraph D asserts that "[Signature's] notice strictly complied with the policy's cancellation provision, although the notice was mailed on [Signature's] behalf by [Foremost]; there is no prohibition in the policy against a third party sending the notice."
Signature argues that a notice that met the requirements for cancellation of plaintiffs' policy of insurance for nonpayment of premium was mailed by Foremost May 29, 2001. Signature relies on plaintiffs' exhibit No. 40 for proof that the required notice was mailed. Plaintiffs argue, however, that Signature did not prove that whatever may have been sent May 29, 2001, complied with policy requirements for unilateral cancellation for nonpayment of premium.
"A unilateral cancellation must strictly comply with the policy." Blair, 118 S.W.3d at 607. As stated, supra, Signature's policy states, "We may cancel this policy... [i]f you or your representative ... [h]ave not paid the premium." (Emphasis added.) The policy provides, "We, us and our means the company named on the Declarations Page."[4] (Emphasis added.) *318 The company named on the "Declarations Page" is Signature. Signature is identified as "A Stock Company."
Plaintiffs testified that they received no cancellation notice or final settlement from Signature reflecting cancellation of their policy. Signature had no copies at trial of any notice canceling the policy of insurance that it claimed had been sent to plaintiffs.[5] Signature's evidence was that any notices sent would have been sent by Foremost. Signature acknowledged that although notices were intended to be on Signature's behalf, they would have been on Foremost stationery rather than on Signature stationery. Plaintiffs argued this would not have complied with policy requirements that Signature give notice of cancellation.
In Safeco Ins. Co. of America v. Stone & Sons, Inc., 822 S.W.2d 565 (Mo.App.1992), Safeco Insurance Company of America (Safeco) mailed a notice of cancellation of an automobile insurance policy in which the insured was Stone & Sons, Inc. The policy required Safeco to mail or deliver a notice of cancellation to the named insured. The notice was mailed to Richard Stone. Richard Stone had previously been the named insured on the policy, but had changed the named insured to Stone & Sons, Inc., when his business was incorporated.[6]
The policy stated, "We may cancel the policy by mailing you at least 10 days notice at your last address known by us. `We' means the company providing the insurance, `you' means the person or organization shown as the named insured in ITEM One of the declarations." Id. at 568. Safeco held the notice was not in accordance with the terms of the policy; that it had not been sent to the named insured on the policy.
Safeco explained:
"The Missouri courts have held, in an unbroken line of decisions, that strict compliance with all the requirements in regard to notice is a prerequisite to cancellation." Farrar v. Mayabb, 326 S.W.2d 337, 340 (Mo.App.1959); See, Farmers Mutual Hail Insurance Co. v. Minton, 279 S.W.2d 523, 526 (Mo.App.1955); ("where a policy contains a specific provision for cancellation by either party, it is binding upon the parties and must be strictly complied with in order to terminate the policy.") Dyche v. Bostian, 229 S.W.2d 25, 28 (Mo.App.) aff'd, 361 Mo. 122, 233 S.W.2d 721 (1950). This is so, even when the provision is "unreasonable." Home Ins. of New York v. Horrell, 206 Mo.App. 352, 227 S.W. 830, 831 (1921) (cancellation terms in insurance policies must be strictly complied with); Continental Ins. Co. of New York v. Phipps, 190 S.W. 994, 995 (Mo.App.1916) ("The parties entered into such a contract and the courts will *319 not undertake to make a different one for them.") In Farrar, an incorrectly addressed notice of cancellation was held ineffective. 326 S.W.2d at 340-41. In Farmers Mutual, the insured sent written notice of cancellation to the insurance company, but his failure to comply with the policy requirement of returning the policy together with the written notice caused him to remain liable to the company for future assessments. 279 S.W.2d at 526-27.
Id. Safeco cited MFA Mutual Ins. Co. v. Southwest Baptist College, Inc., 381 S.W.2d 797 (Mo.1964), and Fuller v. Lloyd, 714 S.W.2d 698 (Mo.App.1986), as "[m]ore recent cases" that "required strict adherence to policy and statutory language to determine if an insurer has effectively canceled an insurance policy." Id.
The trial court in this case had before it plaintiffs' motion for judgment n.o.v. in which plaintiffs claimed Signature "failed to sustain its necessary burden of establishing [Signature's] strict and literal compliance with the terms and requirements of the cancellation provision of its policy of insurance"; that Signature failed to show it mailed the required cancellation notice as the terms of the policy required. The evidence supports that allegation.
Signature had no copies of the notices it claimed had been sent. There was no evidence that Signature took any action as "the company named on the Declarations Page." Rather, the action Signature claimed was taken was performed by Foremost, a company separate and distinct from Signature. See n. 3, supra. The action taken that Signature contends was intended to cancel the policy was done in Foremost's name, not Signature's. Just as the giving of a notice to a party other than the named insured did not comply with policy terms in Safeco, the giving of a notice in this case by a company other than the one that issued the policy of insurance did not comply with policy terms. The part of Point I not previously considered and subparagraph D of Point II are denied. The issues raised in the remaining parts of Point II are moot. The judgment is affirmed.
PREWITT and BATES, JJ., concur.
NOTES
[1]  The policy identified the insureds as "Margie Kraft and Terry Stickler." Plaintiff Lee Stickler testified that "legally" Margie is her name, but she uses her middle name. The pleadings in this case denote Ms. Stickler as "Lee"; however, the judgment identifies her as "Lea Kraft Stickler." This opinion will use the name by which Ms. Stickler is identified in the pleadings and notice of appeal.
[2]  Instruction No. 6 was unusual in that it purported to advise the jury as to the means by which the policy of insurance could be cancelled by quoting a lengthy provision from the text of the policy. No issue regarding the instruction is raised in this appeal.
[3]  Signature acknowledged at trial and in the appellate brief it filed with this court that "Foremost Insurance Company [Foremost] and Foremost Signature [Signature] are separate corporations within the Foremost Insurance Group." At trial, a representative of Foremost Insurance Group testified that the two companies are different entities; that they are "incorporated separately," and they issue separate policies.
[4]  The policy provides that if any policy provision "is in conflict with any governmental requirements" when it is written, the terms of the policy are "automatically changed to conform to them." It also provides that if Signature "broaden[s]" the coverage that has been issued to an insured without additional premium charges, Signature will give the insured "the benefit of these broadened coverages." The policy terms then state, "The only other way this policy can be changed is if we change it in writing." There is no contention that the policy Signature issued plaintiffs was in conflict with any governmental requirements or that Signature "broadened" coverage or otherwise changed its terms.
[5]  Signature contended that Foremost's automation system could recreate documents it claimed Foremost had sent to plaintiffs on its behalf. The trial court sustained plaintiffs' best evidence objections to what Signature contended were recreated documents.
[6]  Richard Stone was president and 50 percent shareholder of Stone & Sons, Inc. His wife, Debra Stone, held the remaining 50 percent of the stock in the corporation. Mr. and Mrs. Stone's residence was also the office of Stone & Sons, Inc. ne & Sons, Inc.


824 S.W.2d 832 (1992)
308 Ark. 325
Mahlon MARTIN, Director of the Arkansas Department of Finance and Administration, Appellant,
v.
COUEY CHRYSLER PLYMOUTH, INC., Appellee.
No. 91-50.
Supreme Court of Arkansas.
February 17, 1992.
Cora L. Gentry, Little Rock, for appellant.
William E. Johnson, Hamburg, for appellee.
HAYS, Justice.
By this appeal we must decide whether the Chancery Court of Ashley County had *833 jurisdiction to enjoin the appellant, as Director of the Arkansas Department of Finance and Administration, (ADFA) from proceeding under the Arkansas Tax Procedure Act to collect unpaid gross receipts (sales) taxes from Couey Chrysler Plymouth, Inc., appellee, on the sale of new automobiles. Couey maintains that an attempt by the ADFA to collect sales taxes from a party not responsible for their payment under law is an illegal exaction within the meaning of Ark. Const, art. 16, § 13. We hold that the efforts of ADFA to collect taxes from Couey under the circumstances of this case were not an illegal exaction and, therefore, the Ashley Chancery Court had no jurisdiction.
Auditors of the ADFA examined invoices of Couey's sales of automobiles covering a period from July 1, 1985, to June 30, 1988. When invoices given by Couey to its financing agent, Chrysler Credit Corporation were compared with records maintained by the Office of Motor Vehicles of the ADFA, the auditors discovered that Couey prepared two sets of retail installment contracts for some 340 vehicles sold during the period covered by the audit. One contract, reflecting the actual selling price, was sent to the financing agent. The other, reflecting a significantly lower purchase price, was sent to the Office of Motor Vehicles to determine the amount of gross receipts tax due on the transaction. ADFA contends the 340 transactions involved sales price discrepancies ranging from a low of $160 to a high of $10,519. The resulting loss in revenues to the state was calculated to be $60,960.46.
On October 14, 1988, AFDA notified Couey of a jeopardy assessment and demanded payment of the amount claimed, plus penalty and interest. The notice of jeopardy assessment required that Couey either pay the assessment or request an administrative hearing within five business days. Couey was notified that failure to respond within the allotted time would result in the filing of a certificate of indebtedness, the equivalent of a judgment against Couey's real and personal property. Arkansas Code Ann. § 26-18-701(a)(3)(A) (1987).
Couey requested an administrative hearing and argued the consumer, rather than the dealer, was liable for gross receipts taxes under Ark.Code Ann. § 26-52-510 (1987) and that a jeopardy assessment could only be instituted against a party responsible for paying the tax, relying on Ark.Code Ann. § 26-18-402 (1987). An administrative law judge upheld the jeopardy assessment and notified Couey it had twenty days to appeal to the Commissioner.
The statutory procedure for obtaining judicial relief from an administrative decision establishing a tax deficiency is set out in Ark.Code Ann. § 26-18-406(a) (1987). Within thirty days after a final decision, a taxpayer may seek judicial relief by paying the tax under protest and filing suit to recover the amount within one year, or posting a bond in double the amount of the tax deficiency to stay the effect of the administrative decision and filing suit within thirty days. Section 26-18-406(d) provides, "[t]he method provided in the section is the exclusive method for seeking relief from a written decision of the director establishing a deficiency in tax" and "[n]o injunction shall issue to stay proceedings for assessment or collection of any taxes levied under any state tax law."
Couey did not pay the amount under protest or post a bond to stay the effect of the administrative decision but filed an illegal exaction suit requesting the Ashley Chancery Court for injunctive relief to prohibit ADFA from proceeding further against it, also requesting attorney's fees and costs.
ADFA responded that Couey was liable for the gross receipts tax and the statute specifically provided no injunction could issue to stay deficiency proceedings. ADFA also counterclaimed alleging fraud, unjust enrichment and a willful attempt by Couey to evade payment of the tax under Ark. Code Ann. § 26-18-501 (1987); that Couey's actions fraudulently caused a deficiency to be reported on a tax return in violation of Ark.Code Ann. § 26-18-208(4) (1987). Couey replied that none of the *834 statutory provisions relied upon by the ADFA applied to an automobile dealer.
The Chancellor granted Couey's motion for summary judgment, finding no genuine issue of material fact, and that the statutes made it clear the taxpayer was the consumer, not the dealer. He also held § 26-18-406(d) to be in violation of the illegal exaction provision of the Arkansas Constitution to the extent the statute prohibited injunctive relief. Couey was awarded a $5,000 attorney's fee pursuant to Ark.Code Ann. § 16-22-309 (1987) because AFDA's answer to the petition stated no justiciable issue of law or fact and was without any reasonable basis. Couey reserved the right to file a motion for summary judgment as to the allegations in ADFA's counterclaim.
On August 23, 1989, ADFA filed a first amended counterclaim, alleging that by delivering contracts reflecting an incorrect sales price to consumers Couey committed a tortious interference with an implied contract between the taxpayers and the state. ADFA also alleged intentional interference with prospective economic advantage and conversion. A second amended counterclaim, filed on May 7,1990, added a misrepresentation claim and requested punitive damages.
Couey filed a motion for summary judgment and a motion to strike and dismiss the amendments to the counterclaim. The Chancellor struck the first and second amended counterclaims due to prejudice and undue delay they would cause by presenting new tort issues. He also held ADFA estopped from asserting that Couey was liable for the gross receipts tax and that the election of remedies doctrine prevented the ADFA from first commencing jeopardy assessment procedures against Couey and then attempting to pursue nonstatutory causes of action.
After striking the amendments, the Chancellor entered a summary judgment in Couey's favor on the original counterclaim. The basis for the decision was that the statutory provisions relied upon by ADFA in the counterclaim applied only to the party responsible for paying the tax, the consumer.
On appeal, ADFA argues the Chancellor lacked subject matter jurisdiction as the statute expressly prohibits injunctive relief to stay a tax assessment proceeding. The Chancellor held Couey's claim was an illegal exaction, and the statute prohibiting injunctive relief was in violation of Ark. Const, art. 16, § 13. ADFA maintains that because Couey does not contest the legality of the tax, no illegal exaction was presented.
Arkansas Const, art. 16, § 13, provides, "[a]ny citizen of any county, city or town may institute suit in behalf of himself and all others interested, to protect the inhabitants thereof against the enforcement of any illegal exactions whatever." The illegal exaction provision is self-executing and requires no enabling act or supplementary legislation to make its provisions effective. The section confers the right to institute suits against the enforcement of an illegal exaction. Section 13 imposes no terms or conditions upon the right of the citizen to file suit, and this court has stated "we would be required to write something into the Constitution, which does not there appear, if we hold that this right was conditional." Samples v. Grady, 207 Ark. 724, 182 S.W.2d 875 (1944); Nelson v. Berry Petroleum Co., 242 Ark. 273, 413 S.W.2d 46 (1967). The General Assembly has the authority to regulate the practice to be pursued in enforcing the illegal exaction provision as long as the constitutional guarantee is not abridged. Samples v. Grady, supra; Taxpayers' Suits to Prevent Illegal Exactions in Arkansas, 7 Ark. L.Rev. 130 (1954).
In Schuman v. Ouachita County, 218 Ark. 46, 234 S.W.2d 42 (1950), the court stated that a flaw in the assessment or collection procedure, no matter how serious from the taxpayer's point of view, will not make the exaction illegal. See also Beard v. Wilcockson, 184 Ark. 349, 42 S.W.2d 557 (1931). In the Schuman case, the defect in the procedure was that the property owners encountered undue difficulty in discharging their debt to the state because the taxes were so extended on the tax books. In the Beard case, we held there was no *835 illegal exaction because the taxes were not illegal or unauthorized but were only excessive in their amount.
AFDA cites Hardin v. Gautney, 204 Ark. 723, 164 S.W.2d 427 (1942). Hardin, the Commissioner of Revenues, filed a certificate of indebtedness with the Circuit Clerk of Mississippi County asserting that O.M. Morgan owed gross receipts taxes on revenues generated by coin operated music machines for which Morgan had filed no returns. Morgan was notified under the statutory procedures then applicable that the Commissioner would determine the tax and after twenty days issue a certificate of indebtedness. Morgan asked to be heard, evidently contending he was not liable for the tax, as the Commissioner responded that the question of liability would not be addressed at the hearing, only the amount of tax due. Morgan did not appear at the hearing and on February 24, 1942, the certificate of indebtedness was filed. Under the procedures then in place a taxpayer had thirty days in which to either sue in his home county if he contended the transaction was not taxable or he was not the party charged by law with payment of the tax, or pay the tax and sue in Pulaski County for a refund. Morgan did neither. Rather, on March 28 he petitioned the Mississippi County Court to enjoin the Commissioner from further efforts to collect the tax. The Commissioner moved to dismiss because Morgan had not acted within thirty days as the law required. This court held there was no illegal exaction within the meaning of Ark. Const, art. 16, § 13, upholding the existing statutory procedures:
We think the legislature had a right to designate a period within which one alleged to owe the state on sales tax, or two percent on gross receipts, would be required to make his defense. If the controversy goes only to the proposition that the transaction is not taxable, or, if taxable, the person assessed is not the party charged by law with payment, such issue is determinable by the chancery court of the county where it is sought to compel collectionthat is, where the certificate, prima facie, creates a lien. If the issue relates only to the amount of a valid tax to be paid, then it is appropriate for the general assembly to require payment as a condition precedent to the right to litigate as to any alleged overcharge; and since the fund, when so paid, is transmitted to Little Rock, it is competent for the lawmaking body to fix the venue in Pulaski County. [Our emphasis.]
Recently, in Taber v. Pledger, 302 Ark. 484, 791 S.W.2d 361 (1990), we said repeatedly that in order for the statutory mechanism to be superseded by an illegal exaction proceeding, the underlying validity of the tax must be challenged:
We find the tax is not an illegal tax, thus there is no illegal exaction ...
* * * * * *
We cannot agree that the McCarroll [McCarroll v. Gregory-Robinson-Speas, Inc., 198 Ark. 235, 129 S.W.2d 254 (1939)] case gives chancellors jurisdiction to hold that the procedural requirements of the tax law do not apply when there is no allegation that the basic tax statute is void.

The same is true of Harrison v. Norton, 104 Ark. 16, 148 S.W. 497 (1912), cited as a "see also" case by Taber. There, the chancellor was held to have jurisdiction of an illegal exaction suit where a county road tax was challenged because the results of the election which had resulted in the tax had allegedly been improperly reported. Again, there was a challenge to the validity of the underlying tax law. [Our emphasis.]
The wording of Ark. Const, art. 16, § 13 is broad and not to be narrowed by statute or interpretation. We believe our cases are consistent with that concept. But we also think it clear that the provision was not intended to be the vehicle by which taxpayers air individual grievances in the methods by which taxes are assessed and collected. Rather, it was intended to be the means by which taxpayers, generally in a collective capacity, resist illegal taxation.
In Pledger v. Featherlite Precast Corp., 308 Ark. 124, 823 S.W.2d 852 (1992), we *836 discuss the two categories of illegal exactions which are encompassed by our cases. One category, "public funds" exaction cases, deals with the misapplication of public funds or the recovery of funds wrongly paid to a public official. Citing Brewer v. Hawkins, 241 Ark. 460, 408 S.W.2d 492 (1966), as illustrative, we said public funds exaction cases are given a broad interpretation because taxpayers are the equitable owners of all such funds and are obliged to replenish funds wrongly used. The other category, "illegal tax" exaction cases, involve a taxpayer who seeks to enjoin a governmental entity from taxing him, and are not supported by the same rationale. In this group, of which Greedup v. Franklin County, 30 Ark. 101 (1875) is typical, "the exaction itself must be alleged to be illegal before the chancery court has jurisdiction under the constitutional provision." Featherlite, supra, 823 S.W.2d at page 855. Here, the legality of the tax is not at issue and therefore, no illegal exaction occurred. It follows that the chancellor had no jurisdiction in these premises.
Reversed and dismissed.
HOLT, C.J., and NEWBERN and CORBIN, JJ., dissent.
NEWBERN, Justice, dissenting.
Apparently realizing the error of its position, the Arkansas Department of Finance and Administration (ADFA) effectively admitted Couey Chrysler Plymouth, Inc., (Couey) did not owe the motor vehicle sales tax ADFA was attempting to collect. It attempted unsuccessfully to amend its pleading to state various contract and tort claims. So at this point, ADFA, Couey, and the Chancellor have all concluded the attempt to impose the tax on Couey was wrong and illegal, and yet this Court refuses to characterize the collection of the tax from one who is not even the "taxpayer" under the law as an illegal exaction. That means Couey will have to pay a tax all concede it does not owe, subjecting its property to lien and execution, before it can obtain judicial relief from an act by ADFA which no one can contend was proper.
ADFA did not concede the error of its position until after the Chancellor entered summary judgment against it with respect to its tax claim. It then attempted to amend to state the alternative claims mentioned above. The Chancellor's reaction is contained in part 4. of his statement of conclusions:
The Court further concludes the two amendments should be stricken under a combined theory of estoppel and undue prejudice. After defendants completed an audit of new car sales by plaintiff, they determined that gross receipts taxes of over $60,000.00 had not been paid on vehicles purchased from plaintiff. Arkansas Code 26-52-510 is clear that payment of such gross receipts tax is the duty of the consumer, not the dealer. Therefore, defendants had the following possible options:
A. Collect the unpaid taxes from the consumers who had allegedly underpaid, or
B. File a civil action against plaintiff, or
C. Both of the above.
None of these remedies were chosen. Instead, defendants, or their agents, assessed the taxes against plaintiff and gave notice that a Certificate of Indebtedness would be filed. Defendants knew, or certainly should have known, that there was no authority for such action under Arkansas law. Therefore, their motives must be considered. The Court has no alternative but to find the defendants opted to shortcut and simplify collection by utilizing a despotic method intended to intimidate and frighten plaintiff into submission. Legal collection of the taxes from the hundreds of consumers would have been time consuming and burdensome. A civil action against plaintiff would have been time consuming with the result not as certain as of that afforded by a successful filing of a Certificate of Indebtedness. Such certificate provides for a judgment and lien on all property owned by plaintiff, and immediate execution is possible. This is an extreme measure which should not be utilized lightly.
*837 The plaintiff filed an action in this court for an injunction against the Certificate of Indebtedness. Even then, the defendants did not retreat from their incorrect position, but continued to attempt their bluff. Only after this Court granted plaintiff's Motion for Summary Judgment did they acknowledge the dealer was not liable for the tax. They should now be estopped from asserting such a blatantly inconsistent position. The plaintiff had no choice but to rely on the first course of action by defendants in the preparation of a defense against the Certificate of Indebtedness. To have ignored it could have invited immediate execution against his property. The Court can certainly take notice from the number of hearings, the size of the court file, and the briefs submitted that the plaintiff has incurred considerable legal expense. It would be fundamentally unfair and inequitable to allow a powerful state agency to knowingly assert an illegal position against one of its subjects and then change that position entirely after the Court has ruled in a manner which indicates that such tactics will not be allowed. Such change would unduly prejudice plaintiff and should be denied. To rule otherwise would be tantamount to condoning illegal exaction of taxes as opposed to legal civil actions any time private citizens or businesses are indebted to the state for any reason. The majority is willing to place this Court in the anomalous posture of condoning an illegal attempt at tax collection because this case cannot be placed in one of the illegal exaction categories we have previously described. We have cases in which we have broadly defined an illegal exaction as an exaction that is either not authorized by, or contrary to, law. Hartwick v. Thome, 300 Ark. 502, 780 S.W.2d 531 (1989); Tedford, et al. v. Mears & Scott, 258 Ark. 450, 526 S.W.2d 1 (1975); Mackey v. McDonald, 255 Ark. 978, 504 S.W.2d 726 (1974). We have written, "the remotest effect upon the taxpayer concerning any unlawful act by a tax supported program or institution may be enjoined under Article 16, Section 13, of the Arkansas Constitution." Starnes v. Sadler, 237 Ark. 325, 372 S.W.2d 585 (1963). Our refusal to follow those cases in this instance is perhaps the ultimate nit pick.
The majority relies on Schuman v. Ouachita County, 218 Ark. 46, 234 S.W.2d 42 (1950), and Beard v. Wilcockson, 184 Ark. 349, 42 S.W.2d 557 (1931), for the proposition that a flaw in the tax assessment or collection procedure will not make the exaction itself illegal. The case now before us hardly involves a mere collection or procedural flaw, and the Schuman and Beard cases are irrelevant.
In the Schuman case the Court recognized a property tax debt existed, and the sole defect was in the procedure used by the county in recording mineral interest ownership and in collection of the appropriate taxes. In the Beard case, we held there was no illegal exaction because the taxes were not illegal or unauthorized but were only excessive in amount. I cannot conclude these cases have anything to do with an attempt to collect a tax from one who is not even the taxpayer contemplated by the law.
The majority also states that when the taxpayer only claims it is not the person or entity responsible for paying the taxes under law, no illegal exaction is presented, relying on Hardin v. Gautney, 204 Ark. 723, 164 S.W.2d 427 (1942). The Hardin case has been interpreted as meaning that only when the taxpayer claims "no tax due" could the venue of his own county be invoked. See, e.g. Scurlock, Comm. of Rev. v. Yarbrough, 224 Ark. 113, 271 S.W.2d 916 (1954). It cannot be interpreted as meaning when the taxpayer claims "no tax due" an illegal exaction is not present, as the majority suggests. The case no longer has any validity whatever, as the specific venue statute at issue in the Hardin case was repealed. We recognized that in Taber v. Pledger, 302 Ark. 484, 791 S.W.2d 361 (1990).
The majority also relies on Taber v. Pledger, supra, for the proposition that, because Couey did not claim the basic gross receipts tax unconstitutional, no illegal exaction is presented. In the Taber *838 case, the taxpayer claimed an exemption for gross receipts tax, and we held no illegal exaction existed. The taxpayer was not contending that the nderlying tax was unconstitutional or void. If Couey were a taxpayer under the tax law as ADFA contended in its pleading prior to amendment, and if Couey were questioning the right to an exemption under the law, I would hold no illegal exaction had been stated. While Couey is not questioning the validity of an underlying tax law, the point is that there is no underlying tax law, and the attempt to collect this tax from Couey was wholly unauthorized.
It should be clear that in no manner do I condone the actions ADFA alleges Couey took in attempting to assist its customers in evading full taxation on transactions with Couey. The case did not reach the proof stage, however, and Couey's conduct is not at issue here. The issue rather is whether the actions of ADFA should be condoned in attempting to collect a tax from a citizen who had no liability for it whatever under the law. While there may have been proper remedies for ADFA to have pursued against Couey, they were not properly pursued, and it was correct for the Chancellor to find that an attempt to collect an unauthorized "tax" was an illegal exaction.
I respectfully dissent.
HOLT, C.J., and CORBIN, J., join in this dissent.


738 A.2d 962 (1999)
162 N.J. 42
In the Matter of E. Lorraine HARRIS, a/k/a Etta Lorraine Harris, an Attorney at Law.
Supreme Court of New Jersey.
October 28, 1999.

ORDER
This matter having been duly presented to the Court on the petition for reinstatement to the practice of law of respondent, E. LORRAINE HARRIS, a/k/a ETTA LORRAINE HARRIS of GIBBSTOWN, who was admitted to the bar of this State in 1994, and who was temporarily suspended from the practice of law effective September 29, 1999, by Order of this Court dated September 28, 1999, and good cause appearing;
It is ORDERED that E. LORRAINE HARRIS, a/k/a ETTA LORRAINE HARRIS, be restored to the practice of law, provided that respondent comply with the following conditions pending the further Order of the Court:
Respondent shall practice law only under the supervision of a practicing attorney approved by the Office of Attorney Ethics (see Rule 1:20-18) and all disbursements from respondent's attorney business and trust accounts shall be co-signed by an attorney approved by the Office of Attorney Ethics.


           UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS

NO . 95-1068

HUGH D. COX ,                                                 PETITIONER ,

   V.

TOGO D. WEST , JR.,
SECRETARY OF VETERANS AFFAIRS,                                RESPONDENT .

            Before NEBEKER, Chief Judge, and FARLEY and STEINBERG, Judges.

                                            ORDER

        This matter is now before the Court on the petitioner's May 25, 1999, application for attorney
fees and expenses pursuant to the Equal Access to Justice Act, 28 U.S.C. § 2412(d) (EAJA). The
underlying facts are set forth in our prior opinions in this case. In the Matter of the Fee Agreement
of Cox, 10 Vet.App. 361, 363-65 (1997) (Fee Agreement of Cox), vacated on other grounds, Cox
v. West, 149 F.3d 1360 (Fed. Cir 1998) (affirming all holdings; vacating only for consideration of
asserted facts occurring after this Court's opinion); In the Matter of the Fee Agreement of Smith,
4 Vet.App. 487, 499-500 (1993) (Fee Agreement of Smith), rev'd on other grounds sub nom. In the
Matter of the Fee Agreement of Wick, 40 F.3d 367 (Fed. Cir. 1994).

        Briefly, the pertinent facts follow: In August 1991, the veteran, Samuel Mosley, filed with
a Department of Veterans Affairs (VA) regional office (RO) a claim to reopen a previously and
finally disallowed claim for service connection for post-traumatic stress disorder (PTSD). In
December 1991, he retained the appellant here, attorney Hugh D. Cox (the attorney), by a fee
agreement calling for a 20% contingency fee, based on any award of past-due benefits to the veteran,
to be paid directly by the Secretary to the attorney. In October 1992, the VARO granted the veteran
service connection for PTSD and paid him $37,408.00 in past-due benefits. In response to a
November 3, 1992, inquiry from the attorney, the RO notified him by letter that he was entitled to
20% of the PTSD award but stated that, because it had disbursed the total amount to the veteran by
mistake, the attorney's recourse was to recover the attorney fees from the veteran. On December 4,
1992, the RO sent the veteran a letter stating that it had disbursed erroneously the entire amount of
past-due benefits awarded and that the veteran and the attorney would now need to make
arrangements for payments to the attorney of the 20% contingency fee that the attorney was owed.
Fee Agreement of Cox, 10 Vet.App. at 363-64; Fee Agreement of Smith, 4 Vet.App. at 500.

       In January 1993, the attorney filed with this Court a pro se petition asking the Court to order
VA to pay him the 20% that should have been withheld from the past-due benefits paid to the
veteran. On April 8, 1993, the Court denied that petition on the ground that the attorney had an
adequate alternate administrative remedy in filing a petition with the Board of Veterans' Appeals
(Board or BVA), under 38 C.F.R. § 20.609(i), to review his fee agreement. In 1993 and 1995, the
attorney filed with the Board motions seeking payment of the attorney fees (20%) that the RO had
wrongfully failed to withhold. Relying on the opinion of the U.S. Court of Appeals for the Federal
Circuit (Federal Circuit) in Fee Agreement of Wick, supra, the BVA Deputy Vice Chairman in April
and May 1995 notified the attorney that the Board had concluded that it had no authority to issue an
order compelling the RO to pay a fee to an attorney when the veteran had received all the past-due
benefits awarded. That same month, the RO sent to the veteran a letter stating that the RO could not
create an overpayment against the veteran for the 20% due to the attorney. In August 1995, the BVA
Deputy Vice Chairman denied the attorney's motion for a final decision as to payment or nonpayment
of attorney fees to the attorney. Fee Agreement of Cox, 10 Vet.App. at 364-65; Fee Agreement of
Smith, 4 Vet.App. at 499-500.

        On October 27, 1995, the attorney filed pro se a petition for extraordinary relief, seeking a
Court order compelling a final decision by the Board on the issue of the payment of attorney fees to
the attorney by VA pursuant to 38 U.S.C. § 5904(d) and 38 C.F.R. § 20.609(h). In an August 7,
1997, opinion, this Court concluded that it possessed the authority to issue a writ of mandamus under
the All Writs Act, 28 U.S.C. § 1651(a), but denied the petition because the attorney had an
alternative remedy that obviated the need for extraordinary relief. Fee Agreement of Cox,
10 Vet.App. at 365-70, 376-77 ("if the petitioner files a timely NOD [(Notice of Disagreement) with
the RO], the Secretary and Board possess authority -- indeed, the obligation -- pursuant to [38 U.S.C.
§§] 511(a) and 7104(a), to issue a Board decision stating whether the petitioner is entitled to VA
payment of attorney fees, and that any such interpretation of law ensconced in a BVA decision may
be appealed to this Court"). The attorney appealed to the Federal Circuit.

        On July 16, 1998, the Federal Circuit expressly upheld this Court's power to issue a writ of
mandamus and its jurisdiction to review Board decisions as to fee agreements, and concluded that
this Court "had correctly held that a writ of mandamus was not warranted because [the attorney] had
yet to file an NOD". Cox, 149 F.3d at 1363-65. Nonetheless, the Federal Circuit remanded this
matter to this Court for reconsideration of the propriety of issuing the writ because, subsequent to
our August 1997 decision, counsel for the attorney had asserted during oral argument before the
Federal Circuit that the attorney had pursued the alternative remedy by filing, subsequent to this
Court's August 7, 1997, opinion in Fee Agreement of Cox, an NOD with the RO, but that VA had
failed to adjudicate his claim. Cox, 149 F.3d at 1365-66. On March 24, 1999, after this Court had
ordered supplemental briefing that revealed that the attorney had in fact filed two NODs and that the
RO had issued a Statement of the Case (SOC), this Court denied as moot the petition for
extraordinary relief. Cox v. West, 12 Vet.App. 270, 271-72 (1999).

         On May 25, 1999, the attorney filed, through attorney Kenneth Carpenter, an application for
EAJA fees and expenses in connection with his litigation in the Federal Circuit and subsequent
litigation in this Court. See PPG Indus. v. Celanese Polymer Specialties Co., 840 F.2d 1565, 1569
(Fed. Cir. 1988) (in reviewing an award of attorneys fees under 35 U.S.C. § 285, holding that
jurisdiction to award attorney fees for appellate work was not exclusive domain of appellate court);

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Oliveira v. United States, 827 F.2d 735, 738-39 (Fed. Cir. 1987) (reversing lower court decision not
to award legal expenses to appellant and remanding because lower court "committed an error of law
by interpreting the EAJA as not allowing the recovery of expenses that ordinarily arise in the course
of providing legal services" for representation before lower court and Federal Circuit); Hines v. Sec.
of Dep't of HHS, 26 C. Ct. 114, 116 (1992) (in affirming Special Master's award of attorney fees
under 42 U.S.C. § 300aa-15(e), holding that PPG Indus., supra, provided "sufficient authority for
a special master to award attorney[] fees and costs for appeals to the Federal Circuit"); Barrera
v. West, 13 Vet.App. 139, 140 (1999) (disallowing EAJA fees for work for Federal Circuit appeal
where appellant had already requested such fees and Federal Circuit had denied them). But see id.
at 140-41 (Kramer, J., concurring) (concurring in result but stating that he would have held that "this
Court was without jurisdiction to consider fees generated for work done in a reviewing court").

        The Court is concerned about the possibility of piecemeal EAJA litigation in this case. See,
e.g., Carbino v. West, 168 F.3d 32, 34 (Fed. Cir.1999) ("improper or late presentation of an issue or
argument [i.e., raised in the reply brief for the first time] . . . ordinarily should not be considered"),
aff'g Carbino v. Gober, 10 Vet.App. 507, 511 (1997) (declining to review argument first raised in
appellant's reply brief); Ledford v. West, 136 F.3d 776, 781 (Fed. Cir. 1998) (stressing importance
of raising arguments to BVA pursuant to "doctrine of exhaustion of administrative remedies");
Savage v. Gober, 10 Vet.App. 488, 498 (1997) (Court declines to review matter first raised by
amicus curiae subsequent to appellant's motion for panel review); Tubianosa v. Derwinski, 3
Vet.App. 181, 184 (1992) (appellant "should have developed and presented all of his arguments in
his initial pleading"); Fugere v. Derwinski, 1 Vet.App. 103, 105 (1990) ("Advancing different
arguments at successive stages of the appellate process does not serve the interests of the parties or
the Court. Such a practice hinders the decision-making process and raises the undesirable specter
of piecemeal litigation."), aff'd, 972 F.2d 331 (Fed. Cir.1992). The Court is not prepared at this point
to consider this application (as to representation from the time of this Court's August 28, 1997,
opinion to this Court's March 24, 1999, order denying the petition on remand from the Federal
Circuit) in isolation from other applications (as to representation provided subsequent to the
representation that is the subject of the pending application) that may be filed at the end of the
underlying merits litigation that precipitated this matter.

        The Court notes the uniqueness of this matter, in that the Federal Circuit affirmed this Court's
holdings yet remanded the case for reconsideration of new evidence and that there is still pending
before VA the underlying fee-agreement matter that was the direct result of the Federal Circuit's and
this Court's prior holdings. The Court also notes that, since before his first appeal to this Court in
1993, the attorney has been trying to obtain a VA decision as to this fee-agreement matter.
Accordingly, the Court will revoke its March 24, 1999, order denying the petition, dismiss, without
prejudice, the EAJA application as premature, and defer reconsideration of the petition pending
filing by the Secretary of status reports on the progress of the VA administrative proceedings
pursuant to the attorney's NOD and the SOC. As to those status reports, the Court will require the
Secretary to advise the Court as to the schedule for the BVA's adjudication of this claim. Cf. Friscia
v. Brown, 7 Vet.App. 294, 297-98 (1994) (requiring Secretary to advise Court, within 10 days, of
actions taken or to be taken (citing, inter alia, 38 U.S.C. § 7261(a)(2) ("[the Court], to the extent

                                                    3
necessary to its decision and when presented, shall . . . compel action of the Secretary . . .
unreasonably delayed"))).

       On consideration of the foregoing, it is

       ORDERED that the Court's March 24, 1999, order (Cox v. West, 12 Vet.App. 270 (1999) (per
curiam)) is REVOKED, and the petition is reinstated. It is further

        ORDERED that the petitioner's EAJA application for attorney fees and expenses is
DISMISSED as premature, without prejudice to a future filing under the EAJA after the Court acts
on the petition. It is further

       ORDERED that, not later than 30 days after the date of this order, the Secretary file, and
serve on the petitioner, a supplemental memorandum advising the Court of the progress and
timetable for completion of the VA administrative proceedings in the ongoing adjudication of the
fee-agreement matter that is the subject of the petition. See Friscia, supra. It is further

        ORDERED that, every 60 days after the Secretary files such supplemental memorandum, he
file, and serve on the petitioner, a status report as to the progress and timetable for completion of
those VA administrative proceedings and, if VA adjudication has not been completed by the end of
each 60-day period, a statement of the reasons why it has not been completed.

DATED: March 6, 2000                                          PER CURIAM.

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