Roberts v. United States, CV 76-1110-RF.

• Decision Date: 14 December 1976
• Docket Number: No. CV 76-1110-RF.,CV 76-1110-RF.
• Court: U.S. District Court — Central District of California
• Parties: E. Jan ROBERTS, Plaintiff, v. UNITED STATES of America, Defendant.

423 F. Supp. 1314

E. Jan ROBERTS, Plaintiff, v. UNITED STATES of America, Defendant.

No. CV 76-1110-RF.

United States District Court, C. D. California.

December 14, 1976.

E. Jan Roberts, in pro. per.

William D. Keller, U.S. Atty., Los Angeles, Cal., Charles H. Magnuson, Asst. U.S. Atty., Chief, Tax Div. by William J. James, Asst. U.S. Atty., Los Angeles, Cal., for defendant.

DECISION GRANTING MOTION TO DISMISS AMENDED COMPLAINT AND FOR SUMMARY JUDGMENT

HAUK, District Judge.

The Court sits for the Honorable Robert Firth only as to the motion before it on November 8, 1976, that is, the defendant's "Motion to Dismiss Amended Complaint to Recover Income Tax Unlawfully Assessed and Collected."

This case, having come on for argument and hearing on November 8, 1976, the Court, being fully advised in the premises, now renders its decision granting defendant's "Motion to Dismiss Amended Complaint to Recover Income Tax Unlawfully Assessed and Collected" with prejudice, and making summary judgment in favor of plaintiff.

On or before April 15, 1970, plaintiff E. Jan Roberts filed a Form 1040 Federal Income Tax Return and paid the amount computed therein by plaintiff to be due and owing for the calendar year 1969. On November 19, 1970, plaintiff received from defendant United States of America a Form L-134 requesting substantiation of his claimed deductions for business expense and casualty losses. Plaintiff did not comply. On June 16, 1971, plaintiff received from defendant Forms L-87 and 1902-E disallowing plaintiff's claimed deductions. On January 21, 1972, plaintiff received from defendant a Notice of Deficiency, Code 411:90D:MVD, for the amount of $1,081.09 for the calendar year 1969, whereupon plaintiff filed in the United States Tax Court a petition for redetermination of the purported tax deficiency as set forth by the Commissioner of Internal Revenue, Docket No. 2868-72, decision by the Honorable Charles R. Simpson reported as E. Jan Roberts, Petitioner, v. Commissioner of Internal Revenue, Respondent, 62 T.C. 834 (Cal.1974). In this decision, which was handed down September 23, 1974, the Tax Court decided against the petitioner and upheld the Commissioner's determination. Subsequent motions to vacate and to reopen case No. 2868-72 were filed with the Tax Court on October 18, 1974, and June 2, 1975, respectively. The motion to vacate was denied November 4, 1974; the motion to reopen was denied June 12, 1975. Plaintiff paid the deficiency of $1,081.09, but took no appeal from the Tax Court's rulings.

Plaintiff made appearance in our Court by filing his "Complaint to Recover Income Tax Unlawfully Assessed and Collected," on April 6, 1976, which was dismissed by Judge Firth on June 28, 1976, with leave to amend within sixty days, on the basis that plaintiff had not first filed a claim for refund or credit before seeking relief in District Court, as required by Title 26 United States Code § 7422(a).¹ Plaintiff filed a claim for refund, Form 843, for the amount of $1,081.09, then filed his Amended Complaint August 27, 1976, as of which date no response to the refund claim had yet been received.²

Defendant now brings its motion to dismiss on the ground that "the Tax Court has already rendered a final decision on the merits of plaintiff's claim herein, and therefore, this matter is res judicata." The motion must be granted.

The Supreme Court has held that the doctrine of res judicata is completely applicable to federal tax cases. Tait v. Western Maryland Railway, 289 U.S. 620, 53 S.Ct. 706, 77 L.Ed. 1405 (1933); Commissioner v. Sunnen, 333 U.S. 591, 68 S.Ct. 715, 92 L.Ed. 898 (1948). The doctrine applies equally where the case originates in the Tax Court. Fairmont Aluminum Co. v. Commissioner of Int. Rev., 222 F.2d 622 (C.A. 4, 1955), cert. denied 350 U.S. 838, 76 S.Ct. 76, 100 L.Ed. 748.

Plaintiff contends that res judicata is not a proper basis for a motion to dismiss since it is included in the Federal Rule of Civil Procedure 8(c) list of affirmative defenses one may set forth. However, this is not a bar to the desired use of res judicata by the defendant. As the Court stated in King v. Mordowanec, 46 F.R.D. 474 (R.I.1969) at 480 (where the affirmative defenses of res judicata and the statute of limitations were properly raised by summary judgment motion),

"It is now beyond doubt that summary judgment or a motion to dismiss under Rule 12 is a proper means by which a Rule 8 affirmative defense may be placed before the court."

Thus, the motion to dismiss on the basis of res judicata is properly before the Court.

Plaintiff did not take appeal from the September 23, 1974, decision of the Tax Court, nor from the denial of the November 4, 1974, motion to vacate. Time to appeal expires upon the expiration of the time allowed for filing a notice of appeal, if no such appeal has been duly filed within such time. Title 26 U.S.C. § 7481(a)(1).³ Where a motion to vacate is filed with the Tax Court and it enters an order disposing of such, petitioner has 90 days from entry to file notice of appeal. Plaintiff did not file such notice, and thus plaintiff's right to appeal expired on February 2, 1976. Because the Tax Court's decision on the merits was final, res judicata bars plaintiff's claim here in that it operates as an absolute deterrent to subsequent litigation.

Plaintiff argues on much the same grounds in the instant case as he did in the Tax Court, and he apparently argues different grounds as well. But res judicata also bars any consideration of these new grounds. The rule has been definitively stated by the Honorable Malcolm M. Lucas of this district as follows:

"Once a Tax Court has decided a matter on its merits ... such decision acts as an absolute bar to subsequent litigation and is conclusive not only as to all matters which were decided, but also as to all matters which might have been decided. (citations omitted)." United States v. Flood, 74-1 U.S.T.C. ¶ 9174 at p. 83,228.

By reason of, and in accordance with the foregoing decision, which shall also constitute findings of fact and conclusions of law, pursuant to Federal Rule of Civil Procedure 52, the Court in addition files its formal findings of fact and conclusions of law.

FINDINGS OF FACT

1. Pursuant to Section 6212, Internal Revenue Code (26 U.S.C. Section 6212),⁴

plaintiff E. Jan Roberts was sent a notice of deficiency in respect of his income tax for the year 1969.

2. Plaintiff elected to petition the Tax Court for a redetermination of said deficiency as provided for by Section 6213, Internal Revenue Code (26 U.S.C. § 6213).⁵

3. On September 23, 1974, the Tax Court rendered a final decision determining a deficiency for the taxpayer E. Jan Roberts in respect of his income tax for the year 1969.

4. On November 4, 1974, plaintiff's motion to vacate the decision which had been rendered by the Tax Court was denied. No appeal was taken either by the plaintiff from the Tax Court decision or from its denial of plaintiff's motion to vacate the decision, and both Tax Court rulings became final when the time to appeal expired on February 2, 1975.

CONCLUSIONS OF LAW

1. The decision of the Tax Court became final upon the expiration of the time allowed for filing a Notice of Appeal, to wit, the date of February 2, 1975. Section 7481, Internal Revenue Code (26 U.S.C. § 7481),⁶ Fed.R.App.P. 13(a).

2. Once the Tax Court has decided a case on the merits, such decision is res judicata and acts as an absolute bar to subsequent litigation and is conclusive not only as to all matters which were decided, but also as to all matters which might have been decided. United States v. Flood, No. CV 70-764-MML, C.D.Calif., November 21, 1973 (74-1 U.S.T.C. ¶ 9174). Summary Judgment for defendant and against plaintiff must be granted.

3. Moreover, once invoked, the Tax Court's jurisdiction is exclusive as to all issues that might have been included in the taxpayer's petition and, with certain statutory exceptions, not applicable here, no suit for the recovery of any part of the later paid tax to which such petition related may be instituted in any court, and certainly not in the District Court for refund. Section 6512, Internal Revenue Code (26 U.S.C. § 6512).⁷ And, therefore, since plaintiff's complaint fails to state a claim upon which relief can be granted, it must be dismissed with prejudice.

4. A Motion for Summary Judgment under Rule 56, where, as here, recourse is required to matter outside the complaint, or a Motion to Dismiss under Rule 12 is a proper means by which a Rule 8 affirmative defense may be placed before the Court. King v. Mordowanec, 46 F.R.D. 474 (D.R.I., 1969). The Motion to Dismiss shall be treated as a Motion for Summary Judgment and be disposed of as such by granting it with prejudice.

LET JUDGMENT BE ENTERED ACCORDINGLY.

1 § 7422. Civil actions for refund

(a) No suit prior to filing claim for refund. — No suit or proceeding shall be maintained in any court for the recovery of any internal revenue tax alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessive or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Secretary or his delegate, according to the provisions of law in that regard, and the regulations of the Secretary or his delegate established in pursuance thereof.

26 United States Code § 7422(a)

2 This is obviously an anomaly because six months is the period which must pass without response or the receipt of an unfavorable response before suit can be filed in the District Court (see 26 United States Code § 6532(a)(1), infra), but plaintiff filed his amended complaint within the sixty days fixed by Judge Firth. But this anomaly is in no way determinative of the case before us, the motion or our decision herein, as we conclusively demonstrate later on....