Santa Barbara Optical Co. v. State Bd. of Equalization

Decision Date16 April 1975
Citation120 Cal.Rptr. 609,47 Cal.App.3d 244
CourtCalifornia Court of Appeals Court of Appeals
PartiesSANTA BARBARA OPTICAL CO., INC., and Kern Optical Service, and in behalf of all others similarly situated, Plaintiffs and Appellants, v. STATE BOARD OF EQUALIZATION of the State of California, Defendant and Respondent. Civ. 44370.

Danch & Lagomarsino, Ventura, for plaintiffs and appellants.

Evelle J. Younger, Atty. Gen., Philip C. Griffin and Rodney Lilyquist, Jr., Deputy Attys. Gen., for defendant and respondent.

LILLIE, Associate Justice.

The named plaintiffs, dispensing opticians, brought this class action for a refund of sales taxes paid to defendant by them and others 'similarly situated' (unnamed plaintiffs). Defendant demurred to the complaint on the ground that it failed to state a cause of action in favor of the unnaned plaintiffs; the demurrer was sustained with leave to amend only as to them; they declined to amend and judgment of dismissal was entered pursuant to section 581, subdivision 3, Code of Civil Procedure. Plaintiffs appeal from the judgment. 1

We accept as true the material allegations of the complaint under settled principles relating to demurrers. It alleges that the named plaintiffs are registered dispensing optical corporations doing business in California, they bring the action on behalf of themselves and all the unnamed plaintiffs similarly situated--all other registered dispensing opticians conducting business in California prior to July 1, 1971--a well defined community of interest in questions of law and fact exists between the named plaintiffs and the other members of the class and it is impracticable to bring all members of the class before the court as individual plaintiffs because they are numerous and located throughout the state; the action is brought under authority of section 6933, Revenue and Taxation Code, to recover sales taxes erroneously and unlawfully collected from all plaintiffs up to July 1, 1971; effective that date, section 6018 was amended to include plaintiffs in the group of medical practitioners deemed not to be retailers, and thus not thereafter obliged to pay sales taxes to defendant; prior thereto the assessment and collection of sales taxes was discriminatory and deprived plaintiffs of equal protection of the laws; on March 16, 1973, the named plaintiffs, in behalf of themselves and all others similarly situated, filed a claim for refund of sales taxes and interest thereon with defendant, and by written notices mailed May 16, 1973, defendant denied their claim in full; named plaintiffs seek specific refund amounts and six percent interest thereon, and each member of the class seeks refund in an amount according to proof, with interest thereon, upon receipt of which refunds they will return the taxes to their respective customers.

According to the minute order, the demurrer was sustained on the single ground that the complaint contained 'no allegation that such other (unnamed) plaintiffs have filed claims as required by law. Otherwise demurrers overruled.' Although sections 6902 and 6905, Revenue and Taxation Code, make the filing of a claim for a refund of sales taxes with defendant mandatory, 2 and section 6932 bars any court action for such refund unless such claim is timely filed with defendant, we nevertheless conclude the trial court erred in sustaining the demurrer.

The complaint alleges that the named plaintiffs filed a claim with defendant in behalf of themselves and all others similarly situated, and attached thereto, incorporating therein, a document filed with defendant commencing, 'The named claimants . . . respectfully claim in behalf of themselves and in behalf of all others similarly situated (specifically, all other registered dispensing opticians conducting business in the State of California) a refund for sales taxes illegally collected. . . .' Respondent argues that a claim form which does not expressly identify a claimant by his correct name and account number and fails to set forth and specific amount of the refund fails to meet the statutory requirements for a proper claim. 3 A similar contention was rejected by the Supreme Court in City of San Jose v. Superior Court, 12 Cal.3d 447, 115 Cal.Rptr. 797, involving a class suit wherein named plaintiffs had filed a claim for themselves and on behalf of other class members pursuant to section 910, Government Code, 4 which Unlike section 6902 or any of its related sections 5 patently requires specific identification of each claimant. 'We conclude 'claimant,' as used in section 910, must be equated with the class itself and therefore reject the suggested necessity for filing an individual claim for each member of the purported class. To require such detailed information in advance of the complaint would severely restrict the maintenance of appropriate class actions--contrary to recognized policy favoring them. (Code Civ.Proc., § 382; see also Vasquez v. Superior Court, Supra, 4 Cal.3d 800, 94 Cal.Rptr. 796, 484 P.2d 964.) We do not believe the claims statutes were intended to thwart class relief.

'Moreover, treating the class as claimant is consistent with treatment of the class for purposes of filing the complaint. While section 422.40 of the Code of Civil Procedure requires a complaint to name the 'parties,' it is settled the pleading need only establish the existence of an ascertainable class rather than name each member of the class. (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 706, 63 Cal.Rptr. 724, 433 P.2d 732.)

'Thus, to satisfy the claims statutes, the class claim must provide the name, address, and other specified information concerning the Representative plaintiff and then sufficient information to identify and make ascertainable the class itself. Because such information would meet the statutory requirements of name and address, Any effort to identify the class would satisfy the Some compliance test. Beyond this, the sufficiency of the identifying information must be measured by the Substantial compliance test.

'It is therefore clear a class claim may satisfy the claims statutes requirements.' (12 Cal.3d p. 457, 115 Cal.Rptr. p. 803.)

Respondent attempts to distinguish City of San Jose on the ground that it concerns a claim for nuisance and inverse condemnation, while this is a claim for refund of sales taxes; but it is a distinction without a difference. It also cites Bozaich v. State of California, 32 Cal.App.3d 688, 108 Cal.Rptr. 392, a class action to recover moving and relocation expenses on behalf of every person who had been required to move in connection with eminent domain proceedings brought by the state; but Bozaich is distinguished in City of San Jose: 'Language indicating a contrary conclusion (to ours) in Boziach v. State of California, Supra, 32 Cal.App.3d 688, 108 Cal.Rptr. 392, must be read in light of that court's limitation of its holding in its footnote 5, page 699, 108 Cal.Rptr. 392, 6 recognizing the possibility of proper class claims.' (12 Cal.3d, p. 457, fn. 5, 115 Cal.Rptr. p. 804.) Respondent also argues it is impossible to act on a claim for refund filed on behalf of a group of unnamed class members where no specific amount is claimed; but a similar contention was rejected in Javor v. State Board of Equalization, 12 Cal.3d 790, 117 Cal.Rptr. 305, 527 P.2d 1153. The Supreme Court in reversing a judgment of dismissal against class suit plaintiffs also seeking sales tax refunds from defendants, said: 'The exact amount of this sales tax overage can be easily ascertained from the books and records of the retailers.' (P. 797, 117 Cal.Rptr. p. 309, 527 P.2d p. 1157.) Obviously defendant could determine the specific identity of each unnamed plaintiff and the amount of his sales tax payments from its own files.

Respondent's unsupported declaration that class actions are not permitted by statute in state tax refund matters, is completely negated in Javor v. State Board of Equalization, 12 Cal.3d 790, 117 Cal.Rptr. 305, 527 P.2d 1153, 'Under the circumstances, suffice it to say after an examination of the complaint that it states sufficient facts to constitute a class action under section 382 of the Code of Civil Procedure since there is (1) 'an ascertainable class' and (2) 'a well defined community of interest in the questions of law and fact involved affecting the parties to be represented.' (Daar v. Yellow Cab Co., Supra, 67 Cal.2d at p. 704, 63 Cal.Rptr. 724, 731, 433 P.2d 732, 739; Vasquez v. Superior Court (1971) 4 Cal.3d 800, 808--810, 94 Cal.Rptr. 796, 484 P.2d 964.) The complaint before us alleges an ascertainable class of multitudinous consumer-purchasers of the described vehicles during the approximate four-month period, all of whom according to later developments have paid a sales tax based on the amount of the refunded federal excise tax and now no longer entitled to be retained by the state. . . . The questions of law and fact are common to all members of the class. If a class suit were not permitted a multiplicity of actions will be necessary in order to effectuate recovery by the individual purchasers. Since in many instances, the small amount involved may discourage an individual action as economically impractical, the state would be unjustly enriched, if a class suit were not permitted. (Compare Daar, Supra, 67 Cal.2d at pp. 713--715, 63 Cal.Rptr. 724, 433 P.2d 732.)' (12 Cal.3d pp. 796--797, 117 Cal.Rptr. p. 309, 527 P.2d p. 1157.) The one case cited by respondent, Henderson v. Carter, 229 Ga. 876, 195 S.E.2d 4 (1972), was decided upon the ground of sovereign immunity pursuant to an express Georgia statute different from that of California.

Totally specious is respondent's further argument that the class suit is improper in that the additional requirement of a community of interest in the Issues of fact (§ 382, Code Civ.Proc.) 7 is not...

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