Tarver v. Oliver H. Van Horn Co., Inc.
| Decision Date | 30 December 1991 |
| Docket Number | No. 90-CA-1757,90-CA-1757 |
| Citation | 591 So.2d 1366 |
| Parties | Leon R. TARVER III, Secretary for the Department of Revenue and Taxation v. OLIVER H. VAN HORN CO., INC. |
| Court | Court of Appeal of Louisiana — District of US |
Marlin N. Gusman, Dept. of Revenue and Taxation, State of La., Baton Rouge, for plaintiff/appellant.
Charles Emile Bruneau Jr., New Orleans, for defendant/appellee.
Before ARMSTRONG and PLOTKIN, JJ., and GULOTTA, J. Pro Tem.
Plaintiff, Leon R. Tarver III, in his capacity as Secretary of the Louisiana Department of Revenue and Taxation, appeals the judgment of the trial court sustaining a peremptory exception of res judicata in favor of defendant, Oliver Van Horn, Co., Inc. We now affirm.
This case involves a suit for Louisiana general sales taxes allegedly collected by Oliver Van Horn Co., Inc. (Van Horn) on its retail sales, but not remitted to the State of Louisiana. The suit covers the period from November 1979 through December 1982. The plea of res judicata sustained by the trial court was based upon a joint motion to dismiss an assessment against Van Horn by the Louisiana Department of Revenue and Taxation for penalties and disputed interest relating to collected and unremitted sales taxes for the period January 1, 1983 to May 31, 1986. The court found that the motion reflected a compromise or transaction agreement between the parties on the issue of all taxes due before May 31, 1986. A history of that proceeding is necessary to understand the issues in the appeal before us.
On September 16, 1986, the Department of Revenue and Taxation mailed a letter to Van Horn requesting that it furnish certain records for the period January 1, 1976 through March 31, 1986. On September 24, 1986, Van Horn's attorney replied, noting that there was a a three-year prescription on the taxes in question. La. Const. Art. 7, Sec. 16 provides that taxes, other than those on real property, prescribe in three years after the 31st day of December in the year in which they are due. On the face then, at that time, the Department could only get unremitted taxes on sales during the period January 1, 1983 to December 31 1986. It was the Department's position, however, that, under the case of Sabine Pipe & Supply Co. v. McNamara, 411 So.2d 1167 (La.App. 1st Cir.1982), writ denied, 414 So.2d 1254 (La.1982), taxes collected but not remitted could be recovered by the State after the prescriptive period had run.
On October 1, 1986, the Department issued an administrative subpoena to Van Horn requesting business records for the purpose of determining civil and criminal liability for sales taxes collected and not remitted for the period from August 1, 1976 through December 31, 1982. On October 22, 1986, Van Horn's attorney informed the Department that, because of the three-year prescription, his client was refusing to supply the requested records.
On October 24, 1986, Van Horn filed amended returns for the period January 1, 1983 to May 30, 1986, remitting $20,655.16 in sales taxes and interest. Van Horn protested the penalties and disputed the Department's calculation of interest. On December 4, 1986, the Department notified Van Horn that it was proposing to formally assess it for sales taxes collected but not remitted for the period January 1, 1983 to May 31, 1986, plus interest and penalties. The Department credited Van Horn for the payments sent along with the amended returns, leaving a balance claimed in the amount of $3,067.18. The assessment was made, and on February 17, 1987, Van Horn appealed to the Board of Tax Appeals. As stated in Van Horn's brief in the instant case, its appeal before the Board of Tax Appeals was entitled "Appeal for Redetermination of Assessment of Louisiana General Sales Tax."
Following a settlement conference, on July 22, 1987, the Department and Van Horn, by joint motion, dismissed Van Horn's appeal pending in the Board of Tax Appeals. The joint motion recited:
On joint motion of petitioner, OLIVER H. VAN HORN COMPANY, INC., and respondent, SECRETARY OF REVENUE AND TAXATION, appearing herein through their respective undersigned counsel, and on suggesting to the Board that the respective parties have met and that all differences have been resolved, and that all monies due to the State of Louisiana, through the Department of Revenue and Taxation by peititoner for Louisiana general sales tax for periods before May 31, 1986, were paid by peititoner when it filed its amended return, and that, accordingly, the appeal is moot and these proceedings should be dismissed.
The instant suit was filed on November 20, 1989. Trial of the exception of res judicata was held on March 9, 1990, and judgment sustaining same was rendered on that date.
At the time of the trial of Van Horn's exception of res judicata La.R.S. 13:4231 provided:
The authority of the thing adjudged takes place only with respect to what was the object of the judgment. The thing demanded must be the same; the demand must be founded on the same cause of action; the demand must be between the same parties, and formed by them against each other in the same quality.
The absence of any one of these elements is fatal to an exception of res judicata. First Guaranty Bank v. Durham, 409 So.2d 380 (La.App. 4th Cir.1982).
A transaction or compromise is an agreement between two or more persons, who, for preventing or putting an end to a lawsuit, adjust their differences by mutual consent. La.C.C. art. 3071. A compromise or transaction has, between the parties, the effect of a thing adjudged. La.C.C. art. 3078; Barnhill v. Consolidated Medical, Disability & Life Trust, 569 So.2d 1115 (La.App. 3rd Cir.1990), writ denied, 572 So.2d 93 (La.1991). An exception of res judicata is the proper procedural vehicle when a suit is barred by a valid written compromise or transaction. Watkins v. Sentry Insurance Co., 502 So.2d 1132 (La.App 4th Cir.1987). The plaintiff against whose action the exception of res judicata is directed may introduce evidence of a defense to the compromise agreement without the necessity of filing replicatory pleadings or a prior independent action to annul the compromise. Smith v. Leger, 439 So.2d 1203 (La.App. 1st Cir.1983); Bielkiewicz v. Rudisill, 201 So.2d 136 (La.App. 3rd Cir.1967).
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