Court Opinion

ID: 9599869
Source: CourtListenerOpinion
Date Created: 2023-08-22 01:21:59.109079+00
Date Added: 2024-06-11T18:01:47.215895
License: Public Domain

KAUS, J.
Although I agree with the majority’s conclusion—a taxpayer who has made only partial payment of a tax may not sue for a refund—I believe that that holding follows from article XIII, section 32 of the California Constitution itself, rather than from the additional res judicata analysis set forth in the majority opinion. (See ante, p. 641.) As Modern Barber Col. v. Cal. Emp. Stab. Com. (1948) 31 Cal.2d 720, 731-732 [192 P.2d 916] and Pacific Gas & Electric Co. v. State Bd. of Equalization (1980) 27 Cal.3d 277, 283 [165 Cal.Rptr. 122, 611 P.2d 463] make clear, article XIII, section 32 embodies the important public policy of ensuring that the government is not deprived of tax revenues while questions of the validity or the amount of a tax are being litigated. That purpose would surely be undermined if taxpayers could maintain actions for refund after simply paying a nominal portion of the tax that is allegedly due. Thus, the majority’s res judicata analysis is unnecessary to its conclusion.
Furthermore, not only is the majority’s res judicata discussion unnecessary, but I have serious doubts whether it is correct. The analysis rests on the proposition that “resolution of O’Hara’s claim [for refund of the $250 partial payment] will require the court to adjudicate the total amount due for any tax period to which the $250 payment is applied.” (Ante, p. 640.) Why should that be so? Suppose that the board claims that O’Hara actually owes $2,000 for the relevant tax period, but that evidence of the alleged liability above $1,000 is more difficult to come by than is evidence of the first $1,000 of liability. If a taxpayer were permitted to pay only $250 and to sue for a refund of that limited amount, why would the board not be able to show simply that the tax liability for the relevant period was unquestionably more than $250, and thus that the taxpayer is clearly not entitled to a *644refund of any of the $250 payment? Why should the board be required to prove the taxpayer’s entire tax liability simply to defeat a clearly meritless suit for refund of a small partial payment?
If a taxpayer seeks to pursue a partial payment refund action, it is clear that the board cannot appropriately be accused of “splitting a cause of action” if it simply puts on sufficient evidence to defeat the taxpayer’s refund claim. Pope Estate Co. v. Johnson (1941) 43 Cal.App.2d 170 [110 P.2d 481], discussed by the majority, is clearly distinguishable from the present case, for there the taxpayer had paid under protest all taxes which the board had alleged were due for the year in question and had obtained a final judgment entitling it to a specified refund; res judicata principles were applied simply to prohibit the board from reducing the amount of the refund embodied in the final judgment in favor of the taxpayer. Nothing in Pope Estate suggests that if the board had prevailed in the initial refund action, res judicata principles would have required the board not only to defeat the taxpayer’s initial claim for refund but also to defeat all potential future refund actions that the taxpayer might bring.1
Accordingly, if a partial payment refund action were permitted, I do not think it is at all clear that the board would necessarily be obligated by res judicata principles to litigate the question of the taxpayer’s entire tax liability in the taxpayer’s initial refund suit. Nonetheless, as explained at the outset, the importance of the doctrine embodied in article XIII, section 32 is such that we need not rely on the doctrine of res judicata to thwart real party’s attempt to evade it. Thus, I concur in the judgment.
Lucas, J., concurred.

It may be that if we were to hold that a taxpayer could bring a partial payment refund action, the taxpayer would be limited—by the rule prohibiting the splitting of a cause of action—to one such refund action, and that even if it prevailed in the initial action it would only be entitled to avoid payment of the specific amount litigated in that action. In other words, even if the taxpayer were successful in its initial partial refund suit, it would remain liable for all of the remaining unpaid taxes relating to the tax period in question.
While this consequence would certainly make the partial payment refund procedure less attractive from the taxpayer’s point of view, permitting even one partial payment refund action would still enable the taxpayer to litigate the validity of an assessed tax without paying the tax bill in full. Thus, the state’s interest in prompt revenue collection would still be thwarted.