Mitchell v. Franchise Tax Board

Opinion

SMITH, J.

Daniel L. Mitchell and Wendy Mitchell appeal from a judgment of dismissal entered after the sustaining of the demurrer of defendant, State of California Franchise Tax Board (FTB), to their second amended complaint without leave to amend. We affirm.

On November 23, 1982, plaintiffs filed a complaint for damages against the State of California and various individual defendants (apparently employees of the FTB), attempting to state causes of action for negligence, slander of title and interference with credit relations arising out of a California personal income tax proposed assessment and a tax lien placed on plaintiffs’ property by defendants. On March 16, 1983, the demurrer of the State of California to this complaint was sustained with 20 days’ leave to amend.

On April 5, 1983, plaintiffs filed a first amended complaint against the FTB and six of its employees, attempting to state causes of action for negligence, interference with credit relations and the taking of property without due process of law. On July 28, 1983, the demurrer of the FTB to this complaint was sustained with 30 days’ leave to amend.

[1135]

On September 1,1983, plaintiffs filed a second amended complaint against the FTB and six of its employees, attempting to state causes of action for negligence, slander of title, interference with credit relations and the taking of property without due process of law.

The second amended complaint alleged as follows: On or about April 13, 1982, and thereafter, plaintiffs owned real property in Berkeley and plaintiff Daniel Mitchell owned real property in Alameda. On or about April 9, 1975, plaintiffs were notified that defendants proposed a deficiency tax assessment against them for 1972. Within 60 days of said notice, plaintiffs filed with the FTB a written protest of the proposal and demanded an oral hearing. Thereafter defendants failed and refused to perform their ministerial duties prescribed by Revenue and Taxation Code section 18590 et seq. to reconsider the proposed deficiency assessment; to grant plaintiffs a hearing; to notify plaintiffs of the action, if any, taken by defendants on plaintiffs’ protest; and to afford plaintiffs the right to appeal to the State Board of Equalization. Defendants knew or should have known that they had assessed no additional 1972 income tax against plaintiffs, and that plaintiffs owed no personal income tax for that or any other year. On or about April 13, 1982, defendants negligently, carelessly and unlawfully caused to be filed a false and unfounded tax lien for alleged delinquencies in payment of personal income taxes ($15,920.87 for 1972 and $20.21 for 1980) to encumber all property owned by each plaintiff.