Manning's, Inc. v. Burkett

GIBSON, C. J. — Plaintiff instituted this proceeding against defendant, the Director of Employment, seeking to recover contributions allegedly overpaid to the unemployment fund and to obtain a readjustment of its account. A demurrer to the complaint was sustained without leave to amend, and judgment was entered for defendant.

The complaint alleged as follows: In 1944 plaintiff commenced an action against defendant which resulted in a judgment ordering a refund to plaintiff of $22,481 and the removal of charges from its account in the sum of $45,390 covering the years 1941, 1942 and 1943. The judgment was affirmed on May 11, 1950, in Manning’s, Inc. v. Bryant, 35 Cal.2d 903 [218 P,2d 7], Defendant paid the judgment and adjusted plaintiff’s account, effective as of June 30, 1949. In connection with this adjustment, defendant issued to plaintiff a statement of its reserve account dated May 31, 1950. Plaintiff protested this statement within the time and in the manner prescribed by law upon the ground that defendant failed to make an adjustment of tax rates and contributions for the rating periods from 1943 to 1949. An appeal from disallowance of the protest was taken to the California Unemployment Insurance Appeals Board and was denied. During the calendar years 1944 through 1950, plaintiff paid its contributions regularly at the tax rates indicated by defendant’s computations. As a result of the judgment affirmed in Manning’s, Inc. v. Bryant, 35 Cal.2d 903 [218 P.2d 7], defendant was required to adjust plaintiff’s contribution rates for the periods which elapsed during the pendency of the action. If adjustments had been made as of June 30, 1943, plaintiff’s tax rate for 1944 would have been decreased from 2.5 per cent to 1.5 per cent, which would have resulted in a reduction of $17,314.05 in plaintiff’s contributions. With respect to 1945, the tax rate would have been decreased from 2 per cent to 1.5 per cent, which would [45]have resulted in a reduction of $9,365.73 in plaintiff’s contributions. It is further alleged that there is now due plaintiff on account of excess contributions the sum of $26,679.78 and interest thereon, that upon the refund of the excess contributions further adjustment of plaintiff’s reserve account balances will be required for the taxable periods after 1945. and that plaintiff’s tax rates for these years will not be changed.

It is not disputed that the judgment for plaintiff, affirmed by this court in 1950, covering 1941, 1942 and 1943, affected the contributions plaintiff was required to make for the years 1944 and 1945. Defendant, however, takes the position that a cause of action was not stated in the complaint because of the failure to allege that proper and timely protests were filed by plaintiff in 1944 and 1945.