2013-00149064-CU-MC

Robert A DeMarco vs. State of CA Franchise Tax Board

Nature of Proceeding: Hearing on Demurrer to First Amended Complaint

Filed By: O’Donnell, Jane

Defendant California Franchise Tax Board’s demurrer to Plaintiff’s first amended
complaint is ruled upon as follows.
This is an action for declaratory relief. Plaintiff Robert A. DeMarco alleges that prior
April 12, 2013, Defendant had levied his bank account without notice. He alleges that
Defendant sought another levy on April 22, 2013. Plaintiff alleges the Defendant has
applied Section 19280 of the California Tax and Revenue Code to his detriment by: (1)
levying his bank account without notice, (2) imposing an arbitrary and cumulative
interest rate, and (3) failing to send Plaintiff notice demanding payment of the debt
before levying the bank account and charging interest.

Government Tort Claims Act

Defendant demurs on the grounds the Plaintiff has failed to allege compliance with
Tort Claims Act.

“Under the Claims Act, no suit for “money or damages” may be brought against a
public entity until a written claim has been presented to the public entity and the claim
either has been acted upon or is deemed to have been rejected. (Gov. Code, § 905,
945.4.) A suit for “money or damages” includes all actions where the plaintiff is seeking
monetary relief, regardless whether the action is founded in ” ‘tort, contract or some
other theory.’ ” (Hart v. County of Alameda (1999) 76 Cal. App. 4th 766, 778.)

However, the Tort Claims Act generally does not apply to an action for declaratory
relief. (Id. at 782.) Nonetheless, where the demand for nonmonetary relief is “merely
incidental or ancillary to a prayer for damages”, the Tort Claims Act applies. (Id.)

Here, Plaintiff seeks a declaration declaring that Section 19280 is unconstitutional,
invalid, and void on its facts, as applied to Plaintiff. He also seeks injunctive relief
against Defendant to prevent further levies on his bank account without notice. He
further seeks damages in excess of the jurisdictional limit for the arbitrary and
cumulative interest imposed on Plaintiff without notice.

The demurrer is OVERRULED. Here, the Court agrees with Plaintiff that his claim for
declaratory and injunctive relief is not “merely incidental or ancillary” to his claim for
damages. Although the prayer for relief includes a claim for damages, Plaintiff’s, the
crux of his declaratory relief cause of action seeks a declaration that Section 19280 is
unconstitutional as applied to Plaintiff. Thus, Plaintiff was not required to comply with
the Tort Claims Act.

Gov’t Code 860.2

Defendant demurs on the grounds that it is immune from suit for its collection activities
pursuant to Govt’ Code section 860.2.

Gov’t Code 860.2 provides that “neither a public entity nor a public employee is liable
for an injury caused by: (a) Instituting any judicial or administrative proceeding or
action for or incidental to the assessment or collection of a tax. (b) An act
or omission in the interpretation or application of any law relating to a tax.”

Tax is defined as “a tax, assessment, fee or charge.” (Gov’t Code section 860.)

In opposition, Plaintiff argues that Gov’t Code section 860.2 does not apply because
there is no tax at issue. Here, Plaintiff alleges that “no tax is at issue.” (FAC, para. 16.) Taking these
allegations as true, the demurrer is OVERRULED.

Due Process

Defendant lastly demurs on the grounds that Plaintiff does not have a cognizable claim
for lack of due process. It argues that as part of his criminal conviction, Plaintiff was
ordered to pay restitution in the amount of $256,916.09, thus, Plaintiff was on notice of
the amount he owed.

The demurrer is OVERRULED. Defendant’s reliance on Greene v. Franchise Tax Bd.
(1972) 27 Cal. App. 3d 38, 43 is misplaced as the case dealt with the procedures used
to collect unpaid taxes (i.e. earnings withholding order). Here, as noted above no
taxes are at issue here.

Defendant shall file and serve an answer by no later than April 28, 2014.

The minute order is effective immediately. No formal order pursuant to CRC Rule
3.1312 or further notice is required.