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Goumas v. State Tax Assessor

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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	2000 ME 79
Docket:	Ken-99-427
Submitted 
on Briefs:	January 14, 2000
Decided:	May 9, 2000

Panel:WATHEN, C.J., and CLIFFORD, RUDMAN, DANA, SAUFLEY, and CALKINS, JJ.




STEVEN M. GOUMAS v. STATE TAX ASSESSOR


SAUFLEY, J.

	[¶1]  Steven Goumas appeals from a judgment entered in the Superior
Court (Kennebec County, Studstrup, J.) dismissing as barred by the doctrine
of res judicata his complaint, brought pursuant to 36 M.R.S.A. § 151 (1990
& Supp. 1999) and M.R. Civ. P. 80C, in which Goumas challenged the State
Tax Assessor's authority to assess income taxes on his income earned at the
Portsmouth Naval Shipyard.  Finding no error, we affirm.
I. BACKGROUND
	[¶2]  Steven Goumas is a New Hampshire resident employed as a
civilian federal employee at the Portsmouth Naval Shipyard.  Goumas asserts
that the Shipyard is located in New Hampshire and not in Maine.  Based on
this belief, Goumas and other similarly situated New Hampshire residents
filed a class action suit seeking relief from taxes due or refunds of taxes paid
during tax years 1989 through 1992 and seeking inter alia a declaration that
income of class members earned at the Shipyard "at any and all times" is
not taxable by the State of Maine.  The class was certified on October 3,
1994, representing nonresident employees of the Shipyard.  The
certification of the class required certain class members to continue to
pursue administrative remedies regarding the assessment of each year's
income taxes as time progressed.  Accordingly, members of the class were
required to file timely challenges to the assessment of taxes, but resolution
and enforcement of the taxes was effectively stayed throughout the
pendency of the class action.  See, e.g., 36 M.R.S.A. § 175-A (1990 & Supp.
1999).
	[¶3]  Goumas and the other members of the class, however, failed to
prosecute their action.  On June 12, 1998, the Superior Court dismissed the
suit with prejudice for failure to prosecute.  While the class action was
pending, Goumas had continued to challenge the Assessor's annual
determination that he owed income taxes to the State of Maine.  Consistent
with the requirements of his certification as a class member, in 1997,
Goumas sought a reconsideration of the Assessor's determination that he
owed Maine income taxes for tax years 1992 through 1995.  The Assessor
concluded that the assessments were not in error.  On October 15, 1997,
Goumas appealed the Assessor's reconsideration decisions to the Superior
Court pursuant to 36 M.R.S.A. § 151 and M.R. Civ. P. 80C.  Because resolution
of the class action would render the obligatory Rule 80C action moot, no
action was taken on the Rule 80C complaint pending final judgment in the
class action.
	[¶4]  Once the class action suit was dismissed with prejudice, the
Superior Court addressed Goumas's Rule 80C complaint, and, after motion
and hearing, dismissed the complaint because Goumas was a member of the
class and could not, therefore, relitigate the same cause of action regarding
Maine's authority to tax his income.  This appeal followed.
II. DISCUSSION
	[¶5]  We review de novo the Superior Court's legal conclusion that the
current claim is barred by the application of the doctrine of res judicata. 
See Draus v. Town of Houlton, 1999 ME 51, ¶ 5, 726 A.2d 1257, 1259.  Res
judicata bars the relitigation of "an entire 'cause of action.'"  Johnson v.
Samson Constr. Corp., 1997 ME 220, ¶ 6, 704 A.2d 866, 868 (quoting
Beegan v. Schmidt, 451 A.2d 642, 644 (Me. 1982)).  The doctrine applies
only when:  "(1) the same parties or their privies are involved in both
actions; (2) a valid final judgment was entered in the prior action; (3) the
matters presented for decision in the second action were, or might have
been, litigated in the first action," Department of Human Servs. v. Comeau,
663 A.2d 46, 48 (Me. 1995); and (4) both cases involve the same cause of
action, see Camps Newfound/Owatonna Corp. v. Town of Harrison, 1998 ME
20, ¶ 11, 705 A.2d 1109, 1113.  
	[¶6]  Here, the first three elements are indisputably present.  First,
both Goumas and the Assessor, the parties before us, were parties in the
class action.  Second, the first suit was decided on the merits, and a valid
final judgment was entered.  See Johnson v. Samson Constr. Corp., 1997 ME
220, ¶ 8, 704 A.2d 866, 869.  And third, the "matters presented for
decision" in the class action case included the adjudication of Goumas's
challenge to the taxability of his income earned at the Shipyard, for all tax
years through and including those he seeks to challenge here.  Accordingly,
the applicability of the doctrine of res judicata to this matter rests on the
fourth element:  whether the two suits involve the same cause of action.  
	[¶7]  In determining whether two cases involve the same cause of
action, we apply the "transactional test."  Draus, 1999 ME 51, ¶ 8, 726 A.2d
at 1260.  Under this test, causes of action are the same if they were
"founded upon the same transaction, arose out of the same nucleus of
operative facts, and sought redress for essentially the same basic wrong." 
Brown v. Osier, 628 A.2d 125, 127 (Me. 1993), quoted in Draus, 1999 ME
51, ¶ 8, 726 A.2d at 1260.  The transactional test, requiring that the court
analyze the factual groupings that can be aggregated for trial, is a
"pragmatic" test.  Beegan, 451 A.2d at 644.  This conceptualization of the
doctrine of res judicata requires "a plaintiff to pursue all rights that he may
have against a given defendant arising out of the 'transaction or series of
transactions' from which his suit arises."  Id. at 646.
	[¶8]  In his first action, as a member of the class, Goumas asserted
that he was a resident of New Hampshire; that he earned income at the
Portsmouth Naval Shipyard; that the State Tax Assessor had assessed and
declined to return income taxes against his earnings at the Shipyard; that
the Shipyard is located in Portsmouth, New Hampshire, and "has never
been located within the State of Maine"; and that income earned at the
Shipyard is "not properly subject to Maine Income Tax."  The court
consolidated the action filed by Goumas and others with another pending
action that also challenged the taxing of income earned at the Shipyard.  
	[¶9]  The court certified two classes and defined the Goumas class as
consisting of "all nonresident individuals (for Maine income tax purposes)
who were, are or will become Federal civilian employees who have timely
pursued or actually do timely pursue their administrative remedies" on the
grounds that the Shipyard is not located in Maine (emphasis added).{1}  The
language of certification makes evident the scope of the class action.  It was
intended to address past and future assessments of Maine income taxes
against the members of the class.  At the time that the action was eventually
dismissed for want of prosecution, the court noted that the pendency of the
action had not only prevented the State of Maine from collecting back taxes
from members of the class but also that the plaintiffs had filed suit "to
prevent collection for the indefinite future, while they do nothing to pursue
the litigation."
	[¶10]  The document that brings Goumas before us now, filed in the
Superior Court, consisted of a two-paragraph letter, purporting to be a
complaint, in which he petitioned for review of his 1992 through 1995
taxes and set forth exactly the same argument:  "My contention is that the
Portsmouth Naval Shipyard is located in Rockingham County, Portsmouth,
New Hampshire, and that the State of Maine has no jurisdiction in taxing my
wages for State of Maine income tax purposes."  As is apparent, both the
class action suit and the current complaint are "founded upon the same
nucleus of operative facts."  Both suits were generated by the actions of the
State of Maine in taxing Goumas's income and both presented the same
cause of action-determining whether the State of Maine is authorized to tax
the income of nonresident civilian employees at the Portsmouth Naval
Shipyard.{2}  
	[¶11]  Moreover, Goumas seeks exactly the same remedy in the matter
before us as he did in the class action-a judicial determination that the
State of Maine may not impose an income tax on him because his income
was earned in New Hampshire.  Because Goumas has already litigated his
claim that the State of Maine may not impose an income tax upon his
Shipyard earnings for the tax years 1992 through 1995 as well as other
years, and failed to prevail in that litigation, he may not now relitigate the
same cause of action.
	[¶12]  Accordingly, we conclude that the two suits were founded on
the same nucleus of facts and sought the same redress, thus constituting the
same cause of action for purposes of the doctrine of res judicata.  The
Superior Court, therefore, did not err in concluding that the current suit is
barred.
	The entry is:
Judgment affirmed.

For plaintiff: Steven M. Goumas RR 1 Box 274 L Farmington, NH 03835 Attorneys for defendant: Andrew Ketterer, Attorney General Crombie J.D. Garrett, Asst. Attorney General Clifford B. Olson, Asst. Attorney General 6 State House Station Augusta, ME 04333-0006
FOOTNOTES******************************** {1} . A second class was certified to include residents of New Hampshire earning income at the Shipyard who had not or did not perfect their challenges against the Assessor. Relief for those class members would be granted only prospectively through declaratory and injunctive relief. {2} . Goumas does not challenge the amount, calculation, or basis of the taxes assessed by the State Tax Assessor except to argue that the Shipyard is not in Maine and, thus, that the Assessor lacked the authority to assess taxes on income earned there.