CITY OF LOS ANGELES, a municipal corporation, Plaintiff and Respondent, v. James E. VAUGHN, Defendant and Appellant.*
The defendant Vaughn, a court reporter, appeals from a judgment rendered against him for certain delinquent business license taxes adjudged to be owing by him to the city of Los Angeles.
After defendant's general demurrer to the complaint of said city for recovery from him of said business license taxes was overruled, defendant did not answer and permitted judgment to be rendered against him by court after default for the amount of said business license taxes.
The defendant was and is a duly appointed court reporter of the Superior Court in and for the County of Los Angeles.
The essence of the city's complaint was that the defendant, within the city of Los Angeles, had prepared transcripts of testimony and trial proceedings for parties to civil actions in which defendant had acted as official court reporter; that he had collected fees from various parties for preparing such transcripts; that he had failed and neglected to pay business license taxes allegedly owing to the city of Los Angeles by reason thereof and that said business license taxes and become due and were delinquent.
Section 21.190 of the Los Angeles Municipal Code provides in part that every person engaged in any trade, calling, occupation, vocation, profession or other means of livelihood, as an independent contractor and not as an employee of another, and not specifically licensed by other provisions of said municipal code relating to business license and license fees in connection therewith, shall pay a license fee of $12 per calendar year for the first $12,000 or less of his gross receipts, and in addition thereto, the sum of $1 per year for each additional $1,000 or fractional part thereof, of gross receipts in excess of $12,000.
Defendant contends that in preparing such transcripts and collecting fees therefor he was not engaged in any trade or occupation as an independent contractor but that, on the contrary, he had acted in preparing such transcripts as the employee of another, i. e., as an employee of the superior court of which he was an official court reporter.
The sole question presented is whether, in preparing such transcripts at the request of parties to civil actions and collecting fees therefor, defendant engaged in any trade, occupation or other means of livelihood as an independent contractor and not as an employee of said superior court.
We have reached the conclusions, for the reasons hereinafter stated, that official court reporters operate in a dual capacity; that they operate not as employees of the court but rather engage in business as independent contractors when they prepare transcripts of testimony and trial proceedings at request of parties to civil actions and collect fees therefor; that the defendant was liable for payment of the business license taxes in preparing and collecting fees for such transcripts as alleged in the city's complaint and that therefore the judgment herein should be affirmed.
Such official court reporters are no doubt to be regarded and considered as employees of the court appointing them and exercising control over them when they are engaged in performing various functions, including serving as official reporters at trials for statutory salary compensation. §§ 69894.1, 72705, Gov.Code. On the other hand, they cannot reasonably be regarded or considered to be employees of the court when they are engaged in preparing reporter's transcripts at the request of parties to civil actions and are collecting compensation therefor from the parties. § 69953, Gov.Code.
Courts have all will exercise only minimal control over reporters with reference to preparation and furnishing of reporter's transcripts in civil cases. The trial court in a case on appeal has power to determine whether appellant has complied with all necessary legal requirements to secure a transcript and, if so, to see to it that the reporter complies with the law and prepares and files the transcript. But the court in that case has no jurisdiction to pass on disputes between the reporter and the appellant over the fees charged therefor and the question of the validity of an agreement entered between them relative to such fees must necessarily be resolved in a separate action. Summers v. Superior Court, 53 Cal.2d 295, 1 Cal.Rptr. 324; Williams v. Superior Court, 14 Cal.2d 656, 665, 96 P.2d 334; Gjurich v. Fieg, 160 Cal. 331, 116 P. 745.
Defendant urges that, since section 269 of the Code of Civil Procedure and sections 69950–69951 and other sections of the Government Code impose duty on court reporters to prepare and furnish transcripts when requested, which duty they are not at liberty to decline to perform, court reporters must therefore be regarded as employees of the court even though they contract separately as to fees for such transcripts.
The mere circumstance, however, that court reporters have a statutory duty to prepare transcripts under certain conditions and that the court has power to compel the preparation and furnishing of such transcripts in certain limited situations does not establish that court reporters, when engaged in preparing and furnishing such transcripts, are employees of the court. Except where the reporters fail or neglect to so furnish transcripts when requested, in accordance with statute, the court remains aloof and the reporters act on their own initiative in their contractual arrangements with litigants concerning such transcripts. Summers v. Superior Court, supra, 53 Cal.2d 295, 1 Cal.Rptr. 324.
Defendant further contends that Government Code, sections 69941, 69894.1 and 70043, declare, in effect, that court reporters are employees of the court.
Examination of said sections and other related sections of the Government Code, as well as section 269, Code of Civil Procedure, indicates that official court reporters are employees of the court or country to the extent that they are required to perform certain basic duties prescribed by statute for which they are remunerated on a salary basis. When, however, such court reporters engage in the function of preparing transcripts of testimony or of trial proceedings at request of parties to civil actions and contract with such parties or other persons for payment of fees therefor they are operating not as employees of the court but rather in the capacity of independent contractors. As further evidence of the latter relationship judicial notice may be taken of the fact that reporters commonly hire and compensate transcribers to perpare such transcripts from their previous record made at the trial. It appears herein from exhibits attached and made a part of the complaint that the defendant in various instances hired a transcriber to prepare his reporter's transcripts. Likewise, the court is required to furnish stationery and supplies to court reporters for the transaction of court business but the furnishing of such materials is not authorized for the preparation by them of transcripts. § 68073, Gov.Code.
Defendant further urges that a license tax ordinance, such as section 21.190 of the city's municipal code herein, is against the will and without consent of the citizen thus being in invitum; that, as such, it should be strictly construed in favor of the person upon whom the license tax is sought to be imposed (46 Cal.Jur.2d 485, § 5); that, since employees are excluded and since such a person as defendant herein is not expressly made subject to the license tax but at most only impliedly as a purported independent contractor, he (defendant) should not be regarded as subject to the license tax.
The said section 21.190 of the municipal code was considered and discussed in City of Los Angeles v. Rancho Homes, Inc., 40 Cal.2d 764, 768, 256 P.2d 305, 306, the court therein pointing out that the intent of said section is to make the scope of its operation (i. e. the terms ‘engaged in any trade * * * occupation * * * as an independent contractor’) a very broad one.
Granting that such a license tax ordinance is in invitum we nevertheless conclude that reporters do not act as employees of the court but as independent contractors in preparing and furnishing transcripts in civil case appeals.
In a somewhat analogous situation the United States Internal Revenue Service has ruled that for federal income tax purposes federal court reporters operate in a dual capacity, being employees with respect to the performance of their basic statutory duties for the courts and independent contractors with respect to the furnishing of official transcript of record proceedings to those persons who order and pay for them. (Internal Revenue Bulletin Number 1958–29, issued July 21, 1958, Rev.Rul. 58–549, 58–360.)
The judgment is affirmed.
KINCAID, Justice pro tem.
FOX, P. J., and ASHBURN, J., concur.