Opinion
Civil Action No. 01-146-JMH
February 26, 2002
MEMORANDUM OPINION AND ORDER
This matter is before the Court on Respondent's motion to dismiss the petition to quash summons [Record No. 10]. Petitioner has filed a response [Record No. 21]. The time for reply has passed and this matter is now ripe for a decision.
In connection with an Internal Revenue Service ("IRS") criminal investigation of Petitioner Rudd Drywall Company, Inc. ("Rudd Drywall") and the company's president, Billy Joe Rudd, the IRS issued a summons on April 4, 2000 to Rudd Drywall's accountant Dennis Joseph ("Joseph") to produce tax and financial records of Rudd Drywall. On April 4, 2000, IRS agents visited Joseph's office and reviewed Rudd Drywall's records. As the agents left they presented the summons to Joseph. On April 5, 2000, the IRS mailed a copy of the summons and a notice of service to Rudd Drywall via certified mail. The summons and notice was received by Billy Joe Rudd on April 8, 2000. Rudd Drywall filed this petition to quash the summons on March 30, 2001.
Respondent has filed a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6) arguing that the petition is untimely and that the summons was issued in good faith for a legitimate purpose. Inasmuch as Respondent relies upon matters outside the pleadings, the Court will treat the motion to dismiss as one for summary judgment. Fed.R.Civ.P. 12(b). Petitioner has not requested more time for discovery, thus this Court will proceed to analyze Respondent's motion under the standards applicable for a motion for summary judgment.
Under Fed.R.Civ.P. 56(c), summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no issue as to any material fact, and that the moving party is entitled to judgment as a matter of law." The moving party may discharge its burden by showing "that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). The nonmoving party, which in this case is the petitioner, "cannot rest on [its] pleadings," and must show the Court that "there is a genuine issue for trial." Hall v. Tollett, 128 F.3d 418, 422 (6th Cir. 1997). In considering a motion for summary judgment the court must construe the facts in the light most favorable to the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
The IRS summons was issued pursuant to 26 U.S.C. § 7609, which requires that when a summons is issued to a third-party record keeper, the IRS must provide notice to the person to whom the records pertain within three (3) days of the day the summons is served. 26 U.S.C. § 7609(a)(1). The notice must contain a copy of the summons and an explanation of the right to bring a proceeding to quash the summons. Id. A person who has a right to receive such notice has twenty (20) days in which to begin a proceeding to quash and may do so in a U.S. district court. 26 U.S.C. § 7609(b)(2)(A) and § 7609(h).
In this case, proper notice was provided to the petitioner. The summons was served on April 4, 2000, and a copy of the summons and explanation of the right to bring a proceeding was mailed via certified mail to the petitioner on April 5, 2000. However, Petitioner did not file this petition to quash the summons until almost a year later. Petitioner does not contest these facts, but instead argues that the principle of equitable tolling should be applied to allow the petition to quash to proceed.
"The doctrine of equitable tolling permits a prospective plaintiff to delay filing suit beyond the statute of limitations if, despite due diligence on his part, he is given insufficient notice or cannot timely obtain the information he needs in order to determine whether he has a claim on which a suit can be founded." Shisler v. U.S., 199 F.3d 848, 851 (6th Cir. 1999). "Equitable tolling is available in suits only where notice is insufficient or where the claimant has actively pursued his judicial remedies by filing a defective pleading during the statutory period or where he has been induced or tricked into allowing the filing deadline to pass." Id. at 852. (citations omitted). Factors which a court considers in determine whether to apply equitable tolling include: a lack of actual notice of filing requirement; a lack of constructive knowledge of filing requirement; diligence in pursuing one's rights; absence of prejudice to the defendant; and a plaintiff's reasonableness in remaining ignorant of the notice requirement. Andrews v. Orr, 851 F.2d 146, 151 (6th Cir. 1988).
Assuming that the doctrine of equitable tolling can be invoked to toll the statute of limitations found in 28 U.S.C. § 7609(b)(2)(A), this Court declines to apply the doctrine in the present case. Petitioner argues that it missed the filing deadline because its former attorney failed to inform the company president of its right to bring a petition to quash and because the IRS agents impermissibly gained access to the company's records prior to serving the summons on the company's accountant. Neither of these arguments provides the Court with grounds to apply to doctrine of equitable tolling. Petitioner received adequate notice, which included an explanation of its right to bring a petition to quash. The fact that Petitioner received bad advice from its attorney does not change the fact that Petitioner actually had notice of the deadline. Furthermore, whether the IRS agents impermissibly gained access to the company's records prior to serving the summons on the company's accountant goes to the merits of the petition to quash, not to the appropriateness of equitable tolling. Although, Petitioner did not learn of the actions of the IRS agents on April 4, 2000 until well after the filing deadline, there was nothing preventing Petitioner from discovering the details regarding the service of the summons from its accountant prior to the filing deadline.
Inasmuch as the petition was not timely filed, this Court lacks jurisdiction to consider the merits of the petition to quash the summons. Clay IV v. U.S., 199 F.3d 876, 879 (6th Cir. 1999).
Accordingly, IT IS ORDERED, that Respondent's motion to dismiss [Record No. 10] be, and the same hereby is, GRANTED.
ORDER
This matter is before the Court on the motion by Petitioner to file the Affidavit of Billy Joe Rudd under seal [Record No. 16]. The Respondent has not objected and the matter is ripe for a decision.
Having considered the matter, IT IS ORDERED:
(1) That said motion [Record No. 16] be, and the same hereby is GRANTED; and
(2) That the clerk shall file the Affidavit of Billy Joe Rudd under seal.
ORDER
This matter is before the Court on the motion by Petitioner for return of property pursuant to Fed.R.Crim.P. 41(e) [Record No. 8]. Respondent has filed a response, [Record No. 15], to which Petitioner has replied [Record No. 18]. This matter is now ripe for a decision.
Petitioner did not assert its claim for a return of property pursuant and basis for jurisdiction of this claim in its initial complaint. This Court believes that it may not consider the pending motion without an amendment of the complaint. Thus, this Court will grant the Petitioner leave to amend its complaint, but will not require the parties to re-file its briefs on this issue.
Accordingly, IT IS ORDERED:
(1) That the Petitioner be, and the same hereby is, GRANTED leave to amend the complaint;
(2) That the Petitioner shall amend the complaint within ten (10) days of the entry of this order; and
(3) That the Court will refrain from considering Petitioner's motion for return of property pursuant to Fed.R.Crim.P. 41(e) until the Petitioner has amended the complaint.
ORDER
This matter is before the Court on the motion by Billy Joel Rudd to intervene [Record No. 19]. The Respondent has not objected and the matter is ripe for a decision.
Having considered the matter, IT IS ORDERED:
(1) That said motion [Record No. 19] be, and the same hereby is GRANTED;