Opinion
Civil Case No. 02-40316.
April 15, 2004
ORDER
Pursuant to the joint final pretrial order, the Court permitted the Government to file a motion to dismiss Defendant's counterclaim and a motion in limine to exclude each of Defendant's exhibits at trial. Defendant, who is proceeding pro se, filed responses to these motions, and the Government submitted reply briefs. For the reasons stated below, the Court will grant the motion to dismiss the counterclaim and will grant in part and deny in part the motion in limine.
I. BACKGROUND
The Government brings this action to collect allegedly unpaid tax liabilities and penalties from Defendant, George Kraljevich, totaling over $30,000.00. The complaint was filed on December 2, 2002. Defendant filed an answer on April 9, 2003. On December 8, 2003, Defendant submitted a counterclaim against the Government for approximately $7,000,000.00.
II. MOTION TO DISMISS COUNTERCLAIM
The Government moves to dismiss Defendant's counterclaim on two grounds: because the Government is immune from suit under the doctrine of sovereign immunity and because the counterclaim is untimely under Federal Rule of Civil Procedure 13. The Court also notes that this counterclaim may have been previously addressed by Judge Victoria Roberts in case 99-75300 or 01-71415,Kraljevich v. Commissioner. The docket sheet states that Judge Roberts granted summary judgment to the Government in case 01-71415 on September 25, 2001, and the Government states in its reply that this was on the basis of sovereign immunity. Reply at 2. Judge Roberts, however, determined that this case was not a companion to the earlier case. See Local R.E.D. Mich. 83.11(b)(7). As the parties have not addressed claim or issue preclusion, the Court will assume that the counterclaim is not barred by that previous action and will instead grant the Government's motion to dismiss the counterclaim based on sovereign immunity, or in the alternative, based on timeliness.
The doctrine of sovereign immunity provides that the United States may not be sued without its consent. Clay v. United States, 199 F.3d 876, 879 (6th Cir. 1999). If the United States has not consented, the Court lacks subject matter jurisdiction over the suit. Id. Any consent to suit "must be unequivocal."Id. (citations omitted).
Defendant argues that the Government has consented to be sued in this case. He states that on March 4, 1998 he received a letter that permitted him to sue the Government "within two (2) years from the mailing date of this letter." Resp. at 2. Two years after the date of that letter is March 4, 2000. This counterclaim was brought on December 8, 2003, well after the expiration of the consent to suit. As the Sixth Circuit has noted, the Court is without jurisdiction when the time limit for bringing a suit expires. Clay, 199 F.3d at 879 ("[t]he government's waiver of sovereign immunity ends — and thus jurisdiction ends — when the limitation period has run." (internal quotation and citations omitted)). Consequently, Defendant's letter does not provide the Court with jurisdiction over this matter.
Additionally, Defendant has not shown that the time limit in a waiver of sovereign immunity can be tolled. Even if the time were tolled throughout the pendency of the previous lawsuits, the two year time limit elapsed. The docket sheet provided by the Government indicates that the first suit, case 99-75300, was filed on October 29, 1999. Thus, well over one year elapsed between the receipt of the letter in March of 1998 and the filing of the first lawsuit, case 99-75300, in October of 1999. A second year elapsed between the termination of both prior cases and the filing of the counterclaim in this case: both prior cases, 99-75300 and 01-71415, were concluded by October 2002 and this counterclaim was not filed until December 2003. Consequently, even if the time during which Defendant's lawsuits remained pending were tolled, more than two years elapsed without Defendant filing this claim.
Defendant also argues that the United States has waived sovereign immunity through the Federal Tort Claims Act ("FTCA") and argues that this counterclaim should proceed under that waiver. The Sixth Circuit, however, has held that "failure to file a timely administrative claim under the FTCA bars federal jurisdiction." Singleton v. United States, 277 F.3d 864, 873 (6th Cir. 2002). The Court has no evidence that any administrative claim, timely or not, was filed by Defendant. Consequently, the Court concludes that sovereign immunity has not been waived in this case and will therefore dismiss this counterclaim for lack of jurisdiction.
Even if the Court had jurisdiction, the claim would be untimely under the Federal Rules of Civil Procedure. Rule 13 provides that "a pleading shall state as a counterclaim any claims which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction." Fed.R.Civ.P. 13(a) (emphasis added). This rule states that a counterclaim arising out of the same transaction or occurrencemust be brought "at the time of serving the pleading." It is uncontested that Defendant did not bring the counterclaim in his answer. Instead, the counterclaim was filed almost eight months after Defendant filed his answer and over three months after the close of discovery.
Defendant does cite to Federal Rule of Civil Procedure 13(f). This rule states that a party who "fails to set up a counterclaim through oversight, inadvertence, or excusable neglect, or when justice requires the pleader may by leave of the court set up the counterclaim by amendment." Fed.R.Civ.P. 13(f) (emphasis added). In this case, Defendant has not articulated specific instances of "oversight, inadvertence, or excusable neglect." Furthermore, it appears that Defendant's counterclaim arose before the Government brought this action. Thus, there is no excuse for the delay in bringing the claim. Furthermore, the rule provides that Defendant should seek leave to file an omitted counterclaim; such leave was never sought in this case.
Defendant argues that the fact that he is proceeding pro se should excuse his failure to comply with the rules. While Defendant is entitled to leniency because he is proceeding without counsel, this does not eliminate the requirements of the federal rules. As the Supreme Court has noted, a pro se litigant "must conduct enough investigation to draft pleadings that meet the requirements of the federal rules." Burnett v. Graten, 468 U.S. 42, 50 (1984). Additionally, the Supreme Court "has never suggested that procedural rules in ordinary civil litigation should be interpreted so as to excuse mistakes by those who proceed without counsel." McNeil v. United States, 508 U.S. 106, 113 (1993).
The Court is not without sympathy for Defendant's situation. The Court has referred the case to the Pro Bono Attorney Program, but no counsel has yet accepted the case. As the Sixth Circuit has noted, "[a]ppointment of counsel in a civil case is not a constitutional right. It is a privilege that is justified only by exceptional circumstances." Lavado v. Keohane, 992 F.2d 601, 605-06 (6th Cir. 1993) (internal quotations and citations omitted). As exceptional circumstances do not exist in this case, the Court has not appointed counsel for the Defendant.
For the reasons stated above, the Court will grant the Government's motion to dismiss for lack of jurisdiction based on the doctrine of sovereign immunity. In the alternative, the Court would grant the motion for failure to comply with Federal Rule of Civil Procedure 13.
III. MOTION IN LIMINE TO EXCLUDE EVIDENCE
The Government has also submitted a motion in limine objecting to each of Defendant's fourteen exhibits. The Government objects on the grounds of relevance, foundation, authenticity, and hearsay. The Court will address each exhibit below.
Exhibit 1 is a spreadsheet of payments that is, in Defendant's words, "[a] compilation of the financial worth of Maximum Industries, Inc." Resp. at 4. Defendant asserts that this demonstrates that Maximum Industries "can pay it's [sic] taxes if properly asked." Id. As the counterclaim in this case has been dismissed, the only claim at issue in this action is the Government's tax assessment under 26 U.S.C. § 6672 against the individual George Kraljevich. As Maximum Industries appears to be a distinct corporate entity, the Court concludes that the ability of Maximum Industries to pay its own taxes is not relevant to the alleged tax liability of Defendant. Accordingly, the Court will sustain the Government's objection for lack of relevance. Fed.R.Civ.P. 402.
Exhibits 2 and 3 are check stubs indicating payments made to the Internal Revenue Service ("IRS") by United Technologies Automotive, Incorporated ("United Technologies"). The Government suggests that United Technologies was a customer of Maximum Industries and owed payments to Maximum Industries. The check stubs indicate that the IRS collected the amount owed by United Technologies to Maximum Industries and credited the amount owed towards Maximum Industries' tax deficiency. Defendant corroborates that these check stubs are for payments "in the account of Maximum Industries." Again, the Court concludes that tax payments by Maximum Industries to pay its own taxes are not relevant to the alleged tax liability of Defendant. Accordingly, the Court will sustain the Government's objection for lack of relevance. Fed.R.Civ.P. 402.
Exhibit 4 is a letter regarding payments made to the IRS on behalf of Maximum Industries. Again, the Court concludes that tax payments by Maximum Industries to pay its own taxes are not relevant to the alleged tax liability of Defendant. Accordingly, the Court will sustain the Government's objection for lack of relevance. Fed.R.Civ.P. 402.
Exhibit 5 is a letter from the IRS to Defendant regarding Defendant's claim for a refund. As this letter does appear to address the individual liabilities of Defendant, the Court considers the document to be relevant. As to the objections regarding authenticity, foundation, and hearsay, the Court will overrule those objections without prejudice to renew the motions at trial. This will enable Defendant to articulate the purpose for which he is offering this exhibit and provide an opportunity for establishing authentication and foundation through witnesses at trial.
Exhibits 6 and 7 are apparently IRS printouts of taxes paid by George Kraljevich, Marylou Kraljevich, and Maximum Industries. As these printouts appear to address the individual liabilities of Defendant, the Court considers the exhibits to be relevant. As to the objections regarding authenticity, foundation, and hearsay, the Court will overrule those objections without prejudice to renew the motions at trial. This will enable Defendant to articulate the purpose for which he is offering these exhibits and provide an opportunity for establishing authentication and foundation through witnesses at trial.
Exhibit 8 is a letter regarding the sale of George Kraljevich's property. As this letter does appear to address the individual liabilities of Defendant, the Court considers the document to be relevant. As to the objections regarding authenticity, foundation, and hearsay, the Court will overrule those objections without prejudice to renew the motions at trial. This will enable Defendant to articulate the purpose for which he is offering these exhibits and provide an opportunity for establishing authentication and foundation through witnesses at trial.
Exhibit 9 contains four letters from the IRS regarding the application of overpaid taxes to other taxes owed. As this letter appears to address the individual liabilities of Defendant, the Court considers the document to be relevant. As to the objections regarding authenticity, foundation, and hearsay, the Court will overrule those objections without prejudice to renew the motions at trial. This will enable Defendant to articulate the purpose for which he is offering this exhibit and provide an opportunity for establishing authentication and foundation through witnesses at trial.
Exhibit 10 consists of copies of payroll check stubs. Defendant's response to the Government's objections simply states that the exhibit consists of "[c]opies of garnishment of wages to support historical data printout. Some relevance." Resp. at 6. Without further information, the Court cannot conclude that this exhibit is relevant to the tax liabilities at issue in this case. Accordingly, the Court will sustain the Government's objection for lack of relevance. Fed.R.Civ.P. 402.
Exhibit 11 is a credit report for George Kraljevich from Trans-Union. Defendant argues that this is "corresponding and supporting previous evidence. Some relevance and authenticity." Resp. at 6. The Court does not consider this credit report from a third party to be relevant to establishing the tax liability of Defendant. Accordingly, the Court will sustain the Government's objection for lack of relevance. Fed.R.Civ.P. 402. Additionally, the Court has concerns regarding the authentication of this document. Fed.R.Civ.P. 901.
Exhibit 12 is a receipt for tax payments. Defendant has also submitted an affidavit that the receipts represent payments made "on behalf of Maximum Industries." The Court concludes that tax payments by Maximum Industries are not relevant to the alleged tax liability of Defendant. Accordingly, the Court will sustain the Government's objection for lack of relevance. Fed.R.Civ.P. 402.
Exhibit 13 is a list of equipment seized from Maximum Industries. Again, the Court concludes that items seized from Maximum Industries to pay its own taxes are not relevant to the alleged tax liability of Defendant. Accordingly, the Court will sustain the Government's objection for lack of relevance. Fed.R.Civ.P. 402.
Exhibit 14 appears to be a counterclaim and explanation of the exhibits. Defendant does not respond to the Government's motion objecting to this exhibit. Accordingly, the Court will consider this exhibit to be withdrawn and will deny the Government's motion as moot.
ACCORDINGLY, IT IS HEREBY ORDERED that the Government's motion to dismiss Defendant's counterclaim [docket entry 15] is GRANTED. IT IS FURTHER ORDERED that the Government's motion in limine to preclude the admission of certain documents [docket entry 14] is GRANTED IN PART AND DENIED IN PART. The Court will sustain the Government's objections and grant the motion to exclude exhibits 1, 2, 3, 4, 10, 11, 12, and 13; the Court will overrule the Government's objections and deny without prejudice the motion to exclude exhibits 5, 6, 7, 8, and 9. The Court will deny as moot the Government's objection to exhibit 14.
IT IS FURTHER ORDERED that this matter is set for the trial term beginning on August 2, 2004. This is a non-jury bench trial. This Court uses a trailing trial docket and it is the responsibility of the parties to maintain communication with the Court's Deputy Clerk to ascertain the position of the case on the Court's trial docket.