Opinion
Case No. 02-21060-CIV-UNGARO-BENAGES
February 24, 2003
ORDER GRANTING DEFENDANT UNITED STATES' MOTION FOR SUMMARY JUDGMENT AND REMANDING CASE TO STATE COURT
THIS CAUSE is before the Court upon Defendant United States' Motion for Summary Judgement ("Motion"), filed December 17, 2002.
THE COURT has considered the motion, the pertinent portions of the record and is otherwise fully advised in the premises. Plaintiff began this action on March 8, 2002 in the Circuit Court of the Eleventh Judicial Circuit, in and for Miami-Dade County, Florida, seeking to quiet title to certain real property located in that county. On April 8, 2002, the case was removed to this Court. On December 17, 2002, Defendant United States of America ("Defendant") filed the present motion for summary judgment. For the following reasons, the Court finds that no genuine issues of material facts exist and Defendant is entitled to judgment as a matter of law.
The various defendants were made parties to this action by virtue of obtaining and recording final judgments issued in their favor and against Plaintiff. See Complaint at ¶ 13-17.
This Court entered Final Default Judgment in favor of Plaintiff and against Defendants United Parcel Service, Inc. and General Electric Credit Auto Lease, Inc. on June 24, 2002. See DE 30. Accordingly, the only defendants remaining in this action are the United States of America, Swain Enterprises, Inc. and Interamerican Car Rental, Inc.
FACTUAL BACKGROUND
On May 23, 1983, a delegate of the Secretary of the Treasury made an assessment against Plaintiff of a trust-fund recovery penalty pursuant to 26 U.S.C. § 6672. Plaintiffs Response to the United States Motion for Summary Judgment ("Response") at 4; Motion at 1. On or about April 13, 1989, Plaintiff brought suit in this Court to contest the assessment, and Defendant filed an answer and counterclaim on June 26, 1989, seeking a judgment for the unpaid balance of the assessment. See Response at 4; Motion at 2. On May 10, 1990, this Court entered a "Consent Final Judgment" in favor of Defendant against Plaintiff in the amount of $81,691.01 plus interest thereon from May 23, 1983. See Response at 4; Motion at 2. Subsequently, the Internal Revenue Service ("IRS") filed a notice of federal tax lien against Plaintiff on or about August 20, 1990. See Response at 4; Motion at 2.On February 11, 1996, the IRS issued a "Certificate of Release of Federal Tax Lien" for the assessment made against Plaintiff. See Motion at 2. On or about December 18, 1998, Plaintiff and his wife, now deceased, acquired real property which served as the couple's homestead domicile and residence, in Dade County, Florida. See Response at 2; Motion at 3. Thereafter, on April 23, 2002, the IRS issued a "Revocation of Certificate of Release of Federal Tax Lien," with respect to the release of the federal tax lien that was issued on February 11, 1996. See Response at 5; Motion at 3. The IRS issued the "Revocation of Certificate of Release of Federal Tax Lien" because it deemed that on February 11, 1996, it "mistakenly issued" the "Certificate of Release of Federal Tax Lien." See Motion at 3, Ex. 8. The "Revocation of Certificate of Release of Federal Tax Lien" was filed with the Clerk of the Circuit and County Courts, Dade County, Florida, on May 6, 2002. Response at 4-5; Motion at 3.
On June 3, 2002, this Court Ordered the sale of Plaintiffs property and the deposit of the sale proceeds into the registry of the Court. See Response at 3; Motion at 3; DE 22. The Order provided that "the Proceeds of sale shall not lose or gain any exemption rights, creditor protection rights, homestead rights and the like by the mere fact of the sale of the property." Plaintiffs Response at 4; Defendant's Motion at 3; DE 22. On June 12, 2002, the sale proceeds in the amount of $187,983.66 were deposited in the registry of the Court. See Motion at 3; DE 26.
STANDARD FOR SUMMARY JUDGMENT
Summary judgment is authorized only when the moving party meets its burden of demonstrating that "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56. See Adickes v. S.H. Kress Co., 398 U.S. 144, 157 (1970). The Adickes Court explained that when assessing whether the movant has met this burden, the court should view the evidence and all factual inferences therefrom in the light most favorable to the party opposing the motion. See Adickes, 398 U.S. at 157; Poole v. Country Club of Columbus, Inc., 129 F.3d 551, 553 (11th Cir. 1997) (citing Adickes).
The party opposing the motion may not simply rest upon mere allegations or denials of the pleadings; after the moving party has met its burden of coming forward with proof of the absence of any genuine issue of material fact, the non-moving party must make a sufficient showing to establish the existence of an essential element to that party's case, and on which that party will bear the burden of proof at trial. See Celotex Corp. v. Catrell, 477 U.S. 317 (1986); Barfield v. Brierton, 883 F.2d 923, 933 (11th Cir. 1989).
If the record presents factual issues, the Court must not decide them; it must deny the motion and proceed to trial. See Environmental Defense Fund v. Marsh, 651 F.2d 983, 991 (5th Cir. 1981). Summary judgment may be inappropriate even where the parties agree on the basic facts, but disagree about the inferences that should be drawn from these facts. See Lighting Fixture Elec. Supply Co. v. Continental Ins. Co., 420 F.2d 1211, 1213 (5th Cir. 1969). If reasonable minds might differ on the inferences arising from undisputed facts then the Court should deny summary judgment. See Impossible Electronics Techniques, Inc. v. Wackenhut Protective Sys., Inc., 669 F.2d 1026, 1031 (5th Cir. 1982). See also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) ("[T]he dispute about a material fact is 'genuine,' . . . if the evidence is such that a reasonable jury could return a verdict for the non-moving party.").
Moreover, the party opposing a motion for summary judgment need not respond to it with evidence unless and until the movant has properly supported the motion with sufficient evidence. See Adickes, 398 U.S. at 160. The moving party must demonstrate that the facts underlying all the relevant legal questions raised by the pleadings or otherwise are not in dispute, or else summary judgment will be denied notwithstanding that the non-moving party has introduced no evidence whatsoever. See Brunswick Corp. v. Vineberg, 370 F.2d 605, 611-12 (5th Cir. 1967). The Court must resolve all ambiguities and draw all justifiable inferences in favor of the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
LEGAL ANALYSIS
26 U.S.C. § 6321 provides that
[i]f any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.
A lien imposed by 26 U.S.C. § 6321 "arise[s] at the time the assessment is made and shall continue until the liability for the amount so assessed (or a judgment against the taxpayer arising out of such liability) is satisfied or becomes unenforceable by reason of lapse of time." 26 U.S.C. § 6322. The lien is enforceable against the taxpayer without public notice. See, e.g., Rice Investment Co. v. United States, 625 F.2d 565, 568 (5th Cir. 1980) ("The lien is effective from the date of assessment of the tax and has aptly been described as a secret lien. . . . [A]gainst the rest of the world, including the taxpayer himself, the federal tax lien . . . [is] effective upon assessment without any need for public notice."). When the assessment is made, the tax liability "may be collected by. . . a proceeding in court, but only if . . . the proceeding begun . . . within 10 years after the assessment of the tax." 26 U.S.C. § 6502. "If a timely proceeding in court for the collection of a tax is commenced, the period during which such tax may be collected by levy shall be extended and shall not expire until the liability for the tax (or a judgment against the taxpayer arising from such liability) is satisfied or becomes unenforceable." Id.
Under 26 U.S.C. § 6325 (a), "the Secretary [of the Treasury] shall issue a certificate of release of any lien imposed with respect to any internal revenue tax not later than 30 days after the day on which . . . (1) [t]he Secretary finds that the liability for the amount assessed, together with all interest in respect thereof; has been fully satisfied or has become legally unenforceable." However, if "the Secretary determines that a certificate of release . . . of a lien . . . was issued erroneously or improvidently, . . . and if the period of limitation on collection after the assessment has not expired, the Secretary may revoke such certificate and reinstate the lien." 26 U.S.C. § 6325(f)(2).
Plaintiff argues that the tax lien on his real property is unenforceable because although "26 USCA § 6325 allows the USA to revoke a certificate of release of tax lien 'if the period of limitation after assessment has not expired['] . . . the assessment period did in fact expire." Response at 15. Plaintiff argues that "[o]nly after ten years and one month after the 1990 tax lien was filed of record, and subsequent to the filing of this lawsuit, did the IRS seek to file a Notice of Tax Lien." Id. at 14.
This Court disagrees with Plaintiffs assertion that the statute of limitations on collection had expired when the IRS issued and filed the "Revocation of Certificate of Release of Federal Tax Lien" in 2002 with the Clerk of the Circuit and County Courts, Dade County, Florida. As described earlier, the federal tax lien which resulted from the 1983 assessment was effective against Plaintiff upon the date of the assessment and "without any need for public notice." Rice Investment Co. v. United States, 625 F.2d 565, 568 (5th Cir. 1980). Additionally, Defendant obtained a favorable judgment on Plaintiffs tax liability in 1990, namely within the ten year period provided by 26 U.S.C. § 6502 for collection on such a liability through a court proceeding. As a result, Defendant's time period for collecting on the judgment was extended and was not to expire "until the liability for the tax (or a judgment against the taxpayer arising from such liability) is satisfied or becomes unenforceable." 26 U.S.C. § 6502. Accordingly, the statute of limitations on collection had not expired, as Plaintiff argues, when the IRS issued and filed its "Revocation of Certificate of Release of Federal Tax Lien" in 2002.
Plaintiff also argues that the judgment obtained by Defendant does not attach to his homestead property. See Response at 5 (arguing that Defendant's "judgment in the instant cause does not attached [sic] to homestead property."). The Florida homestead exemption does not protect Plaintiff from the federal tax lien. See, e.g., United States v. Estes, 450 F.2d 62, 65 (5th Cir. 1971) ("Even though the homestead might be exempt under state law from the claims of private creditors, 'no provisions of a state law may exempt property or rights to property from levy for the collection of federal taxes owed.'") (internal citation omitted); United States v. Stalker, 2000 WL 1175715 *2 (M.D. Fla. 2000) ("It has long been established that Florida's Homestead exemption 'does not erect a barrier around a taxpayer's home sturdy enough to keep out the Commissioner of the Internal Revenue Service.'") (citing Estes). Accordingly, this Court rejects Plaintiffs argument that Defendant's judgment does not attach to Plaintiffs homestead property.
Plaintiff further argues that Defendant's motion should be denied because the allegations contained in Defendant's counterclaim "are in contravention of the testimony in the depositions of [Roberta] Stogner and [Barry] Cuba," employees of Defendant. See Response at 9. Specifically, Plaintiff notes that the counterclaim attributes the issuance of the "Certificate of Release of Federal Tax Lien" to an employee inputting a code into the INS's computer, eliminating Plaintiffs tax liability, whereas the testimony of the employees reveals that the code was computer-generated. See id. Plaintiff argues that Defendant should have "sought to amend it's [sic] Counter-Claim to confirm [sic] to the evidence." Id. The Court disagrees. Fed.R.Civ.P. 8(f) provides that "[a]ll pleadings shall be so construed as to do substantial justice." The inconsistency between the counterclaim and the deposition testimonies only relates to the manner in which the "Certificate of Release of Federal Tax Lien" was issued, and this Court is convinced that such an inconsistency has no effect on the adequacy of Defendant's counterclaim to set forth a claim and to give Plaintiff fair notice of its basis. Therefore, the Court rejects Plaintiffs argument that Defendant's summary judgment motion should be denied on that basis.
Finally, Plaintiff argues that if this Court were to grant Defendant's motion for summary judgment, Defendant should only be allowed to collect $117,685.67 because this sum represents "the only amount of money claimed to be due pursuant to the Certificate of Assessments, and Payments and Other Specified Matters, which was attached to and used in support of the USA's Motion for Summary Judgment. . . ." Plaintiffs Response at 15 (referring to exhibit 1 of Defendant's motion). Again, this Court disagrees. In support of its motion for summary judgment, Defendant has supplied the Consent Final Judgment issued by this Court in 1990 in favor of Defendant and against Plaintiff. The Consent Final Judgment states "[t]hat the defendant United States of America [shall] recover of the plaintiff, Stanton Freedman, the sum of $81,691.01 plus interest thereon according to law from May 23, 1983. . . ." Motion at Ex. 6 (emphasis added). Evidence submitted by Plaintiff reveals that the accrued interest to date — $337,754.99 — far surpasses the amount deposited in the registry of the Court ($187,983.66) as a result of the sale of Plaintiffs property. See Deposition of Barry Cuba at Ex. 7. Therefore, Defendant's recovery is not limited to $117,685.67 as Plaintiff alleges, but rather to the entire amount contained in the registry of the Court.
Accordingly, it is hereby
ORDERED AND ADJUDGED that Defendant United States of America's motion for summary judgment is GRANTED. it is further
ORDERED AND ADJUDGED that this case is REMANDED to the Circuit Court of the Eleventh Judicial Circuit, in and for Miami-Dade County, Florida, pursuant to 28 U.S.C.
§ 1367(c)(3), the Court having resolved all claims over which it had original jurisdiction.
DONE AND ORDERED