Opinion
C.A. NO. C-01-252
March 21, 2003
ORDER GRANTING UNITED STATES OF AMERICA'S MOTION FOR RULE 60(b)(1) MODIFICATION OF JUDGMENT
On this day came on to be considered Defendant's Motion for Rule 60(b)(1) Modification of Judgment in the above-styled action. For the reasons stated below, the Court GRANTS the Motion.
I. JURISDICTION
The Court has federal question jurisdiction over this 26 U.S.C. § 6672 suit pursuant to 28 U.S.C. § 1340 and 1346.
II. FACTS AND PROCEEDINGS
The above-captioned case arose from the failure of Rockport Fabrication, Inc. ("RFI") to pay employment taxes to the IRS for the third and fourth quarters of 1994 and the first, second, and third quarters of 1995. Plaintiff brought this action for a refund of the Trust Fund Recovery Penalty pursuant to 26 U.S.C. § 6672.
On March 13, 2002, the Court granted the Government's motion for summary judgment, finding that Plaintiff was a responsible person who acted willfully and the Government was entitled to assess a penalty pursuant to 28 U.S.C. § 6672. The Court entered Final Judgment entitling the Government "to recover from Plaintiff the sum of $37,199.84, which represents the balance of the Trust Fund Recovery Penalty assessed against Plaintiff." (D.E. 42)
The Government now moves to have the final judgment modified to reflect that it is also entitled to the interest and statutory additions on the amount remaining of the Trust Fund Recovery Penalty and not just the remaining sum of the penalty without interest.
The Court now considers the motion.
III. DISCUSSION
On motion and upon such terms as are just, the court may relieve a party or a party's legal representative from a final judgment, order or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect, (2) newly discovered evidence, (3) misconduct of adverse party, (4) void judgment, (5) judgment satisfied, or (6) any other reason justifying relief from the operation of the judgment. See Fed.R.Civ.P. 60(b). Motions under Rule 60(b) are directed to the sound discretion of the district court. In Re Grimland, Inc., 243 F.3d 228, 233 (5th Cir. 2001); Crutcher v. Aetna Life Ins. Co., 746 F.2d 1076, 1082 (5th Cir. 1984).
Several factors shape the framework of this Court's consideration of a 60(b) motion: (1) that final judgments should not lightly be disturbed; (2) the motion is not to be used as a substitute for appeal; (3) that the rule should be liberally construed in order to do substantial justice; (4) whether the motion was made within a reasonable time; (5) whether, if the judgement was a default or a dismissal in which there was no consideration of the merits, the interest in deciding cases on the merits outweighs, in the particular case, the interest in the finality of judgments, and there is merit in the movant's claim or defense; (6) whether, if the judgment was rendered after a trial on the merits, the movant had a fair opportunity to present his claim or defense; (7) whether there are any intervening equities that would make it inequitable to grant relief; and (8) any other factors relevant to the justice of the judgment under attack. Magness v. Russian Federation, 247 F.3d 609, 618-619 (5th Cir. 2001).
The Government moves pursuant Rule 60(b)(1) on the grounds that the language of the Government's entitlement in the final judgment qualifies as a mistake. Rule 60(b)(1) may be used to correct judicial error when an obvious error of law is apparent on the record. Grimland, 243 F.3d at 233; Hill v. McDermott, Inc., 827 F.2d 1040, 1043 (5th Cir. 1987). "The error of law must involve a fundamental misconception of the law or a conflict with a clear statutory mandate." Grimland, 243 F.3d at 233. A mistake in computing interest on an IRS judgment is the sort of error Rule 60(b)(1) was designed to correct. In re West Texas Marketing Corp., 12 F.3d 497, 502 (5th Cir. 1994).
The motion for summary judgment requested final judgment "be entered for the remaining amount of the trust fund recovery penalty of $37,199.84, plus interest and statutory additions as allowable by law." (U.S. Mot. Summ. J. at 23.) The Final Judgment entered by this Court entitled the Government to "the sum of $37,199.84, which represents the balance of the Trust Fund Recovery Penalty." (Final Judg.) On December 5, 2002, Plaintiff filed bankruptcy and reported the IRS as having a secured claim of $37,135.84, which the Government suspects, "represents the remaining amount of the penalty without interest." (U.S. Mot. Modif. J., ¶ 5) The Government requests the Court modify the Final Judgment to include interest and statutory additions as allowable by law in the Government's entitlement from Plaintiff.
The Government is entitled to collect the interest that accrues on Plaintiff's tax liability as stated in the Internal Revenue Code. 26 U.S.C. § 6601(e)(1). It was by mistake that the Final Judgment did not explicitly express the Government's entitlement to interest on the Trust Fund Recovery Penalty. Final Judgment was entered on March 13, 2002, and the Government has timely moved within one year of entry to correct the mistake. Fed.R.Civ.P. Rule 60(b). Therefore, the Court finds good cause to grant the Government's Motion and to amend the Final Judgment to state that the Government is entitled to recover from Plaintiff interest and statutory additions as allowable by law.
IV. CONCLUSION
For the reasons stated above, the motion is GRANTED.