Opinion
Civil Action No. 98-WY-I 965-WD
November 8, 2000.
Linda Sanders — Pro Se.
Philip Blondin — For defendants
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
This matter is before the Court on the defendant's Motion to Dismiss, filed October 16, 1998, and the plaintiffs Motion to Amend Complaint, filed January 4, 2000. Under 28 U.S.C. § 636(a) and (b) and FED. R. Civ. P. 72(a) and (b), this matter has been referred to Magistrate Judge O. Edward Schlatter. The parties' rights to seek review or reconsideration of this Recommendation, by filing objections within ten days, are attached hereto, and are entitled "Advisement Under Fed.R.Civ.P. 72." For the reasons discussed below, I recommend that the Motion to Amend Complaint be DENIED, that the Motion to Dismiss be GRANTED, and that the plaintiffs Complaint be DISMISSED.
A complaint may be dismissed for failure to state a claim on which relief can be granted under FED. R. Civ. P. 12(b)(6). Such a dismissal is proper only when, accepting the plaintiff's allegations as true, it is clear that no relief could be granted under any set of facts that could be proven consistent with the allegations. Barrett v. Tallon, 30 F.3d 1296, 1299 (10th Cir. 1994). The plaintiffs Complaint should be dismissed for lack of subject matter jurisdiction, because her claim is barred by collateral estoppel, and because she has failed to pay a monetary sanction imposed upon her by this Court in another case.
In her Complaint, the plaintiff, Linda Sanders, names an individual, Ruth Williams, as the defendant. Ms. Sanders claims Ms. Williams "gave testimony at an eviction hearing which evidence was to support the assertions that she had employed proper statutory procedures in the taking of Plaintiff's property through an IRS auction, held in March of 1993." Complaint, ¶ 4. According to the plaintiff, Ms. Sanders
misrepresented evidence on January 25, 1995, specifically the IRS "Record 21" required by 26 U.S.C. § 6340, to the extent that such misrepresentation resulted in theft of the Plaintiff's property title, illegal conversion of Plaintiff's (sic) Deed of Trust and interference with Plaintiff's mortgage contract on said property.
Complaint, ¶ 10. Ms. Sanders alleges that Ms. Williams is "an individual, retired from the IRS." Complaint, ¶ 3.
The hearing Ms. Sanders describes was part of an eviction and quiet title action brought by purchasers of a house once owned and occupied by Ms. Sanders. The Internal Revenue Service had filed a tax lien against the house, and the house was sold at a tax sale to satisfy Ms. Sander's unpaid tax liabilities. Behr v. Burge, 940 P.2d 1084, 1085 (Colo.App. 1996), cert. denied, 522 U.S. 928 (1997). The state court proceedings also are described in some detail in Judge Sparr's opinion in Sanders v. U.S., 77 AFTR 2d 96-1838 (D. Colo. 1996) (attached to Motion to Dismiss). In Behr v. Burge, the state trial court authorized the eviction of Ms. Sanders from the house, and quieted title in the name of the parties who purchased the house at the tax sale Id., 1086-89.
I. PROPER DEFENDANT
The defendant, Ms. Williams, testified in state court concerning procedures used by the IRS leading to the tax sale of Ms. Sanders' house. Ms. Williams is a retired IRS employee who had some involvement in the collection of taxes against Ms. Sanders. There is no question that Ms. Sanders' claim against Ms. Williams arose as a result of Ms. Williams' actions as an employee of the IRS, part of the United States government. Again, Ms. Sanders' claims Ms. Williams falsely testified that "she had employed proper statutory procedures in the taking of Plaintiff's property through an IRS auction . . ." Complaint, ¶ 4.
On October 6, 1998, the United States filed a Notice of Substitution of United States as Defendant. Under 28 U.S.C. § 1346 (b) and § 2679, the United States is the only proper defendant in an action to recover for harm suffered due to "the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment." 28 U.S.C. § 2679 (b)(1). Further, an action against the United States is "exclusive of any other civil action or proceeding for money damages by reason of the same subject matter against the employee whose act or omission gave rise to the claim . . ."Id. In short, if Ms. Williams committed any sort of wrong in the course of the proceedings by the IRS to seize and sell Ms. Sanders' house, or in testifying about those proceedings, Ms. Sanders' sole remedy is an action against the United States. Ms. Sanders' argument that Ms. Williams somehow was acting outside of the scope of her employment when she testified in state court is unpersuasive.
II. SUBJECT MATTER JURISDICTION SOVEREIGN IMMUNITY
The United States moves to dismiss for lack of subject matter jurisdiction, arguing that the United States has not waived sovereign immunity as to the plaintiffs' claim.
It is elementary that "[t]he United States, as sovereign, is immune from suit save as it consents to be sued . . ., and the terms of its consent to be sued in any court define that court's jurisdiction to entertain the suit." United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 769-770, 85 L.Ed. 1058 (1941). A waiver of sovereign immunity "cannot be implied but must be unequivocally expressed." United States v. King, 395 U.S. 1, 4, 89 S.Ct. 1501, 1503, 23 L.Ed.2d 52 (1969).U.S. v. Mitchell, 455 U.S. 535, 538 (1980). To maintain a suit against the United States, a plaintiff must show a waiver of sovereign immunity.
Ms. Sanders has not shown a waiver of sovereign immunity as to her claim. The Court knows of no waiver of sovereign immunity applicable to a suit, such as this one, concerning the assessment and collection of taxes. To the extent Ms. Sanders' claim can be viewed as a tort claim, her exclusive remedy is under the Federal Tort Claims Act (FTCA), 28 U.S.C. § 2671, et seq. However, under the FTCA, the Court does not have subject matter jurisdiction over a claim against the United States concerning the assessment or collection of any tax. Capozzoli v. Tracey, 663 F.2d 654 (5th Cir. 1981). The defendant's Motion to Dismiss should be granted because the United States is shielded by sovereign immunity and this Court does not have subject matter jurisdiction over Ms. Sanders' claim.
III. COLLATERAL ESTOPPEL
Although Ms. Sanders characterizes her claim as a claim for "tortious misrepresentation," the essence of her claim here is a challenge to the propriety of the sale of her house by the IRS as a means of collecting taxes owed by Ms. Sanders. Ms. Sanders claims that Ms. Williams allegedly provided false testimony concerning IRS seizure procedures permitted the state court to conclude that the tax sale was proper, resulting in a finding that the purchasers at the tax sale were the rightful owners of the property. In essence, Ms. Sanders' claim here is a challenge to the propriety of the IRS' seizure of Ms. Sanders' house. Ms. Sanders previously has challenged the IRS' seizure and sale procedures in the state court action, and the state court ruled that the required procedures were followed. Ms. Sanders also has challenged the IRS' seizure and sale procedures in at least one other case in this court, discussed below. The defendant argues that Ms. Sanders' claim in this case is barred by the doctrine of collateral estoppel.
The doctrine of collateral estoppel precludes a party from re-litigating issues that were actually decided in a prior action.Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 (1979). Collateral estoppel may only be applied if:
(1) the issue previously decided is identical with the one presented in the action in question; (2) the prior action has been finally adjudicated on the merits; (3) the party against whom the doctrine is invoked was a party or in privity with a party to the prior adjudication; and (4) the party against whom the doctrine is raised had a full and fair opportunity to litigate the issue in the prior action.Delta Rocky Mountain Petroleum, Inc. v. United States Department of Defense, 726 F. Supp. 278, 281 (D. Colo. 1989); see also, Tavery v. United States, 695 F. Supp. 1095, 1096 (D. Colo. 1988), rev'd on other grounds, Tavery v. United States, 897 F.2d 1032 (10th Cir. 1990).
Ms. Sanders' claim that the IRS utilized improper procedures to seize and sell her house was fully litigated in the state court action. Behr v. Burge, 940 P.2d 1084, 1085 (Colo.App. 1996), cert. denied, 522 U.S. 928 (1997). The question of whether Ms. Sanders is collaterally estopped from further challenging the propriety of the IRS seizure and sale of her house in other court actions was thoroughly and carefully discussed by Judge Sparr in his opinion in Sanders v. U.S., 77 AFTR 2d 96-1838 (D. Colo. 1996). Judge Sparr noted that Ms. Sanders claimed in the state court case that the IRS had violated various procedural requirements in selling her house. Sanders, 77 AFTR at 96-1841. As noted above, the state court concluded that the applicable procedures were followed adequately. Ms. Sanders challenged these procedures again in the case before Judge Sparr. In the end, Judge Sparr ruled that "the elements of collateral estoppel exist and (Ms. Sanders is) precluded from re-litigating the issue of whether the sale of the real property was handled in a manner in accordance with the law." Id. at 96-1842.
In the present case, Ms. Sanders yet again attempts to assert a cause of action based on her claim that the sale of her real property by the IRS was not handled in accordance with the law. For precisely the same reasons detailed by Judge Sparr, collateral estoppel bars Ms. Sanders from asserting this claim yet again in the present case.
IV. FAILURE TO PAY SANCTIONS
On May 12, 1994, this Court imposed a monetary sanction against Linda Sanders in the amount of $1,307.96. Fran Allen and Linda Sanders v. U.S., 93-N-2463 (D. Colo. May 11, 1994, Order imposing Rule 11 sanctions) (attached to Motion to Dismiss). The defendant argues that this case should be dismissed because Ms. Sanders has not paid the sanction imposed on her in that case. Ms. Sanders makes no representation that she has paid this sanction.
Courts have inherent power to dismiss actions for nonpayment of costs in prior actions. Hacopian v. U.S. Dep't of Labor, 709 F.2d 1295, 1297 (9th Cir. 1983). This power also extends to a litigant's failure to pay previously imposed sanctions. See Schiff v. Simon Schuster, Inc., 766 F.2d 61, 62 (2nd Cir. 1985) (per curiam) ("To make the sanction effective and thereby protect the processes of a court from abuse, a litigant against whom Rule 38 sanctions have been imposed must comply with those sanctions before being permitted to pursue new matters in that court.")Hymes v. U.S., 993 F.2d 701, 702 (9th Cir. 1993). Ms. Sanders' failure to pay the monetary sanctions imposed on her in 1994 is a further reason to dismiss her present baseless Complaint.
V. MOTION TO AMEND COMPLAINT
On January 4, 2000, Ms. Sanders filed a Motion to Amend Complaint, and a proposed Amended Complaint. Predictably, the Amended Complaint makes further allegations about mistakes made by Ms. Williams "while collecting tax from" Ms. Sanders. Amended Complaint, ¶ 12. The proposed Amended Complaint contains nothing that changes the essential nature of Ms. Sanders' claim in this case.
FED.R.Civ.P. 15(a) requires that leave to amend a pleading freely be given when justice so requires. Amendments are generally allowed except where well-defined exceptions apply. The most notable exceptions are considered when there is a showing of undue delay, undue prejudice to the opposing party, or when the amendment would be futile. See, e.g., Castleglen, Inc. v. Resolution Trust Corp., 984 F.2d 1571, 1585 (10th Cir. 1993). Generally, an amendment is considered to be futile when it would be subject to dismissal in the face of a motion to dismiss.
For all of the reasons discussed in this Recommendation, Ms. Sanders' proposed Amended Complaint would be subject to dismissal. Ms. Sanders' proposed amendment of her Complaint would be futile. The Motion to Amend should be denied.
THEREFORE IT IS RECOMMENDED that the defendant's Motion to Dismiss, filed October 16, 1998, be GRANTED, and that the Complaint and this action be DISMISSED WITH PREJUDICE.
FURTHER IT IS RECOMMENDED that the plaintiffs Motion to Amend Complaint, filed January 4, 2000, be DENIED.
FURTHER IT IS RECOMMENDED that any other pending motions be DENIED AS MOOT.