Opinion
97C4114
November 7, 2001
ORDER
Before us are motions for summary judgment by three parties to this case. But before those motions can be addressed, we must first dispose of some procedural motions filed by one defendant, Joseph Stepard, Trustee of the Dare Schaut Family Trust.
The essence of the present controversy is a tax liability allegedly owed by the Defendants and the effect of a subsequent transfer of property owned by the Defendants to a trust, the Dare Schaut Family Trust ("Schaut Trust"). The United States contends that the transfer of property to the Schaut Trust is an invalid attempt to protect that property from federal tax liens. The merits of these claims will be addressed in a subsequent memorandum opinion. At issue for the purpose of this order is the motion for default judgment and the motion to challenge jurisdiction filed by Mr. Stepard in his capacity as trustee for the Schaut Trust.
At the outset, there is some disagreement among the parties as to Mr. Stepard's true name. Mr. Stepard refers to himself as "Joseph George, stepard." The United States refers to him as "Joseph Stepard." For ease and convenience, we will refer to Mr. Stepard in this order and in all subsequent orders and opinions as "Mr. Stepard" or "Joseph Stepard."
Mr. Stepard has filed a pleading labeled "Special Appearance, Jurisdiction Challenged." However, the distinction between special and general appearances has long been abolished in federal courts. SEC v. Wencke, 783 F.2d 829, 832 n. 3 (9th Cir. 1986). Rather, the principle method of challenging a court's jurisdiction is a Rule 12(b)(2) motion. But even recharacterizing Mr. Stepard's motion as a Rule 12(b)(2) motion does not save it from scrutiny. A reading of his reasons for challenging jurisdiction quickly reveals their frivolity.
Mr. Stepard's jurisdictional challenge rests primarily on his belief that the United States District Court is a "mere territorial court" that does not have jurisdiction within the boundaries of the "sovereign Union State of Illinois." To support this conclusion, his motion and supporting memorandum string together language from various constitutions and court cases, most of which are nonsensical and all of which are taken out of context. We have jurisdiction over this case pursuant to 28 U.S.C. § 1340 (giving district courts original jurisdiction over civil actions arising from U.S. laws providing for internal revenue) and 28 U.S.C. § 1345 (giving district courts original jurisdiction over most civil actions commenced by the United States as a plaintiff). As such, and given the obvious existence of federal jurisdiction even within the territorial boundaries of Illinois, Mr. Stepard's jurisdictional challenge is without merit.
Mr. Stepard's motion for default judgment is likewise without merit. On July 30, 2001, Mr. Stepard filed a pleading entitled "Special Appearance, Counter Claim." His motion for default judgment is based upon the fact that the United States never filed an answer to Mr. Stepard's putative counterclaim. However, Mr. Stepard's "Counter Claim" contains no legal or factual allegations that could properly support a counterclaim as required by Rule 8(a) of the Federal Rules of Civil Procedure. Rather, his July 30, 2001 pleading, to the extent it challenges jurisdiction and answers the allegations made in the United States' Second Amended Complaint, is properly characterized as Mr. Stepard's Answer. As such, the United States was not obligated to respond, and a default judgment would here be inappropriate.
For the forgoing reasons, Mr. Stepard's motions for default judgment and dismissal for lack of jurisdiction are denied. It is so ordered.