U.S. v. Kasuboski, 1014

• Citation: 9 Fed.R.Serv.3d 870,834 F.2d 1345
• Decision Date: 31 December 1987
• Docket Number: D,No. 1014,No. 87-1052,1014,87-1052
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Charles L. KASUBOSKI, individually and as Trustee of the Basic Bible Church of America; Mary Ann Kasuboski, individually and as Trustee of the Basic Bible Church of America; the Basic Bible Church of America; Matt Graf, Trustee of the Basic Bible Church of America; Shephard Life Science Church; and Order of Almighty God, Chapterefendants-Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 1345

834 F.2d 1345

9 Fed.R.Serv.3d 870

UNITED STATES of America, Plaintiff-Appellee, v. Charles L. KASUBOSKI, individually and as Trustee of the Basic Bible Church of America; Mary Ann Kasuboski individually and as Trustee of the Basic Bible Church of America; the Basic Bible Church of America; Matt Graf Trustee of the Basic Bible Church of America; Shephard Life Science Church; and Order of Almighty God, Chapter No 1014, Defendants-Appellants.

No. 87-1052.

United States Court of Appeals Seventh Circuit.

Argued Sept. 14, 1987.

Decided Nov. 25, 1987.

Rehearing and Rehearing En Banc Denied Dec. 31, 1987.

Joseph W. Weigel, Weigel Law Firm, Milwaukee, Wis., for defendants-appellants.

Janet A. Bradley, Asst. Atty. Gen., Appellate Section, Tax Div., Dept. of Justice, Washington, D.C., for plaintiff-appellee.

Before FLAUM, EASTERBROOK, and KANNE, Circuit Judges.

FLAUM, Circuit Judge.

The United States commenced a civil action against defendants alleging that Charles Kasuboski had failed to pay his federal income tax. The government sought to have certain conveyances of property set aside and to foreclose its federal tax liens against these properties to satisfy its tax assessments against Kasuboski. In the course of the litigation the government served Kasuboski with a request for admissions pursuant to Rule 36 of the Federal Rules of Civil Procedure. Kasuboski failed to respond to the request for admissions and five months later the government moved for summary judgment. Kasuboski did not move to withdraw the admissions or timely resist the motion for summary judgment. The district court granted the government's motion for summary judgment. We affirm.

I.

On May 17, 1985, the United States filed a civil action against Charles L. Kasuboski and his wife, Mary Ann Kasuboski, individually and as trustees of the Basic Bible Church. The Basic Bible Church, Shephard Life Science Church, Order of Almighty God, Chapter No. 1014, and Matt Graf, another trustee of Basic Bible Church, were also named as defendants (collectively "the defendants"). The complaint alleged that certain properties were fraudulently transferred between Charles Kasuboski, Mary Ann Kasuboski, and the churches with which they were affiliated. The government claimed that these properties were transferred without consideration, were still effectively controlled by the Kasuboskis, and were still subject to federal tax liens which arose from assessments against Charles Kasuboski for $70,548.61 (as of September 1, 1983) in unpaid federal income taxes, interest, and penalties. The government sought to establish Charles' liability for this amount and to satisfy the liability by enforcing the federal tax liens against the transferred properties.

The United States commenced discovery in 1986. On March 25, 1986 the government deposed Charles Kasuboski. On May 29, 1986, interrogatories were served upon Charles Kasuboski, Mary Ann Kasuboski, and Matt Graf ("the May 29 interrogatories") and a request for admissions was served upon Charles. Additional depositions were taken in early June.

The scheduling order issued by the district court established a November 15, 1986 deadline for filing dispositive motions. As of that date, none of the defendants had filed answers to the May 29 interrogatories and Charles Kasuboski had not responded to the request for admissions. The government filed a motion for summary judgment on November 17. ¹ The government's motion and the supporting documents were telexed to Milwaukee; consequently the motion was not signed. In addition, all but the first page of the copy of the May 29 interrogatories appended to the motion were missing. On November 20, 1986, the United States mailed complete, signed copies of its motion for summary judgment to the district court and the defendants' attorney. The signed copies were received on November 24 and November 25 respectively.

In its motion for summary judgment the government asserted that Charles Kasuboski's failure to respond to the May 29, 1986 request for admissions constituted an admission of each matter for which an admission was sought, and under those admitted facts the government was entitled to judgment. The May 29, 1986 request asked Charles to admit: (1) that he was liable for the asserted federal income taxes and fraud penalties; (2) that he knew prior to taking his vow of poverty that such taxes were due and owing; (3) that the various transfers of real property left him insolvent; (4) that he had full use and benefit of the real property; and (5) that the transfers were sham conveyances without consideration.

On December 9, 1986 the district court granted the government's motion for summary judgment. United States v. Kasuboski, No. 85-C-755 (E.D.Wis. Dec. 9, 1986). The district court concluded that under Rule 36 of the Federal Rules of Civil Procedure, Charles Kasuboski's failure to respond constituted an admission of the requested information. It also found that "all statutory requirements ha[d] been met regarding the assessments and the liens and that the plaintiff ha[d] produced evidence of all the elements necessary to prove its claim." Id., slip op. at 8.

On the same day the defendants filed a motion for an extension of time in which to respond to the motion for summary judgment. The district court denied this motion on December 15, 1986. The next day the defendants filed a motion for reconsideration of the grant of summary judgment. On December 18 the defendants' response to the motion for summary judgment was mailed to the court. This was accompanied by a motion for relief from the court's order to avoid error or mistake pursuant to Rule 60 of the Federal Rules of Civil Procedure. These motions were also denied. Judgment was entered for the United States. The defendants appealed to this court raising a number of procedural issues. ²

II.

Defendants first argue that the motion for summary judgment filed by the United States on November 17, 1986 was defective because it was unsigned and all but the first page of the appended interrogatories were missing. Although an undisputedly complete motion for summary judgment was filed on November 24, 1986, the validity of the November 17 motion is relevant both to determine whether the government complied with the district court's scheduling order and to calculate the date on which the defendants' response to the motion was due. We find that any defect in the motion was not fatal.

Rule 11 of the Federal Rules of Civil Procedure provides that an unsigned motion shall be stricken "unless it is signed promptly after the omission is called to the attention of the movant." The United States recognized the defect and corrected it by mailing signed, complete copies to both the court and the defendants' attorney on November 20, 1986, three days later.

In cases such as this, which do not involve the issue of sanctions for filing an unfounded motion, the failure to sign will not cause a motion to be stricken unless the adverse party has been severely prejudiced or misled by the failure to sign. ³ 5 Wright, Miller & Kane, Federal Practice and Procedure Sec. 1334 (1987). The defendants do not argue on appeal that they were prejudiced by receiving the unsigned motion and the district court specifically found that no prejudice occurred. United States v. Kasuboski, No. 85-C-755 (E.D.Wis. Dec. 22, 1986) (order denying relief from order pursuant to Rule 60). The district court also found that the absence of all but the first page of the interrogatories did not prevent identification of the document and did not adversely affect the defendants. We hold that the government's motion filed on November 17, 1986 was valid.

III.

The district court's decision to grant the government's motion for summary judgment was predicated on the facts deemed admitted by Kasuboski's failure to respond to the request for admissions. Rule 36(a) of the Federal Rules of Civil Procedure clearly provides that a party must answer each matter for which an admission is requested within 30 days or the matter is deemed admitted. ⁴ Charles Kasuboski never responded to the government's request.

A.

On appeal, the defendants offer two explanations for Charles' failure to respond. First, they argue that a response was not necessary because the same questions raised in the request for admissions were asked and answered in the depositions that took place both before and after the date they received the request for admissions. The defendants misinterpret Rule 36. The use of an alternative form of discovery does not eliminate the requirement that a request for admissions be answered within 30 days. See Mangan v. Broderick and Bascom Rope Co., 351 F.2d 24 (7th Cir.1965) (unanswered requests are not abandoned by the subsequent filing of interrogatories addressed to the same subject). Although there may be some overlap in the information requested in the various forms of discovery, parties are not allowed to pick and choose when to respond based on their own determination of whether they have previously answered the questions presented. Kasuboski's participation in depositions does not excuse his failure to respond to the request for admissions. ⁵

Second, defendants argue that the parties were close to settlement and that the cost and effort of answering the request for admissions and interrogatories would have been wasted if the parties settled as anticipated. Delaying a response pending a possible settlement may well have been a prudent course of action, but this is not a complete answer. It does not explain why the defendants did not file with the district court a motion to toll the 30 day response period. In addition, the proper procedural vehicle through which to attempt to withdraw admissions made in these circumstances is a motion under Rule 36(b) to withdraw admissions. ⁶ No such motion was ever filed.

B.

Admissions made under Rule 36, even default...