Clavizzao v. U.S.A

• Decision Date: 30 September 2009
• Docket Number: Case No. 08-CV-06434 (KMK).
• Citation: 706 F.Supp.2d 342
• Parties: Thomas-Anthony CLAVIZZAO, Susanna Armbruster, Plaintiffs,v.UNITED STATES of America (IRS) and HSBC Bank, USA, N.A., Defendants.
• Court: U.S. District Court — Southern District of New York

706 F.Supp.2d 342

Thomas-Anthony CLAVIZZAO, Susanna Armbruster, Plaintiffs,v.UNITED STATES of America (IRS) and HSBC Bank, USA, N.A., Defendants.

Case No. 08-CV-06434 (KMK).

United States District Court,

S.D. New York.

Sept. 30, 2009.

Thomas-Anthony Clavizzao, Susanna Armbruster, New Windsor, NY, Pro Se Plaintiffs.

James N. Boeving, Esq., United States Attorney's Office, Southern District of New York, New York, NY, for Government.

Meredith L. Friedman, Esq., HSBC Bank U.S.A., N.A., Buffalo, NY, for HSBC Bank, U.S.A., N.A.

OPINION AND ORDER

KENNETH M. KARAS, District Judge:

Plaintiffs Thomas-Anthony Clavizzao and Susanna Armbruster, proceeding pro se, bring this action against the United States of America, Internal Revenue Service (“IRS”) and HSBC Bank, USA, N.A. (“HSBC”). Plaintiffs complain that the IRS placed liens on and levied money from their joint bank account and Mr. Clavizzao's pension and Social Security checks, and that HSBC complied with these liens and levies. (Am. Compl. ¶ 2.)

Plaintiffs assert that the IRS acted without statutory or constitutional authority because inter alia, taxation of income is not authorized by the Constitution or statute ( id. ¶¶ 4, 18); Clavizzao is not a citizen of the United States, but rather a citizen of New York ( id. ¶¶ 22-23); tax liens and levies are only proper as against federal employees ( id. ¶ 18); the relevant tax forms have not been published in the Federal Register ( id. ¶ 19); and the Internal Revenue Code (“I.R.C.”) has not been enacted into “positive law” ( id. ¶ 26). As a result of these and other supposed infirmities, Plaintiffs claim that Defendants exceeded their legal authority ( id. ¶ 48), seized property unlawfully and without due process ( id. ¶¶ 30, 33, 49, 73-75, 91-92), fraudulently represented their authority ( id. ¶ 77), and committed various other torts, ( id. ¶¶ 77-78, 80, 83, 85-86).

Plaintiffs also seek to hold HSBC liable, under negligence and civil conspiracy theories, for complying with the IRS tax levy. (Order to Show Cause-Pet. to Reverse Order, June 26, 2009, (“Pet. to Reverse”) ¶¶ 3, 10.) Plaintiffs have asked for (1) an injunction forbidding the IRS from current and future collection activities (Am. Compl. ¶ 84); (2) a declaratory judgment that Clavizzao is not subject to federal income tax laws ( id., Prayer for Relief ¶¶ 3-6); ¹ (3) a refund of all funds taken from them ( id., Prayer for Relief ¶ 3.); and (4) damages ( id.).

The Government filed a Motion to Dismiss this action for lack of subject matter jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(1), and for failure to state a claim, pursuant to Federal Rule of Civil Procedure 12(b)(6). (Dkt. No. 8.) For the following reasons, the Court grants the Government's 12(b)(1) motion.

Also, the Court previously ordered Plaintiffs to show cause why their claims against HSBC should not be dismissed for failure to state a claim under Rule 12(b)(6). (Dkt. No. 22.) Because they have failed to do so, the Court also dismisses Plaintiffs' claims against HSBC.

I. Background

A. Facts

Mr. Clavizzao was born in New York state and is currently a retired New York resident. (Am. Compl. ¶¶ 8, 16.) He is the caretaker for Ms. Armbruster, and is a co-signer on her bank account. ( Id. ¶ 8.) On April 13, 2001, the IRS sent Mr. Clavizzao a Notice of Intent to Levy. ( Id., Ex. A at 6.) ² On January 15, 2008, Clavizzao sent the IRS a “constructive notice,” in which he claimed that he had no obligation to conform with the requirements of Title 26 of the United States Code. (Compl. ¶ 11; see also id. Ex. A.)

Records from the IRS reveal the following additional facts.³ Clavizzao has not filed a tax return since 1996, and he owes approximately $32,000 for the tax years 1997, 2000, and 2001. (Decl. of Carolyn Fields ¶¶ 2-6 (“Fields Decl.”).) On December 11, 2004, Clavizzao received a Notice of Intent to Levy and a Collection Due Process notice (“CDP notice”) regarding back taxes owed. ( Id. ¶ 7.) The CDP notice was refused or unclaimed on February 24, 2005. ( Id.) On April 11, 2005, Clavizzao was issued another Notice of Intent to Levy and another CDP notice for taxes due for 2002. ( Id. ¶ 11.) There is no record that Clavizzao exercised the rights outlined in the CDP notices ( id. ¶¶ 8, 12), or that he disputed the amounts owed ( id. ¶¶ 3-6). Levy payments began on June 6, 2005, and continue to the present. ( Id. ¶ 9.) Neither Plaintiff has filed for a tax refund or otherwise pursued their administrative remedies. ( Id. ¶¶ 15-16.) ⁴

B. Procedural History

Plaintiffs filed the initial Complaint in this action on July 18, 2008. (Dkt. No. 1.) The Amended Complaint was filed on September 19, 2008. (Dkt. No. 5.) The pending Motion to Dismiss the Amended Complaint was filed on November 12, 2008. (Dkt. No. 15.) Plaintiffs filed their Opposition to Defendant's Motion to Dismiss on December 15, 2008. (Dkt. Nos. 13, 14.) ⁵ On December 22, 2008, the Government filed its reply. (Dkt. No. 18.)

On June 3, 2009, the Court ordered Plaintiffs to show cause why their complaint against HSBC should not be dismissed for failure to state a claim. (Dkt. No. 22.) ⁶ On June 26, 2009, Plaintiffs submitted a brief entitled “Order to Show Cause Answer-Petition to Reverse Order.” (Dkt. No. 23.) HSBC responded on July 15, 2009.

II. Discussion

A. Standard of Review

On a motion to dismiss pursuant to Rule 12(b)(1), plaintiffs must establish by a preponderance of the evidence that the court has subject matter jurisdiction over their claims. See Makarova v. United States, 201 F.3d 110, 113 (2d Cir.2000). In considering 12(b)(1) motions, a court may rely on evidence extrinsic to the pleadings. See Phifer, 289 F.3d at 55; Kamen v. Am. Tel. & Tel. Co., 791 F.2d 1006, 1011 (2d Cir.1986).

“On a Rule 12(b)(6) motion to dismiss a complaint, the court must accept a plaintiff's factual allegations as true and draw all reasonable inferences in [the plaintiff's] favor.” Gonzalez v. Caballero, 572 F.Supp.2d 463, 466 (S.D.N.Y.2008); see also Ruotolo v. City of New York, 514 F.3d 184, 188 (2d Cir.2008) (“We review de novo a district court's dismissal of a complaint pursuant to Rule 12(b)(6), accepting all factual allegations in the complaint and drawing all reasonable inferences in the plaintiff's favor.”) (internal quotation marks omitted). The Supreme Court has held that “[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal citations omitted) (second alteration in Twombly ). “Factual allegations must be enough to raise a right to relief above the speculative level,” id., and “once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint,” id. at 563, 127 S.Ct. 1955.

Simply put, Plaintiffs must allege “enough facts to state a claim to relief that is plausible on its face.” Id. at 570, 127 S.Ct. 1955. If Plaintiffs “have not nudged their claims across the line from conceivable to plausible, their complaint[s] must be dismissed.” Id.; see also Ashcroft v. Iqbal, --- U.S. ----, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009) (“Determining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]’-‘that the pleader is entitled to relief.’ ” (internal citation omitted) (quoting Fed.R.Civ.P. 8(a)(2)) (alteration in original)).

Finally, in adjudicating a Rule 12(b)(6) motion, a court must confine its consideration to “facts stated in the complaint or documents attached to the complaint as exhibits or incorporated by reference” or facts of which the Court may take judicial notice. Nechis v. Oxford Health Plans, Inc., 421 F.3d 96, 100 (2d Cir.2005); see also Leonard F. v. Isr. Disc. Bank of N.Y., 199 F.3d 99, 107 (2d Cir.1999).

When presented with both 12(b)(1) and 12(b)(6) motions, courts normally consider the 12(b)(1) motion first in order to establish jurisdiction before proceeding to the merits. See Cantor Fitzgerald, L.P. v. Peaslee, 88 F.3d 152, 155 (2d Cir.1996) (“Customarily, a federal court first resolves any doubts about its jurisdiction over the subject matter of a case before reaching the merits or otherwise disposing of the case.”); cf. Fed.R.Civ.P. 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”).

Pleadings submitted by pro se litigants are held to a lesser standard than those drafted by practicing attorneys. See Fed. Express Corp. v. Holowecki, 552 U.S. 389, 128 S.Ct. 1147, 1158, 170 L.Ed.2d 10 (2008) (“Even in the formal litigation context, pro se litigants are held to a lesser pleading standard than other parties.”). Because Plaintiffs are proceeding pro se, the Court construes their pleadings liberally so as to interpret them to raise the strongest arguments that they suggest. See Triestman v. Fed. Bureau of Prisons, 470 F.3d 471, 474 (2d Cir.2006).

B. Analysis

1. Claims Against the IRS

The IRS claims that the Court lacks jurisdiction based on sovereign immunity. Sovereign immunity dictates that the United States cannot be sued without its consent. See United States v. Mitchell, 463 U.S. 206, 212, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983). Thus, “[w]hen an action is brought against the United States government,” waiver of “sovereign immunity is necessary for subject matter jurisdiction to exist.” Williams v. United States, 947 F.2d 37, 39 (...