Falbo v. Falbo, Civil Action No. 2:17-cv-04046
| Decision Date | 17 July 2018 |
| Docket Number | Civil Action No. 2:17-cv-04046 |
| Parties | JOHN M. FALBO, Plaintiff, v. ALBERT THOMAS FALBO; MARY GUIFFRI; UNITED STATES OF AMERICA; and DALE W. STEAGER, Commissioner of the West Virginia Tax Division of the Department of Revenue, Defendants. |
| Court | U.S. District Court — Southern District of West Virginia |
Pending are two motions for summary judgment and one motion for partial summary judgment. Plaintiff John M. Falbo and defendant Dale W. Steager, Commissioner, acting on behalf of the State of West Virginia, each filed a motion for summary judgment on January 10, 2018. Defendant United States of America filed a motion for partial summary judgment on January 17, 2018.
John Falbo's complaint seeks partition by sale of a number of real properties jointly owned by himself, defendant Mary Guiffri, and defendant Albert Thomas Falbo. He also seeks to have Albert Falbo's share of the proceeds applied to the discharge of tax liens held by the United States and Steager.
Also pending is John Falbo's motion to dismiss Albert Falbo's counterclaim and to strike matter from Albert Falbo's answer, filed September 27, 2017. The counterclaim and answer are contained within the same document, and they more closely resemble a request for information than a typical counterclaim and answer. (See ECF #2.) At a scheduling conference held December 1, 2017, Albert Falbo advised the court that he had since spoken to counsel for John Falbo, that his issues had been resolved, and that he wanted to sell the real properties. Thus, John Falbo's motion to dismiss the counterclaim and to strike matter from the answer is granted.
In addition, pending is the United States' motion for a more definite statement, filed October 30, 2017. The United States asserted that the complaint failed to include three items required by 28 U.S.C. § 2410(b): (U.S. Mot. for More Definite Statement 1.) On November 7, 2017, John Falbo filed a response to the United States' motion, to which he attached documents containing the requested information. The United States did not reply. Accordingly, the United States' motion is denied as moot.
The facts underlying this matter are not in dispute. John Falbo and Albert Falbo each own a one-half undivided fee interest in the following real properties, all located in Fayette County, West Virginia, except that the property in paragraph D below is held by them as joint tenants with right of survivorship and except further that the property in paragraph B below is owned by them along with defendant Mary Giuffri in equal one-third undivided fee interests:
(Aff. of John Falbo ¶ 4; see also ECF #22 Attach. 1, Title Report ("Title Report") at 1-3.)
John Falbo commenced this action on August 30, 2017, in the Circuit Court of Fayette County. He seeks partition by sale of the real properties listed above pursuant to West Virginia Code §§ 37-4-1 et seq. ) The United States and Steager are joined in this matter inasmuch as they claim liens on the real properties owned by Albert Falbo in Fayette County.1 See Farmers & Merchants Nat'l Bank & Trust Co. v. Janney, 117 W. Va. 28, 30 (1936) (). The state court docket shows that Giuffri received service of process on September 6, 2017, , but she did not file an answer nor has she otherwise appeared.
On September 27, 2017, the United States removed to this court, invoking the court's jurisdiction under 28 U.S.C. §§ 1441(a), 1442(a), 1444, and 1446(b)(3) (2016). (Not. Removal ¶ 3.) According to 28 U.S.C. § 2410, the United States waives its sovereign immunity for the limited purpose to be named in, inter alia, a civil action "to partition . . . real . . . property on which the United States has or claims a . . . lien." See Hudson Cty. Bd. of Chosen Freeholders v. Morales, 581 F.2d 379, 382-83 (3d Cir. 1978) ().
At the December 1, 2017, scheduling conference, John Falbo, Albert Falbo, the United States, and Steager informed the court that they agreed to the facts of the case and desired a private sale of the properties. Thus, the court, by order entered December 6, 2017, directed John Falbo (alongside Guiffri, if possible); the United States; and Steager to file a title report for the real properties; a plan of sale; and motions for summary judgment setting forth the dollar amount of liens, the rates of interest accruing thereon, and an agreed lien priority. (See ECF #17.)
The United States assessed income taxes against Albert Falbo on three occasions: November 19, 2012, for the tax periodending December 31, 2011; November 18, 2013, for the tax period ending December 31, 2012; and January 11, 2016, for the tax period ending December 31, 2013. (Decl. of David W. Ross ¶ 3.) For each assessment, the United States demanded payment from Albert Falbo and filed with the Clerk of the County Commission in Fayette County a notice of tax lien. (Id. ¶¶ 3-4, 9.) The corresponding notices of tax lien were recorded in Fayette County on November 12, 2013, in Federal Tax Lien Book 9, at page 453; January 24, 2014, in Federal Tax Lien Book 9, at page 463; and May 31, 2016, in Federal Tax Lien Book 9, at page 598, respectively. 2 Albert Falbo has not paid those taxes. (Decl. of David W. Ross ¶ 5.) As of December 31, 2017, the respective amount owed under each assessment was $1,158,013.03; $289,230.22; and $356,985.77, totaling $1,804,229.07. (Id. ¶¶ 3, 6.) Interest on that amount is currently compounding daily at a rate of four percent per annum.
(Id. ¶ 7 (citing Rev. Rul. 2017-25, 2017-52 I.R.B. 586 (Dec. 26, 2017)).)
The West Virginia State Tax Department filed with the Clerk of the County Commission in Fayette County three notices of tax lien against Albert Falbo for the tax periods ending December 31 of 2011, 2012, and 2013. (See Steager Mot. Summ. J. Attach. 1.) The notices were recorded on May 23, 2013, in State Tax Lien Book 34, at page 363; April 24, 2014, in State Tax Lien Book 35, at page 439; and May 31, 2016, in State Tax Lien Book 37, at page 568. (Id.; see also Title Report at 4.) The original balances due were $170,812.01; $78,797.71; and $65,699.40, respectively. (Steager Mot. Summ. J. Attach. 1.) However, Steager states that as of December 31, 2017, the outstanding balances were $128,193.82; $64,769.00; and $40,202.00, respectively, totaling $233,164.82. (Steager Mot. Summ. J. 2.) Beginning January 1, 2018, and ending December 31, 2018, interest on that amount compounds daily at a rate of 8.75 percent per annum. See State Tax Commissioner, Administrative Notice 2017-26, Notice of Adjusted Interest Rates on Tax Underpayments (Dec. 8, 2017), https://tax.wv.gov/TaxProfessionals/AdministrativeNotices/Pages/AdministrativeNotices2017.aspx; W. Va. Code § 11-10-17a(e)(1) ().
On January 10, 2018, John Falbo and Steager filed separate motions for summary judgment. John Falbo seeks partition by sale of the jointly-owned real properties according to his proposed plan, which contemplates a private sale, (see John Falbo Mot. Summ. J. ¶ 2), and Steager seeks summary judgment directing Albert Falbo's share of the sale proceeds to "be paid to West Virginia State Tax Department in accordance with the lien priority." (Steager Mot. Summ. J. 5.) Necessarily, Steager's desired judgment would require the court also to decide the existence and amount of the State of West Virginia's liens. The United States moved for summary judgment on January 17, 2018, requesting...
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