Mirando v. U.S. Dep't of Treasury, 13–4207.
| Decision Date | 13 November 2014 |
| Docket Number | No. 13–4207.,13–4207. |
| Citation | 766 F.3d 540 |
| Parties | Michael A. MIRANDO, Plaintiff–Appellant, v. UNITED STATES DEPARTMENT OF TREASURY, Defendant–Appellee. |
| Court | U.S. Court of Appeals — Sixth Circuit |
OPINION TEXT STARTS HERE
ARGUED:Benjamin C. Heidinger, Robert J. Fedor, Esq., LLC, Westlake, Ohio, for Appellant. Gretchen M. Wolfinger, United States Department Of Justice, Washington, D.C., for Appellee. ON BRIEF:Benjamin C. Heidinger, Robert J. Fedor, Robert J. Fedor, Esq., LLC, Westlake, Ohio, for Appellant. Gretchen M. Wolfinger, Bridget M. Rowan, United States Department of Justice, Washington, D.C., for Appellee.
Before: SILER, GILMAN, and GIBBONS, Circuit Judges.
Following his entry of a guilty plea to conspiracy to defraud the United States and for income tax evasion, Michael Mirando filed a tax refund suit, seeking to recover amounts he claims he overpaid to the Internal Revenue Service (“IRS”) based on three of the four taxable years for which he was convicted. The district court granted summary judgment in favor of the IRS, finding that Mirando was judicially estopped from bringing his tax refund suit because of his prior guilty plea, and dismissed Mirando's suit without explicitly addressing Mirando's motion to file a surreply, which responded to the issue of judicial estoppel first raised by the government in its reply brief. For the reasons stated below, we AFFIRM.
In 2001, Mirando pleaded guilty to two counts of mail fraud, one count of money laundering, and two counts of tax evasion, with the tax evasion charges stemming from his efforts to evade the payment of taxes for the 1995 and 1996 tax years. Following his 2003 release from imprisonment, the IRS assessed additional tax, interest, and penalties for Mirando's taxes due for the 1995 and 1996 tax years, as well as for unpaid tax liabilities for the 2000 and 2004 tax years.
In 2007, Mirando was indicted on one count of conspiracy to defraud the United States and four counts of tax evasion, one for each of the 1995, 1996, 2000, and 2004 tax years. He again pleaded guilty to all charges. In exchange for his plea, the United States agreed, inter alia, “not [to] pursue criminal charges against [Mirando's] ex-wife or two children for any offense known to the United States” and to recommend to the district court at sentencing that Mirando receive a three-level reduction for acceptance of responsibility.
In the agreement, Mirando and the United States stipulated that certain facts would have been established beyond a reasonable doubt at trial, including:
As of June 29, 2007, the total tax liability, including interest and penalties, amounted to $448,776.13.
[ ] From the time MIRANDO realized that he was under investigation for the matters leading to his 2001 conviction and continuing until the present, MIRANDO took measures to evade the payment of his outstanding tax liability and to hide assets. His many measures included, but are not limited to, arranging a sham divorce from his wife, submitting false statements to the IRS Collection Department and the United States Probation Office regarding his income, assets and living arrangements, among other things, and assisting his college-age children in submitting false financial information in order to receive need-based financial aid.
[ ] At all times relevant, MIRANDO made all decisions regarding the Mirando family finances and[ ] contemporaneously took affirmative steps to understate his income and assets to the IRS in order to evade the payment of his tax liability when he indeed has access to the resources to pay the assessed tax debt that is due and owing.
Mirando made three payments of restitution to the IRS prior to entering his guilty plea, totaling $467,686.04, which was reflected in an attachment to the plea agreement. Therefore, Mirando inexplicably paid $18,909.91 more than the amount stated in the plea agreement. He was sentenced to 50 months' imprisonment followed by three years' supervised release.
In 2008, Mirando and his ex-wife filed Amended U.S. Individual Income Tax Returns, claiming refunds for the taxable years 1995, 1996, and 2000 in the amounts of $38,871, $54,112, and $32,332, respectively. The IRS denied all three refund claims. Mirando then filed this tax refund suit, arguing that the IRS erroneously assessed and collected an overpayment of $125,315. The government filed its answer, but failed to assert any affirmative defenses.
Mirando and the government filed cross-motions for summary judgment. In its motion, the government argued that it was entitled to judgment as a matter of law because collateral estoppel barred Mirando from challenging the amount of taxes. In Mirando's response in opposition, he argued that the government waived its collateral estoppel argument because it failed to assert it as an affirmative defense in its answer and, in the alternative, that the government failed to satisfy each element of collateral estoppel. The government then filed a motion for leave to amend its answer to assert collateral estoppel. However, three days later, it conceded in its reply to Mirando's response in opposition that it could not establish collateral estoppel. The government instead argued that judicial estoppel barred Mirando from recovering in his tax refund suit and further argued that it did not waive the affirmative defense of estoppel, but did not specify which type.
In response to the government asserting judicial estoppel for the first time in its reply brief, Mirando moved for leave to file a surreply addressing judicial estoppel. Mirando attached his proposed surreply to his motion, in which he argued that the government waived the affirmative defense of judicial estoppel by failing to plead it in its answer or amended answer and, alternatively, that the government could not establish each element of judicial estoppel.
Without explicitly ruling on Mirando's motion for leave to file a surreply, the district court granted the government's motions to amend its answer and for summary judgment, denied Mirando's motion for summary judgment, and entered judgment terminating the suit. The court did not address the fact that the government raised judicial estoppel for the first time in its reply brief, or that its motion to amend did not seek to add the affirmative defense. The court nonetheless concluded that judicial estoppel prevented Mirando from bringing his tax refund suit because “Mirando's position that he is entitled to a refund for overpaid taxes ... is directly contrary to his plea agreement in his 2007 criminal case,” and because he would gain an unfair advantage if allowed to proceed with his suit.
Mirando argues that the district court erred in granting summary judgment to the government because it erroneously determined that he was judicially estopped from contesting the accuracy of the IRS's assessments. We review de novo a district court's grant of summary judgment. Strayhorn v. Wyeth Pharm., Inc., 737 F.3d 378, 388 (6th Cir.2013). Summary judgment is proper where there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). We likewise review a district court's judicial estoppel analysis de novo. Lorillard Tobacco Co. v. Chester, Willcox & Saxbe, LLP, 546 F.3d 752, 757 (6th Cir.2008).1
The doctrine of judicial estoppel prevents a party who successfully assumed one position in a prior legal proceeding from assuming a contrary position in a later proceeding. New Hampshire, 532 U.S. at 749, 121 S.Ct. 1808. “Judicial estoppel is an equitable doctrine that preserves the integrity of the courts by preventing a party from abusing the judicial process through cynical gamesmanship, achieving success on one position, then arguing the opposite to suit an exigency of the moment.” Lorillard Tobacco, 546 F.3d at 757 (internal quotation marks and citation omitted).
Although the Supreme Court has noted that the “circumstances under which judicial estoppel may appropriately be invoked are probably not reducible to any general formulation of principle,” three factors may typically be used to help a court decide whether it applies:
First, a party's later position must be clearly inconsistent with its earlier position. Second, [we] regularly inquire whether the party has succeeded in persuading a court to accept that party's earlier position, so that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first or the second court was misled.... A third consideration is whether the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped.
New Hampshire, 532 U.S. at 750–51, 121 S.Ct. 1808 (internal quotation marks and citations omitted). “[B]ecause the doctrine precludes a contradictory position without examining the truth of either statement,” we must apply it “with caution to avoid impinging on the truth-seeking function of the court.” Lorillard Tobacco, 546 F.3d at 757.
In granting the government's motion for summary judgment, the district court found that Mirando was judicially estopped from bringing his tax refund claim because his “position that he is entitled to a refund for overpaid taxes for the years 1995, 1996, and 2000 is directly contrary to his plea agreement in the 2007 criminal case,” wherein he “specifically agreed he owed $448,776.13.” The court further found that Mirando would gain an unfair advantage if allowed to proceed with his claim because, by pleading guilty, he “avoided the possibility of a longer sentence and the [government] agreed not to prosecute Mirando's ex-wife or two children.”
First, Mirando's position in his tax refund suit is clearly inconsistent with the position he took in his 2007 criminal...
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