Streeter v. United States

• Decision Date: 08 December 2015
• Docket Number: No. 14-cv-10290-DJC,14-cv-10290-DJC
• Citation: 150 F.Supp.3d 82
• Parties: Cornelia V.R. Streeter, Plaintiff, v. United States of America, Defendant.
• Court: U.S. District Court — District of Massachusetts

150 F.Supp.3d 82

Cornelia V.R. Streeter, Plaintiff,

v.United States of America, Defendant.

No. 14-cv-10290-DJC

United States District Court, D. Massachusetts.

Signed December 8, 2015

Anna Rachel Dray-Siegel, Jacqueline K. Mantica, Robert M. Buchanan, Jr., Choate, Hall & Stewart, Boston, MA, for Plaintiff.

Karen A. Smith, US Department of Justice, Washington, DC, for Defendant.

MEMORANDUM AND ORDER

CASPER

, DISTRICT JUDGE.

I. Introduction

Plaintiff Cornelia V.R. Streeter (“Streeter”) has filed this lawsuit against Defendant the United States of America (“United States”) pursuant to 28 U.S.C. § 1346

and 26 U.S.C. §§ 6511 and 7422 seeking a refund, with interest, of the sum paid to remove a lien filed by the Internal Revenue Service (“IRS”) on her property (Count I). D. 1. Streeter also brings a claim for damages pursuant to 26 U.S.C. § 7432 for the IRS's alleged failure to release the lien (Count II) and requests attorneys' fees and costs. Id. Both Streeter and the United States have moved for summary judgment on all of Streeter's claims. D. 41; D. 44. For the reasons stated below, the Court DENIES in part and ALLOWS in part the motions.

II. Standard of Review

The Court grants summary judgment where there is no genuine dispute as to any material fact and the undisputed facts demonstrate that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a)

. “A fact is material if it carries with it the potential to affect the outcome of the suit under applicable law.” Santiago–Ramos v. Centennial P.R. Wireless Corp. , 217 F.3d 46, 52 (1st Cir.2000) (quoting Sanchez v. Alvarado , 101 F.3d 223, 227 (1st Cir.1996)

). The movant bears the burden of demonstrating the absence of a genuine issue of material fact. Carmona v. Toledo , 215 F.3d 124, 132 (1st Cir.2000) ; see Celotex v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the movant meets its burden, the non-moving party may not rest on the allegations or denials in her pleadings, Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), but “must, with respect to each issue on which she would bear the burden of proof at trial, demonstrate that a trier of fact could reasonably resolve that issue in her favor,” Borges ex rel. S.M.B.W. v. Serrano–Isern , 605 F.3d 1, 5 (1st Cir.2010). “As a general rule, that requires the production of evidence that is 'significant[ly] probative.”' Id. (quoting Anderson , 477 U.S. at 249, 106 S.Ct. 2505 ) (alteration in the original). The Court “view[s] the record in the light most favorable to the nonmovant, drawing reasonable inferences in his favor.” Noonan v. Staples, Inc. , 556 F.3d 20, 25 (1st Cir.2009).

III. Factual Background

The following facts are taken from the parties' Statement of Agreed Facts, D. 42, and the exhibits to the complaint, D. 1. The parties agree that the material facts are not in dispute. D. 43 at 2-3; D. 46 at 3.

Streeter was previously married to Anwar Wissa (“Wissa”). They had two children and divorced in 2001. D. 42 ¶ 2. Before their divorce, Streeter and Wissa jointly owned, as tenants by the entirety, a property located at 83 Asbury Street in Topsfield, Massachusetts (the “Property”). Id. ¶ 4. On May 10, 2001 (nunc pro tunc March 19, 2001), the Essex Probate and Family Court entered a divorce decree stating that Wissa was to transfer all “his right, title and interest” in the Property to Streeter and Streeter was to pay Wissa $1,164,995.50 on or before June 15, 2001. Id. ¶¶ 5-7.

Following entry of the divorce decree, Wissa abducted the two children and left the United States. Wissa has not returned, but the children were returned in 2003. Id. ¶¶ 9, 14. With Wissa absent from the country, on August 9, 2001, the Essex Probate and Family Court directed that Streeter's payment for the Property otherwise due to Wissa to be held in an escrow account. Id. ¶ 10. Streeter and her attorney at that time established an escrow account in the name of the designated escrow agents, not in the name of Wissa. Id. ¶ 11. Streeter funded the account in the amount of $1,164,995.50 and the account opened with a starting date of September 24, 2001. Id. Wissa, absent from the country, never filed a deed to transfer his interest in the Property but, sometime in 2001, Streeter recorded a copy of the divorce decree in the Southern Essex District Registry of Deeds. Id. ¶ 18.

On March 4, 2004, the IRS issued a Notice of a Federal Tax Lien on all property belonging to Wissa. Id. ¶ 15. The tax lien stated that Wissa owed $247,126 for the tax year 2000. Id. Streeter and Wissa did not file a joint tax return for the year 2000 and Streeter was not personally liable to pay Wissa's tax liability. Id. ¶¶ 16-17. The Notice of a Federal Tax Lien was addressed to Wissa at the Property's address, where Streeter was living at the time. Id. ¶ 24. Streeter knew Wissa was receiving tax notices, but did not know that they related to a lien on the Property. Id. On March 11, 2004, the IRS filed the tax lien with the Southern Essex District Registry of Deeds. Id. ¶ 15. Pursuant to Mass. Gen. L. c. 183, § 43

, and by a declaration of the Essex Probate and Family Court issued in January 2010, Wissa did not have an interest in the Property when the Notice of Federal Tax Lien was filed in 2004. Id. ¶¶ 12, 18. In 2009, Streeter learned of the lien on the Property in the course of obtaining a mortgage on the Property. Id. ¶ 24.

In January 2010, Streeter requested a certificate of non-attachment from the IRS for the lien on the Property pursuant to 26 U.S.C. § 6325(e)

. Id. ¶ 25.¹ The IRS responded, stating that such a request was not proper and suggested that Streeter request a certificate of discharge. Id. ¶ 26. In February 2010, Streeter requested a certificate of discharge from the IRS and provided a copy of the January 2010 declaration from the Essex Probate and Family Court and a letter from Streeter's attorney stating that Streeter made the required payment for the Property in September 2001. Id. ¶ 27. Streeter did not include any supporting documents, such as a canceled check for the payment, with the letter to the IRS. Id. ; D. 45-1 ¶ 4. In June 2010, despite the lien, Streeter sold a small portion of the Property to an adjoining landowner. D. 42 ¶ 28. In 2011, Streeter found a buyer to sell the majority portion of the Property and, according to Streeter, the buyer insisted that the lien be resolved before purchasing the Property. Id. ¶¶ 29-30. The ultimate deadline set to sell the Property was March 20, 2012. Id. ¶ 40.

Between December 2011 and March 2012, Streeter's attorneys contacted the IRS regarding the lien. Id. ¶ 31. On January 23, 2012, Streeter filed another application for a certificate of discharge pursuant to 26 U.S.C. § 6325(b)(4)

using Form 14135 (Rev. 06-2010) accompanied by a letter stating that “the Applicant will make a cash deposit .... In accordance with Publication 783, Q1, the deposit is not being submitted with this application.” D. 42 ¶ 32 (emphasis in the original); D. 1-5 (Application for Certificate of Discharge). In February 2012, Streeter's attorneys contacted the IRS employee assigned to the case, Jo Anne Mixner (“Mixner”), who stated that a certificate of discharge would not be granted and the only way to resolve the lien would be to pay Wissa's tax debt in full. D. 42 ¶¶ 34, 37. Mixner (erroneously) believed that the lien had attached to the Property before it had transferred to Streeter. Id. ¶ 35; D. 45-1 ¶ 8. From late February 2012 through early March 2012, Streeter's attorneys also spoke with IRS attorney Michael Fiore (“Fiore”) regarding a written statement from the IRS that the Property was not subject to the lien. D. 42 ¶ 38. On March 8, 2012, Fiore forwarded a draft to Mixner and asked her to contact him, but she did not as she was out of the office. Id. ¶ 39. Streeter's attorneys again had a conversation with Mixner on March 12, 2012, but the parties disagree about what was said and believe it is immaterial. Id. ¶ 41. With the deadline to sell the Property approaching, Streeter decided to pay Wissa's tax debt to remove the lien and later seek a refund. Id. ¶ 42. Streeter's attorney contacted Mixner, and not Fiore, to request a payoff amount. Id. The IRS faxed a Letter 3641 (02-2010)² stating the payoff amount for payment by March 20, 2012 and that the lien would be released if payment was made. Id. ¶¶ 43- 45; D. 1-6 (“payoff” letter). On March 16, 2012, Streeter, through her attorneys, paid the IRS $253,434.12 by cashier's check. D. 42 ¶ 46; D. 1-7. A letter was not given to the IRS along with the cashier's check and the check was not designated as a deposit for discharge of the lien. D. 42 ¶ 47. That same day, the IRS provided a Certificate of Release of Federal Tax Lien on Form 668(Z) (Rev. 10-1999) certifying that Wissa met the requirements under 26 U.S.C. § 6325(a)

and that the lien on the Property was released. Id. ¶ 48; D. 1-8 (Certificate of Release of Federal Tax Lien). On October 25, 2012, Streeter filed a Claim for Refund and Request for Abatement on Form 843. D. 42 ¶ 49; D. 1-9 (Claim for Refund and Request for Abatement). The IRS denied Streeter's claim by letter on June 28, 2013, stating that “the assessment of the tax against Mr. Wissa was proper” and that “our lien had attached.” D. 42 ¶ 50; D. 1-10 (Denial letter).

IV. Procedural History

Streeter filed this action on February 7, 2014. D. 1. The United States moved to dismiss on April 16, 2014. D. 10. After the Court (Young, J.) denied the motion to dismiss on July 10, 2014, D. 16, the case was reassigned to this session of the Court. D. 19. The parties cross-moved for summary judgment on September 10, 2015. D. 41, 44. The Court heard the parties on their pending summary judgment motions on October 29, 2015 and took the matters under advisement. D. 48.

V. Discussion

A. Claim for Refund

Streeter seeks a refund for the sum she paid to the IRS to remove a lien placed on her Property for...