United States v. Bedford
| Decision Date | 10 November 2016 |
| Docket Number | CASE NO. 8:15-cv-2487-T-26JSS |
| Court | U.S. District Court — Middle District of Florida |
| Parties | UNITED STATES OF AMERICA, Plaintiff, v. ROBERT N. BEDFORD, LINDA J. BEDFORD, DAWN THOMPSON POOL CARE, and BB&T BANK, Defendants. |
BEFORE THE COURT is the United States' Motion for Summary Judgment (Dkt. 41), the Response of BB&T Bank (Dkt. 48), the Joint Stipulation of Lien Priorities between the United States and Dawn Thompson Pool Care (Dkt. 49), the Response of Linda J. Bedford (Dkt. 50), the Response of Robert N. Bedford with attachments (Dkt. 51), and the Government's Reply with attachments (Dkt. 54). The pro se motions for summary judgment (Dkts. 43 & 44), which this Court denied, will also be considered as submissions "in addition to the responses" of Robert Bedford and Linda Bedford when resolving whether the United States is entitled to summary judgment (Dkt. 45). After careful consideration of the motion, the applicable law, and all the submissions of the parties, the Court concludes the motion should be granted.
The Government brings this action to reduce to judgment unpaid federal income tax liabilities for Defendant Robert N. Bedford from 1999 through 2003, and for Defendant Linda J. Bedford from 1999 through 2001. The Government seeks foreclosure of federal tax liens against the Bedford personal residence located in Pinellas County, Florida, which is now owned solely by Ms. Bedford, and also an order of sale.
The tax liability for the years 1999 through 2001 was initially assessed against both the Bedfords, having filed their tax returns jointly as a married couple during that time. In February 2007, after the Bedfords petitioned the United States Tax Court to redetermine the deficiencies, the Bedfords stipulated to an amount owed for the years 1999 to 2001.1 The Secretary of the Treasury assessed federal income tax, penalties, and interest against both Robert and Linda Bedford for 1999 to 2001 as of November 4, 2013, in the amounts of $3,029.27, $67,914.91, and $26,530.79, for the years 1999, 2000, and 2001, respectively.
In 2009, Linda Bedford challenged the amount for the years 1999 through 2001 based on innocent spouse relief. In January 2013, the matter was resolved when the TaxCourt entered a stipulated order that assessed the amount she owed for the years 1999 through 2001.2 Despite demand, Linda Bedford failed to remit payment. The stipulated decision reduced the amount owed by Linda Bedford, but did not affect the amount owed by Robert Bedford.
In addition to the years 1999 through 2001, Robert Bedford owes tax deficiencies, penalties, and interest for the years 2002 and 2003, when he filed individual tax returns. The Secretary of Treasury made assessments against him as of November 4, 2013, for those two years in the amounts of $10,465.83 and $2,190.11, respectively. Demand for payment was made. Mr. Bedford did not dispute the proposed deficiencies, and failed to pay.
Robert and Linda were divorced on June 27, 2013. The federal tax liens were recorded prior to the divorce. As of September 22, 2016, Robert Bedford owes $113,668.97 for the years 1999 through 2003, plus uncalculated interest for 19993 and other additions that continue to accrue as allowed by law. As of that same date, LindaBedford owes $20,127.15 for the years 1999 through 2001, plus the uncalculated interest for 1999 and the penalties and interest continuing to accrue.
Federal tax liens as well as two other liens have attached to the personal residence in Seminole, Florida, since the Bedfords acquired it in 1997. The tax liens were recorded in the public records of Pinellas County, Florida, on March 23 and December 6, 2007, against both Robert and Linda Bedford, and on August 15, 2011, against Robert, and on August 16, 2013, against Linda.4 A mortgage was recorded on the property by Republic Bank on September 1, 1999, in the amount of $24,296.65.5 BB&T Bank is the successor in interest to Republic Bank. Dawn Thompson Pool Care (Thompson) recorded a claim of lien in the amount of $643.64 on January 7, 2010, and again on October 10, 2011.6 The property was quitclaimed to Linda Bedford in the divorce in July 2013, which was made subject to the tax liens, and she is now the sole owner.7
The Government now moves for summary judgment, and the pro se Bedfords independently challenge the relief sought and contend that many genuine issues of material fact exist to prohibit summary judgment.
Summary judgment is properly granted where there is no genuine dispute regarding a material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The facts must be viewed, and all reasonable inferences drawn, in the light most favorable to the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513, 91 L.Ed.2d 202 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 474 U.S. 574, 587-88, 106 S.Ct. 1348, 1356, 89 L.Ed. 2d 538 (1986). If the Court determines the moving party has met its burden, then the burden shifts to the non-moving party to show there is a genuine issue of material fact for trial. Matsushita, 474 U.S. at 587. The non-moving party must "come forward with significant, probative evidence demonstrating the existence of a triable issue of fact." United States v. Four Parcels of Real Prop., 941 F.2d 1428, 1438 (11th Cir. 1991) (en banc) (quoting Chanel, Inc. v. Italian Activewear of Fla., Inc., 931 F.2d 1472, 1477 (11th Cir. 1991)).
The Government argues that the undisputed facts show that Robert and Linda Bedford owe tax deficiencies, penalties, and interest in the amounts set forth in the declarations as noted above. It is uncontested that BB&T Bank's lien has priority over all tax and other liens. It is stipulated between Thompson and the Government that the order of satisfaction pursuant to a sale of the property, apart from BB&T, is as follows: (1) the tax liens for the years 1999-2003 recorded before January 7, 2010; (2) the claim of lien byThompson filed January 7, 2010, over the tax lien for 2000 and 2001 filed August 15, 2001; and (3) the claim of lien by Thompson filed October 10, 2011, over the tax lien for 2000-2001 filed August 16, 2013.8
Neither of the Bedfords contested the final assessments as evidenced in the account transcripts attached to the declaration of Bryan Morris, which are consequently presumed valid. See, e.g., Welch v. Helvering, 290 U.S. 111, 115 (1933); United States v. Chila, 871 F.2d 1015, 1018 (11th Cir. 1989), cert. denied, 493 U.S. 975 (1989); United States v. Enright, No. 8:14-cv-2189-T-30JSS, 2015 WL 5883166, at *3 (M.D. Fla. Oct. 6, 2015); United States v. Dixon, 672 F.Supp. 503, 506-07 (M.D. Ala. 1987), aff'd, 849 F.2d 1478 (11th Cir. 1988). In addition to the transcripts, the stipulated decision of the Tax Court regarding the 1999 to 2001 tax liabilities is further proof.9 The Bedfords have not carried their burden of overcoming the presumption of validity of the tax assessment by challenging its correctness or the method of computing the tax. See Olster v. Comm'r, 751 F.2d 1168, 1174 (11th Cir. 1985) (citing Mersel v. United States, 420 F.2d 517, 520 (5th Cir. 1969)); Dixon , 672 F. Supp. at 506.10 The Bedfords incorrectly assert that theaccount transcripts are inaccurate with respect to overpayment of $759.02 by Mr. Bedford for the tax year 2009. Mr. Morris explains in his supplemental declaration that the overpayment was properly applied to the tax year 2001 as $403.02 on February 22, 2011; $156.00 on April 15, 2011; and $200.00 on March 13, 2012.11 Absent any evidence that the tax assessments were arbitrary and without foundation or incorrect, the assessments are valid and enforceable. See United States v. Henry, No. 8:09-cv-1963-T-27TBM, 2010 WL 299249, at *2 (M.D. Fla. Jan. 21, 2010).
Each of the Bedfords separately raise additional issues not directed to the correctness and validity of the assessments. They suggest that the Government should be estopped from collecting the tax based on their good faith that they did not owe any taxes. Claiming that this is the first time they have seen the correct transcripts showing the amounts due, the Bedfords contend that the transcripts in their possession show amounts written off, refunded, and transferred out. Mr. Morris' declaration explains that entries showing amounts transferred out refers to the October 2009 adjustment for Ms. Bedford'sinnocent spouse claim.12 New transcripts were generated showing the new balance due for each of the Bedfords.
Equitable estoppel requires "(1) 'words, acts, conduct or acquiescence causing another to believe in the existence of a certain state of things' (2) 'wilfulness or negligence with regard to the acts, conduct or acquiescence' and (3) 'detrimental reliance by the other party upon the state of things so indicated.'" Tefel v. Reno, 180 F.3d 1286, 1302 (11th Cir. 1999) (quoting Federal Deposit Ins Corp. v. Harrison, 735 F.2d 408, 413 (11th Cir. 1984)). Apart from proving these elements, the Bedfords may not rely on equitable estoppel against the Government without establishing that it acted in its privateor proprietary capacity. See Mendez v. United States, No. 02-60857-Civ, 2003 WL 23309467, at *4 (S.D. Fla. Dec. 15, 2003). Because the activities of "[p]romulgating, interpreting and enforcing tax laws are sovereign functions" and not conducted for private or commercial benefit, the Bedfords cannot establish equitable estoppel on the part of the Government in recovering tax assessments. United States v. Qurashi, No. 8:03-cv-1002-T-27EAJ, 2004 WL 1771071, at *2 (M.D. Fla. June 16, 2004).
The Bedfords contend that they relied on the account transcripts received from the Internal Revenue Service (IRS) in 2014 "at face value" concerning their interpretation of what was due.13 Mr. Bedford conceded that he never tried to speak with anyone...
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