United States v. Cornwell
| Decision Date | 11 February 2020 |
| Docket Number | Case No: 6:18-cv-2194-Orl-22EJK |
| Parties | UNITED STATES OF AMERICA, Plaintiff, v. JOSEPH D. CORNWELL, JR., ROBERT A. LABELLA, JR., SOMERSET SHORES HOMEOWNER'S ASSOCIATION, INC., DR. PHILIPPS COMMUNITY ASSOCIATION, INC., ORANGE COUNTY TAX COLLECTOR, JOMICO, LLC, GLORIA LA BELLA and ROBERT A. LABELLA, JR. AS PERSONAL REPRESENTATIVE OF THE ESTATE OF ROBERT ACCURSIO LABELLA, Defendants. |
| Court | U.S. District Court — Middle District of Florida |
This cause comes before the Court on the Motion for Default Judgment against Joseph D. Cornwell, Jr., Dr. Phillips Community Association, Inc. and JOMICO, LLC (Doc. 93), and the Motion for Summary Judgment against Gloria LaBella (Doc. 94), filed by the United States. In this action to enforce the federal tax liens against Joseph D. Cornwell which arose and attached to his property, the United States has reached stipulations or obtained defaults against several of the claimants. The United States now seeks a default judgment against the taxpayer, his alter ego, and the homeowners association, as well as summary judgment against the remaining claimant.
For the reasons set forth below, the Court finds that the United States has enforceable tax liens on the property belonging to Defendant Joseph Cornwell and his alter ego Defendant JOMICO, LLC, which have attached to the real property at issue and can be foreclosed, resolving the claims of other Defendants as set forth below.
On December 21, 2018, the United States filed this action against Joseph Cornwell pursuant to 26 U.S.C. § 7402, to reduce to judgment his federal tax liabilities for the tax years ending 2002, 2003 and 2005 (Count I); and to enforce federal tax liens (Count II) against the real property purchased in 2015 located at 7313 Somerset Shores Court, Orlando, Florida 32819 (the "Subject Property") held in the name of his alter-ego, the limited liability company, JOMICO, LLC. (Doc. 1). The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1340 and 1345, and 26 U.S.C. § 7402. (Doc. 1 ¶ 3).
In addition to the tax payer-Defendant Joseph D. Cornwell, Jr., and his alter-ego JOMICO, LLC, the United States named as Defendants, pursuant to 26 U.S.C. § 7403(b), several entities who could potentially claim an interest in the Subject Property, including: the Orange County Tax Collector; the Somerset Shores Homeowner's Association, Inc.; Dr. Phillips Community Association; and Robert A. LaBella, Jr., in his capacity as Trustee of the Robert A. Labella Revocable Trust UAD 7-14-97 (the "LaBella Revocable Trust"), the seller of the Subject Property.
The Orange County Tax Collector and Somerset Shores Homeowner's Association, Inc. filed Answers to the complaint (Docs. 10, 19), and the United States subsequently reached stipulations with them concerning the priority of their liens resolving their claims. (Docs. 28, 92). Dr. Phillips Community Association did not file an answer the Complaint.
On June 14, 2019, the United States filed an Amended Complaint (Doc. 42) adding as a potential claimant Robert A. LaBella, Jr., in his capacity as the Personal Representative of theEstate of Robert Accursio LaBella. In response, on June 14, 2019, Robert A. LaBella, Jr. filed his Answer.2 (Doc. 45). The United States and Robert A. LaBella, Jr., in both of his capacities, subsequently entered into a stipulation regarding the priority of the liens against the Subject Property that resolved those claims. (Doc. 85).
The Amended Complaint also added the potential claimant, Gloria LaBella3—the estranged wife of the late Robert A. LaBella—after counsel for the United States received a letter from her claiming an interest in the Subject Property.4 (Doc. 42). Gloria LaBella filed her Answer to the Amended Complaint on July 22, 2019. (Doc. 63).
On August 30, 2019, the United States filed a Motion seeking a declaration that Defendant Joseph D. Cornwell, Jr. had properly been served with process. (Doc. 81). On December 9, 2019, Magistrate Judge Kidd entered an order finding that substituted service was warranted and properly executed; that Order has not been appealed. (Doc. 96). On December 10, 2019, the Clerk entered a default against Cornwell pursuant to Federal Rule of Civil Procedure 55(a). (Doc. 97). The United States obtained leave of court to serve JOMICO, LLC by publication (Doc. 38), and when it failed to answer, the Clerk entered default against JOMICO, LLC. (Doc. 39). Dr. Phillips Community Association was served with the Complaint on February 19, 2019 (Doc. 16) but failed to answer and the Clerk entered a default against the Association on March 27, 2019. (Doc. 24).
The United States now moves pursuant to Federal Rule of Civil Procedure 55(b) to have final default judgment entered against Defendants Joseph D. Cornwell, Jr., JOMICO, LLC,5 as well as Dr. Phillips Community Association, Inc. Following discovery on the only remainingclaim, as filed pro se by Gloria LaBella, the United States filed a Motion for Summary Judgment (Doc. 94) on October 30, 2019 to resolve on the merits her claims: (1) the Subject Property had been her "marital home" with the late Robert A. LaBella and (2) title documents conveying the Subject Property to JOMICO, LLC were deficient to transfer ownership. (Doc. 63 ¶¶ 6, 15-16).
On November 5, 2019, the Court directed Ms. LaBella to file a response to the Motion for Summary Judgment by December 10, 2019 and warned that her claim could be terminated without further proceedings if she failed to respond. (Doc. 95). Ms. LaBella failed to file a response.
These Motions are now ripe for decision. Because the tax-payer Defendant, his alter ego, and the remaining potential claimants have failed to appear or produce evidence in support of their claims, the Motions will be GRANTED and final judgment will be entered against the Defendants.
Pursuant to Federal Rule of Civil Procedure 55, before the Court enters final default judgment, the clerk must enter a default when the "party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise." Fed. R. Civ. P. 55(a); see also Solaroll Shade & Shutter Corp. v. Bio Energy Sys., 803 F.2d 1130, 1134 (11th Cir. 1986) () (citation omitted)). After receiving the clerk's default, if the plaintiff's claim is not for a sum certain and the defendant is not an infant or an incompetent person, then the Court can enter a default judgment against the defendant for not appearing. Fed.R.Civ.P. 55(b)(2). A default judgment may be entered "against a defendant who never appears or answers a complaint, for in such circumstances the case never has been placed at issue." Solaroll, 803 F.2d at 1134; DirecTV, Inc. v. Griffin, 290 F.Supp.2d 1340, 1343 (M.D. Fla. 2003).
Under Federal Rule of Civil Procedure 4(e), service of a federal complaint is accomplished as follows:
Fed. R. Civ. Pro. 4(e). Under the subsection that deals with service on a corporation, the corporation may be served in the same manner as service on an individual (as in Rule 4(e)(1)) or "by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process and—if the agent is one authorized by statute and the statute so requires—by also mailing a copy of each to the defendant." Fed.R.Civ.P. 4(h).
Florida law also permits service on a defendant who conceals his or her identity by serving the Florida Secretary of State. Fla. Stat. §§ 48.161(1), 48.181(1). Section 48.161(1), governing substituted service of an individual, provides in pertinent part:
When authorized by law, substituted service of process on a . . . person who conceals his or her whereabouts by serving a public officer designated by law shall be made by leaving a copy of the process with a fee of $8.75 with the public officer or in his or her office or by mailing the copies by certified mail to the public officer with the fee. The service is sufficient service on a defendant who has appointed a public officer as his or her agent for the service of process. Notice of service and a copy of the process shall be sent forthwith by registered or certified mail . . . to the defendant, and the defendant's return receipt and the affidavit of the plaintiff or his or her attorney of compliance shall be filed on or before the return day of the process or within such time as the court allows, or the notice and copy shall be served onthe defendant, if found within the state, by an officer authorized to serve legal process, or if found without the state, by a sheriff or a deputy sheriff of any county of this state or any duly constituted public officer qualified to serve like process in the state or jurisdiction where the defendant is found.
Fla. Stat. §...
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