United States v. Goodman
| Citation | 6 CIT 132,572 F. Supp. 1284 |
| Decision Date | 13 September 1983 |
| Docket Number | Court No. 81-9-01150. |
| Parties | UNITED STATES, Plaintiff, v. Harold GOODMAN, Defendant. |
| Court | U.S. Court of International Trade |
COPYRIGHT MATERIAL OMITTED
J. Paul McGrath, Asst. Atty. Gen., Joseph I. Liebman, Atty. in Charge, Intern. Trade Field Office, Commercial Litigation Branch, Washington, D.C. (Susan Handler-Menahem, Teaneck, N.J., on the brief), for plaintiff.
Richard A. Kulics, Detroit, Mich., on the brief, for defendant.
Introduction
The Government has instituted this action pursuant to 28 U.S.C. § 1582(3) to recover $117,231.46 for estimated customs duties (plus interest and costs) claimed to be due under 19 U.S.C. § 1505(a) on six entries by defendant at the port of San Francisco, California, between December 1980 and March 1981.
Presently before the Court are plaintiff's motion for summary judgment and defendant's cross-motion for summary judgment, or in the alternative, to dismiss.
The facts in this case are not in dispute.
The six entries in question were made by defendant, Harold Goodman, as the importer of record, and the importations were released by Customs to defendant on immediate delivery applications. Duties were estimated on the entries by the San Francisco District Director as follows:
ESTIMATED
ENTRY NO. DUTIES DUE DATE
XX-XXXXXX-X $ 21,895.26 Jan. 9, 1981
XX-XXXXXX-X 26,589.76 Jan. 13, 1981
XX-XXXXXX-X 19,866.90 Jan. 26, 1981
XX-XXXXXX-X 20,814.67 Jan. 26, 1981
XX-XXXXXX-X 20,356.68 Feb. 2, 1981
XX-XXXXXX-X 13,928.19 Mar. 20, 1981
While the estimated duties total $123,451.46, Customs has, except for checks returned unpaid by the bank, received only $6,220.00, leaving an unpaid balance of $117,231.46. Although the record is not clear, obviously defendant is playing "fast and loose" relative to the payment of duties. Significantly, according to plaintiff's memorandum in support of its motion for summary judgment (at 4),
These facts are not disputed by defendant.
The Government contends that pursuant to 19 U.S.C. § 1505(a) Harold Goodman, as the importer of record, is liable for payment of estimated duties (plus interest and costs) on the goods that he entered, notwithstanding that the importer posted a bond stipulating liquidated damages.
Defendant admits that there is an unpaid balance of $117,231.46 in estimated duties, but raises several affirmative defenses: (1) the action is premature since the entries are unliquidated; (2) this suit is barred by the doctrine of election of remedies since plaintiff has demanded liquidated damages under defendant's bond; (3) the Government is estopped to bring this action by the fact that defendant submitted a bond stipulating liquidated damages and the Government has made a demand for liquidated damages; consequently, the Government's sole remedy is a suit for liquidated damages under the bond.1
OpinionI find that defendant's affirmative defenses are wholly without merit, and inasmuch as there is no genuine justiciable issue of fact for trial, the Government is entitled to summary judgment.
The Government's claim in this action is predicated upon a statutory obligation of defendant, as the importer of record and consignee of the goods, to deposit estimated duties at the time of making entry. This obligation is set forth in 19 U.S.C. § 1505(a):
Additionally, the Customs Regulations, 19 CFR § 141.1(b), state:
(b) Personal debt of importer. The liability for duties, both regular and additional, attaching on importation constitutes a personal debt due from the importer to the United States which can be discharged only by payment in full of all duties legally accruing, unless relieved by law or regulation. * * *
As long ago as the time-honored holding in Meredith v. United States, 38 U.S. 486, 10 L.Ed. 258 (1839), Mr. Justice Story, writing for the United States Supreme Court, stated (at 493):
It appears to us clear upon principle, as well as upon the obvious import of the provisions of the various acts of Congress on this subject, that the duties due upon all goods imported constitute a personal debt due to the United States from the importer.
Equally clear is that defendant, as the importer of record,2 is the "consignee" for purposes of duty liability under section 1505(a). See A.N. Deringer, Inc. v. Consolidated Computer Services International, Inc., 381 F.Supp. 1208 (D.Mass.1974), and cases cited therein.
Notwithstanding the above-cited authorities, defendant seeks to be relieved of his liability on several grounds, which we now consider.
First, defendant asserts that this action is premature since the entries involved are unliquidated, and consequently, the Government is attempting to recover an amount which is not yet a "sum certain." (Defendant's brief, at 2.)
Defendant's position ignores the explicit mandate of section 1505(a) which requires the deposit of estimated duties "at the time of making entry."3 Further, 19 CFR § 141.1(b), quoted supra, refers to the liability for duties as "attaching on importation." Even more to the point is 19 CFR § 141.1(a), which provides:
(a) Time duties accrue. Duties and the liability for their payment accrue upon imported merchandise on arrival of the importing vessel within a Customs port with the intent then and there to unlade, or at the time of arrival within the Customs territory of the United States if the merchandise arrives otherwise than by vessel, unless otherwise specially provided for by law.
In light of the pertinent statute and regulations, it is readily apparent that liquidation (the final ascertainment and computation of the importer's duty liability) is not a condition precedent to defendant's liability for estimated duties, which accrue upon importation.
Defendant next argues that the doctrine of election of remedies bars the instant action. Briefly, the doctrine of election of remedies serves to prevent double redress for a single wrong by precluding suitors from pursuing contradictory or inconsistent remedies on the same state of facts. See 25 Am.Jur.2d 646 (1966).
Defendant contends that the remedies available to the Government, viz, liquidated damages under defendant's bond or the recovery of estimated duties by virtue of defendant's statutory liability under section 1505(a), are inconsistent; therefore, urges defendant, the Government by its administrative demand for liquidated damages for breach of the bond has made an election of the former remedy which bars pursuit of the latter.
Defendant has not demonstrated that a binding election has been made by the Government. While Customs concededly issued a notice of liquidated damages for breach of the Immediate Delivery and Consumption Entry (term) Bond in conformance with 19 CFR § 172.1(a), there is no showing that such demand was satisfied by defendant. Defendant's allegation concerning an administrative demand for liquidated damages is plainly insufficient to establish a binding election by the Government. As stated by the District Court in Twentieth Century-Fox Film Corp. v. National Publisher's Inc., 294 F.Supp. 10, 12 (S.D.N. Y.1968): "A binding election occurs only where one party pursues a remedy to a point where, in reliance upon such action, the other changes his position to his detriment." The mere demand by Customs for payment of liquidated damages, without more, cannot constitute a binding election. See 25 Am.Jur.2d 646 (1966) and cases cited. In essence, defendant's allegations demonstrate merely that a remedy other than the one pursued here was available to the Government. No showing whatsoever has been made that a remedy other than the one sought in this action has been pursued by the Government to the point where defendant had reasonably relied thereon to his detriment. Accordingly, the principle of election of remedies is inapplicable here.
Finally, we reach defendant's affirmative defense of equitable estoppel.
While not clearly articulated in either defendant's answer or brief, it would appear that defendant's argument is that the Government is estopped to hold him liable for estimated duties since allegedly no entries were filed inasmuch as estimated duties were never deposited. Defendant, therefore, reasons that plaintiff's only remedy is on the bond. In this connection, defendant urges that by accepting a bond, plaintiff represented to defendant that a demand for liquidated damages under the bond would be plaintiff's only remedy for failure to enter the goods properly and pay estimated duties; that defendant relied to his detriment upon plaintiff's demand for liquidated damages under the bond; and that such detriment arises "by virtue of the instant case and demand for judgment" (Defendant's brief, at 7). In substance, apparently defendant is claiming that the Government falsely represented to defendant that a bond would relieve defendant of liability for estimated duties, and hence ...
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