United States v. Molen

• Decision Date: 21 May 2014
• Docket Number: No. 2:10-cv-2591 MCE KJN,2:10-cv-2591 MCE KJN
• Court: U.S. District Court — Eastern District of California
• Parties: UNITED STATES OF AMERICA, Plaintiff, v. JAMES O. MOLEN, et al., Defendants.

UNITED STATES OF AMERICA, Plaintiff, v. JAMES O. MOLEN, et al., Defendants.

No. 2:10-cv-2591 MCE KJN

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

Dated: May 21, 2014

FINDINGS AND RECOMMENDATIONS

Plaintiff United States of America ("plaintiff") filed this civil action on September 23, 2010, to reduce to judgment outstanding federal tax assessments and foreclose on real property owned by defendants. (ECF No. 1.) The tax assessments at issue are against defendants James O. Molen, Sandra Molen, and the James Orbin Molen Limited Partnership (collectively "defendants").¹ Defendants are proceeding without counsel in this action.²

Presently before the court is plaintiff's motion for partial summary judgment, filed November 22, 2013, which seeks to reduce to judgment federal tax liabilities assessed against defendants.³ (ECF No. 148.) On December 5, 2013, defendants filed a written opposition to plaintiff's motion arguing, among other things, that the court should dismiss the motion for being untimely filed. (ECF No. 155.) On December 12, 2013, the court ordered plaintiff to show cause why the court should deem plaintiff's motion timely filed and ordered defendant to file a declaration stating whether he was prejudiced by plaintiff's delay in filing its motion. (ECF No. 156.) Plaintiff filed a response to the court's December 12, 2013 order and defendants filed a declaration of prejudice. (ECF Nos. 157, 158.) On January 27, 2014, the court discharged its order to show cause, deemed plaintiff's motion timely filed, and ordered defendants to file an amended opposition that complied with the requirements of Rule 56 of the Federal Rules of Civil Procedure and Local Rule 260(b), including but not limited to the filing of a separate Statement of Disputed Facts. (ECF No. 159.) Defendants filed an amended opposition on February 25, 2014, which primarily consists of arguments recycled from defendants' previous declaration of prejudice and fails to include a Statement of Disputed Facts. (ECF No. 161.) Plaintiff filed a reply on March 4, 2014. (ECF No. 163.)

The court heard this matter on its May 8, 2014 law and motion calendar. Attorney Guy Patrick Jennings appeared on behalf of plaintiff. James Molen, who is proceeding without an attorney, failed to appear at the hearing.⁴

The undersigned has fully considered the parties' briefs, the parties' oral arguments, and appropriate portions of the record. For the reasons that follow, the undersigned recommends that plaintiff's motion for partial summary judgment be granted in full.

I. Plaintiff's Motion for Partial Summary Judgment

Plaintiff requests entry of summary judgment against defendants for tax liabilities that have accrued against them because of their failure to pay employment taxes due on the wages paid to employees in their flower shop and filing of frivolous tax returns that reported no income. Specifically, plaintiff "requests entry of judgment against James O. Molen in the amount of $194,025.86 for unpaid federal employment tax and $5,843.85 for frivolous return penalties, plus additional interest and other statutory additions that have accrued since November 30, 2013" for the tax periods including all quarters of 2000, 2001, 2002, 2003, the first and fourth quarters of 2004, as well as for frivolous return penalties assessed for 1997 through 2004.⁵ (ECF No. 148-1 at 2, 11.) It further "requests entry of judgment against Sandra Molen in the amount of $3,867.27, for frivolous return penalties [assessed against her from 1998 through 2004], plus additional interest and other statutory additions that have accrued since November 30, 2013." (Id.) Finally, it "requests that judgment be entered against the James Orbin Molen Limited Partnership in the amount of $19,092.67 plus additional interest and other statutory additions that have accrued since November 30, 2013" for non-payment of employment taxes for the second and fourth quarters of 2005, all quarters of 2006, and non-payment of federal unemployment tax ("FUTA tax") for 2005 and 2006.⁶ (Id.)

II. Legal Standards Governing Motions for Summary Judgment

Federal Rule of Civil Procedure 56(a) provides that "[a] party may move for summary judgment, identifying each claim or defense--or the part of each claim or defense--on which summary judgment is sought." It further provides that "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a).⁷ A shifting burden of proof governs motions for summary judgment under Rule 56. Nursing Home Pension Fund, Local 144 v. Oracle Corp. (In re Oracle Corp. Sec. Litig.), 627 F.3d 376, 387 (9th Cir. 2010). Under summary judgment practice, the moving party always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any," which it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (quoting then-numbered Fed. R. Civ. P. 56(c)). "Where the non-moving party bears the burden of proof at trial, the moving party needonly prove that there is an absence of evidence to support the non-moving party's case." In re Oracle Corp. Sec. Litig., 627 F.3d at 387 (citing Celotex Corp., 477 U.S. at 325); see also Fed. R. Civ. P. 56 advisory committee's notes to 2010 amendments (recognizing that "a party who does not have the trial burden of production may rely on a showing that a party who does have the trial burden cannot produce admissible evidence to carry its burden as to the fact").

If the moving party meets its initial responsibility, the opposing party must establish that a genuine dispute as to any material fact actually exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-86 (1986). To overcome summary judgment, the opposing party must demonstrate the existence of a factual dispute that is both material, i.e., it affects the outcome of the claim under the governing law, see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Fortune Dynamic, Inc. v. Victoria's Secret Stores Brand Mgmt., Inc., 618 F.3d 1025, 1031 (9th Cir. 2010), and genuine, i.e., "'the evidence is such that a reasonable jury could return a verdict for the nonmoving party,'" FreecycleSunnyvale v. Freecycle Network, 626 F.3d 509, 514 (9th Cir. 2010) (quoting Anderson, 477 U.S. at 248). A party opposing summary judgment must support the assertion that a genuine dispute of material fact exists by: "(A) citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations . . . , admissions, interrogatory answers, or other materials; or (B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1)(A)-(B). However, the opposing party "must show more than the mere existence of a scintilla of evidence." In re Oracle Corp. Sec. Litig., 627 F.3d at 387 (citing Anderson, 477 U.S. at 252).

In resolving a motion for summary judgment, the evidence of the opposing party is to be believed. See Anderson, 477 U.S. at 255. Moreover, all reasonable inferences that may be drawn from the facts placed before the court must be viewed in a light most favorable to the opposing party. See Matsushita, 475 U.S. at 587; Walls v. Cent. Contra Costa Transit Auth., 653 F.3d 963, 966 (9th Cir. 2011). However, to demonstrate a genuine factual dispute, the opposing party "must do more than simply show that there is some metaphysical doubt as to the material facts . .. . Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no 'genuine issue for trial.'" Matsushita, 475 U.S. at 586-87 (citation omitted).

III. Undisputed Facts

In accordance with Local Rule 260(a), plaintiff filed a Statement of Undisputed Facts ("SUF") in support of its motion for partial summary judgment. (ECF No.148-2.) Defendants failed to directly respond to plaintiff's SUF beyond generalized arguments that the documentary evidence plaintiff's SUF is based on is all impermissible hearsay evidence that was obtained "by threat and duress of contempt of court."⁸ (ECF No. 161 at 4.) Moreover, defendants did not file a statement of disputed facts, which violates Local Rule 260(b) and the court's order requiring defendants to file an opposition and supporting materials that comply with Rule 56 of the Federal Rules of Civil Procedure and Local Rule 260. The procedure prescribed in Local Rule 260 contemplates identification of the facts that the parties assert are material, disputed or undisputed. "If the nonmovant does not 'specifically . . . [controvert duly supported] facts identified in the [movant]'s statement of undisputed facts,' the nonmovant 'is deemed to have admitted the validity of the facts contained in the [movant]'s statement.'" United States v. Burrell, 2013 WL 4710498 at *1 (E.D. Cal. Aug. 30, 2013) (quoting Beard v. Banks, 548 U.S. 521, 527 (2006)). Accordingly, for purposes of the motion for partial summary judgment, the court accepts plaintiff's evidence and proposed undisputed facts, outlined below, as the truth.

Defendants James O. Molen and Sandra Molen, doing business as Touch of Class Florist, had employees and paid wages and other compensation to those employees. (SUF ¶ 2.) Beginning in the second quarter of 2005, defendants operated their business in a similar fashion under the name "James Orbin Molen Limited Partnership" ("Partnership"). (Id. at ¶¶ 2, 18.) Defendants' workers were treated the same prior to and after the business was...