United States v. Seeley, Civil Action No. 16-cv-10935-ADB
| Decision Date | 08 November 2018 |
| Docket Number | Civil Action No. 16-cv-10935-ADB |
| Parties | UNITED STATES OF AMERICA, Plaintiff, v. DAVID SEELEY, et al., Defendants. |
| Court | U.S. District Court — District of Massachusetts |
BURROUGHS, D.J.
Plaintiff, United States of America (the "Government"), commenced this action against Defendants David Seeley and Seretha Seeley (the "Seeleys") to recover unpaid tax liabilities and to enforce federal tax liens that encumber a parcel of real property located in Topsfield, Massachusetts (the "Property") by means of a forced sale. [ECF No. 1]. The Government has joined as Defendants the Town of Topsfield, Massachusetts and the Massachusetts Department of Revenue because they have or could claim an interest in the Property. [See ECF No. 1 ¶¶3-4]. Currently pending before the Court is the Government's motion for partial summary judgment. [ECF No. 40]. For the reasons stated below, the Government's motion is GRANTED.
The following facts are drawn from the statement of facts contained in the Government's motion for summary judgment [ECF No. 40-1], unless otherwise noted. The Court considers all undisputed facts set forth in the Government's statement of facts to be admitted. See Zimmerman v. Puccio, 613 F.3d 60, 63 (1st Cir. 2010).
The Seeleys reside in Topsfield, Massachusetts at the Property, which they purchased in 1999. [ECF No. 40-1 ¶ 15]. From 2005 through 2014, the Seeleys accrued federal tax liabilities for every tax year. [Id. ¶¶ 1-10]. A delegate of the Secretary of the Treasury made assessments for federal income tax liabilities against the Seeleys for those tax years. [Id.]. As to each assessment, a delegate of the Secretary of the Treasury notified the Seeleys of the assessment and made a demand for payment. [Id. ¶ 12]. The Internal Revenue Service ("IRS") has issued Form 4340 Certificates of Assessment and Payment that detail the Seeleys' tax liabilities for each individual tax period, including statutory interest and penalties. [ECF No. 40-4 at 43-93]. These assessments reflect the Seeleys' unpaid tax liabilities as of the dates of assessment. [Id.]. Unpaid balances totaling $103,082.04 remain for the assessed tax periods, plus statutory interest and penalties that have accrued since January 31, 2018.
Notices of Federal Tax Liens against the Seeleys for their income tax liabilities for the tax years 2005 to 2014 were recorded by the IRS with the Southern Essex District Registry of Deeds in 2009, 2011, 2013, 2014, and 2015. [ECF No. 40-5 at 5-11]. Notices of Federal Tax Liens against the Seeleys were refiled for the tax years 2005 and 2006 in 2016. [Id. at 12; ECF No 54-1 at 3].
On August 31, 2016, the Seeleys filed for relief under Chapter 7 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Massachusetts (the "Bankruptcy Court"). [ECF No. 40-1 ¶ 14]; In re Seeley, No. 16-13357 (Bankr. D. Mass.). On December 28, 2016, the Bankruptcy Court granted an Order of Discharge, and the Bankruptcy Court closed the Seeleys' bankruptcy case on January 4, 2017. [ECF No. 40-1 ¶ 14].
The Government commenced this action on May 24, 2016 to enforce federal tax liens pursuant to 26 U.S.C. §§ 7401 and 7403. [ECF No. 1]. On March 5, 2018, the Government filed its motion for partial summary judgment seeking (i) to reduce to judgment its assessments against the Seeleys for unpaid taxes, penalties, and interest; (ii) a judgment that the Seeleys' bankruptcy judgment did not discharge their liabilities for the 2013 and 2014 tax years; (iii) a judgment that the tax liens are valid and were not discharged by the Seeleys' bankruptcy judgment; and (iv) to enforce the federal tax liens associated with the Seeleys' liabilities for the tax years 2005 through 2014 via a foreclosure sale of the Property. [ECF No. 40]. The Town of Topsfield, the Seeleys, and the Massachusetts Department of Revenue filed their responses to the Government's motion on April 2, April 6, and April 12, 2018, respectively. [ECF Nos. 41, 42, 47].1 On April 23, 2018, the Government filed its reply brief. [ECF No. 54].
Summary judgment is appropriate where "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. An issue is considered "genuine" when "the evidence of record permits a rational factfinder to resolve it in favor of either party." Borges ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 4-5 (1st Cir. 2010) (citing Medina-Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990)). A fact is considered "material" when "its existence or nonexistence has the potential to change the outcome of the suit." Id. at 5 (citing Martínez v. Colón, 54 F.3d 980, 984 (1st Cir. 1995)).
"To succeed in showing that there is no genuine dispute of material fact, the moving party must direct [the Court] to specific evidence in the record that would be admissible at trial." Ocasio-Hernández v. Fortuño-Burset, 777 F.3d 1, 4 (1st Cir. 2015). "That is, it must 'affirmatively produce evidence that negates an essential element of the non-moving party's claim,' or, using 'evidentiary materials already on file . . . demonstrate that the non-moving party will be unable to carry its burden of persuasion at trial.'" Id. at 4-5 (citing Carmona v. Toledo, 215 F.3d 124, 132 (1st Cir. 2000)). Once the moving party has laid out its basis for summary judgment, the burden shifts to the party opposing summary judgment to demonstrate, "with respect to each issue on which she would bear the burden of proof at trial, . . . that a trier of fact could reasonably resolve that issue in her favor." Borges, 605 F.3d at 5.
On a motion for summary judgment, the Court reviews "the entire record in the light most hospitable to the party opposing summary judgment." Podiatrist Ass'n, Inc. v. La Cruz Azul De P.R., Inc., 332 F.3d 6, 13 (1st Cir. 2003). Where inferences are to be drawn from the stated facts, those inferences "must be viewed in the light most favorable to the party opposing the motion." Oleskey ex rel. Boumediene v. U.S. Dep't of Def., 658 F. Supp. 2d 288, 294 (D. Mass. 2009) (citing Founding Church of Scientology of Wash., D.C., Inc. v. Nat'l Sec. Agency, 610 F.2d 824, 836 (D.C. Cir. 1979)). The Court, however, "safely may ignore conclusory allegations, improbable inferences, and unsupported speculation." Cochran v. Quest Software, Inc., 328 F.3d 1, 6 (1st Cir. 2003) (internal quotation and citation omitted).
In its motion for partial summary judgment, the Government contends that there is no genuine issue of material fact as to the validity of the federal income tax assessments against the Seeleys and that it is entitled to enforce its liens arising from those assessments against theProperty. As set forth below, the Court finds that the tax assessments and tax liens against the Seeleys are valid and that the Government may enforce the tax liens through the sale of the Property.
A. Judgment on Federal Income Tax Assessments
The Government first seeks to reduce to judgment its assessments against the Seeleys for unpaid taxes, penalties, and interest. A tax assessment, which is "an IRS determination that a taxpayer owes the Federal Government a certain amount of unpaid taxes . . . is entitled to a legal presumption of correctness" in a tax suit. United States v. Fior D'Italia, Inc., 536 U.S. 238, 242 (2002); see also United States v. Berk, 374 B.R. 385, 391 (D. Mass. 2007) ("In all tax suits, the Internal Revenue Commissioner's deficiency determination 'is presumed correct, and . . . the taxpayer bears the burden of proof and persuasion to show otherwise.'" (quoting Lefebvre v. Comm'r of Internal Revenue, 830 F.2d 417, 419 n.3 (1st Cir. 1987)). "A taxpayer who challenges the IRS's assessment must present specific evidence sufficient to overcome the presumption." United States v. Curley, No. 12-cv-11494-JCB, 2014 WL 12573545, at *4 (D. Mass. Jan. 2, 2014) (citation omitted). "If the taxpayer cannot meet this burden then the court must allow the United States' motion for summary judgment as to the validity of the assessed tax amounts." Berk, 374 B.R. at 391 (citing United States v. LaBombard, 107 F. Supp. 2d 57, 60 (D. Mass. 2000)).
In support of its motion for partial summary judgment, the Government introduced sufficient evidence to trigger the legal presumption of correctness afforded to tax assessments. The Government submitted the declaration of Mary Bishop, an IRS advisor, and IRS documentation supporting the amounts due from the Seeleys for the 2005-2014 tax years, including interest. [See ECF No. 40-4]. This documentation includes an "INTST" report fromthe Information Data Retrieval System ("IDRS"), account transcripts from the IDRS, and Form 4340 Certificates of Assessment and Payments. [Id.]. According to the Bishop declaration and these documents, notices of the assessments and demands for payment were sent to the Seeleys, the Seeleys have not paid the assessed federal tax liabilities, and, as of January 31, 2018, the total balance of assessed liabilities was $103,082.04. [Id. at ¶¶ 19-20; id. at 10-93]; see also Geiselman v. United States, 961 F.2d 1, 5-6 (1st Cir. 1992) ().
In opposition to the Government's motion for partial summary judgment, the Seeleys do not specifically dispute the Government's calculation regarding their tax liabilities or set forth an alternative calculation. [See ECF No. 42]. The Seeleys contend that "it is questionable whether the Penalties for the years 2005, 2007, 2008, 2009, 2010, 2014, 2015, et seq[.], should be assessed under the circumstances" because the Government "can waive said penalties," id. at 4, but this assertion is...
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