United States v. Wintner
| Decision Date | 08 December 1961 |
| Docket Number | Civ. A. No. 35830. |
| Citation | 200 F. Supp. 157 |
| Parties | UNITED STATES of America, Plaintiff, v. Lillian WINTNER, and Alexander Brien, Administrator of the Estate of Alex S. Wintner, deceased, Defendants. |
| Court | U.S. District Court — Northern District of Ohio |
Merle McCurdy, U. S. Atty., Cleveland, Ohio, for plaintiff.
Richard Katcher and Herbert B. Levine, Cleveland, Ohio, Ulmer, Berne, Laronge, Glickman & Curtis, Cleveland, Ohio, of counsel, for defendants.
This is an action pursuant to 26 U.S. C.A. §§ 7401 and 7403, to enforce income tax liens on the cash surrender values of certain life insurance policies of the taxpayer, the proceeds of the policies having been paid to the defendant, Lillian Wintner, widow of the taxpayer. As there was no evidence suggesting the liability of Alexander Brien, Administrator of Wintner's estate, when the term "defendant" is used herein it shall include only Mrs. Wintner. The case was submitted to the Court for decision on an agreed stipulation of facts following oral argument and the submission of briefs by plaintiff and defendant, Mrs. Wintner.
This Court has jurisdiction of this case under 28 U.S.C.A. §§ 1340 and 1345.
These are the salient facts as set forth in the stipulation: The taxpayer, Alex S. Wintner, filed a federal income tax return for the year 1946 reporting a tax liability of $35,243.53, but paid therewith only the amount of $243.53. On April 21, 1947, the Commissioner made an assessment against Wintner in the amount of $35,000 with respect to his unpaid 1946 income tax liability and certified the assessment to the Collector of Internal Revenue at Cleveland, Ohio, who, in turn, gave notice thereof to Wintner on that date. Thereafter, from time to time, payments were made on Wintner's 1946 tax so that as of May 12, 1960, his liability had been reduced to $8,034.04, plus interest. No notice of tax lien was ever filed in accordance with State law.
When Wintner died on June 8, 1954, his life was insured under eight policies, each of which named his wife, the defendant herein, as beneficiary. The face amounts of the policies totalled $87,500 and the cash surrender values of the policies as of the date of Wintner's death amounted to $34,503.85. At the time of his death, Wintner was indebted to the Union Bank of Commerce Company, Cleveland, Ohio, in the amount of $34,000 for sums he had borrowed at various times prior to his death. On December 13, 1948, Wintner had assigned to the bank each of the eight life insurance policies as collateral security for payment of his indebtedness.
On June 21, 1954, the Columbus Mutual Life Insurance Company paid $34,000 to the Union Bank of Commerce out of the $40,000 in life insurance policies it had issued on Wintner's life, said payment to the bank being in full satisfaction of Wintner's indebtedness. The balance of the Columbus Mutual policies was paid to the defendant. Shortly thereafter the bank executed releases of the assignments of the policies.
Copies of the eight life insurance policies, together with the respective assignments to the bank, are included in the stipulation as exhibits.
At all times relevant herein, Wintner was domiciled in and a resident of the State of Ohio. At various times from 1948 to 1952, Wintner submitted to the Commissioner offers in compromise of his tax liability, which offers included waivers of the statutory period of limitations. The compromise offers are included in the stipulation as Exhibits K, L, M and N.
On May 22, 1956, the defendant filed a petition in the Tax Court of the United States seeking a redetermination of a deficiency asserted against her as transferee of assets of Alex S. Wintner for the amount representing the balance due on his 1946 income tax. (Ex. P.)
Defendant contends that the present action is barred by res judicata, that no lien ever arose which the Government may enforce in this action, and that, in any event, the cash surrender values of the policies were exhausted in satisfying taxpayer's debts to the bank.
In Case No. 62478 in the Tax Court of the United States, where Mrs. Wintner, the defendant herein, was the petitioner, the Court held, upon written stipulation of counsel, that there was "no liability due from petitioner under Section 311 of the Internal Revenue Code of 1939, as transferee of assets of Alex S. Wintner, deceased, for income taxes due for the taxable year 1946." (Ex. Q.)
In this case we have a petition to enforce an alleged lien by the United States on the cash surrender values of Wintner's life insurance policies, the proceeds of which are now in the hands of Mrs. Wintner. While, as defendant contends, both in this case and in the Tax Court proceeding "the parties are the same, the amount sought to be recovered is the same, the taxable year which is involved is the same (1946), and all of the facts which the Government must prove in order to maintain its action in both cases are substantially the same," (Brief, p. 4) neither res judicata, estoppel by judgment, nor collateral estoppel constitutes a bar to this action. The Commissioner's answer in the Tax Court case alleged that the taxpayer had died insolvent owing some $11,000 in taxes, that Mrs. Wintner had received proceeds from his life insurance policies in the amount of $53,500, and that receipt of such proceeds rendered the estate unable to satisfy the tax liability. In the case now under consideration, the Government alleges the tax liability of Alex S. Wintner for the year 1946 and claims that a lien therefor was in effect at the time of his death on the cash surrender values of his life insurance policies, which assets have been paid to the defendant. Clearly, different causes of action are involved, the Tax Court case having been an attempt to hold Mrs. Wintner personally liable as a transferee, while the present case is an effort to realize an alleged lien on the taxpayer's property. In neither case was the tax liability of Alex S. Wintner an issue. Being different causes of action, res judicata does not apply and therefore the Tax Court judgment is not binding as to matters which might have been offered to sustain or defeat the claim. Commissioner of Internal Revenue v. Sunnen, 333 U.S. 591, 597, 68 S.Ct. 715, 92 L.Ed. 898. Nor is this action defeated by the principle of collateral estoppel or estoppel by judgment since it does not involve matters which were controverted and determined in the Tax Court. (Id. 598, 68 S.Ct. 715.) United States v. International Building Co., 345 U.S. 502, 505, 73 S.Ct. 807, 97 L.Ed. 1182.
Section 3670 of the Internal Revenue Code of 1939, 26 U.S.C.A. § 3670 provides:
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11 293 Meyer v. United States
...applied the doctrine, despite state law, to the collection of federal tax liens. United States v. Behrens, supra, and United States v. Wintner, D.C., 200 F.Supp. 157, aff'd 312 F.2d 749 (C.A.6th Cir.). We note, however, that Behrens antedates our Stern and Bess opinions as well as those in ......
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United States v. Wintner
...in the amount of $18,274.65 and costs, on the following grounds: "1. This Court filed its opinion in this action on December 8, 1961. 200 F.Supp. 157. Pursuant thereto, the Court entered judgment on January 2, 1962, in the amount of $26,002.09, plus interest and costs, in favor of the plain......
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United States v. Wintner, 14900.
...that the judgment of the District Court be affirmed for the reasons and upon the authorities1 relied on in its opinion, reported at 200 F.Supp. 157. 1 See also later decision of the Court of Appeals for the Second Circuit in United States v. Meyer, 309 F.2d ...
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