US v. Davis
| Decision Date | 09 May 1994 |
| Docket Number | No. 93-3373-CV-S-4.,93-3373-CV-S-4. |
| Parties | UNITED STATES of America, Plaintiff, v. Warren B. DAVIS, Trustee of the Warren B. Davis Revocable Living Trust, and Westwood Industrial Park, Ltd., Defendants. |
| Court | U.S. District Court — Western District of Missouri |
John T. McGuire, U.S. Dept. of Justice, Tax Div., Washington, DC, for plaintiff.
William G. Todd, Woolsey, Fisher, Whiteaker & McDonald, Lynn C. Rodgers, Hall, Ansley, Carmichael & Gardner, Springfield, MO, for defendant Warren B. Davis.
Lynn C. Rodgers, Hall, Ansley, Carmichael & Gardner, Andrew K. Bennett, Gannaway, Fiorella, Cummings & Bennett, Springfield, MO, for defendant Westwood.
This matter comes before the Court on the defendants' motion for Temporary Restraining Order, and cross-motions of the parties for summary judgment. The issues presented in this case have been extensively briefed and the record presently before the Court is wholly sufficient for purposes of determining the motions for summary judgment. Based on the factual statements agreed to herein, there are no genuine issues of material fact yet to be determined. The Court has fully considered the legal arguments advanced by each of the parties and based on the law applicable to these issues the Court will grant defendants' motion for summary judgment and deny plaintiff's motion for summary judgment. Additionally, defendants' motion for TRO will be denied as moot and the defendants' request for summary judgment on their counterclaim will be granted as set out herein.
There are well settled principles in ruling a motion for summary judgment. Summary judgment is appropriate when there is no genuine issue of material fact present in the case and judgment should be awarded to the party seeking the motion as a matter of law. Camp v. Commonwealth Land Title Ins. Co., 787 F.2d 1258, 1260 (8th Cir.1986). However, because summary judgment remedy is drastic, it should not be granted unless the moving party has established the right to a judgment with such clarity that there is no room for controversy. Umpleby v. United States, 806 F.2d 812, 814 (8th Cir.1986). In addition, the party opposing summary judgment motions may not rest upon the allegations in their pleadings. The nonmovant must resist the motion by setting forth specific facts showing there is a genuine issue of fact for trial. Fed.R.Civ.P. 56(e); Buford v. Tremayne, 747 F.2d 445, 447 (8th Cir.1984). In AGRISTOR Leasing v. Farrow, 826 F.2d 732, 734 (8th Cir.1987), the Court stated that such a motion is to be viewed in the light most favorable to the opposing party who also must receive the benefit of all reasonable inferences to be drawn from the underlying facts. In Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986), the court held that summary judgment is mandated against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case. "In such a situation, there can be `no genuine issue as to any material fact' since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial."
In ruling a motion for summary judgment, the Court does not decide material factual issues, rather it determines whether or not they exist. Columbia Union Nat'l Bank v. Hartford Accident & Indem. Co., 669 F.2d 1210, 1212-13 (8th Cir.1982). Summary procedures are appropriate where the issues for resolution are primarily legal rather than factual. Lomar Wholesale Grocery, Inc. v. Dieter's Gourmet Foods, Inc., 824 F.2d 582, 585 (8th Cir.1987), cert. denied, 484 U.S. 1010, 108 S.Ct. 707, 98 L.Ed.2d 658 (1988). Issues of fact must be material to a resolution of the dispute between the parties; where the only disputed issues of fact are immaterial to the resolution of the legal issues, summary judgment is appropriate. Id. at 585.
With these standards in mind, the Court will proceed to consider the cross-motions for summary judgment.
The parties have extensively briefed the facts involved in this case. To that end, there have been many references as to the inaccuracy of the opposing parties' interpretation of the facts. However, the challenges to the facts at issue in this case are technical and have no bearing as to any material facts at issue. The Court will now endeavor to describe the basic facts around which the issues herein revolve.
Edward F. McDaris died on June 30, 1984 and the Circuit Court of Greene County, Missouri, Probate Division had jurisdiction over the administration of his estate. Frederick Dale McDaris was the duly appointed personal representative of the Estate of E.F. McDaris by the Circuit Court of Greene Count, Missouri, Probate Division. On April 1, 1985, Frederick Dale McDaris made payment to the Internal Revenue Service in the amount of $78,538.00, and made payment to the Missouri Department of Revenue in the amount of $26,678.00 for estate taxes owed by the Estate of E.F. McDaris on behalf of the estate.
On April 1, 1985, Frederick Dale McDaris requested a loan from Commerce Bank of Springfield, Missouri, to the Estate of E.F. McDaris for payment of the estate taxes referred to above. The real property referred to in plaintiffs' complaint constitutes all of the real estate inventoried into the Estate of E.F. McDaris. On April 3, 1985 Frederick Dale McDaris filed a Petition for Authority to Borrow Monies and Pledge Assets in the Estate of E.F. McDaris, and on that same date, the Circuit Court of Greene County, Missouri, Probate Division, entered its Order authorizing the estate to borrow funds and execute deeds of trust covering the real estate to secure the loan in order to reimburse Frederick Dale McDaris for the estate taxes paid. On April 4, 1985, Commerce Bank of Springfield, Missouri approved a loan in the amount of $105,216.00 to the Estate of E.F. McDaris; the loan closed on May 8, 1985, and on that date, a Promissory Note and Deed of Trust were executed by Frederick Dale McDaris as personal representative of the Estate of E.F. McDaris.
On October 30, 1985, Frederick Dale McDaris made payment on behalf of the Estate of E.F. McDaris to the Internal Revenue Service in the amount of $32,154.00 for the balance of the estate taxes believed to be due from the Estate of E.F. McDaris. On November 5, 1985, Frederick Dale McDaris borrowed the sum of $32,000.00 from Christian County National Bank for the purpose of making payment to the IRS on behalf of the Estate of E.F. McDaris, deceased. On March 27, 1986, Frederick Dale McDaris filed a Petition for Partial Distribution in the Circuit Court of Greene County, Missouri, Probate Division, in the Estate of E.F. McDaris, for the purpose of borrowing additional funds to pay off the loan referred to above and to pay certain other estate expenses. On March 27, 1986, the Probate Division entered its Order approving the Petition of Partial Distribution.
On May 1, 1986, the Christian County National Bank made a loan in the amount of $180,000.00 to Frederick Dale McDaris, secured by the property at issue herein; the proceeds of the loan were distributed as follows: $97,997.67 was disbursed directly to Commerce Bank to pay off the loan made to the Estate of E.F. McDaris and to obtain release of the Deed of Trust conveyed by the estate to secure such loan; $32,915.29 was disbursed to Christian County National Bank to pay the principal and accrued interest on the loan obtained by Frederick Dale McDaris for the purpose of paying the balance due the IRS on the estate taxes due from the Estate of E.F. McDaris; $17,816.65 was disbursed directly to the Greene County Collector of Revenue in payment of real estate taxes due on the property at issue herein; $1,800.00 was retained by Christian County National Bank as a loan origination fee; and the balance of $39,470.39 was deposited into a checking account at Christian County National Bank titled in the name of the Estate of E.F. McDaris, Fred D. McDaris, Personal Administrator.
The United States is seeking in this lawsuit to foreclose an estate tax lien pursuant to 26 U.S.C. § 6324(a)(1) on two parcels of real property originally belonging to the Estate of Edward F. McDaris and subsequently transferred to Frederick Dale McDaris as the beneficiary of the Estate of E.F. McDaris. Frederick Dale McDaris sold part of the distributed real estate to defendant, Westwood Industrial Park. Additionally, the remaining portion of the real estate at issue herein was acquired by defendant, Warren B. Davis Revocable Living Trust, from Landmark Bank, which had acquired title through foreclosure of a Deed of Trust from Frederick Dale McDaris.
The Court has determined that the above mentioned facts are uncontroverted to the extent that they have any bearing on any issue of material fact. Plaintiff asserts that the $105,216.00 loan from Commerce Bank of Springfield, Missouri and secured by the property at issue herein was not used wholly for the purposes of paying federal estate tax obligations and that a portion was used to pay taxes owed to the State of Missouri by the Estate of E.F. McDaris. Defendants have no dispute with this characterization of the facts and further assert that there is no dispute that all of these loan proceeds were used to pay bona fide estate expenses and were approved by the Circuit Court of Greene County, Probate Division. There is a dispute as to whether the subsequent $180,000 loan from Christian County National Bank came under the provisions of § 6324(a)(1); however, as the Court will discuss further, supra, the $180,000 has absolutely no bearing on the Court's decision and will not be considered in that regard.
The entire dispute presently before the Court centers on the Court's interpretation of 26 U.S.C. § 6324(a)(1) and its application to the facts as...
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