US v. Schaeffer, 94 N 1114.
| Citation | 245 BR 407 |
| Decision Date | 05 August 1999 |
| Docket Number | No. 94 N 1114.,94 N 1114. |
| Parties | UNITED STATES of America, Plaintiff, v. Alan H. SCHAEFFER and Patricia M. Schaeffer, Defendants. |
| Court | U.S. District Court — District of Colorado |
COPYRIGHT MATERIAL OMITTED
Mark S. Pestal, Assistant United States Attorney, Civil Division, Christopher H. La Rosa, United States Department of Justice, Trial Attorney, Tax Division, Washington, D.C., for United States.
Michael J. Abramovitz, David A. Sprecace, Abramovitz & Merriam, Denver, CO, for Patricia Schaeffer.
Alan H. Schaeffer, Highlands Ranch, Pro se.
This is a tax case. Plaintiff United States of America ("the Government") seeks (1) to reduce to judgment Defendant Alan H. Schaeffer's tax deficiency in the amount of $178,114.89, plus accrued interest from April 2, 1999; (2) to set aside an allegedly fraudulent transfer of real property located at 6 Wing Foot Way, Littleton, Colorado ("the Property")1 from Mr. Schaeffer to Defendant Patricia M. Schaeffer, Mr. Schaeffer's former wife,2 or, in the alternative, to obtain a finding that Mrs. Schaeffer holds a one-half interest in the Property as Mr. Schaeffer's nominee; (3) to foreclose federal tax liens on the Property; and (4) to obtain a deficiency judgment, if necessary, against Mr. Schaeffer. The case is before me on "United States' Motion for Summary Judgment" filed May 3, 1999. Jurisdiction is based on 28 U.S.C.A. §§ 1340, 1345 (West 1993).
On February 24, 1984, the Schaeffers acquired the Property by warranty deed as tenants-in-common. On April 11, 1985, the Internal Revenue Service ("IRS") mailed Mr. Schaeffer a Notice of Deficiency for his 1978 individual income tax liabilities. On April 12, 1985, the IRS mailed Mr. and Mrs. Schaeffer a Notice of Deficiency for their 1981 joint individual income tax liabilities. In June 1985, the Schaeffers petitioned the United States Tax Court for a redetermination of those tax liabilities.
In March 1990, the Schaeffers entered into a written, signed marital agreement which provided that Mr. Schaeffer would transfer his interest, rights, and title in the Property to Mrs. Schaeffer by a quitclaim deed for $10 consideration. After Mr. Schaeffer transferred the house to Mrs. Schaeffer, his liabilities exceeded his assets, and he became insolvent. During the period after the execution of the marital agreement until March 1993, Mr. Schaeffer continued to reside at the Property. Mr. Schaeffer continued to use the Property in an unrestricted manner, as he had prior to the execution of the marital agreement.
On March 27, 1991, the Tax Court entered two stipulated decisions regarding Mr. Schaeffer's tax liability. The first found a deficiency in Mr. Schaeffer's 1978 federal income taxes in the amount of $2208, plus certain additional charges. The second stipulated decision found a deficiency in Mr. Schaeffer's 1981 tax payments in the amount of $26,747, plus certain additional charges. Thereafter, the IRS made assessments against Mr. Schaeffer for unpaid federal income taxes, penalties, and other statutory additions in the amounts of $6691 for the 1978 taxes (as of June 24, 1991) and $89,464.44 for the 1981 taxes (as of June 17, 1991). As of April 2, 1999, there remained due and owing on those assessments the sum of $178,114.89, and interest continues to accrue on the outstanding payments. On September 27, 1991, a Form 668(Y) Notice of Federal Tax Lien was filed with the Clerk and Recorder's Office of Arapahoe County in Littleton, Colorado, with respect to the assessments made against Mr. Schaeffer for the 1978 tax year. On February 20, 1992, a second Form 668(Y) Notice of Federal Tax Lien was filed with the Clerk and Recorder's Office of Arapahoe County in Littleton, Colorado, with respect to the assessments made against Mr. Schaeffer for the 1981 tax year. On May 29, 1992, a third and final Form 668(Y) Notice of Federal Tax Lien was filed with the Clerk and Recorder's Office of Arapahoe County in Littleton, Colorado, naming Mrs. Schaeffer as a nominee of Mr. Schaeffer with respect to the assessments made against Mr. Schaeffer for the 1978 and 1981 tax years.
On May 10, 1994, the Government filed a complaint in this court, seeking to reduce Schaeffer's income tax assessments to judgment and to set aside the allegedly fraudulent transfer of the Property to his wife, or, in the alternative, to obtain a finding that Mrs. Schaeffer holds title to a one-half interest in the Property and a deficiency judgment against Mr. Schaeffer. (Compl. filed May 10, 1994.) On September 23, 1994, Mr. Schaeffer filed a Chapter 7 bankruptcy petition with the United States Bankruptcy Court for the District of Colorado ("Bankruptcy Court"), effecting an automatic stay in this litigation as of October 17, 1994. On February 7, 1995, the Bankruptcy Court entered an order of discharge in favor of Mr. Schaeffer. On August 16, 1995, the Government initiated an adversary proceeding in the Bankruptcy Court ("Adversary Proceeding") by filing a complaint to determine the dischargeability of Mr. Schaeffer's 1978 and 1981 income tax liabilities under 11 U.S.C.A. § 523(a)(1)(C) (West 1993 & Supp.1999). Following a trial on the merits, on June 14, 1996, the Bankruptcy Court entered an order and judgment stating that Mr. Schaeffer's 1978 and 1981 federal income tax liability was excepted from discharge because the debt was a tax "with respect to which the debtor . . . willfully attempted . . . to evade or defeat such tax." Id.
On May 22, 1998, the Government filed a motion to reopen this case. (United States' Mot. to Reopen filed May 22, 1998.) At a status conference on March 10, 1999, I granted the Government's motion to reopen this case. (Courtroom Mins. filed Mar. 10, 1999.) On May 3, 1999, the Government filed a motion for summary judgment. (United States' Mot. for Summ. J. filed May 3, 1999.) The Government argues that, as a matter of law, the tax liability assessment against Mr. Schaeffer should be reduced to judgment because the undisputed facts and the doctrine of collateral estoppel based on earlier court decisions in this matter lead to the ineluctable conclusion that Schaeffer fraudulently conveyed the Property to Mrs. Schaeffer, who was a nominee with respect to Mr. Schaeffer. (Id.)
Under rule 56(c) of the Federal Rules of Civil Procedure, the court may grant summary judgment where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and the . . . moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986); Concrete Works of Colorado, Inc. v. City & County of Denver, 36 F.3d 1513, 1517 (10th Cir. 1994). The moving party bears the initial burden of showing an absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986). "Once the moving party meets this burden, the burden shifts to the nonmoving party to demonstrate a genuine issue for trial on a material matter." Concrete Works, Inc., 36 F.3d at 1518 (citing Celotex Corp., 477 U.S. at 325, 106 S.Ct. at 2554). The nonmoving party may not rest solely on the allegations in the pleadings, but must instead designate "specific facts showing that there is a genuine issue for trial." Celotex Corp., 477 U.S. at 324, 106 S.Ct. at 2553; see Fed.R.Civ.P. 56(e). The court may consider only admissible evidence when ruling on a summary-judgment motion. See World of Sleep, Inc. v. La-Z-Boy Chair Co., 756 F.2d 1467, 1474 (10th Cir.1985). The factual record must be viewed in the light most favorable to the nonmoving party. Concrete Works, Inc., 36 F.3d at 1518 (citing Applied Genetics Intern., Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 10th Cir.1990).
"For purposes of granting summary judgment, a Certificate of Assessments and Payments is sufficient evidence that an assessment was made in the manner prescribed by 26 U.S.C.A. § 6203" and concomitant regulations. Long v. United States, 972 F.2d 1174, 1181 (10th Cir.1992) (). In this case, the Government has offered certified copies of one Form 4340 Certificate of Assessments and Payments for Mr. Schaeffer for the 1978 tax period and another such form for the 1981 tax period. (Pl.'s Br., Ex. 7 1978 Form 4340, Ex. 8 1981 Form 4340.) I have found no evidence to rebut this presumption in the record. Indeed, by his own hand, Mr. Schaeffer admits that the Government is entitled to judgment against him for his 1978 and 1981 tax liabilities. ...
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