USA v. Black .
| Decision Date | 16 July 2010 |
| Docket Number | No. CV-07-355-RHW.,CV-07-355-RHW. |
| Citation | 725 F.Supp.2d 1279 |
| Parties | UNITED STATES of America, Plaintiff, v. Daniel R. BLACK, et al., Defendants. |
| Court | U.S. District Court — District of Washington |
OPINION TEXT STARTS HERE
COPYRIGHT MATERIAL OMITTED.
COPYRIGHT MATERIAL OMITTED.
Michael G. Pitman, Alexis Andrews, US Department of Justice, Washington, DC, for Plaintiff.
Daniel R. Black, Chelan, WA, pro se.
Maire E. Black, Chelan, WA, pro se.
Eowen S. Rosentrater, Law Office of Eowen Rosentrater PLLC, George Roy Guinn, George R. Guinn PS, Spokane, WA, Gary Alan Riesen, Chelan County Prosecuting Attorney, Wenatchee, WA, for Defendants.
ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT; DENYING THE BLACK DEFENDANTS' AND DEFENDANT HOPE SPRINGS MOTIONS FOR SUMMARY JUDGMENT
Before the Court are Plaintiff's Motion for Summary Judgment (Ct. Rec. 121); Defendant Hope Springs Corporation Sole's Motion for Summary Judgment (Ct. Rec. 129); and the Black Defendants' Motion for Summary Judgment (Ct. Rec. 133). The motions were heard without oral argument.
The United States commenced this action on November 2, 2007, in order to reduce to judgment federal income tax assessments against Defendants Daniel R. Black and Maire E. Black, and to foreclose federal tax liens against the following Subject Properties:
(1) Parcel A
Parcel A is a 160-acre parcel identified by Chelan County Tax # 272201-100000. The address for Parcel A is 56 Union Valley Loop Road, Chelan, Washington. The legal description of Parcel A is as follows:
Lots 1 and 2 and the South half of the Northeast quarter; and the Northwest quarter of the Southeast quarter of Section 1, Township 27 North, range 22 East of the Willamette Meridian.
(2) Parcel B
Parcel B is a 27-acre parcel identified by Chelan County Tax # 272201-230025. A mobile home permanently affixed to the land is located on this property. The legal description of Parcel B is as follows:
The Southwest quarter of the Northwest quarter and that portion of Government Lot 4 lying South of Union Valley Road # 38 right of way in Section 1, Township 27 North, Range 22, E.W.M. Chelan County, Washington; except the East 575 feet thereof.
(3) Parcel C
Parcel C is an 8-acre parcel identified by Chelan County Tax # 272201-200050. Parcel C is commonly known as both 56 Valley Loop Road, Chelan, Washington, and 96 Valley Loop Road, Chelan, Washington. The legal description of Parcel C is as follows:
Beginning at the Southwest corner of the Northwest quarter of the Southeast quarter of Section 1, Township 27 North, range 22 East of the Willamette Meridian; thence North to the Northwest corner of the Northeast quarter of said Section 1; thence West 60 feet; thence South 980 feet; thence Southwesterly to a point 174 feet West of a point 320 feet South; thence South 50 feet; thence Southwesterly to a point of 127 feet East of a point 180 feet South; thence South to the South line of the Northeast quarter of the Southwest quarter of the above described in Section 1; thence East 60 feet to the point of beginning. Except right of way for the Union Valley Loop Road.
(4) Parcel D
Parcel D is a 20-acre parcel identified by Chelan County Tax # 272201-42000 and referred to as orchard property. The legal description of Parcel D is as follows:
The North half of the Northwest quarter of the Southeast quarter of Section 1, Township 27 North, Range 22 East of the Willamette Meridian.
Defendants Daniel and Maire Black maintain that they are not taxpayers and have no obligation to pay income taxes. From 1981 to 2000, Daniel Black did not file any income tax returns. Sometime prior to 1981, the Blacks formed Summer Hill Freedom Trust. Maire Black served as trustee for Summer Hill Freedom Trust from the time of its creation throughout its existence. Bill Shoenmaker was also a Trustee during this entire time. Sometime prior to 1981, the Blacks also formed B.C. Trust. Maire Black served as a trustee for B.C. Trust from the time of its creation throughout its existence. Bill Shoenmaker was also a Trustee during this entire time.
In 1981, Summer Hill Freedom Trust entered into a contract to acquire Parcels A, C, and D. These parcels are contiguous parcels of land. The purchasing contract was signed by Daniel and Maire Black as Trustees. The Blacks reside in a home located on the real property purchased in the name of Summer Hill Freedom Trust. They have resided in this home, on this property, since 1981. The Blacks' daughter and son-in-law live on a mobile home situated on one of the parcels, for which they pay rent.
In 1989, Maire Black and Bill Shoenmaker, acting as Trustees for B.C. Trust, purchased Parcel B by warranty deed. The Blacks operate an engineering business on Parcel B. This business was originally known as Techni-Systems Trust, but is now operating under the name of Techni-Systems, LLC. Techni-Systems Trust was controlled by trustee Maire Black. A caretaker lives in a mobile home on Parcel B, next to the office building. The caretaker is not compensated for his caretaker duties and does not pay rent.
In March, 1999, the Internal Revenue Service filed Notices of Federal Tax Lien against the Blacks. On June 4, 1999, the Blacks created Hope Springs, Corporation Sole. At the time of Hope Springs' creation, Daniel Black was serving as overseer. He held this position until March, 2009. During this time, he had complete authority over all aspects of Hope Springs. Since its creation, Hope Springs has held office space in the Blacks' residence.
On June 9, 1999, Maire Black, as Trustee for Summer Hill Freedom Trust, transferred all its assets-Parcels A, C, and D-to Hope Springs, Corporation Sole by quit claim deed, for no consideration. Bill Shoenmaker did not sign the quit claim deed. On that same day, Maire Black, as Trustee for B.C. Trust, transferred all its assets-Parcel B-to Hope Springs, Corporation Sole by quit claim deed, for no consideration. No one moved on or off the property as a result of the transfer. The engineering business-Techni-Systems Trust-was also unaffected.
Summer Hill Freedom Trust made no payments toward the purchase price of Parcels A, C, and D since 1981, but had made payments toward interest.
In 2000, the Blacks created Summerhill Supply, LLC. Summerhill Supply, LLC began leasing Parcels A, B, C, and D from Hope Springs in 2001. Summerhill Supply is completely controlled by Daniel and Maire Black, who serve as managers. They receive $500 annually as compensation for the duties they perform as managers. Also in 2000, the Blacks created Techni-Systems, LLC to replace Techni-Systems Trust. Shortly after its formation, Techni-Systems, LLC began leasing property from Summerhill Supply, LLC. Techni-Systems, LLC is controlled by manager Daniel Black. He receives $500 annually as compensation for his role as manager. Techni-Systems, LLC is virtually identical to Technical-Systems Trust.
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¦Date ¦Action ¦
+----------+------------------------------------------------------------------¦
¦1981 ¦Summerhill Freedom Trust entered into contract to purchase ¦
+----------+------------------------------------------------------------------¦
¦March, ¦Notice of Federal Tax Lien filed ¦
¦1999 ¦ ¦
+----------+------------------------------------------------------------------¦
¦June 9, ¦Summerhill Freedom Trust transferred parcels to Hope Springs, ¦
¦1999 ¦Corporation Sole ¦
+----------+------------------------------------------------------------------¦
¦2001 ¦Summerhill Supply, LLC leased parcels from Hope Springs ¦
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Summary of Transfers and Leases for Parcel B
+-----------------------------------------------------------------------------+
¦Date ¦Action ¦
+------------+----------------------------------------------------------------¦
¦1999 ¦B.C. Trust purchased parcel by warranty deed ¦
+------------+----------------------------------------------------------------¦
¦March, 1999 ¦Notice of Federal Tax Lien filed ¦
+------------+----------------------------------------------------------------¦
¦June 9, 1999¦B.C. Trust transferred parcels to Hope Springs, Corporation Sole¦
+------------+----------------------------------------------------------------¦
¦2001 ¦Summerhill Supply, LLC leased parcels from Hope Springs ¦
+------------+----------------------------------------------------------------¦
¦2001 ¦Techni-Systems leased parcels from Summerhill Supply, LLC ¦
+-----------------------------------------------------------------------------+
Throughout all these property transfers, leases, and sub-leases, the Blacks continue to live on the property. They run their engineering business out of the property and also operate an orchard on part of the land. They pay no rent.
In March 2009, Daniel Black transferred the title of overseer of Hope Springs to Greg Hanks. Mr. Hanks was given no ledger or bank records for Hope Springs when he assumed the title of overseer, and had no knowledge of Hope Springs' affairs prior to his appointment as overseer. There is no evidence that Hope Springs has ever interfered with the Blacks' use of the property. The Blacks own no assets whatsoever. They have not held property in their own names since 1981.
Beginning in 1998, a delegate of the Secretary of the Treasury made assessments of federal income taxes, penalties and...
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