Yuska v. Iowa Dep't of Revenue (In re Yuska)

• Decision Date: 06 July 2016
• Docket Number: Bankruptcy No. 14–01504,Adversary No. 15–9004
• Citation: 553 B.R. 669
• Parties: In re: David Eugene Yuska, Debtor. David Eugene Yuska, Plaintiff, v. Iowa Department of Revenue, Defendant.
• Court: U.S. Bankruptcy Court — Northern District of Iowa

553 B.R. 669

In re: David Eugene Yuska, Debtor.

David Eugene Yuska, Plaintiff
v.
Iowa Department of Revenue, Defendant.

Bankruptcy No. 14–01504
Adversary No. 15–9004

United States Bankruptcy Court, N.D. Iowa.

Signed July 6, 2016

553 B.R. 674

David Eugene Yuska, Waterloo, IA, pro se.

Laurie Heron McCown, Iowa Attorney General's Office, John E. Waters, Iowa Department of Revenue, Des Moines, IA, for Defendant.

RULING ON MOTION FOR SUMMARY JUDGMENT

THAD J. COLLINS, U.S. BANKRUPTCY JUDGE

These dispositive motions of Creditor Iowa Department of Revenue (“IDOR”) came before the Court for hearing on February 29, 2016. Laurie Heron McCown appeared for IDOR. Debtor David Yuska appeared pro se. He has asked to be referred to as “David.” The Court took the matters under advisement. The parties filed briefs. David filed the last portion of briefing to be considered on April 26, 2016. This is a core proceeding under 28 U.S.C. § 157(b)(2)(B).

STATEMENT OF THE CASE

David filed this adversary case within his bankruptcy contesting IDOR's tax claims. David argues that he does not owe Iowa income tax for tax years 2004, and 2006–2014. David argues that Iowa's income tax is unconstitutional; that IDOR has not complied with Iowa law in assessing his taxes; that Iowa tax liability depends on federal tax liability and he does not owe federal income tax; and that IDOR has not met its burden to show that he owes income tax. He asserts that there are disputes of material fact because he disputes which laws apply to him.

IDOR originally filed a Motion to Dismiss, a Motion for Partial Summary Judgment, and a Motion to Abstain. While these matters were pending, IDOR moved for summary judgment on the full case. The Court considered all of these matters together at the February hearing.

IDOR argues that David's tax liability for 2007 has already been adjudicated and so cannot be relitigated. IDOR also argues that his constitutional argument and his argument that IDOR's assessment was improper have been rejected. IDOR argues that David's remaining arguments have no merit and there is no genuine dispute of material fact about the amount of tax assessed.

The Court concludes that there are no genuine disputes of material fact—only disputes about the law. The Court finds that David's arguments do not have merit and grants IDOR's motion for summary judgment.

STATEMENT OF THE FACTS AND BACKGROUND

The following facts are relevant to this dispute. David has not paid Iowa income

553 B.R. 675

tax or filed tax returns for tax years 2004–2014. After IDOR assessed taxes for the 2007 tax year, David filed an objection to that assessment. On November 29, 2012 Iowa Administrative Law Judge Christie J. Scase issued a decision on IDOR's assessment for tax year 2007. Judge Scase found that the Iowa Supreme Court had twice considered the issue of the state constitutionality of Iowa's income tax laws and had upheld the tax. Judge Scase found that IDOR's 2007 assessment was supported by fact and law. David did not appeal that ruling.

David filed bankruptcy on September 29, 2014. David filed under Chapter 13, which is available only to an individual wage earner. In his filing he certified that he was an individual who resided in Black Hawk County in Iowa. He filed as “David Eugene Yuska.” He did not list any trade names. He signed this petition under penalty of perjury that all of this information was true and correct. The case was later converted to Chapter 7.

David then brought a separate adversary case against IDOR. David sought to set aside all IDOR's tax claims and assessments from 2004–2014. IDOR filed several motions, including a motion for summary judgment. In support of that motion, IDOR filed a statement of undisputed facts that set out the following facts:

David resided in Iowa for the tax years in question. He received rental income from rental property in Iowa. He received wages or a salary while living in Iowa from 2004–2014. He received interest, dividends, capital gains, or other types of income while living in Iowa from 2004–2014.

David did not pay Iowa income tax on any income he received in the years 2004–2014. He did not file complete or accurate income tax returns for these years. IDOR has assessed David for the following years and amounts:

• 2004 income tax—$467.08

• 2006 income tax—$1,034.03

• 2007 income tax—$81,646.29

• 2008 income tax—$22,112.07

• 2009 income tax—$37,133.45

• 2010 income tax—$56,352.11

• 2011 income tax—$10,528.00 plus a penalty of $7,050.00

• 2012 income tax—$8,510.62 plus a penalty of $5,954.25

• 2013 income tax—$8,966.14 plus a penalty of $6,567.00

• 2014 income tax—$22,552.00 plus a penalty of $16,914.00

IDOR's claims for tax years 2004, 2006–2010 are secured claims. IDOR's claims for the income tax for tax years 2011–2014 are priority unsecured claims. IDOR's penalties for 2011–2013 are general unsecured claims and the 2014 penalty is a post-petition penalty.

David did not object to IDOR's statement of undisputed facts. David has argued that there are factual issues about what laws apply to him. The Court finds that these arguments present legal issues, not factual issues, and will address them as such. The Court accepts IDOR's statement of undisputed facts as uncontested.

David's arguments come in many different filings: Adversary Proceeding: Brief and exhibits (Doc. 34); Adversary Proceeding: Addendum to Brief and exhibits (Doc. 36); Adversary Proceeding: Supplemental Briefing and exhibits (Doc. 55); Memorandum in Resistance/Opposition to Motion for Summary Judgment (Doc. 59); Notice of Claim Dispute (Doc. 68); Statement of Trade Names (Doc. 69); Affidavit of Denial of U.S. Citizenship (Doc. 70); Statement of Denial of Rights Under Color of Law (Doc. 71); Letter sent to IDOR

553 B.R. 676

requesting documentation supporting claims (Doc. 72); Supplement to Hearing of 2/29/16 (Doc. 83); and Supplement to Hearing of 2/29/16 and exhibits (Doc. 84). David has filed other documents but, per Proceeding Memo and Order (Doc. 92), the Court declined to consider Doc. 91 or any subsequent filings in making its decision. David had been allowed several supplemental filings already. When the Court granted David's motion to file Docs. 83 and 84, the Court specifically told him that the record was closed and no further filings would be considered.

David has repeatedly characterized these proceedings as unfairly prejudiced against him. David has stated that the Court has “railroaded” him during the proceedings. The following summary of the docket in this case shows that those allegations are baseless. The Court has given David great latitude to advocate his position in this litigation.

On November 16, 2015, IDOR filed this Motion for Summary Judgment, accompanying brief, and statement of undisputed facts.

On December 15, David filed a motion asking for additional time to file a resistance. The Court granted that motion and gave David until December 23 to file his resistance.

On December 20, David filed another motion asking for additional time to file a resistance. The Court granted that motion and gave David until January 7, 2016, to file his resistance.

On January 7, 2016, David filed his Objection to Motion for Summary Judgment. On January 13, without seeking an extension, David filed an amended objection. On January 14, IDOR filed its reply to David's timely filed objection.

The Court scheduled arguments on the motion for February 10. On February 9, David filed a motion to continue that hearing. The Court granted his motion and continued the hearing to February 29. On February 29, the Court heard argument and gave both parties until March 7 to file post-hearing briefs.

On March 4, David filed a motion to extend time to file post-hearing briefs. The Court granted his motion and gave the parties until March 21 to file their briefs. IDOR filed its post-hearing brief on March 7.

On March 21, David filed another motion to extend time to file his brief. The Court granted his motion and gave him until April 5 to file his brief.

On April 5, David filed his post-hearing brief. On April 12, however, he filed what he characterized as an “addendum” to his brief, along with additional support documents. IDOR objected to these additional documents, noting that they were filed out of time and contained a new argument that Iowa's income tax statute is unconstitutionally vague. The Court overruled IDOR's objection. The Court stated that it would consider David's “addendum” and new argument but would not consider any further filings in deciding the motion for summary judgment.

As this background shows, the Court has allowed David ample time and opportunity to make his arguments.

ARGUMENTS

The Court has informed David several times over many proceedings, in this adversary and the main case, that it will not entertain or discuss at length any arguments about unconstitutionality or invalidity of income tax that have been rejected by other courts. To the extent that David has made any such arguments, they will be rejected...