United States of America v. Hall et al

Filing 11

ORDER granting 9 Motion for Default Judgment. Signed by Judge Kristi K. DuBose on 12/30/2013. Copy of Order mailed to Brian L. Hall and Brenda R. Hall as directed. (sdb)

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IN  THE  UNITED  STATES  DISTRICT  COURT   FOR  THE  SOUTHERN  DISTRICT  OF  ALABAMA   SOUTHERN  DIVISION       UNITED  STATES  OF  AMERICA,         Plaintiff,       v.         BRIAN  L.  HALL  and     BRENDA  R.  HALL,         Defendants.     )   )   )   )   )   )   )   )   )   )   CIVIL  ACTION  NO.  13-­‐326-­‐KD-­‐N   ORDER       This  action  is  before  the  Court  on  the  motion  for  default  judgment,  exhibits  and   memorandum  in  support  filed  by  the  United  States.  (Docs.  9,  10)    Upon  consideration  and  for   the  reasons  set  forth  herein,  the  motion  is  GRANTED.         I.  Background       The  United  States  filed  its  complaint  against  the  defendants  Brian  L.  Hall  and  Brenda   R.  Hall.  (Doc.  1)    In  Count  One,  the  United  States  alleges  that  Brian  Hall  owes    $4,770,245.43   for  unpaid  trust  fund  recovery  penalties,  plus  interest  in  the  amount  of  $2,813,453.79,  for  a   total  of  $7,583,699.22,1  assessed  against  him  as  a  responsible  officer  for  several   corporations.  (Doc.  1)  The  United  States  alleges  that  in  various  taxable  quarters  during  1999,   2001  and  2002,  Brian  Hall  willfully  failed  to  collect,  truthfully  account  for,  and  pay  over  to   the  Internal  Revenue  Service  (IRS)  the  payroll  taxes  withheld  from  employees  that  Express   Payroll  PEO,  Inc.  and  its  successors,  MesaStaff  and  Saguaro  Services,  Inc.,  leased  to   customers  under  employee  leasing  contracts.    The  United  States  alleges  that  Brian  Hall  failed                                                                                                                   1    At  the  time  of  filing  the  motion  for  default  judgment,  this  amount  had  increased  to   $7,659,664.91  due  to  the  accrual  of  interest  (doc.  9-­‐1).       to  remit  to  the  IRS,  the  employment  and  income  taxes  withheld  from  employees  of  his   corporation  Trico  Services,  Inc.  in  September  2003  and  for  employees  of  Matchtech,  Inc.,  a   corporation  he  acquired  in  2007,  for  various  taxable  quarters  in  2008,  2009,  and  2010.      The   United  States  alleges  that  Brian  Hall  with  knowledge  that  the  employment  taxes  were  not   paid,  used  the  trust  fund  taxes  to  pay  personal  expenses,  pay  other  corporate  expenses,  pay   corporate  vendors,  creditors  and  employees,  and  to  finance  other  business  interests.           In  Count  Two,  the  United  States  alleges  that  Brenda  Hall  owes  $393,131.41,  plus   interest  in  the  amount  of  $19,733.49,  for  a  total  of  $412,864.90,2  assessed  against  her  as  a   responsible  officer  for  Matchtech,  Inc.    The  United  States  alleges  that  Brenda  Hall  willfully   failed  to  collect,  truthfully  account  for,  and  pay  over  to  the  IRS  the  federal  income  tax  and   employment  taxes  withheld  from  employees  of  Matchtech,  Inc.       In  Count  Three,  the  United  States  alleges  that  Brian  Hall  failed  to  file  his  personal   income  tax  return  for  the  years  of  2004,  2006,  2007  and  2009.      The  United  States  alleges   that  an  assessment  for  taxes,  penalties  and  interest  in  the  total  amount  of  $11,453.103  has   been  assessed  against  him.         II.  Notice  of  default  to  Brian  L.  Hall  and  Brenda  R.  Hall     The  Halls  were  initially  served  with  the  summons  and  complaint  on  July  27,  2013.     (Docs.  1,  5,  6)  They  filed  a  motion  for  extension  of  time  to  answer  or  respond  stating  that   they  needed  additional  time  to  obtain  an  attorney.    (Doc.  3)    The  motion  was  granted.  (Doc.                                                                                                                   2  At  the  time  of  filing  the  motion  for  default  judgment,  this  amount  had  increased  to   $416,917.93  due  to  the  accrual  of  interest  (doc.  9-­‐1).       3    At  the  time  of  filing  the  motion  for  default  judgment,  this  amount  had  increased  to   $11,567.25  due  to  the  accrual  of  interest  (doc.  9-­‐1).       2   4)    However,  no  attorney  appeared  on  behalf  of  the  Halls  and  they  did  not  file  an  answer  or   any  other  responsive  pleading.         The  United  States  then  filed  an  application  for  entry  of  default  and  the  certificate  of   service  indicates  that  a  copy  of  the  application  was  sent  to  the  Halls  at  their  address  in  Grand   Bay,  Alabama.    (Doc.  7)      The  Clerk  entered  default.  (Doc.  8)  The  docket  indicates  that  a  copy   of  the  Clerk’s  Entry  of  Default  was  mailed  to  the  Halls.  (Staff  notes).    The  United  States  then   filed  its  motion  for  default  judgment,  exhibits,  and  memorandum  in  support.    (Docs.  9,  10)   The  certificates  of  service  on  the  motion  and  the  memorandum  indicate  that  copies  were   mailed  to  the  Halls  at  their  address  in  Grand  Bay,  Alabama.  (Doc.  9)    Also,  the  proposed   Default  Judgment  indicates  that  a  copy  was  sent  to  the  Halls.  (Doc.  9-­‐5)    Thus,  the  Court  finds   that  the  Halls  have  received  sufficient  notice  of  the  proceedings  against  them.     III.  Subject  matter  jurisdiction     This  action  is  brought  by  the  United  States  to  recover  unpaid  trust  fund  recovery   penalties  assessed  against  Brian  and  Brenda  Hall  and  for  unpaid  personal  income  taxes  and   penalties  assessed  against  Brian  Hall.      Title  28  U.S.C.  §  1340  provides  that  the  “district   courts  shall  have  original  jurisdiction  of  any  civil  action  arising  under  any  Act  of  Congress   providing  for  internal  revenue  .  .  .”    Also,  28  U.S.C.  §  1345  grants  original  jurisdiction  to  the   district  courts  “of  all  civil  actions,  suits  or  proceedings  commence  by  the  United  States  .  .  .  “     Additionally,  26  U.S.C.  §  7402  provides  that  the  district  courts  shall  have  jurisdiction  over   civil  actions  for  the  enforcement  of  the  internal  revenue  laws.    Therefore,  the  Court  has   subject  matter  jurisdiction  over  this  action.         IV.  Venue     3     The  United  States  alleges  that  venue  is  proper  because  the  liabilities  accrued  while   Brian  and  Brenda  Hall  resided  in  Mobile  County,  Alabama.    Their  motion  to  extend  time  to   answer  indicates  that  they  reside  in  Grand  Bay,  Alabama,  which  is  in  Mobile  County,   Alabama.    Therefore,  venue  as  alleged  is  proper  in  this  district  court.           V.  Personal  jurisdiction     The  United  States  alleges  that  the  Halls  are  residents  of  Mobile  County,  Alabama,  and   the  address  on  their  motion  to  extend  time  confirms  their  residence  in  Mobile  County,   Alabama.    The  Halls  were  served  with  the  summons  and  complaint  by  a  private  process   server.    (Doc.  5,  6)    On  the  return  of  service,  the  process  server  stated  that  he  left  the   summons  at  their  residence  or  their  usual  place  of  abode  with  their  daughter,  a  person  of   suitable  age  and  discretion  who  also  resides  there.  (Doc.  5,  6)           Rule  4(e)  of  the  Federal  Rules  of  Civil  Procedure  provides  for  serving  individuals   within  a  judicial  district  of  the  United  States.    In  relevant  part,  Rule  4(e)(2)(B)  states  that  an   individual  may  be  served  by  “leaving  a  copy  of  [the  summons  and  complaint]  at  the   individual’s  dwelling  or  usual  place  of  abode  with  someone  of  suitable  age  and  discretion   who  resides  there[.]”  Fed.  R.  Civ.  P.  4(e)(2)(B)    Also,  the  Halls’  receipt  of  the  summons  and   complaint  is  confirmed  by  their  subsequent  motion  to  extend  the  time  to  answer  or  respond   to  the  complaint.  (Doc.  3)    Additionally,  the  United  States  has  certified  that  the  Halls  are  not   infants  nor  incompetents,  and  that  the  United  States  does  not  possess  any  information  to   indicate  that  they  are  currently  on  active  military  duty.  (Doc.  7)    Therefore,  the  Court  has   personal  jurisdiction  over  the  Halls.         VI.  Statement  of  the  law   4     Generally,  in  the  Eleventh  Circuit,  “there  is  a  strong  policy  of  determining  cases  on   their  merits  and  we  therefore  view  defaults  with  disfavor.”  In  re  Worldwide  Web  Systems,   Inc.,  328  F.3d  1291,  1295  (11th  Cir.2003).    Thus,  “there  must  be  strict  compliance  with  the   legal  prerequisites  establishing  the  court’s  power  to  render”  the  default  judgment.  Varnes  v.   Local  91,  Glass  Bottle  Blowers  Ass‘n,  674  F.2d  1365,  1369  (11th  Cir.1982).    Overall,  the   district  court  “has  the  authority  to  enter  default  judgment  for  failure  to  prosecute  ...  or  to   comply  with  its  orders  or  rules  of  procedure.”  Wahl  v.  McIver,  773  F.2d  1169,  1174  (11th  Cir.   1985).       Rule  55  of  the  Federal  Rules  of  Civil  Procedure  provides  that  the  Clerk  of  Court  shall   enter  default  if  a  party  fails  to  plead  or  otherwise  defend  an  action  brought  against  it.  Fed.  R.   Civ.  P.  55(a).    If  a  defendant  has  been  defaulted  for  failure  to  appear,  plead  or  otherwise   defend,  then  upon  request  by  the  plaintiff,  the  Clerk  shall  enter  judgment  for  the  amount   sought  if  it  is  “for  a  sum  certain  or  for  a  sum  which  can  by  computation  be  made  certain.”   Fed.  R.  Civ.  P.  55(b)(1).    Otherwise,  the  party  entitled  to  default  judgment  must  apply  to  the   district  court.  Fed.  R.  Civ.  P.  55(b)(2).       The  Court  of  Appeals  for  the  Eleventh  Circuit  has  held  that  although  “a  default  is  not   treated  as  an  absolute  confession  by  the  defendant  of  his  liability  and  of  the  plaintiff's  right   to  recover,  a  defaulted  defendant  is  deemed  to  admit  the  plaintiff's  well-­‐pleaded  allegations   of  fact.    The  defendant,  however,  is  not  held  to  admit  facts  that  are  not  well-­‐pleaded  or  to   admit  conclusions  of  law.”  Tyco  Fire  &  Sec.,  LLC  v.  Alcocer,  218  Fed.  Appx.  860,  863  (11th  Cir.   2007)  (per  curiam)  (citations  and  internal  quotations  omitted).    Moreover,  “before  entering   a  default  judgment  for  damages,  the  district  court  must  ensure  that  the  well-­‐pleaded   allegations  of  the  complaint  ...  actually  state  a  cause  of  action  and  that  there  is  a  substantive,     5   sufficient  basis  in  the  pleadings  for  the  particular  relief  sought.”  Id.  (emphasis  omitted);   Nishimatsu  Costr.  Co.  v.  Houston  Nat'l  Bank,  515  F.2d  1200,  1206  (5th  Cir.  1975)  (on  motion   for  default  judgment,  the  Court  must  determine  whether  there  is  a  sufficient  factual  basis  in   the  complaint  upon  which  a  judgment  may  be  entered).    Therefore,  the  United  States  must   establish  a  “prima  facie  liability  case”  against  the  Halls.    Pitts  ex  rel.  Pitts  v.  Seneca  Sports,  Inc.,   321  F.  Supp.  2d  1353,  1357  (S.D.  Ga.  2004)  (citations  omitted).         When  assessing  default  judgment  damages,  the  Court  has  “an  obligation  to  assure   that  there  is  a  legitimate  basis  for  any  damage  award  it  enters.”  Anheuser  Busch,  Inc.  v.   Philpot,  317  F.3d  1264,  1266  (11th  Cir.  2007).  Overall,  a  “default  judgment  must  not  differ  in   kind  from,  or  exceed  in  amount,  what  is  demanded  in  the  pleadings.”  Fed.  R.  Civ.  P.  54(c).         Also,  the  district  court  may  hold  a  hearing  to  enter  or  effectuate  a  judgment  if  the   court  needs  to  “(A)  conduct  an  accounting;  (B)  determine  the  amount  of  damages;  (C)   establish  the  truth  of  any  allegation  by  evidence;  or  (D)  investigate  any  other  matter.”  Fed.  R.   Civ.  P.  55(b)(2).    However,  a  hearing  is  not  necessary  because  the  United  States  seeks  a  sum   certain  that  is  capable  of  a  mathematical  calculation  and  there  is  sufficient  evidence  before   the  Court  in  support  thereof;  specifically,  the  Declaration  of  Katherine  Young,  an  Advisor   with  the  Small  Business  Self-­‐Employed  Division  of  the  IRS  and  the  exhibits  attached  which   establish  the  unpaid  trust  fund  penalties  plus  interest  as  of  the  date  of  filing  the  motion  for   default  judgment;  and  the  certified  transcripts  of  the  Halls’  official  IRS  records  (Docs.  9-­‐1,  9-­‐ 2,  9-­‐3,  9-­‐4).    Securities  and  Exchange  Commission  v.  Smyth,  420  F.3d  1225,  1231-­‐1232  (11th   Cir.  2005)  (“Judgment  of  default  awarding  cash  damages  could  not  properly  be  entered   without  a  hearing  unless  the  amount  claimed  is  a  liquidated  sum  or  one  capable  of   mathematical  calculation)  (internal  quotes  and  citations  omitted);  Id.  at  n.13  (noting  that  an     6   “evidentiary  hearing  is  not  a  per  se  requirement;  indeed,  Rule  55(b)(2)  speaks  of  evidentiary   hearings  in  a  permissive  tone.  .  .  .  We  have  held  that  no  such  hearing  is  required  where  all   essential  evidence  is  already  of  record.”).     VII.  Facts  deemed  admitted  by  the  default       Upon  entry  of  default,  the  well-­‐pleaded  allegations  of  the  complaint  are  taken  as  true.   See  Fed.  R.  Civ.  P.  8(b)(6)  (“An  allegation  .  .  .  is  admitted  if  a  responsive  pleading  is  required   and  the  allegation  is  not  denied.”);  Tyco  Fire  &  Sec.,  LLC,  218  Fed.  Appx.  at  863  (stating  that   only  the  well-­‐plead  factual  allegations  are  deemed  admitted  as  true  upon  default).      The   Court  finds  the  following  facts  are  well-­‐plead  and  therefore,  deemed  admitted  by  the  default.       Trust  fund  recovery  penalties  were  assessed  against  Brian  Hall  as  a  responsible   officer  of  Express  Payroll  PEO,  Inc.,  (for  the  four  taxable  quarters  3/31/99  -­‐  12/31/99);   Saguaro  Services,  Inc.,  (for  taxable  quarters  3/31/01,  6/30/01  and  6/30/02-­‐12/31/02);   Trico  Services,  Inc.,  (9/30/2003)  and  Matchtech,  Inc.,  (12/31/08,  3/31/09,  6/30/09  and   6/30/2010).    For  each  of  these  periods  and  companies,  Brian  Hall  was  a  person  required  to   collect,  truthfully  account  for,  and/or  pay  over  the  federal  income  and  employment  taxes   withheld  from  employees.  (Doc.  1,  at  ¶¶  8  &  19)         For  Express  Payroll,  Brian  Hall  was  a  co-­‐owner,  president,  director,  and  resident   agent.    As  such,  Hall  had  control  over  Express  Payroll’s  financial  affairs,  had  the  ability  to   disperse  corporate  funds,  routinely  signed  corporate  checks  paying  expenses  other  than  the   accumulating  employment  tax  liabilities,  and  controlled  the  business.  (Doc.  1  at  ¶¶  9-­‐10)     After  Express  Payroll  accrued  significant  payroll  tax  liabilities  in  1999,  Brian  Hall   transferred  the  employee  leasing  operations  to  other  corporations  he  controlled,  specifically   Mesastaff  and  later  Saguaro  Services.  (Doc.  1  at  ¶  11)       7     As  a  successor  entity  of  Express  Payroll  and  Mesastaff,  Saguaro  Services  employed   and  leased  the  same  individuals  to  the  same  customers  as  the  other  two  companies.  For  all   taxable  periods  from  2001  through  2002,  Brian  Hall  was  an  owner,  director,  officer,  and   registered  agent  of  Saguaro  Services.  As  such,  Hall  controlled  its  financial  affairs,  had  the   ability  to  disperse  corporate  funds,  routinely  signed  corporate  checks,  signed  Form  941   (Employer’s  Quarterly  Federal  Tax  Return)  tax  returns,  otherwise  controlled  the  business,   and  also  signed  Saguaro  Services’  voluntary  bankruptcy  petition.  See  In  re  Saguaro  Services, Inc., Bankruptcy No. 02-16512 (Bank. S. D. Ala.). (Doc. 1, at ¶ 13)     During  the  four  tax  periods  in  19994  and  the  years  thereafter,  Brian  Hall  failed  to  fully   pay  the  payroll  taxes  withheld  from  the  employees  his  companies  leased  to  customers  under   employee  leasing  arrangements.  Instead,  Hall  used  these  funds  to  pay  personal  expenses,   pay  other  vendors  and  creditors  and  finance  his  other  business  interests.  (Doc.  1  at  ¶  14)     During  2002  and  2003,  Brian  Hall  was  Trico’s  co-­‐owner,  vice  president,  and  an   officer.    Brian  Hall  controlled  Trico’s  financial  affairs,  had  the  ability  to  disperse  corporate   funds,  routinely  signed  corporate  checks  paying  expenses  other  than  the  accruing  tax   liabilities  and  otherwise  controlled  the  business.  In  this  capacity,  Hall  authorized  the   payment  of  thousands  of  dollars  to  himself,  and  failed  to  authorize,  or  make,  payments  to  the   IRS  for  the  employment  and  income  taxes  withheld  from  its  employees.  (Doc.  1  at  ¶¶  15-­‐16)     After  Trico,  Brian  Hall  became  the  CEO  and  a  director  for  Matchtech.    Brian  Hall   controlled  Matchtech’s  financial  affairs,  directed  the  disbursement  of  corporate  funds  and   the  payment  of  its  creditors,  employees  and  vendors  from  the  time  he  acquired  the  company                                                                                                                   4    The  United  States  explains  that  although  more  than  ten  years  have  lapsed  since  this   assessment,  Brian  Hall  submitted  an  offer-­‐in-­‐compromise  in  2003  that  extended  the  statute   of  limitations  (See  Doc.  1,  ¶  23,  p.  6-­‐7).     8   through  at  least  mid-­‐2010.  He  authorized  these  payments  at  a  time  when  he  knew,  or  should   have  known,  that  Matchtech  failed  to  remit  to  the  IRS  employment  and  income  taxes   withheld  from  its  employees.  (Doc.  1  at  ¶¶  17-­‐18)     During  all  of  the  periods  referenced  above,  Brian  Hall  willfully  failed  to  collect,   truthfully  account  for  and/or  pay  over  the  federal  tax  income  and  employment  taxes   withheld  from  the  employees  of  his  companies.  Instead,  at  a  time  when  he  knew  or  should   have  known  that  those  employment  taxes  were  not  being  paid,  He  directed  his  companies  to   pay  other  liabilities,  including  personal  expenses.    In  addition,  Brian  Hall  failed  to  exercise   his  authority  to  ensure  that  withheld  employment  taxes  were  paid  to  the  United  States.  (Doc.   1  at  ¶20)     Pursuant  to  26  U.S.C.  §§  6671  and  6672,  for  the  taxable  quarters  and  in  the  amounts   listed  in  paragraph  21  of  the  Complaint,  a  delegate  of  the  Secretary  of  the  Treasury  assessed   trust  fund  recovery  penalties  against  Brian  Hall  for  the  unpaid  federal  income  and   employment  taxes  withheld  from  his  companies’  employees.  (Doc.  1  at  ¶  21);  see  also  Forms   4340  certifying  to  the  trust  fund  recovery  penalty  assessments  against  Hall  (Doc.  9-­‐2)     Following  the  assessments,  the  IRS  provided  notice  and  demand  for  payment  of  the   assessments  described  in  paragraph  21  of  the  complaint  on  Brian  Hall;  however,  he  has   failed  to  pay  the  amount  owed.  As  a  result,  as  of  June  1,  2013  when  the  complaint  was  filed   Hall  owed  the  United  States  for  these  outstanding  trust  fund  recovery  penalties  in  the   amount  of  $7,583,699.22,  plus  interest  that  continued  to  accrue  after  that  date.    (Doc.  1  at  ¶   22)     Brenda  Hall  is  married  to  Brian  Hall.    For  Matchtech,  during  the  periods  ending   December  31,  2008,  March  31  and  June  30,  2009,  and  June  30,  2010,  Brenda  Hall  was  (i)  the     9   Vice  President  of  Operations  and  an  Officer,  (ii)  had  the  ability  to  control  its  financial  affairs   and  disperse  corporate  funds,  (iii)  routinely  signed  corporate  checks  at  a  time  when  she   knew  or  should  have  known  that  the  employment  taxes  were  not  being  paid,  (iv)  signed  a   Form  941  tax  return,  and  (v)  directed  the  disbursement  of  corporate  funds  and  the  payment   of  its  creditors,  employees  and  vendors.  As  such,  during  the  periods  at  issue,  Brenda  Hall  was   a  person  required  to  collect,  truthfully  account  for,  and/or  pay  over  the  federal  income  and   employment  taxes  withheld  from  Matchtech.    (Doc.  1  at  ¶¶  24-­‐26)     Brenda  Hall  willfully  failed  to  collect,  truthfully  account  for  and/or  pay  over  the   federal  tax  income  and  employment  taxes  withheld  from  Matchtech’s  employees.  Brenda   Hall  signed  checks  or  directed  others  to  sign  company  checks  to  pay  her  personal  expenses,   fund  Brian  Hall’s  business  interests,  and  pay  other  corporate  debts  at  a  time  she  knew,  or   should  have  known,  that  Matchtech’s  employment  tax  liabilities  went  unpaid.    (Doc.  1  at  ¶   27)     Pursuant  to  26  U.S.C.  §§  6671  and  6672,  for  the  taxable  quarters  and  in  the  amounts   listed  in  paragraph  28  of  the  Complaint,  a  delegate  of  the  Secretary  of  the  Treasury  assessed   trust  fund  recovery  penalties  against  Brenda  Hall  for  the  unpaid  federal  income  and   employment  taxes  withheld  from  Matchtech’s  employees.  (Doc.  1  at  ¶  28);  see  also  Forms   4340  certifying  to  the  trust  fund  recovery  penalty  assessments  against  Hall  (Doc.  9-­‐4)       Following  the  assessments,  the  IRS  provided  notice  and  demand  for  payment  of  the   assessments  described  in  paragraph  28  of  the  complaint  on  Brenda  Hall;  however,  she  has   failed  to  pay  the  amount  owed.  As  a  result,  as  of  June  1,  2013  when  the  complaint  was  filed,   Brenda  Hall  owed  the  United  States  for  these  outstanding  trust  fund  recovery  penalties  in   the  amount  of  $412,864.90,  plus  statutory  interest  accruing  after  that  date.  (Doc.  1  at  ¶  29)         10     For  the  years  2004  and  2006,  Brian  Hall  failed  to  file  his  personal  income  tax  returns.   The  IRS  conducted  an  examination  of  his  liabilities  for  those  years,  and  calculated  the  income   tax  owed.  After  issuing  a  notice  of  deficiency,  a  delegate  of  the  Secretary  of  Treasury  made   assessments  for  tax,  penalties  and  interest  against  Brian  Hall  for  the  income  tax  liabilities   owed  on  the  dates  and  in  the  amounts  indicated  in  paragraph  31  of  the  Complaint.  (Doc.  1  at   ¶  31);  see  also  Forms  4340  certifying  the  assessments  (Doc.  9-­‐3)   For tax years 2007 and 2008, on the dates and in the amounts indicated in paragraph 32 of the Complaint, a delegate of the Secretary of the Treasury made assessments against Brian Hall for unpaid federal income taxes, including penalties and interest, gave notice of the assessments, and made demand for payment thereon. (Doc. 1 at ¶ 32); see also Forms 4340 certifying to the federal income tax liability assessments. (Doc. 9-3)   Despite  the  notices  of  the  assessments  and  the  demands  for  payment,  Brian  Hall  has   failed  to  pay  the  assessments  described  in  paragraphs  31  and  32  of  the  complaint.    As  of  June   1,  2013  when  the  complaint  was  filed,  he  owed  the  United  States  his  outstanding  2004,  2006,   2007  and  2009  federal  income  taxes  in  the  amount  of  $11,453.10,  plus  statutory  additions   and  interest  accruing  after  that  date.    (Doc.  1  at  ¶  33)     VIII.  Analysis     Pursuant  to  the  Internal  Revenue  Code,  employers  are  required  to  withhold  income   taxes  and  Federal  Insurance  Contribution  Act  (FICA)  taxes  from  the  employee’s  wages  when   those  wages  are  paid.  See  26  U.S.C.  §  3102(a)  (The  tax  imposed  by  [the  Federal  Insurance   Contributions  Act]  shall  be  collected  by  the  employer  of  the  taxpayer,  by  deducting  the   amount  of  the  tax  from  the  wages  as  and  when  paid.”);  26  U.S.C.  §  3402(a)(1)  (“Except  as   otherwise  provided  in  this  section,  every  employer  making  payment  of  wages  shall  deduct     11   and  withhold  upon  such  wages  a  tax  determined  in  accordance  with  tables  or  computational   procedures  prescribed  by  the  Secretary.  “)    The  funds  withheld  and  collected  are  generally   referred  to  as  trust  fund  taxes  and  “shall  be  held  to  be  a  special  fund  in  trust  for  the  United   States.”    26  U.S.C.  §  7501.      These  funds  are  for  the  exclusive  use  of  the  United  States  and  may   not  be  used  to  pay  the  employer’s  business  expense  or  for  any  other  purpose.  See  26  U.S.C.  §§   3102(b),  3403  &  7501(a).           A  willful  failure  to  collect  the  trust  fund  taxes  or  truthfully  account  for  and  pay  over   the  tax  results  in  personal  liability  on  the  part  of  the  person  responsible  for  collecting,   accounting  and  paying  over  the  tax  to  the  United  States.    Thosteson  v.  United  States,  331  F.3d   1294,  1299  (11th  Cir.  2003)  (citing  Williams  v.  United  States,  931  F.2d  805,  810,  reh’g   granted  and  opinion  suppl.,  939  F.2d  915  (11th  Cir.  1991)).      Title  26  U.S.C.  §  6672(a)   provides  in  relevant  part  as  follows:   Any  person  required  to  collect,  truthfully  account  for,  and  pay  over  any  tax   imposed  by  this  title  who  willfully  fails  to  collect  such  tax,  or  truthfully   account  for  and  pay  over  such  tax,  or  willfully  attempts  in  any  manner  to   evade  or  defeat  any  such  tax  or  the  payment  thereof,  shall,  in  addition  to   other  penalties  provided  by  law,  be  liable  to  a  penalty  equal  to  the  total   amount  of  the  tax  evaded,  or  not  collected,  or  not  accounted  for  and  paid   over.     26  U.S.C.  §  6672(a).         The  “responsible  person”  is  one  who  must  either  collect,  account  for,  or  pay  over  the   taxes.  Slodov  v.  United  States,  436  U.S.  238,  249,  98  S.  Ct.  1778,  1786  (1978)(a  “responsible   person”  is  one  who  has  a  duty  to  perform  at  least  one  of  the  three  functions  listed  under  §   6672).      In  order  to  establish  liability  for  the  trust  fund  penalties,  the  United  States  must   show  that  there  is  “(1)  a  responsible  person  (2)  who  has  willfully  failed  to  perform  a  duty  .  .  .   to  pay  over  federal  employment  taxes.”    Brown  v.  United  States,  439  F.  App'x  772,  776  (11th     12   Cir.  2011)  (quoting  Thosteson,  331  F.3d  at  1298).    Also,  a  corporation  or  business  may  have   more  than  “one  responsible  person  within  the  meaning  of  section  6672”  and  “the  courts   have  interpreted  rather  broadly  who  will  constitute  a  ‘responsible  person’”.    Williams,  931  F.   2d  at  810,  n.7.    “Indicia  of  responsibility  include  the  holding  of  corporate  office,  control  over   financial  affairs,  the  authority  to  disburse  corporate  funds,  stock  ownership,  and  the  ability   to  hire  and  fire  employees.”  Id.  at  810  (quoting  George  v.  United  States,  819  F.2d  1008,  1011   (11th  Cir.1987)).       A.  Brian  Hall  and  Brenda  Hall       The  Court  finds  that  the  well-­‐pleaded  allegations  of  the  complaint  which  are  deemed   admitted  by  the  default,  state  a  viable  cause  of  action  against  the  Halls  as  the  responsible   persons  for  the  various  corporations  and  form  a  substantive  and  sufficient  basis  in  the   pleadings  to  find  them  liable  to  the  United  States  for  the  relief  sought;  specifically  a  default   judgment  for  damages  for  the  unpaid  trust  fund  recovery  penalties  plus  interest.    Tyco  Fire  &   Sec.,  LLC,  218  Fed.  Appx.  at  863.      Brian  Hall  and  Brenda  Hall’s  corporate  positions  and  duties   are  set  forth  herein.  See  Section  VII.    Based  on  their  overall  control  of  the  financial  affairs  of   the  corporations,  their  respective  check-­‐signing  authority,  and  their  signatures  upon  certain   IRS  Form  941  (Employer’s  Quarterly  Federal  Tax  Return),  the  Court  finds  that  they  were   “responsible  persons”  within  the  meaning  of  the  statute.         Since  the  United  States  has  met  its  burden  to  establish  that  the  Halls  are  “responsible   persons”  under  §  6672],  the  burden  shifts  to  them  “to  disprove  willfulness.”  Malloy  v.  United   States,  17  F.3d  329,  331  (11th  Cir.  1994)  (citing  Williams,  931  F.  2d  at  809-­‐810).    Willfulness,   in  this  context,  has  been  defined  as  the  “voluntary,  intentional  violation  of  a  known  legal   duty.”    Williams,  931  F.  2d.  at  810  (citing  Cheek  v.  United  States,  498  U.S.  192,  –––,  111  S.  Ct.     13   604,  610  (1991)).      In  this  circuit,  the  “willfulness  requirement  is  satisfied  ‘if  the  responsible   person  has  knowledge  of  payments  to  other  creditors  after  [s]he  becomes  aware  of  the   failure  to  remit  the  withheld  taxes.’”    Brown  v.  United  States,  439  Fed.Appx.  772,  776  (11th   Cir.  2011)  (Citing  Thosteson,  331  F.3d  at  1300).    “There  is  no  requirement  that  willfulness  of   the  responsible  person  include  a  fraudulent  or  other  bad  motive.”  Id.       The  undisputed  facts  establish  that  Brian  Hall  failed  to  pay  to  the  IRS  the  federal  taxes   withheld  from  the  employees  of  Express  Payroll  PEO,  Inc.,  (for  the  four  taxable  quarters   3/31/99  -­‐  12/31/99);  Saguaro  Services,  Inc.,  (for  taxable  quarters  3/31/01,  6/30/01  and   6/30/02-­‐12/31/02);  Trico  Services,  Inc.,  (9/30/2003)  and  Matchtech,  Inc.,  (12/31/08,   3/31/09,  6/30/09  and  6/30/2010),  which  resulted  in  the  assessment  of  trust  fund  recovery   penalties  against  him.    The  undisputed  facts  also  establish  that  at  a  time  when  he  controlled   the  corporations  and  knew  or  should  have  known  that  those  federal  employment  taxes  were   not  being  paid,  Hall  directed  his  companies  to  pay  other  liabilities,  including  personal   expenses  and  failed  to  exercise  his  authority  to  ensure  that  withheld  employment  taxes  were   paid  to  the  United  States.    See  Section  VII.      Therefore,  the  Court  finds  that  Brian  Hall  has   failed  to  disprove  the  United  States’  allegations  that  he  acted  willfully.         The  undisputed  facts  establish  that  Brenda  Hall  failed  to  pay  to  the  IRS  the  federal   taxes  withheld  from  the  employees  of  Matchtech.  (12/31/08.  3/31/09,  6/30/09  and   6/30/2010),  which  resulted  in  the  assessment  of  trust  fund  recovery  penalties  against  her.     The  undisputed  facts  also  establish  that  Brenda  Hall  signed  checks  or  directed  others  to  sign   company  checks  to  pay  her  personal  expenses,  fund  Brian  Hall’s  business  interests,  and  pay   other  corporate  debts  at  a  time  she  knew,  or  should  have  known,  that  Matchtech’s   employment  tax  liabilities  were  not  paid  to  the  IRS.    See  Section  VII.      Therefore,  the  Court     14   finds  that  Brenda  Hall  has  failed  to  disprove  the  United  States’  allegations  that  she  acted   willfully.         As  to  damages,  Young’s  Declaration  and  exhibits,  and  the  Certifications  by  an  IRS   officer  as  to  the  amounts  due  to  the  IRS    (docs.  9-­‐1,  9-­‐2,  9-­‐4)  provide  a  sufficient  evidentiary   basis  for  an  award  of  damages  in  favor  of  the  United  States.      Moreover,  there  is  a   presumption  that  a  federal  tax  assessment  issued  by  the  IRS  is  valid.  United  States  v.  Chila,   871  F.2d  1015,  1017–18  (11th  Cir.  1989)  (finding  that  certified  documents  presented  by  the   United  States  in  support  of  the  assessment  provided  the  necessary  statutory  and  regulatory   information  –  “identification  of  the  taxpayer,  the  character  of  the  liability  assesses,  the   taxable  period,  and  the  date  and  amount  of  the  assessment”);  Welch  v.  Helvering,  290  U.S.   111,  115  (1933).    Accordingly,  damages  are  assessed  against  Brian  Hall  in  the  amount  of   $7,659,664.91  plus  statutory  interest  accruing  thereon  and  damages  are  assessed  against   Brenda  Hall  in  the  amount  of  $416,917.93  plus  statutory  interest  accruing  thereon  (doc.  9-­‐1,   Young’s  Declaration,  p.  2-­‐5,  summary  of  assessed  tax  liabilities  with  interest  accrued  through   the  date  of  filing  the  motion  for  default  judgment)  as  set  forth  in  the  separate  Judgment   entered  contemporaneously  herewith.       B.  Brian  Hall’s  personal  income  tax       The  Court  finds  that  the  well-­‐pleaded  allegations  of  the  complaint  which  are  deemed   admitted  by  the  default,  state  a  viable  cause  of  action  against  Brian  Hall  and  form  a   substantive  and  sufficient  basis  in  the  pleadings  to  entitle  the  United  States  to  the  relief   sought;  specifically  a  default  judgment  for  damages  for  the  unpaid  personal  income  taxes   plus  penalties  and  interest.    Tyco  Fire  &  Sec.,  LLC,  218  Fed.  Appx.  at  863.    The  undisputed   evidence  establishes  that  at  the  time  the  complaint  was  filed  on  June  1,  2013,  Brian  Hall  had     15   failed  to  pay  his  person  income  taxes  for  the  years  2004,  2006,  2007  and  2009,  and  owed  the   United  States  a  total  of  $11,453.10  for  taxes,  penalties  and  interest.    (Doc.  9-­‐1,  p.  3-­‐4,  Young   Declaration;  doc.  9-­‐3  Forms  4340  certifying  the  assessments)  At  the  time  of  filing  the  motion   for  default  judgment,  the  total  had  increased  to  $11,567.25  (Id.).    The  well-­‐plead  factual   allegations  by  the  United  States  that  it  assessed  the  unpaid  income  taxes,  penalties  and   interest,  notified  Brian  Hall  of  the  assessment,  and  that  he  failed  to  pay  are  deemed  admitted   as  true  by  his  default.    Thus  he  has  failed  to  dispute  the  validity  of  the  assessment  or  his   liability  to  the  IRS.    See  Chila,  871  F.2d  at1017–18  (presumption  of  validity  of  IRS   assessments  supported  by  certified  documents).    Accordingly,  damages  are  assessed  against   Brian  Hall  in  the  amount  of  $11,  567.25,  plus  statutory  interest  accruing  thereon.         IX.    Conclusion       For  the  foregoing  reasons,  the  United  States’  motion  for  default  judgment  is   GRANTED  as  set  forth  herein.         Default  judgment  shall  be  entered  by  separate  document  in  accordance  with  Rule   58(a)  of  the  Federal  Rules  of  Civil  Procedure.       The  Clerk  is  directed  to  mail  a  copy  of  this  order  to  Brian  L.  Hall  and  Brenda  R.  Hall  at   their  address  of  record.       Done  and  ordered  the  30th  day  of  December  2013.                                                 s/  Kristi  K.  DuBose           KRISTI  K.  DuBOSE         UNITED  STATES  DISTRICT  JUDGE     16  

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