Capitol Waste, Inc. v. A Greener Globe, et al.,

Filing 20

MEMORANDUM AND ORDER signed by Judge Frank C. Damrell, Jr on 4/14/11 ORDERING the United States' motion for summary judgment 14 is GRANTED. The United States has an interest in all property and property rights of plaintiff by virtue of its federal tax liens against plaintiff, and any proceeds due to plaintiff from a partition of the long-term lease at issue should be distributed to the United States for application to plaintiff's unpaid federal tax liabilities. (Becknal, R)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 CAPITOL WASTE, INC., 13 Plaintiff, NO. 2:10-cv-866 FCD EFB 14 v. MEMORANDUM AND ORDER 15 16 17 18 19 20 21 A GREENER GLOBE, aka A GREENER GLOBE CORPORATION, aka A GREENER GLOBE, INC., aka A GREENER GLOBE, DANIEL G. SHEEHAN, dba A GREENER GLOBE, JACKLYN C. SHEEHAN, dba A GREENER GLOBE; WESTERN HIGHLAND MORTGAGE FUND1, LLC; UNITED STATES DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE, NORTHERN CALIFORNIA COLLECTION SERVICE, INC. et al., 22 23 Defendants. _________________________/ 24 ----oo0oo---- 25 This matter is before the court on defendant the United 26 States of America’s (the “United States”) motion for summary 27 judgment pursuant to Rule 56 of the Federal Rules of Civil 28 Procedure. By this motion the United States seeks determinations 1 (1) that United States has an interest in all property and 2 property rights of Capitol Waste (“plaintiff”) by virtue of its 3 federal tax liens against plaintiff, including any interest 4 plaintiff may have in the property located at 901 North Harding 5 Boulevard, Roseville, CA (the “Property”); and (2) that any 6 proceeds due to plaintiff from a partition of the long-term lease 7 at issue should be distributed to the United States for 8 application to the unpaid federal tax liabilities of plaintiff. 9 (Def.’s Mot. for Summ. J. [“Def.’s Mot.”], filed Feb. 25, 2011 10 [Docket # 14-2], at 2.) 11 statement of non-opposition to the United States’ motion for 12 summary judgment.1 13 below,2 the United States’ motion for summary judgment is 14 GRANTED. (Docket #17.) For the reasons set forth BACKGROUND3 15 16 On March 25, 2011, plaintiff filed a Plaintiff brought this suit, inter alia, to partition the 17 parties’ interests by sale of a long-term lease on the property 18 located at 901 North Harding Boulevard, Roseville, CA. 19 Notice of Removal [“DNR”], filed April 13, 2010 [Docket # 1-1], (Def.’s 20 21 1 22 23 24 Plaintiff’s certificate of service indicates that all defendants have been served. (DNR, at Ex. B.) Similarly, the United States’ certificate of service indicates that all parties have been properly served with this motion. (See Docket 14-13; Def.’s Statement of Undisputed Facts (“UF”) [Docket # 14-1], filed Feb. 25, 2011.) However, no other defendant has filed an opposition to the motion or otherwise responded. 25 2 26 27 Because oral argument will not be of material assistance, the court orders the matter submitted on the briefs. E.D. Cal. L.R. 230(g). 3 28 Unless otherwise noted, the facts herein are undisputed. (See UF.) 2 1 2 ¶¶ 20, 21. 34.) A duly authorized delegate of the Secretary of Treasury made 3 assessments against plaintiff for federal employment tax (Form 4 941) liabilities for the quarters ending June 30, 2001, September 5 30, 2001, December 31, 2001, June 30, 2002, September 30, 2002, 6 December 31, 2002, March 31, 2003, June 30, 2003, September 30, 7 2003, December 31, 2003, March 31, 2004, June 20, 2004, September 8 30, 2004, December 31, 2004, March 31, 2005, June 30, 2005, 9 September 30, 2005, December 31, 2005, March 31, 2005, June 30, 10 2006, September 30, 2006, December 31, 2006, March 31, 2007, June 11 30, 2007, and September 30, 2007. 12 Revenue Service (“IRS”) gave plaintiff proper notice and demand 13 for payment of these liabilities. 14 (UF ¶¶ 1-6.) The Internal (Id.) A duly authorized delegate of the Secretary of Treasury also 15 made assessments against plaintiff for federal unemployment tax 16 (Form 940) liabilities for tax years 2000, 2001, 2002, 2003, 17 2004, 2005, and 2006. 18 proper notice and demand for payment of these liabilities. 19 (Id. ¶¶ 7-10.) The IRS gave plaintiff (Id.) On May 2, 2007, the IRS properly filed a Notice of Federal 20 Tax Lien against plaintiff with respect to its unpaid federal 21 employment tax liabilities for quarters ending September 30, 22 2004, and December 31, 2004, with the Placer County Recorder. 23 (Id. ¶ 11.) 24 Notice of Federal Tax Lien against plaintiff with respect to its 25 unpaid federal employment tax liabilities for quarters ending 26 December 31, 2000 through June 30, 2004 and September 30, 2004 27 through September 30, 2007, with the Placer County Recorder. 28 (Id. ¶¶ 12, 13.) On December 23, 2008, the IRS properly filed a The IRS also filed a Notice of Federal Tax Lien 3 1 against plaintiff with respect to its unpaid federal unemployment 2 tax liabilities for the tax years ending December 31, 2000 3 through December 31, 2006. 4 (Id. ¶¶ 13, 14.) Plaintiff has not fully paid its federal employment tax 5 liabilities for the quarters ending June 30, 2001, through 6 September 2007 or its federal unemployment tax liabilities for 7 the tax years ending December 31, 2000 through December 31, 2006. 8 (Id. ¶¶ 15, 16.) 9 property and property rights of plaintiff by virtue of its The United States has an interest in all 10 federal tax liens against plaintiff. 11 STANDARD 12 The Federal Rules of Civil Procedure provide for summary 13 judgment where “the movant shows that there is no genuine dispute 14 as to any material fact and the movant is entitled to judgment as 15 a matter of law.” 16 viewed in the light most favorable to the nonmoving party. 17 Lopez v. Smith, 203 F.3d 1122, 1131 (9th Cir. 2000) (en banc). 18 (Id. ¶ 17.) Fed. R. Civ. P. 56(a). The evidence must be See The moving party bears the initial burden of demonstrating 19 the absence of a genuine issue of fact. 20 Catrett, 477 U.S. 317, 325 (1986). 21 meet this burden, “the nonmoving party has no obligation to 22 produce anything, even if the nonmoving party would have the 23 ultimate burden of persuasion at trial.” 24 Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102-03 (9th Cir. 2000). 25 However, if the nonmoving party has the burden of proof at trial, 26 the moving party only needs to show “that there is an absence of 27 evidence to support the nonmoving party’s case.” 28 477 U.S. at 325. 4 See Celotex Corp. v. If the moving party fails to Nissan Fire & Marine Celotex Corp., 1 2 ANALYSIS Under 26 U.S.C. § 6321, the United States obtains a lien 3 “upon all property and rights to property, whether real or 4 personal, belonging to” any taxpayer who neglects or refuses to 5 pay taxes after notice and demand. 6 arises as of the date of assessment and continues until the tax 7 liability is extinguished. 8 has submitted Account Transcripts showing assessments made 9 against Capitol Waste and the dates these assessments were made. 26 U.S.C. § 6321. 26 U.S.C. § 6322. The lien The United States 10 (Boroughs Decl., filed Feb. 25, 2011 [Docket #14-3], Ex. B-G.) 11 These transcripts show that notice and demand of payment was 12 properly given to plaintiff. 13 has not paid these federal tax liabilities. 14 such, these federal tax liens continue to the present. 15 U.S.C. § 6322. 16 (See id.) Plaintiff admits that it (UF ¶¶ 15, 16.) As See 26 Absent a specific provision to the contrary, “priority for 17 the purposes of federal law is governed by the common-law 18 principle that ‘first in time is the first in right.’” 19 States v. McDermott, 507 U.S. 447, 449 (1993) (quoting United 20 States v. New Britain, 347 U.S. 81, 85 (1954)) (interpreting 26, 21 U.S.C. § 6323). 22 “perfected” or “choate,” meaning that the “‘the identity of the 23 lienor, the property subject of the lien and the amount of the 24 lien are established.’” 25 U.S. at 84). 26 Federal Tax Lien against plaintiff with the Placer County 27 Recorder to perfect these federal tax liens. 28 filing of a Notice of Federal Tax Lien “renders the federal tax United To be first in time, a creditor lien must be Id. at 449-50 (quoting New Britain, 347 In the present case, the IRS filed Notices of 5 (UF ¶¶ 11-14.) The 1 lien extant for ‘first in time’ priority purposes . . . .” Id. 2 at 453. 3 motion, none of plaintiff’s other creditors have responded or 4 otherwise submitted evidence disputing the seniority status of 5 United States’ federal tax lien. 6 proceeds due to plaintiff from a partition of the long-term lease 7 at issue should be distributed to the United States. Despite being having been properly noticed of this (UF ¶ 18.) As such, any 8 CONCLUSION 9 For the foregoing reasons, the United States’ motion for 10 summary judgment is GRANTED. 11 in all property and property rights of plaintiff by virtue of its 12 federal tax liens against plaintiff, and any proceeds due to 13 plaintiff from a partition of the long-term lease at issue should 14 be distributed to the United States for application to 15 plaintiff’s unpaid federal tax liabilities. 16 17 The United States has an interest IT IS SO ORDERED. DATED: April 14, 2011 18 19 FRANK C. DAMRELL, JR. UNITED STATES DISTRICT JUDGE 20 21 22 23 24 25 26 27 28 6

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