USA v. Berryman et al
Filing
43
ORDER Overruling Objection of United States Magistrate Judge's Minute Order and Order Affirming and Adopting Recommendation of United States Magistrate Judge by Chief Judge Wiley Y. Daniel on 08/08/12.(jjhsl, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Chief Judge Wiley Y. Daniel
Civil Action No. 11-cv-02708-WYD-KLM
UNITED STATES OF AMERICA,
Plaintiff,
v.
NANCY D. BERRYMAN,
THE TEMPLE OF THE UNVEILED GOD, and
THE OFFICE OF THE OVERSEER OF DEDICATION TO ENLIGHTENMENT, and her
successors, a corporation sole,
Defendants.
ORDER OVERRULING OBJECTION OF UNITED STATES
MAGISTRATE JUDGE’S MINUTE ORDER
AND
ORDER AFFIRMING AND ADOPTING RECOMMENDATION OF
UNITED STATES MAGISTRATE JUDGE
I.
INTRODUCTION
This matter is before the Court on the following three matters: (1) Defendant
Berryman’s “Objection to Magistrate Judges’ Ruling Regarding Necessity of Having the
Two Corporation Sole Represented by an Attorney” (ECF No. 36); (2) Defendant
Berryman’s “Motion to Dismiss Unverified Complaint an [sic] Affidavit of Truth Pursuant
to Penalties of Perjury, 28 USC 1746(1)” (ECF No. 12); and (3) Defendant Berryman’s
“Petition to Dismiss With Prejudice Wrong Venue & Jurisdiction” (ECF No. 25).
As to the first matter—Defendant Berryman’s Objection (ECF No. 36) to
Magistrate Judge Mix’s minute order—for the reasons stated below, the objection is
overruled and Magistrate Judge Mix=s minute order dated February 15, 2012 (ECF No.
37) is affirmed.
As to Defendant Berryman’s two motions to dismiss (ECF Nos. 12 and 25), they
were both referred to Magistrate Judge Mix for a Recommendation by Order of
Reference dated October 21, 2011. Magistrate Judge Mix issued a Recommendation
on February 15, 2012, which is incorporated herein by reference. See 28 U.S.C. '
636(b)(1), Fed. R. Civ. P. 72(b), D.C.COLO.LCivR. 72.1. Magistrate Judge Mix
recommended therein that both of Defendant Berryman’s motions to dismiss be denied.
(Recommendation at 1). Magistrate Judge Mix advised the parties that they had
fourteen (14) days to serve and file written, specific objections to the Recommendation.
(Id. at 10.) On March 5, 2012, Defendant Berryman filed an objection which
necessitates a de novo determination as to those specified proposed findings or
recommendations to which objection is made since the nature of the matter is
dispositive. Fed. R. Civ. P. 72(b); 28 U.S.C. ' 636(b)(1).
II.
BACKGROUND
On October 18, 2011, Plaintiff United States of America brought this civil action
against the Defendants to reduce federal income tax assessments to judgment and to
foreclose federal tax liens on real property and water rights. Plaintiff asserts proper
jurisdiction by this Court pursuant to 28 U.S.C. §§ 1331, 1340, and 1345 and to 26
U.S.C. §§ 7402 and 7403. Plaintiff states that venue is proper pursuant to 28 U.S.C.
§§ 1391 and 1396 on the basis that the real property at issue is located within this
District.
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Plaintiff brings the following four claims for relief against the Defendants: (1) to
reduce federal income tax assessments against Defendant Berryman to judgment; (2)
that the subject property is owned by Defendant Berryman, on theories of nominee,
alter ego, and constructive trust as to the two entity Defendants; (3) that any transfer of
the subject property to the two entity Defendants by Defendant Berryman was
fraudulent; and (4) to foreclose the federal tax liens encumbering the subject property
against Defendant Berryman.
The real property that is the subject of this action is referred to as Parcel A and
Parcel B. Parcel A is vacant land located in Larimer County, Colorado, and Parcel B is
commonly referred to as 3295 Tunnel Road, Estes Park, CO 80517.
III.
DEFENDANT BERRYMAN’S OBJECTION TO MAGISTRATE JUDGE MIX’S
FEBRUARY 10, 2012 MINUTE ORDER
On February 10, 2012, Magistrate Judge Mix entered a minute order, granting in
part and denying in part, Defendant Berryman’s “Motion for Leave to Permit Nancy Dell
Berryman, Pro Se, Representing All Defendants to Appear Telephonically at February
15, 20120 Scheduling Conference” (ECF No. 32) (“the Motion”). In her minute order,
Magistrate Mix concluded as follows:
As an initial matter, the Court notes that Defendant
Berryman may only represent herself in this proceeding, and
may not represent the two entity Defendants. It is a
long-standing rule that [an entity] must be represented by an
attorney to appear in federal court,” Tal v. Hogan, 453 F.3d
1244, 1254 (10th Cir. 2006) (footnote and citations omitted),
and an entity cannot appear through a non-attorney
business officer appearing pro se. Harrison v. Wahatoyas,
LLC, 253 F.3d 552, 556 (10th Cir. 2001). Accordingly,
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IT IS HEREBY ORDERED that the Motion is
GRANTED IN PART. Defendant Berryman, representing
herself only, may appear by telephone at the Scheduling
Conference set for February 15, 2012, at 10:00 a.m. …
(ECF No. 35, Minute Order).
On February 14, 2012, Defendant Berryman filed her Rule 72 objection to
Magistrate Judge Mix’s minute order, which is now pending before me. Defendant
Berryman argues that because Defendants Temple of the Unveiled God (“Temple”) and
the Office of the Overseer of Dedication to Enlightenment, and her Successors, a
Corporation Sole (“Dedication”) are not typical business corporations, she may
represent them in federal court along with representing herself.
Since Plaintiff filed a timely objection, I must review Magistrate Judge Mix=s
minute order to determine whether it is Aclearly erroneous or contrary to law@ since the
nature of the matter is nondispositive. FED. R. CIV. P. 72(a). AAn order is clearly
erroneous when the reviewing court on the entire evidence is left with the definite and
firm conviction that a mistake has been made.@ Cook v. Rockwell Int=l Corp., 147
F.R.D. 237, 242 (D. Colo. 1993).
By way of background, the “corporation sole” is one if the least common forms of
corporate structure. It concentrates powers in one office and is appealing to
hierarchical religions because it enables the external structure to match the internal
structure of the church. See Gerstenblith, “Associational Structures of Religious
Organizations,” in Religious Organizations in the United States: A Study of Identity,
Liberty, and the Law (Serritella et al. eds., 2006). The corporation sole is the
incorporation of the office of the bishop of a local diocese. The corporation sole’s
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property and powers are transferred on the resignation or death of the incumbent to
successors in the office. During vacancy of the office, the corporation remains in
abeyance, its powers and properties subject to the administration of a properly
appointed administrator of the office. The corporation sole lacks the usual trappings of
a corporation. It does not have a board of directors, officers, stock, bylaws, official
minutes, seal, or even a corporate name. See Stokes & Pfeffer, Church and State in
the United States 808–18 (1964); Dignan, A History of the Legal Incorporation of
Catholic Church Property in the United States [1784–1932] (1935); Kauper, & Ellis,
Religious Corporations and the Law, 71 Mich. L. Rev. 1499,1520–27 (1973).
Relevant to this matter, the Tenth Circuit has established that “an unlicensed
layperson may only represent himself and not another individual or artificial entity before
a district court or before us.” Divine Church of God and Christ v. Taxation and
Revenue Dept., 116 F.3d 1489 (Table), n.1 (10th Cir. 1997). Furthermore, while 28
U.S.C. § 1654 guarantees one the right to proceed pro se in a civil action in federal
court, “because pro se means to appear for one’s self, [however] a person may not
appear on another person’s behalf in the other’s cause . . . .” Adams ex rel. D.J.W. v.
Astrue, 659 F.3d 1297, 1299-1300 (10th Cir. 2011).
Turning to my analysis, I find that Magistrate Judge Mix=s ruling that both Temple
and Dedication must be represented by an attorney to appear in federal court was not
clearly erroneous or contrary to law. I agree with Magistrate Judge Mix that Temple
and Dedication are separate entities and require an attorney to represent their interests
in this action. While Defendant Berryman may be the corporation sole representative,
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“[t]he interests of a corporation and its principal frequently overlap but are not identical
in all respects. Thus, requiring separate counsel for a corporation works as an
independent safeguard of its interests.” Bowens v. South Carolina Atty. Gen. Office,
2010 1506975, *2 (D.S.C. 2010). After reviewing the record and relevant authority, I
am not left with a definite and firm conviction that a mistake has been made.
Accordingly, I overrule Defendant Berryman’s objection to Magistrate Judge Mix’s
minute order precluding Berryman from representing Temple or Dedication in this
action. I find no error with this ruling.
IV.
RECOMMENDATION
As stated earlier, Magistrate Judge Mix recommends that Defendant Berryman’s
motions to dismiss be denied. (Recommendation at 1). In her Recommendation,
Magistrate Judge Mix noted that Defendant Berryman “raises multiple undeveloped
arguments in her first motion to dismiss” including typical tax protestor arguments.
(Recommendation at 3). Defendant Berryman asserts various contentions including
that
the Complaint is unsupported by any evidence, that she has
no contract with Plaintiff (which she refers to as the “United
States Corporation”), that the Internal Revenue Service is a
debt collector and has not produced a verified tax
assessment, and that enforcement of any lien is a function of
“the Alcohol, Tobacco and Firearms Bureau, not the IRS.”
(Recommendation at 3). In her second motion to dismiss, Defendant Berryman claims
that venue is improper “because Plaintiff styled the caption of the Complaint ‘UNITED
STATES DISTRICT COURT’, as opposed to ‘District Court of the United States.’”
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(Recommendation at 3).
A.
Standard of Review
Since Defendant Berryman fails to identify the rule she bases her motions to
dismiss upon, Magistrate Judge Mix “construes the Motions as seeking dismissal
pursuant to Fed. R. Civ. P. 12(b)(1) and (6).” (Recommendation at 3).
As courts of limited jurisdiction, federal courts may only adjudicate cases that the
Constitution and Congress have granted them authority to hear. Todd Holding Co.,
Inc. v. Super Value Stores, Inc., 744 F. Supp. 1025, 1026 (D. Colo. 1990). Thus, the
court must satisfy itself of subject matter jurisdiction before proceeding to the merits of a
claim. Gold v. Local 7 United Food and Commercial Workers Union, 159 F.3d 1307,
1309-10 (10th Cir. 1998). "[T]he burden is on the party claiming jurisdiction to show it
by a preponderance of the evidence." Celli v. Shoell, 40 F.3d 324, 327 (10th Cir.1994).
"Mere conclusory allegations of jurisdiction are not enough." United States, ex rel.
Hafter v. Spectrum Emergency Care, Inc., 190 F.3d 1196, 1160 (10th Cir. 1999).
Where a party moves to dismiss for lack of subject matter jurisdiction pursuant to Fed.
R. Civ. P. 12(b)(1), the attack can be either a facial attack to the allegations of the
complaint or a factual attack. Osborn v. United States, 918 F.2d 724, 729 n. 6 (8th Cir.
1990). Where there is a facial attack, the court must look to the factual allegations of
the Complaint. Groundhog v. Keller, 442 F.2d 674, 677 (10th Cir. 1971). In a factual
attack, the court may consider matters outside the pleadings, and the motion is not
converted to a motion for summary judgment. Id.; Cizek v. United States, 953 F.2d
1232, 1233 (10th Cir. 1992).
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Fed. R. Civ. P. 12(b)(6) provides that a defendant may move to dismiss a claim
for Afailure to state a claim upon which relief can be granted.@ Fed. R. Civ. P. 12(b)(6).
The Court=s inquiry is Awhether the complaint contains >enough facts to state a claim to
relief that is plausible on its face.=@ Ridge at Red Hawk, LLC v. Schneider, 493 F.3d
1174, 1177 (10th Cir. 2007) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544)).
ATo survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to >state a claim to relief that is plausible on its face.=@ Ashcroft v.
Iqbal, ___ U.S. __, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)). A pleading that offers >labels and conclusions= or a
formulaic recitation of the elements of a cause of action will not do. Nor does the
complaint suffice if it tenders >naked assertion[s]= devoid of >further factual
enhancement.=@ Id. at 1949 (quoting Twombly, 550 U.S. at 555, 557). Furthermore,
conclusory allegations are Anot entitled to the assumption of truth.@ Id. at 1950.
The Tenth Circuit has interpreted Aplausibility,@ the term used by the Supreme
Court in Twombly, to Arefer to the scope of the allegations in a complaint@ rather than to
mean Alikely to be true.@ Robbins v. Okla. ex rel. Okla. Dep't of Human Servs., 519
F.3d 1242, 1247 (10th Cir. 2008). Thus, Aif [allegations] are so general that they
encompass a wide swath of conduct, much of it innocent, then the plaintiffs have not
nudged their claims across the line from conceivable to plausible.@ Id. (internal
quotations omitted). AThe allegations must be enough that, if assumed to be true, the
plaintiff plausibly (not just speculatively) has a claim for relief.@ Id. AThis requirement
of plausibility serves not only to weed out claims that do not (in the absence of
additional allegations) have a reasonable prospect of success, but also to inform the
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defendants of the actual grounds of the claim against them.@ Id. at 1248. Additionally,
the Tenth Circuit has instructed that Athe degree of specificity necessary to establish
plausibility and fair notice, and therefore the need to include sufficient factual
allegations, depends on context@ and that whether a defendant receives fair notice
Adepends on the type of case.@ Id.
B.
Venue
First, Magistrate Judge Mix rejected as frivolous Defendant Berryman’s argument
that venue is improper due to the Plaintiff’s use of capitalization in its pleadings. See
Ford v. Pryor, 552 F.3d 1174, 1179 (10th Cir. 2008) (argument that summons did not
identify taxpayer because his name was typed in all capital letters was “wholly
frivolous”); United States v. Luginbyhl, No. 06-cr-0206-CVE, 2007 WL 2344911, at *1
(N.D. Okla. Aug. 16, 2007) (same, citing multiple Tenth Circuit cases).
C.
Subject Matter Jurisdiction
Second, Magistrate Judge Mix found that this Court has subject matter
jurisdiction over this matter. “Congress vested in the district courts ‘jurisdiction of any
civil action arising under any Act of Congress providing for internal revenue.’” United
States v. Christiansen, 414 F. App’x 218, 220 (11th Cir. 2011) (citing 28 U.S.C. § 1340).
“[D]istrict courts have the right to order the sale of property encumbered by a tax lien, 26
U.S.C. § 7403(c), and ‘to render such judgments and decrees as may be necessary or
appropriate’ to complete that sale, id. § 7402(a).” Id.
D.
Authority to Collect Taxes
Finally, Magistrate Judge Mix rejected Defendant Berryman’s arguments
concluding that Plaintiff has both the authority to initiate this action against her and to
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file notices of federal tax liens and enforce those liens. Magistrate Judge Mix further
stated that pursuant to Fed. R. Civ. P. 12(b)(6), Plaintiff has adequately asserted that
tax assessments have been calculated as to Defendant Berryman, and notice of the
assessments and demands for payment have been issued to Berryman. Finally, tax
liens have been recorded against Defendant Berryman. Thus, Magistrate Judge Mix
found that “[o]n the basis of those assessments and liens, it is plausible, if not probable,
that Plaintiff will be entitled to reduction of the liens to judgment and foreclosure of the
subject property for satisfaction of the judgment.” (Recommendation at 9).
IV.
DEFENDANT BERRYMAN’S OBJECTIONS
On March 5, 2012, Defendant Berryman filed timely objections to Magistrate
Judge Mix’s Recommendation. As a preliminary matter, I point out that it was difficult
to determine what Defendant Berryman’s specific objections to Magistrate Judge Mix’s
Recommendation were. The party filing objections must specifically identify those
findings or recommendations to which the objections are being made. The District
Court need not consider frivolous, conclusive or general objections. Further, at least
one court has stated that arguments not provided to the attention of the magistrate
judge will not be considered in connection with review of nondispositive motions.
Claytor v. Computer Associates Intern., Inc., 211 F.R.D. 665, 667 (D. Kan. 2003). “The
court reiterates that this is not a de novo review permitting a ‘second shot’ based on
new arguments.” Id. (citing City of Wichita v. Aero Holdings, Inc., 192 F.R.D. 300, 302
(D. Kan. 2000)).
Here, Defendant Berryman’s objections consist of numerous conclusory
statements without any supporting argument or evidence. Defendant Berryman
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spends considerable time reiterating her assertion that Defendants Temple and
Dedication are “not corporations in the sense of the typical corporation.” (Objection at
1, ECF No. 42). “If a fiction can only represent a fiction, this appears to be a real
dilemma as it could then be inferred that the Soles are fictions and the same as other
Corporations which they are not. They are not fictions, and neither is Nancy-Dell:
Berryman, Sui Juris.” (Objection at 4).
Defendant Berryman further claims that the IRS is “perpetrating mail fraud” in
that it is giving “the false impression that the IRS is a lawful bureau, department or
agency within the U.S. Department of the treasury. … As pointed out the IRS is not an
agency of the U.S. Government.” (Objection at 7). As Magistrate Judge Mix noted,
these tax protestor arguments have been rejected as meritless and frivolous by many
courts including the Tenth Circuit. See Lonsdale v. United States, 919 F.2d 1440, 1448
(10th Cir. 1990). “[C]ourts . . . are not required to expend judicial resources endlessly
entertaining repetitive arguments.” Id. Accordingly, I summarily overrule any
objections relating to tax protestor arguments that have already been rejected by a
multitude of courts.
Defendant Berryman’s remaining objections include the following continued
assertions: (1) that the United States is a federal corporation; (2) the IRS is a debt
collector and a corporation, not an agency of the United States’ government; (3) that
“capitalizing respondent [sic] name would make her a corporation” (Objection at 11);
and (4) venue is improper because the “UNITED STATES DISTRICT COURT IS FOR
ALIEN RESIDENTS AND brings in a foreign state in violation of the 11th amendment”
(Objection at 11).
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I find little merit to Defendant Berryman’s objections. Magistrate Judge Mix
specifically addressed and rejected Defendant Berryman’s arguments that Jurisdiction
and venue are proper and that the Plaintiff had the authority to bring this action against
her. Nowhere in the objections does Defendant Berryman claim that Magistrate Judge
Mix=s analysis and conclusions were made in error. She simply re-hashes the same
contentions that Magistrate Judge Mix rejected or raises new challenges that were not
before Magistrate Judge Mix. Accordingly, I find that Magistrate Judge Mix’s
Recommendation is well-reasoned and proper. To the extent that Defendant Berryman
asserts any other objections, they are overruled as general, conclusory statements
without citing any proper support.
V.
CONCLUSION
Based on the foregoing, it is
ORDERED that Defendant Berryman’s “Objection to Magistrate Judges’ Ruling
Regarding Necessity of Having the Two Corporation Sole Represented by an Attorney”
(ECF No. 36) is OVERRULED, and Magistrate Judge Mix’s February 10, 2012 minute
order (ECF No. 35) is AFFIRMED. It is
FURTHER ORDERED that the Recommendation of United States Magistrate
Judge Mix (ECF No. 40) is AFFIRMED AND ADOPTED. In accordance therewith, it is
ORDERED that Defendant Berryman’s “Motion to Dismiss Unverified Complaint
an [sic] Affidavit of Truth Pursuant to Penalties of Perjury, 28 USC 1746(1)” (ECF No.
12); and (3) Defendant Berryman’s “Petition to Dismiss With Prejudice Wrong Venue &
Jurisdiction” (ECF No. 25) are DENIED.
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Dated: August 8, 2012
BY THE COURT:
s/ Wiley Y. Daniel
Wiley Y. Daniel
Chief United States District Judge
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