UNITED STATES OF AMERICA v. ESTATE OF JAMES E POWELL et al

Filing 12

ORDER granting 10 Motion for Default Judgment. Ordered by U.S. District Judge W LOUIS SANDS on 4/18/2014. (bcl)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
ALBANY DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
v.
ESTATE OF JAMES E. POWELL,
Deceased, a/k/a Sonny Powell,
d/b/a Powell’s Garage,
IRVIN CLYDE POWELL,
CLARK KENT POWELL, and
RHONDA KAYE MOREE, CoExecutors of the Powell Estate,
Defendants.

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CASE NO.: 1:13-CV-104 (WLS)

ORDER
Presently pending before the Court is Plaintiffs’ Motion for Default Judgment
(Doc. 10). For the following reasons, Plaintiff’s Motion for Default Judgment (Doc. 10)
is GRANTED.
PROCEDURAL BACKGROUND
On June 19, 2013, Plaintiff filed the instant suit seeking to collect unpaid federal
unemployment tax, federal employment tax, and federal income tax liabilities, and a
miscellaneous civil penalty liability, plus interest, fees, and statutory additions. (Doc.
1.) After Defendants failed to timely file a response, Plaintiff filed a Motion for Entry of
Default. (See Docs. 2-5.)

On October 28, 2013, Plaintiff filed the Motion for Default

Judgment currently under review. (Doc. 10.) The Discovery Conference was stayed
pending the resolution of that Motion. (Doc. 11.)

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FACTUAL FINDINGS
The Court makes the following findings of fact from the allegations in Plaintiff’s
complaint and the exhibits attached thereto.1
The Plaintiff to this action is the United States of America. (Doc. 1 at ¶ 5.) James
E. Powell died on February 12, 2005, and his estate is currently under administration in
the Probate Court of Worth County, Georgia. (Id. at ¶ 6.) Defendants Irvin Clyde
Powell, Clark Kent Powell, and Rhonda Kaye Moree are Co-Executors under the Last
Will and Testament of James E. Powell dated July 26, 2002. (Id. at ¶¶ 7-9.) All of those
individuals live within the Middle District of Georgia. (Id.) On March 14, 2005, those
individuals were issued Letters Testamentary by the Probate Court of Worth County
and legally authorized to discharge all duties and exercise all powers of executors
under the Last Will and Testament of James E. Powell. (Id. at ¶ 10.) At the time of
James E. Powell’s death, the Internal Revenue Service (“IRS”) had assessed or was in the
process of assessing unpaid federal tax liabilities against him. (Id. at ¶ 11.)
On August 25, 2005, the IRS filed a proof of claim in the probate proceedings
against the Estate of James E. Powell, a/k/a Sonny Powell, d/b/a Powell’s Garage
reflecting tax liabilities arising from James E. Powell’s operation of Powell’s Garage as a
sole proprietorship. (Id.) A delegate of the Secretary of the Treasury timely made
assessments against James E. Powell for federal unemployment taxes, federal
employment taxes, federal income taxes, a civil penalty for failure to file required Forms
W-2, penalties, statutory additions, and interest for various taxable periods. (Id. at ¶
12.) Despite notice of those assessments and demand for payment, the Estate of James
E. Powell failed to pay the amounts assessed against it, the additional unassessed
interest, penalties, or any other applicable statutory additions that have continued to
accrue since the assessment dates. (Id. at ¶ 13.) As a result, the Estate of James E.
Powell owes $181,885.20 as of October 22, 2013. (See Doc. 10-2.)

By operation of a default judgment, Defendant admits Plaintiff’s well-pleaded allegations of fact.
Buchanan v. Bowman, 820 F.2d 359, 361 (11th Cir. 1987). Documents referenced in the complaint and
attached thereto are considered to constitute the initial pleading. FED. R. CIV. P. 10(c).

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DISCUSSION
“The entry of a default judgment is appropriate ‘[w]hen a party against whom a
judgment for affirmative relief is sought has failed to plead or otherwise defend as
provided by [the Federal Rules of Civil Procedure] and that fact is made to appear by
affidavit or otherwise.’ ” Mitchell v. Brown & Williamson Tobacco Corp., 294 F.3d 1309,
1316 (11th Cir. 2002) (quoting FED. R. CIV. P. 55(a)).

Before obtaining a default

judgment, the party seeking such a judgment must first seek an entry of default from
the Clerk of the Court. FED. R. CIV. P. 55(a). But the entry of a default does not entitle a
plaintiff to a default judgment. Nishimatsu Const. Co. v. Houston Nat’l Bank, 515 F.2d
1200, 1206 (5th Cir. 1975).2 The defaulting party admits the movant’s well-pleaded
factual allegations. Eagle Hosp. Physicians, LLC v. SRG Consulting, Inc., 561 F.3d 1298,
1307 (11th Cir. 2009) (citing Nishimatsu, 515 F.2d at 1206). Those well-pleaded factual
allegations must provide a sufficient basis for imposing liability on the defaulting party.
Tyco Fire & Security, LLC v. Alcocer, 218 F. App’x 860, 863 (11th Cir. 2007).
The Court has subject matter jurisdiction over this matter because a federal
question is presented. See 26 U.S.C. §§ 6502, 7402. Venue is proper in this Court. See 28
U.S.C. §§ 1391(b) & 1396. Also, the Court has personal jurisdiction over Defendants.
See generally Diamond Crystal Brands, Inc. v. Food Movers Int’l, Inc., 593 F.3d 1249 (11th
Cir. 2010) (discussing personal jurisdiction in Georgia).
The Government submitted account transcripts evidencing the above-referenced
unpaid tax liabilities and assessments associated therewith, and a declaration by
Revenue Officer Jeffrey R. Krogh that explains the method used to calculate the unpaid
tax liabilities. (Docs. 10-2, 10-3, 10-4.) “A tax assessment made by the IRS constitutes a
‘determination that a taxpayer owes the Federal Government a certain amount of
unpaid taxes,’ and such a determination ‘is entitled to a legal presumption of
correctness.’ ” United States v. Lena, 370 F. App’x 65, 69-70 (11th Cir. 2010) (quoting
United States v. Fior D’Italia, Inc., 536 U.S. 238, 242 (2002)); see also United States v. Chila,
In Bonner v. City of Pritchard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the Eleventh Circuit adopted
as binding precedent all decisions of the former Fifth Circuit handed down prior to October 1, 1981.
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871 F.2d 1015 (11th Cir. 1989). Thus, once an assessment is made, the taxpayer has the
burden of proving that the IRS’s computations were incorrect. Lena, 370 F. App’x at 70
(citing Pollard v. Comm’r of IRS, 786 F.2d 1063, 1066 (11th Cir. 1986)).

Because

Defendants are in default and have not made any attempt to demonstrate that the IRS’s
computations were incorrect, the Court is bound by the presumption of correctness
given to the IRS’s assessments.3
CONCLUSION
Based on the foregoing, the Clerk of Court shall enter default judgment against
Defendants in favor of Plaintiff because the amount sought is for a sum certain. See Fed.
R. Civ. P. 55(b)(1).

Accordingly, the Clerk is hereby DIRECTED to enter default

judgment as follows:
1. In favor of Plaintiff United States of America and against
Defendant Estate of James E. Powell, Deceased, a/k/a Sonny
Powell, d/b/a Powell’s Garage, and Defendants Irvin Clyde
Powell, Clark Kent Powell, and Rhonda Kaye Moree, CoExecutors of the Powell Estate, jointly in the amount of
$181,885.20 as the outstanding balance of unpaid federal
employment tax liabilities for taxable periods ending September
30, 1998, December 31, 2000, June 30, 2001, September 30, 2001,
December 31, 2001, March 31, 2002, June 30, 2003, December 31,
2003, March 31, 2004, June 30, 2004, September 30, 2004, and
December 31, 2004; federal unemployment tax liabilities for
taxable periods ending December 31, 1996 and December 31,
2002; a federal income tax liability owed for the tax year ending
December 31, 2003; and a miscellaneous civil penalty assessed
pursuant to 26 U.S.C. § 6721 for failure to file a correct
information return for the taxable period ending December 31,
1999. The referenced amount includes fees, interest, and
statutory additions to October 22, 2013.
2. Defendant Estate of James E. Powell, Deceased, a/k/a Sonny
Powell, d/b/a Powell’s Garage, and Defendants Irvin Clyde
Powell, Clark Kent Powell, and Rhonda Kaye Moree, CoExecutors of the Powell Estate, will continue to accrue statutory
interest, fees, and statutory additions on the foregoing unpaid
The Court finds that none of the Defendants are subject to protection by the Servicemembers Civil Relief
Act. (See Doc. 10-1.)

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balances pursuant to 28 U.S.C. §§ 6601, 6621, and 6622 until they
are paid in full or otherwise satisfied by law.
3. Plaintiff United States of America is entitled to recover its costs
of this action.
SO ORDERED, this 18th day of April 2014.
/s/ W. Louis Sands
W. LOUIS SANDS, JUDGE
UNITED STATES DISTRICT COURT

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