Al-Sharif v. EPES Transport System, Inc.

Filing 28

ORDER granting 7 Motion to Dismiss; denying 20 Motion for Joinder; granting 24 Motion to Dismiss; dismissing with prejudice Plaintiff's claims; and directing the Clerk to close this case and terminate all pending motions. Signed by Judge J. Randal Hall on 02/17/2012. (thb)

IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF GEORGIA
AUGUSTA DIVISION

JERRY A. AL-SHARIF,
Plaintiff,

V.
EPES TRANSPORT SYSTEM, INC.,
Defendant.

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CV 111-037

ORDER
Presently pending before the Court are EPES Transport System,
Inc. 's ("Defendant") Motion to Dismiss Plaintiff's Amended
Complaint (doc. no. 7) and Motion to Dismiss Plaintiff's Second
Amended Complaint (doc. no. 24), as well as Jerry A. Al-Sharif's
("Plaintiff") Motion for Joinder of Parties (doc. no. 20)

I. BACKGROUND
This case arises from the garnishment of Plaintiff's wages.
Plaintiff is employed by Defendant as a commercial truck driver.
(Am. Compl. ¶ Iv.) On February 11, 2011, Defendant received a
notice of levy (the "Notice of Levy") from the Internal Revenue
Service ("IRS") relating to Plaintiff's wages, salary, and other
income.' (Id. ¶ V.) The Notice of Levy requires Defendant to turn

1 The Notice of Levy is attached to Plaintiff's Complaint and Amended
Complaint. The Notice of Levy is central to Plaintiff's claim and is
therefore appropriate to consider on a motion to dismiss. See Financial Sec.
Assur., Inc. v. Stephens, Inc., 500 F.3d 1276, 1284 (11th Cir. 2007) (noting

over to the IRS the taxpayer's wages and salary that have been
earned but not paid, as well as wages and salary earned in the
future, until the levy is released. (Id., Ex. A.) The Notice of
Levy seeks payment for taxes owed for the years of 2001 through
2004 in an amount totaling $65,893.89. (Id.) Defendant has
complied with the Notice of Levy, despite Plaintiff's protests.
(Id. ¶ VIII.)
On February 14, 2011, Plaintiff filed a pro se complaint in
the Superior Court of Richmond County, Georgia.

(Doc. no. 1, Ex.

2.) On March 7, 2011, Plaintiff amended his Complaint.

(Doc. no.

1, Ex. 4.) On March 18, 2011, Defendant removed this case to the
United States District Court for the Southern District of Georgia,
Augusta Division. (Doc. no. 1.)
In the Amended Complaint, Plaintiff seeks a declaratory
judgment against Defendant and requests injunctive relief to
prevent Defendant from complying with the Notice of Levy. (Id.)
On March 18, 2011, Defendant filed a Motion to Dismiss Plaintiff's
Amended Complaint for failure to state a claim. (Doc. no. 7.) On
May 16, 2011, Plaintiff filed a motion for joinder requesting that
the Court add employees of Defendant, Michael W. Dunlap and Sharon
Farris, to this case.

(Doc. no. 20.) Shortly thereafter, on June

8, 2011, Plaintiff filed a Second Amended Complaint.
23.)

(Doc. no.

The Second Amended Complaint added claims for breach of

contract and requested damages in the amount of $445,000.

(Id.)

On June 22, 2011, Defendant filed a motion to dismiss Plaintiff's
the court will consider the complaint and documents attached thereto when
analyzing a motion to dismiss)

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Second Amended Complaint.

(Doc. no. 24.)

Each of these motions

will now be addressed in turn.

II. LEGAL STANDARD
In considering a motion to dismiss under Rule 12(b) (6), the
court tests the legal sufficiency of the complaint, not whether the
plaintiff will ultimately prevail on the merits. Scheur v. Rhodes,
416 U.S. 232, 236 (1974) . The court must accept as true all facts
alleged in the complaint and construe all reasonable inferences in
the light most favorable to the plaintiff. See Hoffman-Pugh v.
Ramsey, 312 F.3d 1222, 1225 (11th Cir. 2002). The court, however,
need not accept the complaint's legal conclusions as true, only its
well-pled facts. Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937,
1949-50 (2 00 9)
A complaint also must "contain sufficient factual matter,
accepted as true, 'to state a claim to relief that is plausible on
its face.'" Id. at 1940 (citing Bell Ati. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). The plaintiff is required to plead "factual
content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged." Id. Although
there is no probability requirement at the pleading stage,
"something beyond . . . mere possibility . . . must be alleged."
Twombly, 550 U.S. at 556-57 (citing Durma Pharm., Inc. v. Broudo,
544 U.S. 336, 347 (2005)).

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III. DISCUSSION
A. Defendant's Motion to Dismiss Plaintiff's Amended
Complaint

Plaintiff's Amended Complaint alleges that Defendant illegally
garnished Plaintiff's wages in violation of his constitutional
rights. Plaintiff alleges that the garnishment proceedings are
invalid because there has been no court order issued concerning the
validity of the lien on his wages. (Am. Compi. ¶J VI-VIII.)
Accordingly, Plaintiff seeks a declaratory judgment against
Defendant, a temporary restraining order, and injunctive relief
compelling Defendant to cease all garnishment proceedings against
his wages, income, and salary on behalf of the IRS. (Id.

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IX.)

Plaintiff is not entitled to injunctive relief as a matter of
law. The Anti-Injunction Act provides generally that "no suit for
the purpose of restraining the assessment or collection of any tax
shall be maintained in any court by any person." 26 U.S.C. §
7421(a). The purpose of the Act is "to permit the United States to
assess and collect taxes alleged to be due without judicial
intervention, and to require that the legal right to the disputed
sums be determined in a suit for refund."

Enochs v. Williams

Pacing & Navigation Co., 370 U.S. 1, 7 (1962). The statute
specifies a number of exceptions, none of which are applicable in
this case

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The enumerated exceptions relate to proceedings before the Tax Court
(26 U.S.C. §S 6015(e), 6212 (a) , (c)) , injunctions of assessments related to
partnerships ( 6225(b), 6246(b)), suspension of collection during a hearing
by the IRS Office of Appeals and appeal of that decision ( 6330 (e) (1)),
collection of unpaid divisible employment taxes ( 6331(i)), collection of
penalties against a tax preparer or for failure to collect and account for

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Plaintiff's remedy for an allegedly wrongful assessment is "to
bring a timely suit in the tax court under 26 U.S.C. § 6212 and
6213 or to pay the tax and sue for a refund in district court or
[court of Federal Claims] under 26 U.S.C. § 7422 and 28 U.S.C. §5
1346(a) (1) and 1491." Leves v. Internal Revenue Service, Comm'r,
796 F.2d 1433, 1435 (11th Cir. 1986) (finding that Anti-Injunction
Act precluded suit by taxpayers to enjoin IRS from placing tax
liens on their property and to require IRS to return money already
collected) . This Court lacks jurisdiction to entertain Plaintiff's
claims for injunctive relief as to the Notice of Levy. McLaurine,
II. v. Mid South Rests., Inc., No. 3:07-cv-049-MHT, 2007 WL
1893318, at *1, 3 (M.D. Ala. April 23, 2007) (finding that
plaintiff's requests for injunctive relief against his employer for
wrongful levy of his wages were barred by the Anti-Injunction Act);
see also Enax v. U.S., 243 Fed. Appx. 449, 451 (11th Cir. 2007)
("[U] nless [the plaintiff] qualifies for a statutory or judicial
exception to the [Anti-Injunction Act], we must affirm the district
court's determination that the Act stripped it of the jurisdiction
necessary to issue the requested relief."); Taylor v. Simonetta,
No. 1:99-CV-665, 2000 WL 641615, at *2 (N.D. Ga. Mar. 20, 2000)

taxes (H 6694(c), 6672(c)), expedited review of jeopardy levies and
assessments ( 7429(b)), proceedings for determination of employment status
of individuals working for a taxpayer ( 7436), and civil actions filed by
persons other than the taxpayer (H 7426(a), (b)(l)). Plaintiff also has not
alleged or demonstrated that his claims fall within the judicial exception
set forth in Enochs, supra (exception applies where the plaintiff establishes
that the United States cannot prevail under any circumstances, "under the
most liberal view of the law and the facts" and collection would cause
irreparable harm). The limited exception set forth in South Carolina v.
Regan, 465 U.S. 367, 373 (1984) (applying where "Congress has not provided the
plaintiff with an alternative legal way to challenge the validity of a tax"),
is likewise inapplicable.
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(finding employees who complied with notice of levy could not be
subject

to

injunction pursuant

to Anti-Injunction Act)

Accordingly, since Plaintiff's Amended Complaint only contains
claims for injunctive relief that are barred by the Anti-Injunction
Act, the Amended Complaint must be dismissed .3
B. Leave to .mend

Plaintiff filed a Second Amended Complaint on June 8, 2011,
without leave of court. However, "[w]here it appears that a more
carefully drafted complaint might state a claim, the district court
should give a pro se plaintiff an opportunity to amend his
complaint instead of dismissing it." Schmitt v. U.S. Office of
Pers. Mgmt., 403 Fed. Appx. 460, 462 (11th Cir. 2010); see also
Duff v. Steub, 378 Fed. Appx. 868, 872 (11th Cir. 2010) (vacating
district court's dismissal of pro se plaintiff's complaint after
court failed to allow him an opportunity to amend); Clark v.
Maldonado, 288 Fed. Appx. 645, 647 (11th Cir. 2008) (same); Habib
v. Bank of Am. Corp., No. 1:10-cv-04079, 2011 WL 2580971, at *4_*5
(N.D. Ga. Mar. 15, 2011) (allowing pro se plaintiff an opportunity
to amend prior to dismissal with prejudice) .

With this in mind,

the Court will consider Plaintiff's Second Amended Complaint.
C. Defendant's Motion to Dismiss Plaintiff's Second amended
Complaint

Plaintiff's Second Amended Complaint is based largely on the
same allegations contained in Plaintiff's Amended Complaint.

In

To the extent that Plaintiff's Amended Complaint could be construed as
stating a claim for damages, these claims must also fail due to the immunity
given to third parties who comply with an IRS notice of levy. See 26 U.S.C.
§ 3662(e).
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the Second Amended Complaint, Plaintiff alleges that Defendant
breached its at-will contract with Plaintiff when it garnished his
wages in accordance with the Notice of Levy. Plaintiff alleges
that he never agreed to the taking of his wages, and that since
Defendant was not acting pursuant to a court order, the garnishment
breached the at-will contract between Plaintiff and Defendant.
(Second Am. Compi. at 4.) Plaintiff claims damages in the amount
of $445,000 based on lost wages, lost investments, loss of the
ability to pay normal bills, and the mental anguish associated with
these losses.

(Id. at 5.)

Plaintiff's claims for damages in the Second Amended Complaint
must fail because Defendant is immune from liability for complying
with the Notice of Levy. The Secretary of the Treasury may collect
unpaid taxes by levy on any property belonging to the delinquent
taxpayer or upon which there is a tax lien. 26 U.S.C. § 6331(a);
U.S. v. Speir, 808 F. Supp. 829, 832 (S.D. Ga. 1992). Section
6332(a) of the Internal Revenue Code provides that "any person in
possession of . . . property or rights to property subject to levy
upon which a levy has been made shall, upon demand of the Secretary
[of Treasury] , surrender such property or rights . . . to the
Secretary."

26 U.S.C. § 6332(a).

If the taxpayer's property is

held by another, the IRS customarily serves a notice of levy upon
the custodian.
(1985) .

U.S. v. Nat'l Bank of Commerce, 472 U.S. 713, 720

This notice not only gives the IRS the right to all

property levied upon, it creates a "custodial relationship" between

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the third party and the IRS so that the United States has
constructive possession of the property. Id.
Pursuant to § 6332(e), "[a]ny person in possession of
property or rights to property subject to levy upon which a levy
has been made who, upon demand by the Secretary, surrenders such
property or rights to property . . . to the Secretary . . . shall
be discharged from any obligation or liability to the delinquent

taxpayer and any other person."

26 U.S.C. § 6332(e) (emphasis

added) . If, however, the custodian refuses to surrender property
subject to levy, he or she becomes personally liable to the United
States for the value of the property. 26 U.S.C. § 6332(d) (1); U.S.
v. Metro. Life Ins., 874 F.2d 1497, 1499 (11th Cir. 1989) . A third
party recipient of a notice of levy has a legal obligation under §
6332(a) to turn over the subject property to the IRS; it cannot
challenge the validity of the levy.

Busby v. Internal Revenue

Service & Principal Mut. Life Ins. Co., No. 96-6566-CIV, 1997 WL
364507, at *4 (S.D. Fla. Feb. 23, 1997). A third party "served
with notice of levy has two, and only two, possible defenses for
failure to comply with the demand: that it is not in possession of
the property of the taxpayer, or that the property is subject to a
prior judicial attachment or execution." Nat'l Bank of Commerce,
472 U.S. at 727.
Here, Plaintiff does not dispute that Defendant received an
IRS Notice of Levy requiring Defendant to remit to the IRS certain
non-exempt portions of his wages. Thus, Plaintiff's allegations
are barred because § 6332(e) expressly immunizes a third party
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custodian such as Defendant from liability for honoring a levy.
Moreover, Plaintiff does not allege that Defendant was not in
possession of his wages or that his wages were subject to prior
judicial attachment or execution by a third party. Therefore,
Defendant does not fall into the narrow exception created for
custodians to refuse to comply with a notice of levy. Furthermore,
immunity is provided under
levy is valid.

6332(e) regardless of whether the

Davis v. U.S. Airways, No. 1:99-CV-02260, 2000 WL

1367635, at *1 n. 1 (N.D. Ga. Aug. 1, 2000)
Despite these facts and law, Plaintiff asserts that because
the Notice of Levy is not accompanied by a court order, the
garnishment proceedings deny him due process and equal protection
of the law pursuant to the Fourteenth Amendment of the United
States Constitution.

(Doc. no. 27 at 4-6.)

This argument is

without merit. It is well-established that the Internal Revenue
Code provides two principal tools for the purpose of enforcing a
federal tax lien. Nat'l Commerce Bank, 472 U.S. at 720. One tool
is an administrative levy pursuant to § 6331, and the other tool is
a lien foreclosure suit pursuant to § 7403. Id. Section 7403
states that "whether or not levy has been made, the Attorney
General or his delegate, at the request of the [Treasury]
Secretary, . . . may direct a civil action to be filed in a
district court of the United States to enforce a lien of the United
States." 26 U.S.C. § 7403(a). However, the use of a notice of
levy pursuant to § 6331 does not require a court order or judicial
intervention. Nat'l Commerce Bank, 472 U.S. at 720. Accordingly,
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no court order was necessary to confirm the validity of the Notice
of Levy at issue here.
In sum, Plaintiff's allegations fail to state a claim because
Defendant is immune from liability for complying with the Notice of
Levy pursuant to 26 U.S.C. § 3662(e). Plaintiff failed to assert
any allegations of actions by Defendant, other than compliance with
the Notice of Levy, that could form the basis of a claim against
Defendant. Accordingly, Plaintiff's Second Amended complaint
should be dismissed for failure to state a claim upon which relief
could be granted.
D. Motion for Joinder
On May 16, 2011, Plaintiff filed a self-styled Motion for
Joinder. (Doc. no. 20.) Plaintiff argues in his motion that both
Michael Dunlap ("Dunlap") and Sharon Farris ("Farris"), as
employees of Defendant, are necessary parties pursuant to Federal
Rule of Civil Procedure 19. Rule 19 provides that
[a] person who is subject to service of process and whose
joinder will not deprive the court of subject-matter
jurisdiction must be joined as a party if: (A) in that
person's absence, the court cannot accord complete relief
among existing parties; or (B) that person claims an
interest relating to the subject of the action and is so
situated that disposing of the action in the person's
absence may: (i) as a practical matter impair or impede
the person's ability to protect the interest; or (ii)
leave an existing party subject to a substantial risk of
incurring double, multiple, or otherwise inconsistent
obligations because of the interest.
Fed. R. Civ. P. 19(a). Plaintiff simply restates the language of
Rule 19 in his motion and provides no evidence that without either
Dunlap or Farris this Court cannot provide complete relief or that
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either has an interest in this litigation . 4 Accordingly, this Court
cannot find that Dunlap and Farris are required parties under Rule
19.
Further, because pro se pleadings are to be construed broadly,
this Court will construe Plaintiff's motion as a motion to amend
his complaint to add Dunlap and Farris as party defendants.
Federal Rule of Civil Procedure 15 provides that when a party
requests to amend its complaint, "[t]he court should freely give
leave when justice so requires." "A proposed amendment may be
denied for futility 'when the complaint as amended would still be
properly dismissed.'" Coventry First, LLC v. McCarty, 605 F.3d
865, 870 (11th Cir. 2010) (quoting Cockrell v. Sparks, 510 F.3d
1307, 1310 (11th Cir. 2007)).
Here, Plaintiff seeks to amend his pleadings by adding two
individuals acting within their capacity as employees for
Defendant.

Plaintiff does not state any specific claims against

either Dunlap or Farris. Thus, to the extent that Plaintiff is
seeking injunctive relief to prevent these employees from complying
with the Notice of Levy, the addition of Dunlap and Farris would be
futile because any claims for injunctive relief are barred by the
Anti-Injunction Act. Furthermore, to the extent that Plaintiff
seeks to add Dunlap and Farris to assert claims of liability for
their actions in complying with the Notice of Levy, such claims
would fail as a matter of law as previously explained.

Plaintiff baldly asserts that Dunlap claims an interest in this
litigation; however, there is no indication that Dunlap has any such
interest.
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For these reasons, if the Court were to grant Plaintiff's
motion to add Dunlap and Farris to the case, all claims against the
proposed new parties would have to be dismissed. It would therefore
be futile to grant Plaintiff's motion (doc. no. 20), and it will
thus be denied.

IV. CONCLUSION
Upon the foregoing, Defendant's Motion to Dismiss Plaintiff's
Amended Complaint (doc. no. 7) is GRANTED, Plaintiff's Motion for
Joinder (doc. no. 20) is DENIED, and Defendant's Motion to Dismiss
Plaintiff's Second Amended Complaint (doc. no. 24) is GRANTED.
Accordingly, Plaintiff's claims are DISMISSED WITH PREJUDICE. The
Clerk is DIRECTED to CLOSE this case and TERMINATE all pending
motions.
ORDER ENTERED at Augusta, Georgia, this

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February, 2012.

HONORALE J. RNDAL HALL
UNITEP'STATES DISTRICT JUDGE
OTJERN DISTRICT OF GEORGIA

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day of