UNITED STATES OF AMERICA v. HIATT et al

Filing 133

ORDER - This matter involves an action by the United States of America (the "Government") to collect unpaid income tax liabilities and frivolous return penalties assessed against Defendant Marzella Hiatt, and to enforce federal tax liens on several properties located in Sheridan, Indiana which secure those debts. On September 4, 2014, the Court granted summary judgment and entered final judgment in favor of the Government on all of the Government's claims. [Filing No. 74 ; Filing No. 75 .] The Court now addresses two motions filed by Ms. Hiatt: (1) a Motion to Void Judgment and Dismiss, [Filing No. 129 ]; and (2) a Motion to Cease and Desist - Dismiss, [Filing No. 132 ]. For the reasons stated in this Order, the Court DENIES Ms. Hiatt's Motion to Void Judgment and Dismiss, [Filing No. 129 ], and DENIES her Motion to Cease and Desist - Dismiss, [Filing No. 132 ]. The Court cautions Ms. Hiatt that, as long as she remains represented by counsel in this matter, any future filings must be made through counsel. (See Order). Copy to Plaintiff via US Mail. Signed by Judge Jane Magnus-Stinson on 6/22/2017. (APD)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
UNITED STATES OF AMERICA,

)
)
Plaintiff,
)
)
vs.
)
)
MARZELLA K. HIATT, in her individual capacity, )
JEFFREY HIATT, in his capacity as the personal )
representative of the Estate of Jacob A. Hiatt, )
)
deceased, and TINA SNODGRASS, Receiver,
)
)
Defendants.

No. 1:12-cv-01103-JMS-TAB

ORDER
This matter involves an action by the United States of America (the “Government”) to
collect unpaid income tax liabilities and frivolous return penalties assessed against Defendant
Marzella Hiatt, and to enforce federal tax liens on several properties located in Sheridan, Indiana
which secure those debts. On September 4, 2014, the Court granted summary judgment and
entered final judgment in favor of the Government on all of the Government’s claims. [Filing No.
74; Filing No. 75.] The Court now addresses two motions filed by Ms. Hiatt: (1) a Motion to Void
Judgment and Dismiss, [Filing No. 129]; and (2) a Motion to Cease and Desist – Dismiss, [Filing
No. 132].
I.
MOTION TO VOID JUDGMENT AND DISMISS
In her Motion to Void Judgment and Dismiss, Ms. Hiatt appears to set forth two main
arguments: (1) that she is not a citizen or resident of the United States, so is not subject to federal
tax laws; and (2) that she is not liable for taxes because there is no statute that imposes tax liability
and she has no taxable income because she has never been engaged in a “trade or business” and
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has no source of income within the United States. [Filing No. 129.] The Government argues in
response that Ms. Hiatt’s motion is time-barred, and her arguments are meritless. [Filing No. 130.]
The Court finds that Ms. Hiatt’s Motion to Void Judgment and Dismiss fails for three
reasons. First, Ms. Hiatt is represented by counsel, 1 yet has filed her motion pro se. The Court
may strike motions that are filed pro se when the party is represented by counsel, and Ms. Hiatt’s
Motion to Void Judgment and Dismiss could be denied for that reason alone. See United States v.
Gwiazdzinski, 141 F.3d 784, 787 (7th Cir. 1998) (“A defendant does not have an affirmative right
to submit a pro se brief when represented by counsel”). The Court will, however, address two
other grounds for denial.
Second, Ms. Hiatt’s motion is untimely. Although Ms. Hiatt does not set forth the rule
under which she brings her motion, the Court will treat it as a motion to alter or amend the
judgment under Fed. R. Civ. P. 59. Rule 59(e) allows a party to move the Court for reconsideration
of a judgment within 28 days following the entry of judgment, and encompasses reconsideration
of matters decided on the merits. Osterneck v. Ernst & Whinney, 489 U.S. 169, 174 (1989). The
Court entered final judgment in this matter on September 4, 2014, [Filing No. 75], yet Ms. Hiatt
did not file her motion until May 17, 2017, [Filing No. 129] – 32 months later, which is well
outside of the 28-day period provided in Rule 59. This untimeliness provides yet another basis for
the Court’s denial of Ms. Hiatt’s motion.
Finally, Ms. Hiatt’s motion is without merit. Affording relief through granting a motion
for reconsideration brought pursuant to Rule 59(e) is an “extraordinary remed[y] reserved for the
exceptional case.” Foster v. DeLuca, 545 F.3d 582, 584 (7th Cir. 2008). Rule 59 motions are for

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Although Ms. Hiatt’s counsel informed the Magistrate Judge during a recent telephonic status
conference that he no longer represents Ms. Hiatt, the docket does not reflect that he has formally
moved to withdraw. Accordingly, he is still Ms. Hiatt’s counsel of record.
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the limited purpose of “correct[ing] manifest errors of law or fact or…present[ing] newly
discovered evidence.” Rothwell Cotton Co. v. Rosenthal & Co., 827 F.2d 246, 251 (7th Cir. 1987)
(quoting Keene Corp. v. Int’l Fidelity Ins. Co., 561 F.Supp. 656 (N.D. Ill. 1982)). “A ‘manifest
error’ is not demonstrated by the disappointment of the losing party. It is the ‘wholesale disregard,
misapplication, or failure to recognize controlling precedent.’” Oto v. Metropolitan Life Ins. Co.,
224 F.3d 601, 606 (7th Cir. 2000) (quoting Sedrak v. Callahan, 987 F.Supp. 1063, 1069 (N.D. Ill.
1997)). Ms. Hiatt’s arguments in support of her motion are baseless, and do not warrant
reconsideration. First, her argument that she is not a citizen or resident of the United States, but
rather is a resident of Indiana, is not supported by applicable law. See United States v. Cooper,
179 F.3d 691, 692 (7th Cir. 1999) (rejecting appellant’s “wholly frivolous, tax-protester
arguments, such as that only residents of Washington, D.C., and other federal enclaves are subject
to the federal tax laws because they alone are citizens of the United States…..”). Second, Ms.
Hiatt’s arguments that she has no tax liability are similarly baseless. The Court has already found
that Ms. Hiatt had taxable income for the years for which the Government sought payment, and
that she is liable for taxes based on that income. [Filing No. 74 at 14-16.] Ms. Hiatt has not
presented any basis for the Court to reconsider its earlier determinations.
Because Ms. Hiatt filed her Motion to Void Judgment and Dismiss pro se while represented
by counsel, the motion is untimely, and the motion is meritless, the Court DENIES the motion.
[Filing No. 129.]
II.
MOTION TO CEASE AND DESIST – DISMISS
Ms. Hiatt has also filed a Motion to Cease and Desist – Dismiss, in which she raises some
of the same arguments set forth in her Motion to Void Judgment and Dismiss. [Filing No. 132.]
Specifically, Ms. Hiatt argues that there is no statute that creates income tax liability and that she
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is not subject to federal tax laws because she is a citizen of Indiana. [Filing No. 132 at 2-6.] The
Court will also treat Ms. Hiatt’s Motion to Cease and Desist – Dismiss as a motion to alter or
amend the judgment under Fed. R. Civ. P. 59. For the reasons set forth above in connection with
Ms. Hiatt’s Motion to Void Judgment and Dismiss – that the motion was filed pro se but Ms. Hiatt
is represented by counsel, that the motion is untimely under Rule 59, and that Ms. Hiatt’s
arguments are meritless – the Court DENIES Ms. Hiatt’s Motion to Cease and Desist – Dismiss.
[Filing No. 132.]
III.
CONCLUSION
For the foregoing reasons, the Court DENIES Ms. Hiatt’s Motion to Void Judgment and
Dismiss, [Filing No. 129], and DENIES her Motion to Cease and Desist – Dismiss, [Filing No.
132]. The Court cautions Ms. Hiatt that, as long as she remains represented by counsel in this
matter, any future filings must be made through counsel.

Date: June 22, 2017

Distribution via ECF only to all counsel of record
Distribution via U.S. Mail to:
Marzella Hiatt
8175 N. St. Rd. 38
Sheridan, IN 46069

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