Johnson v. City of Baltimore Development Corporation et al

Filing 73

MEMORANDUM OPINION. Signed by Judge George Levi Russell, III on 7/29/13. (dass, Deputy Clerk) (c/m to plaintiff 7/29/13-das)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
TORRIE JOHNSON,

:

Plaintiff,

:

v.

:
Civil Action No. GLR-11-2174

CITY OF BALTIMORE DEVELOPMENT
CORPORATION, et al.,

:
:

Defendants.
:
MEMORANDUM OPINION
THIS MATTER is before the Court on four motions filed by
Plaintiff Torrie Johnson:
Settlement

Agreement

(ECF

(1) Motion to Compel Enforcement of
No.

64);

(2)

Motion

to

Seal

Plaintiff’s Motion to Compel Enforcement of Settlement Agreement
(ECF No. 65); (3) Motion to Seal Defendants’ Exhibit 1 (ECF No.
68); and (4) Motion to Submit Surreply (ECF No. 69)1.

The Court,

having reviewed the pleadings and supporting documents, finds no
hearing necessary.
For

the

See Local Rule 105.6 (D.Md. 2011).

reasons

outlined

in

specific

detail

below,

Ms.

Johnson’s Motion to Compel Enforcement of Settlement Agreement
as well as her Motions to Seal, will be granted in part and
denied in part.

1

Ms. Johnson’s Motion to Submit Surreply will be granted as
a matter of course because the document is actually a Reply, not
a Surreply.

I.
On

August

5,

2011,

captioned

action

Baltimore

Development

Baltimore,

and

in

this

BACKGROUND
Ms.

Johnson

Court

against

Corporation,

Baltimore

Office

(collectively, “Defendants”).

commenced

Mayor
of

the

Defendants
and

City

Promotion

(ECF No. 1).

&

aboveCity

of

Council

of

The

Arts

According to Ms.

Johnson, Defendants terminated her employment while she was on
medical leave in violation of the Family and Medical Leave Act
of 1993, 29 U.S.C. §§ 2601 et seq. (2012).

(See id.)

After

limited discovery and an unfruitful settlement conference before
United States Magistrate Judge Charles Day, the Court issued a
Second Revised Scheduling Order on October 17, 2012.
No. 52).

(See ECF

On December 12, 2012, Ms. Johnson filed a Motion to

Stay Discovery Responses (ECF No. 55), which the Court granted
on December 13, 2012 (see ECF No. 56).

On April 18, 2013, after

granting several stays in this matter (see ECF Nos. 57-62), the
Court administratively closed the case in light of the parties’
March 21, 2013 joint status report indicating that they had
reached a settlement agreement.

(See ECF No. 63).

The Order

administratively closing the case noted that the closure was
subject to being reopened by either party if the settlement
terms

were

rescinded.

(Id.)

The

Order

also

directed

the

parties to provide notice to the Court upon execution of the
settlement agreement and specifically directed Ms. Johnson to
2

file a notice of dismissal upon execution of said agreement so
that the case could be formally closed.
Unbeknownst
settlement

to

the

agreement

on

Court,

(Id.)

the

February

11,

parties
2013,

finalized

which

a

included

a

settlement sum of $35,000, less federal and state payroll taxes.
(See Pl.’s Mot. to Compel Enforcement Ex. 1, ECF No. 64-1).
Instead

of

filing

Court’s

Order,

a

notice

however,

of

Ms.

dismissal

Johnson

as

directed

refused

the

accept

the

to

in

settlement check because she disagreed with the amount of wage
garnishments

Defendants

The

of

amount

wage

deducted

from

garnishments

the

totaled

settlement

amount.

$17,406.41,

which

consisted of $6,669.77 and $10,736.64 in federal and state taxes
respectively.
After
Defendants

her

attempts

became

to

recoup

unfruitful,

Ms.

the

Johnson

garnishments
filed

the

from

pending

motions and a Motion to Reopen the case.

On June 13, 2013, the

Court

Reopen

granted

Ms.

Johnson’s

Motion

to

the

case

requested additional briefing on the garnishment issue.
ECF

No.

70).

correspondence

On

June

28,

acknowledging

that

respect to the state garnishment.
ECF

No.

71).

Specifically,

2013,
they

Defendants
made

an

and
(See

submitted
error

with

(See Defs.’ Correspondence,

Defendants

indicated

that

the

Comptroller of Maryland directed them to make the garnishment
and that the same entity has assured them that the $10,736.64
3

will be returned to Defendants and made part of Ms. Johnson’s
settlement

sum.

(Id.

at

2;

Attach. 4, ECF No. 71-4).

see

also

Defs.’

Correspondence

Defendants further averred that they

properly complied with the IRS Notice of Levy and that they paid
the garnishments in good faith.
On

July

15,

correspondence
acted

with

2013,

Ms.

requesting
malice

in

(Defs.’ Correspondence at 2-4).

Johnson
that

the

making

Correspondence, ECF No. 72).

responded
Court

the

find

with
the

her

own

Defendants

garnishments.

(Pl.’s

Ms. Johnson also asked that the

Court direct Defendants to issue the settlement sum without any
wage garnishment deductions.
II.
A.

(Id.)
DISCUSSION

Motion to Compel Enforcement of Settlement Agreement
The Court will grant in part and deny in part Ms. Johnson’s

Motion

to

Compel

Enforcement

of

Settlement

Agreement.

Specifically, Defendants will return the amount of the Maryland
State garnishment, but Ms. Johnson must raise her grievances
regarding the federal tax levy with the Internal Revenue Service
(“IRS”).
District
settlement

courts

agreements

“possess
and

to

the

inherent

enter

power

judgments

to

based

enforce
on

such

agreements without a plenary hearing” when “there is no doubt as
to the existence of a settlement agreement.”

Young v. FDIC, 103

F.3d 1180, 1194 (4th Cir. 1997) (citation omitted).
4

Moreover,

having

second

agreement

thoughts

does

agreement.”

not

about

justify

the

setting

results
aside

of

an

a

settlement

otherwise

valid

Id. at 1195 (citation omitted).

It is clear that a valid settlement agreement exists.
agreement

specifically

states

that

Defendants

will

pay

The
Ms.

Johnson the sum of $35,000 “in full and final satisfaction of
all claims in the Litigation, including all costs and attorney’s
fees, minus federal and state payroll taxes.”
Compel Ex. 1, at 1).
satisfy

tax

liens.

(Pl.’s Mot. to

This language includes deductions made to
Ms.

Johnson

avers,

however,

that

the

Defendants “unlawfully deducted $17,406.41 in wage garnishments”
from the settlement sum and requests that the Defendants remit a
settlement amount that excludes the garnishments.
to Compel ¶ 8).

(Pl.’s Mot.

Ms. Johnson also requests that the Court find

Defendants acted in bad faith in deducting the garnished amounts
and asks that the Court award “whatever punitive remedies that
may be available to her.”

(Pl.’s Correspondence at 6).

The

Court will deny both requests.
1. State Tax Liens
Ms. Johnson’s Motion to Compel will be granted as to the
state garnishment because Defendants concede that the deduction
was

an

Johnson.

error

and

have

agreed

to

remit

that

amount

to

Ms.

The Court finds, however, that the Defendants did not

act in bad faith in erroneously deducting $10,736.64 from Ms.
5

Johnson’s

settlement

amount

and

forwarding

the

funds

to

the

Comptroller of Maryland to satisfy a garnishment order.
In

Maryland,

“vexatiously,
delay,

or

for

for

bad

faith

the

purpose

other

has

been

of

improper

judicially

harassment

reasons.”

or

Inlet

defined

as

unreasonable
Assocs.

v.

Harrison Inn Inlet, Inc., 596 A.2d 1049, 1056 (Md. 1991); see
also Piscatelli v. Van Smith, 35 A.3d 1140, 1148 (Md. 2012)
(alterations

omitted)

(defining

malice

as

“a

person’s

actual

knowledge that his or her statement is false, coupled with his
or her intent to deceive another by means of that statement.”).
There is nothing in the record that suggests Defendants
acted in anything other than good faith when it submitted the
garnishment amount to the Comptroller of Maryland.

(See, e.g.,

Smalls

No.

Aff.,

ECF

No.

71-2;

Willis

Aff.,

ECF

71-3).

Moreover, Defendants’ letter to counsel for the Comptroller of
Maryland clearly indicates that the agency directed Defendants
to honor the garnishment order.

(Letter to Slyvia Brokos, ECF

No. 71-4; see also Pl.’s Mot. to Compel Ex. 2, ECF No. 64-3).
As

a

result,

the

Court

finds

that

Defendants

did

not

withhold the $10,736.64 from Ms. Johnson for the “purpose of
harassment
reasons.”

or

unreasonable

delay,

Inlet, 596 A.2d at 1056.

or

for

other

improper

Accordingly, the Court will

grant Ms. Johnson’s Motion to Enforce Settlement as to the state

6

garnishment,

but

will

deny

her

request

for

punitive

damages

because Defendants did not act in bad faith.
2. Federal Tax Levy
The Court will deny Ms. Johnson’s Motion to Compel as it
relates

to

the

federal

tax

garnishment

because

Defendants

properly complied with the IRS Notice of Levy and, therefore,
are immune from any suit based upon that compliance.
The

United

States

Code

provides

that

“[i]f

any

person

liable to pay any tax neglects or refuses to pay the same after
demand, the amount . . . shall be a lien in favor of the United
States upon all property and rights to property, whether real or
personal, belonging to such person.”

26 U.S.C. § 6321 (2012).

Federal tax liens “arise at the time the assessment is made” and
continue until the lien “is satisfied or becomes unenforceable
by reason of lapse of time.”

Id. § 6322.

A federal tax levy is

not

appropriate

official

satisfied

until

“[t]he

[issues]

a

certificate of release for a filed notice of Federal tax lien,
no later than 30 days after the date on which he finds that the
entire tax liability listed in such notice of Federal tax lien
either has been full satisfied . . . or has become legally
unenforceable.”

26 C.F.R. § 301.6325-1(a)(1) (2012).

7

Ms. Johnson avers that the IRS was unable to collect on her
2000 tax debt because the lien expired on June 2011.2

This

alleged error, however, cannot be attributed to Defendants.

The

IRS issued the requisite certificate of release on April 17,
2013

(see

Pl.’s

Defendants

Correspondence

satisfied

the

Ex.

levy.

1,

ECF

Contrary

No.
to

72-1),
Ms.

after

Johnson’s

assertions of bad faith on behalf of the Defendants, there is
nothing

in

the

record

that

indicates

the

IRS

tendered

the

release prior to payment of the levy or that Defendants were
informed the levy had become legally unenforceable.

Indeed,

pursuant to 26 C.F.R. § 301.6325-1(a), it is the responsibility
of the IRS to inform parties of a levy’s enforceability.

It

failed to do so.
Therefore, the Court finds no evidence in the record that
indicates

Defendants

$6,669.77 to the IRS.
recognize

an

acted

in

bad

faith

in

tendering

the

Moreover, the fact that the IRS failed to

overpayment

was

applied

to

Ms.

Johnson’s

outstanding balance until after Defendants satisfied the levy
(see

Pl.’s

Correspondence

Ex.

2

2)

supports

the

Defendants’

Ms. Johnson also avers that she was not an employee of
Defendants when the IRS issued the Notice of Levy.
The law,
however, permits the IRS to attach the lien to “any property or
rights to property acquired by [Ms. Johnson] after the lien
arises.” 26 C.F.R. § 301.6321-1. Therefore, the fact that Ms.
Johnson was not an employee at the time the IRS issued the
Notice of Levy does not automatically mean that it was
unenforceable.
8

averment of good faith because it suggests that even the IRS
believed

the

Defendants’

Consequently,

there

is

payments
no

were

indication

proper
that

at

the

time.

Defendants

have

breached the settlement agreement by making this payment.
Furthermore, employers “in possession of . . . property or
rights to property subject to levy upon which a levy has been
made shall . . . surrender such property or rights . . . to the
Secretary.”

26 U.S.C. § 6332(a).

Any employer who refuses to

honor the IRS levy is subject to being held personally liable to
the IRS.

Id. § 6332(d)(1).

Conversely, employers who surrender

the levied property to the Secretary “shall be discharged from
any obligation or liability to the delinquent taxpayer and any
other person with respect to such property or rights to property
arising from such surrender or payment.”

Id. § 6332(e).

In

other words, “an employer who complies with a Notice of Levy
issued

by

the

IRS

and

garnishes

the

wages

of

one

of

its

employees is immune from a later suit brought by the employee
arising out of the employer’s compliance with the levy.”

Gust

v. U.S. Airways, No. 1:11cv133, 2011 WL 6296076, at *2 (W.D.N.C.
Sept. 6, 2011) (citation omitted).

Therefore, the law compelled

Defendants to release all funds identified in the Notice of
Levy.

Regardless of whether the levy was valid, Ms. Johnson

cannot, now, use Defendants’ compliance with the law as a means
of contending Defendants violated the settlement agreement.
9

See

id. (“The validity of the levy is irrelevant to the immunity
afforded

the

complying

employer.”)

(citations

and

internal

quotation marks omitted).
26 U.S.C. § 7421 permits “the United States to assess and
collect taxes allegedly due without judicial intervention, and
to require that legal right to disputed sums be determined in a
suit for refund.”

MBI Motor Co., Inc. v. Lotus/East, Inc., 399

F.Supp. 774, 774 (E.D.Tenn. 1975).
grievances

regarding

the

federal

Therefore, Ms. Johnson’s
garnishment,

including

the

alleged statute of limitations issue, should be addressed in
administrative proceedings before the IRS and/or Tax Court.
As a result, the Court will deny Ms. Johnson’s Motion to
Compel as to the federal garnishment, and will deny her request
for punitive damages.
B.

Motions to Seal
The Court will grant in part and deny in part Ms. Johnson’s

Motion

to

Seal

Plaintiff’s

Motion

to

Compel

Enforcement

of

Settlement Agreement and will grant Ms. Johnson’s Motion to Seal
Defendant’s Exhibit 1.
There are two sources of a public right of access to court
documents.

First,

the

common

law

“presumes

a

right

of

the

public to inspect and copy all judicial records and documents.”
Va. Dep’t of State Police v. Wash. Post, 386 F.3d 567, 575 (4th
Cir.

2004)

(citations

and

internal
10

quotation

marks

omitted).

This presumption may be rebutted, however, if “countervailing
interests heavily outweigh the public interests in access . . .
.”

Id.

(citation

and

internal

quotation

marks

omitted).

Second, the First Amendment guarantee of access is limited to
certain

judicial

standard,

the

records

court

may

and

documents.

restrict

access

Id.
only

Under

if

there

this
is

a

compelling governmental interest and the restriction is narrowly
tailored.

Id.

Local Rule 105.11 requires all motions to compel to provide
“proposed reasons supported by specific factual representations
to justify the sealing” and “an explanation why alternatives to
sealing would not provide sufficient protection.”

In ruling on

a motion to seal, the court must “give the public notice of the
request to seal and a reasonable opportunity to challenge the
request; . . . consider less drastic alternatives to sealing;
and if it decides to seal it must state the reasons . . . for
its

decision

sealing.”
public

and

reasons

for

rejecting

alternatives

Va. Dep’t of State Police, 386 F.3d at 576.

notice

because

the

the

and

Motions

challenge

requirement

to

Seal

have

avers

that

her

been

has

pending

been

to
The

satisfied

for

over

two

should

be

months.
Ms.
sealed

Johnson

because

the

Motion

Motion

contains

her

to

Compel

personal

identifying

number and the settlement agreement between the parties.
11

Aside

from the garnishment and settlement amounts, however, the only
number contained within the Motion is Ms. Johnson’s telephone
number.

The presence of this number does not warrant sealing of

the Motion to Compel because the number has appeared in previous
filings, including Ms. Johnson’s Complaint.
Moreover, Ms. Johnson doesn’t provide any reasons why the
settlement agreement should be sealed.

The settlement agreement

is the subject of Ms. Johnson’s Motion to Compel, germane to the
issues both parties raise, and referenced in several pleadings.
As a result, the portions of the settlement agreement that are
relevant

to

the

pending

Motion

to

Compel

will

be

unsealed.

Specifically, the Court will unseal paragraphs two, three, four,
and twelve of the settlement agreement.
As to Exhibit 1 of Defendants’ Opposition to Plaintiff’s
Motion to Compel and Motion to Reopen (see ECF No. 67-1), Ms.
Johnson’s personal e-mail address is subject to sealing.
e.g.,

Rock

(stating

v.

McHugh,

personal

819

F.Supp.2d

identification

456,

information

475
may

(D.Md.
be

See,
2011)

sealed).

Defendants are directed to re-submit a redacted version of the
exhibit.
Therefore, I will grant both Motions to Seal in part and
deny

them

in

part.

As

to

Ms.

Johnson’s

Motion

to

Seal

Plaintiff’s Motion to Compel Enforcement of Settlement Agreement
(see ECF No. 65), the only portion of the Motion to Compel (ECF
12

No. 64) subject to sealing is Exhibit 1.

Ms. Johnson may submit

a

agreement

redacted

above.

version

Moreover,

of

the

Ms.

settlement

Johnson

“personal identifying number.”

may

redact

as

her

outlined

referenced

Similarly, as to Ms. Johnson’s

Motion to Seal Defendant’s Exhibit 1 (see ECF No. 68), the Court
will unseal the exhibit once Defendants redact Ms. Johnson’s
personal e-mail address.
Each

party

has

fourteen

days

from

the

date

of

this

Memorandum Opinion, and its accompanying Order, to either file
redacted versions of the documents outlined herein or notify the
Court

that

the

document

is

withdrawn.

If

neither

redacted

versions or notices of withdrawal are filed, the Court will
order the unsealing of the documents after fourteen days have
passed.
III. CONCLUSION
For

the

foregoing

reasons,

the

Court

will,

by

separate

Order, GRANT in part and DENY in part Ms. Johnson’s Motion to
Compel

Enforcement

Specifically,

of

Defendants

Settlement
are

Agreement

DIRECTED

to

(ECF

remit

a

No.

64).

settlement

amount that includes the $10,736.64 state garnishment, but the
$6,669.77 federal tax levy will remain unaltered.

Upon the

tender of that settlement check, this case will be dismissed
with prejudice and closed by the Clerk.

Defendants shall notify

the Court when the check has been tendered or has otherwise been
13

made

available

to

Ms.

Johnson.

Ms.

Johnson’s

request

for

punitive damages will also be DENIED.
Moreover, Ms. Johnson’s Motion to Seal Plaintiff’s Motion
to Compel Enforcement of Settlement Agreement (ECF No. 65) and
Motion

to

Seal

Defendant’s

Exhibit

1

(ECF

No.

68)

will

be

GRANTED in part and DENIED in part.

Entered this 29th day of July, 2013

_________/s/________________
George L. Russell, III
United States District Judge

14