UNITED STATES OF AMERICA

Filing 51

MEMORANDUM OPINION (c/m to Christopher Nazarian 6/5/12 sat). Signed by Chief Judge Deborah K. Chasanow on 6/5/12. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
UNITED STATES OF AMERICA
:
v.

:

Civil Action No. DKC 10-2962

:
CHRISTOPHER T. NAZARIAN, et al.
:
MEMORANDUM OPINION
Presently pending and ready for review are two motions for
default
America.

judgment

filed

by

Plaintiff,

(ECF Nos. 45, 47).

the

United

States

of

The relevant issues are briefed,

and the court now rules pursuant to Local Rule 105.6, no hearing
being

deemed

necessary.

For

the

reasons

that

follow,

the

Government’s motions will be granted in part and denied in part.
I.

Background
The Government filed its complaint on October 20, 2010,

against

Defendants

Christopher

T.

Nazarian

as

Personal

Representative of the Estate of Sarkis K. Nazarian, Hermine H.
Nazarian, Citibank F.S.B., and Joan C. Doll.
complaint

1

sought

to

do

the

following:

(ECF No. 1).1
(1)

convert

The
tax

The complaint also initially listed S. Freedmand & Sons,
Inc. as a Defendant, but the Government voluntarily dismissed
the complaint as to this Defendant on February 7, 2011.
(ECF
Nos. 10, 11).

liabilities previously assessed against the now deceased Sarkis
Nazarian (“Decedent”) and against Doll, to judgment;2 (2) set
aside the alleged fraudulent conveyance of a Potomac, Maryland,
residence from Decedent to his wife, Defendant Hermine Nazarian;
and (3) foreclose federal tax liens against real property owned
by Decedent.

(Id.).

According

arise

from

Decedent’s and Doll’s violations of 26 U.S.C. § 6672(a).

(Id.

¶¶

13,

35).3

positions

at

to

the

Decedent

Government,

and

Catonsville

Doll

these

claims

previously

Eldercare,

business located in Baltimore, Maryland.

Inc.

held

unspecified

(“Eldercare”),

(Id. ¶¶ 13, 34).

a
The

Government asserts that, while in those positions, Decedent and

2

Decedent passed away on January 5, 2009.

(Id. ¶ 6).

3

The complaint cites Title 28, rather than Title 26 of the
United States Code, an obvious typographical error.
Section 6672(a) provides as follows:
Any person required to collect, truthfully
account for, and pay over any tax imposed by
this title who willfully fails to collect
such tax, or truthfully account for and pay
over such tax, or willfully attempts in any
manner to evade or defeat any such tax or
the payment thereof, shall, in addition to
other penalties provided by law, be liable
to a penalty equal to the total amount of
the tax evaded, or not collected, or not
accounted for and paid over.

2

Doll

were

required

to

collect,

account

for,

and

pay

to

the

Internal Revenue Service (“IRS”) federal withholding and FICA
taxes

for

Eldercare’s

employees.

(Id.

¶¶

13,

35).

The

Government further alleges that they failed to do so for the
quarterly tax periods ending September 30, 1998, through June
30, 2000.

(Id. ¶¶ 14, 36).

In March 2002, pursuant to 26

U.S.C. § 6672, a delegate of the Secretary of the United States
assessed trust fund recovery penalties against both Decedent and
Doll.

(Id. ¶¶ 15, 37).
When Decedent – and then his estate – as well as Doll had

failed to pay these penalties as of October 2010, the Government
brought the present action against Defendants.

Hermine Nazarian

and Citibank thereafter answered the complaint.
14).4

(ECF Nos. 8,

Christopher Nazarian filed an answer on behalf of the

Decedent’s estate on January 18, 2011, (ECF No. 7), but the
Government moved to strike the answer on February 16, 2011,
contending

that

Christopher

Nazarian

was

not

an

attorney

authorized to practice in the United States District Court for
the District of Maryland (ECF No. 13).

4

Hermine Nazarian then

Christopher Nazarian, as personal representative of
Decedent’s estate, and Hermine Nazarian were served personally
on December 27, 2010, and Citibank waived service of process.
(ECF Nos. 3, 4, 9). Process servers were unable to locate Doll,
who is allegedly a resident of Myrtle Beach, South Carolina.
She was subsequently served by publication.
3

filed a motion to stay consideration of the motion to strike and
requested that the court delay ruling on that motion until the
conclusion

of

state

court

proceedings

to

remove

Christopher

Nazarian as personal representative of Decedent’s estate.
No. 17).5

(ECF

On April 25, 2011, the court granted the Government’s

motion to strike, denied Hermine Nazarian’s motion to stay, and
ordered Decedent’s estate to retain counsel and file a proper
answer within twenty-one days.

(ECF Nos. 21, 22).

Christopher

Nazarian thereafter filed an “emergency motion” to have counsel
appointed to represent Decedent’s estate (ECF No. 25), but this
motion was denied on May 16, 2011 (ECF No. 26).
The Government moved for entry of default against Doll on
May 18, 2011, and against Decedent’s estate on May 24, 2011.
(ECF Nos. 27, 31).

The clerk entered default against Doll and

Decedent’s estate “for want of answer or other defense” on May
19, and June 14, 2011, respectively.

(ECF Nos. 29, 33).

On

July 12, 2011, the Government moved for judgment by default
against Doll and Decedent’s estate as to the counts that seek to
reduce the tax assessments against them to judgment.
36, 37).

5

(ECF Nos.

The court denied these motions without prejudice to

As a result of these proceedings, the state court “reduced
the [personal representative] to a special Administrator” of
Decedent’s estate. (ECF No. 25, at 2).
4

renewal on October 27, 2011.

(ECF Nos. 43, 44).

subsequently renewed both motions.
Hermine
stipulations

Nazarian,
of

(ECF Nos. 45, 47).

Citibank,

dismissal

with

The Government

and

the

the

court

Government

shortly

filed

thereafter,

stating that they had agreed to dismiss counts two and three of
the complaint with prejudice.

(ECF Nos. 48, 49).

On March 8,

2012, the court approved the stipulations and dismissed these
counts

from

the

complaint.

(ECF

No.

50).

Thus,

the

only

remaining counts are those against Decedent’s estate and Doll to
reduce the trust fund recovery penalties to judgment.
II.

Motions for Default Judgment
Pursuant

to

Rule

55(b)(2),

where

a

default

has

been

previously entered and the complaint does not specify a certain
amount of damages, the court may enter a default judgment upon
the plaintiff’s application and, if the defaulting party has
appeared, notice to that party.

A defendant’s default, however,

does

the

not

default

automatically
judgment;

entitle

rather,

discretion of the court.

that

plaintiff

decision

is

to

entry

left

to

of

a

the

See Dow v. Jones, 232 F.Supp.2d 491,

494 (D.Md. 2002). The United States Court of Appeals for the
Fourth Circuit has a “strong policy” that “cases be decided on
their merits,” id. (citing United States v. Shaffer Equip. Co.,
11 F.3d 450, 453 (4th Cir. 1993)), but default judgment may be
5

appropriate where a party is essentially unresponsive, SEC v.
Lawbaugh, 359 F.Supp.2d 418, 421 (D.Md. 2005) (citing Jackson v.
Beech, 636 F.2d 831, 836 (D.C.Cir. 1980)).
Here, eighteen months have passed since Decedent’s estate
was served with the complaint, with more than a year elapsing
since the court ordered the estate to retain counsel and file a
proper answer – which it never did.

Similarly, more than a year

has passed since the Government served Doll by publication, and
Doll has neither pled nor asserted a defense in response.
the

“adversary

process

has

been

halted

because

of

As

[these]

essentially unresponsive part[ies],” id., default judgment will
be

warranted

against

Decedent’s

estate

and

Doll

if

the

Government can establish liability and resulting damages.
The Fourth Circuit has previously held that the Government
makes

a

prima

facie

case

of

tax

liability

when

it

submits

certified copies of the certificates of tax assessment to the
court.

United States v. Pomponio, 635 F.2d 293, 296 (4th Cir.

1980).

The Government has submitted certified copies of these

assessments

against

periods at issue.

Decedent

and

Doll

for

(ECF Nos. 45-2, 47-2).

each

of

the

tax

“Such certificates

are presumed correct unless the defendant[s] provide[] proof to
the contrary.”

United States v. Register, 717 F.Supp.2d 517,

522 (E.D.Va. 2010).

Having failed to respond to the complaint,
6

Decedent’s

estate

and

Doll

have

offered

no

proof.6

such

Accordingly, the Government has established their liability for
the

trust

fund

recovery

penalties

for

the

quarters

ending

September 30, 1998, through June 30, 2000.
With

the

liability

of

Decedent’s

estate

and

Doll

established, the analysis now turns to the issue of relief.

The

Government has requested damages as follows: (1) judgments of
$462,397.56

and

$463,986.45

for

Decedent’s

and

Doll’s

outstanding tax liabilities as of November 28, 2011, and January
9,

2012,

respectively;

liabilities
judgment,

since
unlike

those

(2)

interest

dates;

with

and

accruing

(3)

allegations

on

costs.

the

On

regarding

tax

default

liability,

allegations regarding damages are not taken as true, Lawbaugh,
359 F.Supp.2d at 421, and the Government bears the burden of
establishing

entitlement

to

recovery,

Greyhound

Exhibitgroup,

Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992).
Additionally,

6

the

court

“may

only

award

damages

without

a

Under Maryland law, Decedent’s estate is liable for his
debts, including unpaid federal taxes at the time of his death.
See Tobiason v. Machen, 217 Md. 207, 211 (1958) (explaining that
“the natural and primary fund for the payment of [a decedent’s]
debts] is from his personal estate”); see also Md. Code Ann.,
Est. & Trusts § 8-105(a) (stating that “[t]axes due by the
decedent” are one of the claims entitled to priority when paying
the debts of a decedent’s estate); generally United States v.
Bielaski, 360 Md. 67 (2000) (concluding that the Government’s §
6672 claim against a decedent’s estate had priority for purposes
of payment from the estate).
7

hearing

if

the

record

supports

Vardoulakis, 2010 WL 5137653, at *5.

the

damages

requested.”

The Government may support

its request for damages with “detailed affidavits or [other]
documentary evidence.”

Adkins v. Teseo, 180 F.Supp.2d 15, 17

(D.D.C. 2001) (citing United Artists Corp. v. Freeman, 605 F.2d
854, 857 (5th Cir. 1979)).
In support of the requests for default judgment as to the
outstanding

tax

liabilities,

the

Government

has

submitted

declarations from Suzanne Fawley, an Internal Revenue Service
advisor, along with the tax transcripts for Decedent and Doll as
of November 28, 2011, and January 9, 2012, respectively.
declarations,
Decedent’s

Ms.

and

Fawley

Doll’s

states

tax

that

the

liabilities

unpaid

were

$463,986.45, respectively, as of those dates.
47-1).7

In her

balances

$462,397.56

of
and

(ECF Nos. 45-1,

These amounts match the total balances on Decedent’s and

Doll’s tax transcripts.

(See ECF Nos. 45-3, 47-3).

Therefore,

the Government is entitled to default judgments against Decedent
and

Doll

for

these

unpaid

tax

liabilities.

Additionally,

pursuant to 26 U.S.C. § 6601(a), the Government is entitled to

7

The “account balance” listed on each tax transcript, which
does not include accrued interest, is the same as the “balance”
listed on the tax assessments for each tax period at issue.
Both of these balances further match the amount of the tax
assessments as stated in the Government’s complaint and renewed
motions for default judgment.
8

recover

interest

that

has

accrued

on

Decedent’s

and

Doll’s

outstanding tax liabilities since November 28, 2011, and January
9, 2012, respectively.

See United States v. Sarubin, 507 F.3d

811, 814 (4th Cir. 2007) (explaining that § 6601(a) “plainly
require[s] a dilatory taxpayer to pay interest accruing from the
date the tax is due and compounding until the date the total
obligation is paid”).
The Government’s separate request for costs, however, must
be denied.

In its motions, the Government asks that the default

judgments against Decedent’s estate and Doll include an award
for “costs that have accrued and will continue to accrue.”
No. 45-6, at 1; ECF No. 47, at 1).

(ECF

It neither specifies the

amount of costs it seeks nor proffers any explanation or support
for these requests.

In the absence of “documentary evidence,”

Adkins, 180 F.Supp.2d at 17 (citing United Artists Corp., 605
F.2d

at

857),

the

record

does

not

support

the

Government’s

requests and, accordingly, they cannot be granted.8

8

Local Rule 109 sets forth the guidelines for a party to
follow when filing a bill of costs. Pursuant to that rule, the
Government may submit its bill of costs to the court clerk
within fourteen days of the entry of judgment.
9

III. Conclusion
For

the

foregoing

reasons,

the

Government’s

motions

default judgment will be granted in part and denied in part.
separate Order will follow.

/s/
DEBORAH K. CHASANOW
United States District Judge

10

for
A