United States of America v. Mann et al

Filing 75

OPINION AND ORDER: The Court will grant the government's motion for summary judgment reducing the tax assessments of $1,383,862.03 to judgment against Mr. Mann. The judgment will include statutory accruals from 7/30/2008, until paid. The Court will address the appropriate next steps in this case at the time presently scheduled for the final pretrial conference on 11/4/2008 at 4 p.m. The trial currently scheduled to being on 11/25/2008, is adjourned without date; signed by Judge Robert J. Jonker (Judge Robert J. Jonker, ymc)

UNITED STATES DISTRICT COURT W E S T E R N DISTRICT OF MICHIGAN S O U T H E R N DIVISION

U N IT E D STATES OF AMERICA, P l a in tif f , C A S E NO. 1:07-CV-260 v. H O N . ROBERT J. JONKER G E R A L D T. MANN and LAUREL MANN, both individually a n d in their capacities as trustees of the N A Z A R E T H SECURITY TRUST,

D e f e n d a n ts . __________________________________/ O P I N I O N AND ORDER This matter is before the Court on the United States' Motion for Summary Judgment against D e fe n d a n ts Gerald T. Mann and Laurel Mann, both individually and in their capacities as trustees o f the Nazareth Security Trust (docket # 68). In their capacities as trustees of the Nazareth Security T r u s t , the Manns are already in default (docket # 63). Moreover, Laurel Mann has filed no response a t all to Plaintiff's motion, and Gerald Mann has filed no substantive response. Instead, he has filed o r attempted to file incomprehensible and immaterial papers that fail to point out any error of fact o r law in Plaintiff's moving papers (docket ## 69 and 72). The matter is ripe for decision without fu rth e r briefing or argument. B a c kg r o u n d M r. Mann filed federal income tax returns for the tax years 1993­99 in 2002 and early 2003, w e ll after they were due. Based upon the returns he filed, the IRS made assessments of unpaid

fe d e ra l income tax against Mr. Mann for the tax years 1993­99. Despite notice of the assessments a n d demand for their payment, Mr. Mann has not paid these liabilities in full. According to the IRS, M r. Mann is indebted to the United States in the amount of $1,383,862.03, plus statutory accruals f ro m June 30, 2008. In support of its claim, the government has filed, among other things, c e r tif ic a te s of payment and assessment against Mr. Mann for the tax years 1993-99, and the sworn d e c la ra tio n of Melissa Echols, a Revenue Officer Advisor employed by the IRS. Neither Mr. nor M r s . Mann has contested the government's claims concerning the tax liabilities, or the government's ta x lien. T h e United States seeks two basic forms of relief at this time. First, the Untied States r e q u e s ts a judgment that Mr. Mann is liable for the specified unpaid income taxes for the tax years 1 9 9 3 ­ 9 9 , plus statutory accruals until paid. Second, the United States seeks to foreclose its liens c o n n e c te d to these liabilities against the interests of Mr. and Mrs. Mann, and the Nazareth Security T ru st (if any), in the real property located at 316 Margaret Street, East Lansing, Michigan 48823 (th e "Margaret Property"). The Margaret Property is, or at one time was, the marital residence of th e Manns. Whether the property is currently held by the Manns as Trustees, as entireties property, a s joint tenants, or in some other fashion is not directly at issue on the pending motion. L e g a l Standard S u m m a ry judgment should be granted if there is no genuine issue of material fact and the m o vin g party is entitled to judgment as a matter of law. Parks v. LaFace Records, 329 F.3d 437, 4 4 4 (6th Cir. 2003) (citing FED. R. CIV. P. 56(c)). A genuine issue of material fact exists if the e vid e n c e is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v . Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In deciding a motion for summary judgment, the 2

C o u rt views the evidence and draws all reasonable inferences in favor of the nonmoving party. M a ts u sh ita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). But that does not m e a n that any amount of evidence, no matter how small, will save a nonmoving party from losing o n a motion for summary judgment. Scott v. Harris, 127 S. Ct. 1769, 1776 (2007). When the n o n m o v in g party's version of the facts is "blatantly contradicted by the record, so that no reasonable ju ry could believe it, a court should not adopt that version of the facts for purposes of ruling on a m o tio n for summary judgment." Id. Discussion T h e facts material to the government's motion for judgment against Mr. Mann are u n d is p u te d . The government has satisfactorily demonstrated Mr. Mann's tax liabilities for the tax ye a r s 1993­99. See Gentry v. United States of America, 962 F.2d 555, 557 (6th Cir. 1992) (" C e rtific a te s of assessment and payments are generally regarded as being sufficient proof, in the a b s e n c e of evidence to the contrary, of the adequacy and propriety of notices and assessments that h a v e been made.") Mr. Mann has submitted no evidence contradicting the government's claims. A c c o rd in gly, the Court will grant the government's motion for summary judgment reducing the tax a s s e s s m e n ts of $1,383,862.03 to judgment against Mr. Mann. The judgment will include statutory a c c ru a ls from July 30, 2008, until paid. T h e facts related to the Plaintiff's motion for foreclosure of tax liens against the interests of th e Manns, individually, and of the Manns as Trustees of the Nazareth Security in the Margaret P ro p e r ty are also beyond genuine dispute to the extent they support the right of Plaintiff to proceed a ga in st whatever interest Mr. Mann has in the Margaret Property. The Manns originally owned the p ro p e rty in their own names. They later actually conveyed or attempted to convey their interest in 3

th a t Margaret Property to the Nazareth Security Trust (and possibly other nominees as well). The u n d is p u te d record demonstrates that Mr. Mann was the driving force behind any and all such tr a n s f e r . B a s e d on this record, the Court has no doubt that the United States has an enforceable tax lie n against the interests of Mr. Mann no matter how many nominees he used to hide his interest in th e Margaret Property. The Court does not believe this resolves the entire matter, however. The M a rga re t Property was at least at one time held by the Manns individually as husband and wife, and p r e s u m p tiv e ly as tenants by the entireties. An analysis of the respective interests of the Manns under U .S . v. Craft, 535 U.S. 274 (2002) may be necessary, and the government's motion does not directly a d d r e s s this. It's complaint does, however, in requesting the proper allocation of sale proceeds a m o n g the interests of the parties including in particular, the possible entireties interest of Mrs. M a n n , which remains to be determined following judicial sale. (Complaint, docket # 1 at Request fo r Relief E). Moreover, whether and how the Plaintiff may proceed against the Margaret Property, w h ic h appears to be the principal residence of the Manns, is a matter of some delicacy wholly apart fro m the entireties issue. See 26 U.S.C. § 6334(e). T h e Court will address the appropriate next steps in this case at the time presently scheduled fo r the final pretrial conference. The trial currently scheduled to being on November 25, 2008, is a d jo u r n e d without date. I T IS SO ORDERED.

D a te d :

October 27, 2008

/s/ Robert J. Jonker ROBERT J. JONKER U N IT E D STATES DISTRICT JUDGE 4