United States of America v. Beissel et al
Filing
46
ORDER denying 36 Motion for Relief from Judgment.(Written Opinion). Signed by Senior Judge David S. Doty on 4/4/2013. (PJM)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 11-2579(DSD/TNL)
United States of America,
Plaintiff,
ORDER
v.
David W. Beissel; Constance W.
Beissel; Theresa Andersen; Allen
Anderson0 Richard Beissel;
Catherine Steinhibel; Daniel
Beissel; Mary Beissel; Kurt
Seleski; Lisa Seleski; Dana
Seleski; Wells Fargo Bank, N.A.;
and Minnesota Department of
Revenue,
Defendants.
Erin Lindgren, U.S. Department of Justice, Tax Division,
P.O. Box 7238, Washington, D.C., 20044, counsel for
plaintiff.
Eric W. Johnson, Esq., U.S. Bank Building, 101 East Fifth
Street, Suite 910, St. Paul, MN 55101, counsel for
defendants Beissel.
This matter is before the court upon the motion for relief
from judgment by defendants David W. Beissel and Constance W.
Beissel.
Based on a review of the file, record, and proceedings
herein, and for the following reasons, the court denies the motion.
BACKGROUND
This tax dispute arises out of the nonpayment of income tax by
David Beissel.1
2002 and 2006.
a
notice
of
Beissel did not file income tax returns between
Kampschroer Decl. ¶ 4.
non-filing and
informed
In response, the IRS sent
Beissel
that,
unless
he
submitted the returns, the IRS would calculate his tax liability.
Olson Decl. ¶¶ 4-8. The IRS determined Beissel’s tax liability for
the missing years and sent a notice of assessment, informing him of
his right to challenge the substitute returns in tax court.
Id.;
Kampschroer Decl. ¶ 4.
On December 3, 2009, the IRS sent David Beissel a notice of
intent to levy, informing him that “[i]f you don’t pay the amount
you owe, make alternative arrangements to pay, or request an
Appeals hearing within 30 days ..., we may take collection action
against your property, or rights to property, such as real estate,
automobiles, business assets, banks accounts, and other income.”
Olson Decl. Ex. A., at 00072.
Communication between the Beissels
and the IRS continued for over a year.
On January 13, 2011, the
IRS informed the Beissels that it intended to pursue a foreclosure
action.
Id. Ex. C.
1
The dispute arises out of David Beissel’s tax liability, but
Constance Beissel is a co-owner of the property at issue.
D.
Beissel Aff. ¶ 5.
2
On
September
complaint.2
8,
2011,
the
government
filed
the
instant
Constance Beissel waived service on October 5, 2011,
and David Beissel was served on October 15, 2011.
The clerk
entered default against David and Constance Beissel on November 10,
2011, and January 12, 2012, respectively.
On May 14, 2012, the
court entered a default judgment against Constance Beissel and
amended a previous default judgment against David Beissel.3
The
court issued an order of sale of the Beissels’ home on May 25,
2012.
On November 16, 2012, the Beissels moved for relief from
judgment.
DISCUSSION
I.
Standard
“[R]elief from a default judgment requires a stronger showing
of excuse than relief from a mere default order.”
Johnson v.
Dayton Elec. Mfg. Co., 140 F.3d 781, 783 (8th Cir. 1998) (citations
and internal quotation marks omitted).
default
judgment
under
Rule
60(b),
A court may set aside a
but
such
relief
“is
an
2
In addition to David and Constance Beissel, the government
named Theresa Andersen, Allen Anderson, Richard Beissel, Catherine
Steinhibel, Daniel Beissel, Mary Beissel, Kurt Seleski, Lisa
Seleski, Dana Seleski, Wells Fargo Bank, N.A. and the Minnesota
Department of Revenue as defendants. All defendants other than
David and Constance Beissel have been dismissed from the action.
See ECF Nos. 6, 10, 21.
3
The court previously entered default judgment against David
Beissel on January 9, 2012. See ECF No. 14.
3
extraordinary remedy and will be justified only under extraordinary
circumstances.”
Prudential Ins. Co. of Am. v. Nat'l Park Med.
Ctr., Inc., 413 F.3d 897, 903 (8th Cir. 2005) (citations and
internal quotation marks omitted).
The court may relieve a party from a final judgment based on
excusable neglect.
Fed. R. Civ. P. 60(b).4
“Whether a party’s
neglect of a deadline may be excused is an equitable decision
turning on all relevant circumstances surrounding the party’s
omission.”
Ceridian Corp. v. SCSC Corp., 212 F.3d 398, 403 (8th
Cir. 2000) (citation and internal quotation marks omitted).
The
court considers the danger of prejudice to the non-moving party,
the length of and reason for the delay, the potential impact on
judicial proceedings, whether the movant acted in good faith and
whether the movant has a meritorious defense to the judgment.
Union Pac. R.R. Co. v. Progress Rail Servs. Corp., 256 F.3d 781,
782-83 (8th Cir. 2001).
II.
Length of and Reason for Delay
The Beissels argue that their failure to respond to the
proceedings amounts to excusable neglect. Central to the excusable
neglect analysis is the blameworthiness of the defaulting party.
Johnson, 140 F.3d at 784; see also Feeney v. AT&E, Inc., 472 F.3d
4
The court may also relieve a party from a final judgment for
“any other reason that justifies relief.”
Fed. R. Civ. P.
60(b)(6).
The Beissels do not argue for relief under Rule
60(b)(6), and the court concludes that there are no additional
reasons that justify relief.
4
560, 563 (8th Cir. 2006) (noting that reason for delay is the most
important factor in the analysis).
There can be no excusable
neglect, however, when a party consciously chooses to ignore
ongoing litigation.
See Hall v. T.J. Cinnamon’s, Inc., 121 F.3d
434, 435 (8th Cir. 1997) (“Despite its knowledge of both the
underlying
lawsuit
and
the
request
for
default
judgment,
[defendant] watched the litigation from afar for over seven months,
apparently without any intention of entering an appearance or
defending the action.”).
Here, the Beissels were given ample
notice of the lawsuit - each was served with the complaint and
received copies of documents from all proceedings - but completely
ignored the litigation.
See ECF Nos. 3, 4.
The Beissels respond that they are unsophisticated and do not
understand financial or legal matters.
Ignorance of court rules,
however, does not constitute excusable neglect.
See Ceridian, 212
F.3d at 403.
Further, the summonses informing the Beissels of the
consequences
of
failure
understand language.
to
respond
were
phrased
in
easy-to-
See, e.g., ECF No. 3 (“A lawsuit has been
filed against you ... If you fail to respond, judgment by default
will
be
entered
against
you
for
the
relief
demanded
in
the
complaint.”). Moreover, the Beissels were warned repeatedly by IRS
5
agents that a lawsuit would be filed if they did not comply with
the IRS.5
See Olson Decl. Ex. C.
The delay of several months between the entry of the default
judgment and the filing of the instant motion further weighs
against granting relief from the default judgment.
See, e.g.,
Progress Rail, 256 F.3d at 783 (excusing default when defendant
filed motion to set judgment aside “only three weeks after it had
notice of the default”).
After considering the circumstances
surrounding the default judgment, the court concludes that the
length of and reason for the delay counsels against granting the
motion.
III.
Meritorious Defense
The Beissels next argue that they have a meritorious defense,
as they allege that their actual tax liability is much less than
the default judgment amount of $782,508.
The Beissels, however,
have adduced no evidence of their actual tax liability.
Instead,
they summarily argue that a “self-employed house painter does not
plausibly generate the tax liability claimed by the United States.”
Defs.’ Mem. Supp. 3.
These bald allegations, “without the support
5
Additionally, the Beissels argue that “[a]t no point were
[they] represented by counsel.”
The Beissels’ pro se status,
however, does not weigh in favor of granting relief. See Ackra
Direct Mktg. Corp. v. Fingerhut Corp., 86 F.3d 852, 856-57 (8th
Cir. 1996) (analyzing default judgment standard and noting “pro se
representation does not excuse a party from complying with a
court’s orders and with the Federal Rules of Civil Procedure”
(citations omitted)).
6
of facts underlying the defense, will not sustain the burden of the
defaulting party to show cause why the entry of default should be
set aside; the trial court must have before it more than mere
allegations that a defense exists.”
Stephenson v. El-Batrawi, 524
F.3d 907, 914 (8th Cir. 2008) (citation and internal quotation
marks omitted).
As a result, no meritorious defense is before the
court, and this argument is unavailing.
In sum, the Beissels point to no exceptional circumstances
that merit the extraordinary relief sought.
Therefore, the motion
for relief from judgment is denied.
CONCLUSION
Accordingly, based on the above, IT IS HEREBY ORDERED that
defendants’ motion for relief from judgment [ECF No. 36] is denied.
Dated:
April 4, 2013
s/David S. Doty
David S. Doty, Judge
United States District Court
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