United States of America v. Mooney et al
MEMORANDUM OPINION AND ORDER adopting 112 Report and Recommendation; denying 83 Motion for Summary Judgment. (Written Opinion) Signed by Judge Susan Richard Nelson on 2/15/2018. (SMD)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
United States of America,
Case No. 16-cv-2547 (SRN/LIB)
William J. Mooney, Joni T. Mooney, and
Harbor Holdings, Mid-Atlantic Trustees
Michael R. Pahl, United States Department of Justice, Tax Division, P.O. Box 7238 Ben
Franklin Station, Washington, District of Columbia, for Plaintiff.
William J. Mooney and Joni T. Mooney, 409 Sixth Avenue Northwest, Little Falls,
Minnesota 56345, pro se.
SUSAN RICHARD NELSON, United States District Judge
This matter comes before the Court on the Answer and Objection [Doc. No. 113]
(“Objection”) of Defendants William J. Mooney and Joni T. Mooney (together, the
“Mooney Defendants”) to United States Magistrate Judge Leo I. Brisbois’s Report and
Recommendation (“R&R”), dated November 2, 2017 [Doc. No. 112]. The magistrate judge
recommended that the Mooney Defendants’ Motion for Summary Judgment [Doc. No. 83]
Pursuant to statute, this Court reviews de novo any portion of the magistrate judge’s
opinion to which specific objections are made, and “may accept, reject, or modify, in whole
or in part, the findings or recommendations” contained in that opinion.
§ 636(b)(1)(C); see also Fed. R. Civ. P. 72(b); D. Minn. LR 72.2(b)(3). For the reasons
stated herein, the Court overrules the Mooney Defendants’ objections and adopts the R&R
in its entirety.
The facts underlying this case and the present motion have been thoroughly and
accurately stated in the R&R, the background section of which the Court incorporates by
reference here. As the Court previously noted in its Order denying the Mooney Defendants’
motion to dismiss and adopting the magistrate judge’s R&R, the Mooney Defendants have
taken an unconventional approach to this litigation. (Order dated May 31, 2017 [Doc. No.
78], at 3.) Since the Court’s last order in this case, the Mooney Defendants have proceeded
with the same litigation strategy as before, filing this and other motions accompanied by a
series of affidavits such as their “Affidavit of Non Response to Notice of Fault in
The Mooney Defendants’ Motion for Summary Judgment raises nine issues which
Magistrate Judge Brisbois addressed in the R&R. Several arguments raised in this motion
simply restate arguments from the Motion to Dismiss which were already rejected by this
Court, and are now barred by the law-of-the-case doctrine. (See R&R, at 4–7.) After
reviewing the rest of the arguments, Magistrate Judge Brisbois found that the Mooney
Defendants had failed to show that the United States could not succeed, as a matter of law,
on the claims presented in the case. (Id. at 10–13.)
Magistrate Judge Brisbois filed the R&R as to the Mooney Defendants’ motion on
November 2, 2017, recommending that the motion be denied. The Mooney Defendants
have since filed timely objections to the R&R, triggering this de novo review. The Mooney
Defendants raise three objections to Magistrate Judge Brisbois’s R&R: (1) that the
Government failed to provide legal authority establishing the Mooney Defendants’
obligation to pay the taxes in question; (2) that counsel for the United States lacks the power
to bring this suit; and (3) that the statute of limitations has expired for claims that arose from
the 2002 and 2003 tax periods, or alternatively, that the form giving notice of the liens was
Standard of Review
Upon issuance of an R&R, a party may “serve and file specific written objections to
the proposed findings and recommendations.” Fed. R. Civ. P. 72(b)(2) (emphasis added).
“The objections should specify the portion of the magistrate judge’s [R&R] to which
objections are made and provide a basis for those objections.” Mayer v. Walvatne, No. 07cv-1958 (JRT/RLE), 2008 WL 4527774, at *2 (D. Minn. Sept. 28, 2008). Objections which
are not specific but merely parrot arguments already presented to and considered by the
magistrate judge are not entitled to de novo review. Dunnigan v. Fed. Home Loan Mortg.
Corp., No. 15-cv-2626 (SRN/JSM), 2017 WL 825200, at *3 (D. Minn. Mar. 2, 2017) (citing
Mashak v. Minnesota, No. 11-cv-473 (JRT/JSM), 2012 WL 928251, at *2 (D. Minn. Mar.
19, 2012)). Furthermore, when presenting arguments to a magistrate judge, parties must put
forth “not only their ‘best shot’ but all of their shots.” Ridenour v. Boehringer Ingelheim
Pharm., Inc., 679 F.3d 1062, 1067 (8th Cir. 2012) (quotations and citations omitted). Thus,
a party cannot, in his objections to an R&R, raise arguments that were not clearly presented
to the magistrate judge. Hammann v. 1-800 Ideas.com, Inc., 455 F. Supp. 2d 942, 947-48
(D. Minn. 2006).
Statutory Authority for United States’ Claims
The Mooney Defendants assert that the Government has not cited any statute that
would obligate them to pay the taxes at issue in this case, which they refer to as “1040”
taxes. (Obj., at 2–3.) The Mooney Defendants raised this argument in their summary
judgment motion and Magistrate Judge Brisbois addressed it in the R&R. (See R&R, at 12–
13.) As Magistrate Judge Brisbois noted, the Mooney Defendants’ argument arises from
their misunderstanding of the charges in the Complaint. (Id.) The Complaint alleges that
the Mooney Defendants failed to pay federal income tax, which is generally reported on a
“Form 1040.” (Compl. [Doc. No. 1] ¶¶ 6–11.) The Mooney Defendants misapprehend this
to mean that the Government alleges they failed to pay estate taxes governed by 26 U.S.C.
§ 1040. (See Obj., at 3 (“Because we are living and not deceased, therefore we are not
subject or have no duty or obligation to pay 26 USC 1040 [sic] tax.”).)
As Magistrate Judge Brisbois discussed, the statutory authority for the Government’s
action to collect unpaid federal income tax is plainly identified on the face of the Complaint.
(See Compl., at 1 (asserting authority under 26 U.S.C. §§ 7401 and 7403).) Accordingly,
the Court agrees with Magistrate Judge Brisbois that “the United States’ ability or inability
to prove a violation of 26 U.S.C. § 1040 is wholly irrelevant” to whether the Mooney
Defendants are entitled to summary judgment, and therefore rejects their objections
claiming a lack of statutory authority. (R&R, at 13.)
Authority of United States Attorney
The Mooney Defendants also argue that counsel for the United States lacks the
authority to bring this suit because United States Attorneys cannot sue in the name of the
United States of America. (Obj., at 4.) There are two flaws in this objection, which was
raised in the summary judgment motion and rejected in the R&R. (See R&R, at 9.) First,
counsel for the United States, Michael R. Pahl, is a Trial Attorney from the Tax Division
of the Department of Justice and not, as the Mooney Defendants assert, a United States
Attorney. Second, even if counsel were a United States Attorney, there is no legal
distinction between the United States and the United States of America. In rejecting this
argument when it was raised on summary judgment, Magistrate Judge Brisbois correctly
noted that the same argument has been raised and rejected repeatedly in cases throughout
the federal courts. See, e.g., United States v. Garcia, No. 13-cr-164 2013 WL 5954688,
*5 (D. Minn. Oct. 4, 2013); United States v. Wacker, No. 98-3267, 1999 WL 176171, at
*2 (10th Cir. Mar. 31, 1999). The Court must therefore reject the Mooney Defendants’
argument as it lacks a legal basis.
Statute of Limitations
Finally, the Mooney Defendants argue that the 10-year statute of limitations period
for the claims that arose from the 2002 and 2003 tax periods expired before the United
States filed this suit. Under 26 U.S.C. § 6502, the government can levy unpaid taxes
“within 10 years after the assessment of the tax.” 26 U.S.C. § 6502(a)(1).
The Mooney Defendants raise two arguments on this point. First, they argue that
taxes from the 2002 and 2003 periods were assessed in 2003 and 2004, respectively,
meaning claims for unpaid taxes from both periods expired before the United States
initiated this suit in July 2016. (Obj., at 6.) Second, they argue that the form filed by the
Government providing notice of the liens against them, which lists the assessment dates,
was “illegal” because it was not a “Form 668” as required by 26 C.R.F. § 301.6323(f)-1.
(Id. at 6–7.) The Mooney Defendants raised these same arguments in their Motion for
Summary Judgment or at the summary judgment hearing before Magistrate Judge
Brisbois, and Magistrate Judge Brisbois rejected both in the R&R. (R&R, at 12–13.)
The Court addresses each objection in turn.
In support of their contention that the taxes in question were assessed in 2003 and
2004, the Mooney Defendants rely on a document entitled “Facsimile Federal Tax Lien
Document,” filed as Exhibit 3 to their Motion for Summary Judgment. (Ex. Index for Mot.
for Summ. J. [Doc. No. 105], at 18.) The document lists tax assessments against the
Mooney Defendants for the years 2002 and 2003 in one chart. For each year, the form lists
two separate assessment dates. For 2002, it lists one entry with an assessment date of April
14, 2003, and one with a date of August 17, 2006. For 2003, it lists an assessment dated
May 17, 2004, and one dated December 18, 2006. As is stated in the Complaint, and as the
United States made clear at oral argument, the taxes at issue in this case are those assessed
in 2006. (See Compl.¶ 7.)
In support of the allegation in the Complaint, the United States cites Internal
Revenue Service Account Transcripts, filed as Exhibits 1 and 2 to the Memorandum in
Opposition to the Motion for Summary Judgment. (United States Mem. of Law in Opp’n to
Defs. Mot. for Summ. J. [Doc. No. 108], at 1–8.) The Account Transcripts make clear that
the taxes claimed by the United States were assessed in 2006 after the Mooney Defendants’
filings were examined. (Id. at 2–8.) Because the 2002 and 2003 taxes were assessed,
respectively, in August and December of 2006, the United States’ claims were timely when
they were filed in July 2016. The Court therefore overrules the Mooney Defendants’
objection on this issue.
Alternatively, the Mooney Defendants contend that the form entitled “Facsimile
Federal Tax Lien Document,” which provided notice of the liens against them and on which
they rely for their statute of limitations argument, was “illegal” because it failed to meet the
requirements for a “Notice of Federal Tax Lien” under 26 C.R.F. § 301.6323(f)-1. (Obj.,
This contention, which Defendant William J. Mooney first raised at oral
argument, was also addressed by Magistrate Judge Brisbois in the R&R. (R&R, at 12 n.
4.) As Magistrate Judge Brisbois noted, the Internal Revenue Regulations provide, in
relevant part, that notice of a lien “shall be filed on Form 668.” 26 C.R.F. § 301.6323(f)1(d)(2). The Mooney Defendants’ contention is that because the form in question was
not labeled “Form 668,” it was legally insufficient to provide notice.
Section 301.6323(f)-1(d)(2) provides in full:
Form 668 defined. The term Form 668 means either a paper form or a
form transmitted electronically, including a form transmitted by facsimile
(fax) or electronic mail (e-mail). A Form 668 must identify the taxpayer,
the tax liability giving rise to the lien, and the date the assessment arose
regardless of the method used to file the notice of Federal tax lien.
The form in question here was not labeled “Form 668,” but instead states “This Lien Has
Been Filed in Accordance with Internal Revenue Regulation 301.6323(f)-1.” (Ex. Index
for Mot. for Summ. J. at 18.) The form identifies the Mooney Defendants as taxpayers,
and identifies the tax liabilities giving rise to the liens and their dates of assessment. (Id.)
Furthermore, the Court does not understand the Mooney Defendants to argue that they
did not have notice of the liens against them. In fact, in their Motion for Summary
Judgment they argue instead that they have been deprived of due process because there
was no additional documentation accompanying the notice of liens. (Mem. of Law [Doc.
No. 84], at 12.)
In short, the Mooney Defendants do not assert that they lacked actual notice of the
liens, but rather that the notice was technically invalid. According to the Eighth Circuit
“[t]he sufficiency of notice is a question of federal law,” and “‘[t]he test is not absolute
perfection in compliance with the statutory requirement for filing the tax lien, but
whether there is substantial compliance sufficient to give constructive notice and to alert
one of the government’s claim.’” Tony Thornton Auction Serv., Inc. v. United States, 791
F.2d 635, 638–39 (8th Cir. 1986) (quoting United States v. Sirico, 247 F.Supp. 421, 422
(S.D.N.Y.1965)). Without question the form here was sufficient to give notice of the
claim against the Mooney Defendants. It contained all the required information and
identified itself as a lien document in accordance with Regulation 301.6323(f)-1, and the
Mooney Defendants do not deny knowledge of its existence. The Court therefore agrees
with Magistrate Judge Brisbois that the notice was valid and overrules the Mooney
For the reasons stated, the Court concludes that the magistrate judge did not err in
concluding that the Mooney Defendants’ Motion for Summary Judgment must be denied.
Accordingly, the Court overrules all objections, and adopts the R&R.
THEREFORE, IT IS HEREBY ORDERED THAT:
1. Defendants’ Objections [Doc. No. 113] to the Magistrate Judge’s
November 2, 2017 Report and Recommendation are OVERRULED;
2. The Court ADOPTS the Report and Recommendation [Doc. No. 112];
3. Defendants’ Motion for Summary Judgment [Doc. No. 83] is DENIED.
Dated: February 15, 2018
s/Susan Richard Nelson
SUSAN RICHARD NELSON
United States District Judge
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