J. FLETCHER CREAMER & SON, INC. v. INTERNAL REVENUE SERVICE et al
Filing
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OPINION. Signed by Judge William H. Walls on 10/4/16. (cm )
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UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
J. FLETCHER CREAMER & SON, [NC.,
Plaintiff,
OPINION
V.
Civ. No. 2:13-cv-3298 (WHW) (CLW)
UNITED STATES OF AMERICA; PORCHETTA
CONTRACTTNG COMPANY Of NEW JERSEY,
INC.; and $ANTOS LANDSCAPING,
Defendants.
Walls, Senior District Judge
Plaintiff J. Fletcher Creamer & Son, Inc. brought this action for interpleader seeking
determination as to the proper recipient of New Jersey state funds paid on a state project where
the work was ultimately completed by a subcontractor, whom the original contractor did not
consent to, and where the Internal Revenue Service has issued a notice of levy on those funds.
Defendant United States of America moves for summary judgment. Decided without oral
argument under Fed. R. Civ. P. 78, Defendant United States of America’s motion is granted.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff J. Fletcher Creamer & Son, Inc. (“JFC”) served as the general contractor for a
construction project at Rutgers University. JFC engaged Nicola Porchetta Contracting Company
(“Porchetta”) as a subcontractor to build a campus bike and walking path on the university’s
campus. ECF. No.1 Ex. A, Compl.
was never signed. Id.
¶ 3.
¶ 1. A contract between JFC and Porchetta was drafled but
Porchetta then engaged another company, Santos Landscaping
(“$antos”), to perform work on the bike path. Porchetta did not give notice to JFC that Santos
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would be performing the work on the bike path until after work was completed. Id. ¶4. After
Santos performed its services, Porchetta submitted an invoice to JFC for $27,954. Id. ¶2.
Following the completion of the bike path project, but before any payment was issued
from JFC to Porchefta, or from Porchetta to Santos, the Internal Revenue Service asserted that
Porchetta owed a sum of $2,248,357 for unpaid employment and income taxes. Id.
¶ 3.
On
October 3, 2012, the IRS issued a Notice of Levy to JFC to recover against this sum from monies
owed by JFC to Porchetta. Notice of Levy, ECF No. 23-4. On April 15, 2013, JFC filed an
interpleader action in New Jersey state court, seeking to determine the proper recipient of the
$27,954 owed on the bike path project.
While Plaintiff JFC initially brought their complaint for interpleader in Bergen County
Superior Court, the case was removed to federal district court pursuant to 28 U.S.C.
§
1441,
1442, 1444, and 1446. Notice of Removal, ECF No. 1. Defendant United States of America
moved for summary judgment on June 3, 2016, asking that the $27,945 at issue be disbursed to
them and not to Defendant Santos. Mot. for Sum. Judg., ECF No. 23. Santos has not opposed the
United States’ motion.1
LEGAL STANDARD
Summary judgment should be granted where “the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a). A factual dispute between the parties must be both genuine and material to defeat a
motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). A
disputed fact is material where it would affect the outcome of the suit under the relevant
‘Despite requesting and receiving three extensions from the Court, ECF Nos. 24, 26, 27,
Defendant Santos ultimately informed the Court on August 8, 2016 that they would not be filing
an opposition to the United States’ motion.
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substantive law. Scott v. Harris, 550 U.S. 372, 380 (2007) and a dispute is genuine where a
rational trier of fact could return a verdict for the non-moving party. Id.
The movant bears the initial burden to demonstrate the absence of a genuine issue of
material fact for trial. Beard v. Banks, 548 U.S. 521, 529 (2006). Once the movant has carried
this burden, the non-movant “must do more than simply show that there is some metaphysical
doubt as to the material facts” in question. Scott, 550 U.S. at 380 (citing Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)). Each party must support its position by
“citing to particular parts of materials in the record.
.
.
or showing that the materials cited do not
establish the absence or presence of a genuine dispute, or that an adverse party cannot produce
admissible evidence to support the fact.” fed. R. Civ. P. 56(c)(1). Facts must be viewed in the
light most favorable to the nonmoving party only if there is a genuine dispute as to those facts.
Scott, 550 U.S. at 380. At this stage, the Court’s “function is not.
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to weigh the evidence and
determine the truth of the matter,” Anderson, 477 U.S. at 249, and it is “inappropriate for a court
to.
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make credibility determinations.” Big Apple BMW, Inc. v. BMWofNorth Am., Inc., 974
f.2d 1358, 1363 (3d Cir. 1992).
When a motion for summary judgment is not formally opposed, the motion should be
granted provided that the movant would be entitled to judgment as a matter of law. Anchorage
Associates v. Virgin Islands Bd. of Tax Review, 922 F.2d 168, 171 (3d Cir. 1990). A party is not
automatically entitled to summary judgment simply because the opposing party has not formally
opposed the motion. There must still be a finding by the court that that judgment for the moving
party is “appropriate”. Id. at 175; Fed. R. Civ. P. 56(e).
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DISCUSSION
1. Any payments owed to S autos are not protected as trust funds
The New Jersey Trust Fund Act, NJ.S.A. 2A:44-148 requires that:
All money paid by the state of New Jersey or by any agency, commission or department
thereof, or by any county, municipality or school district in the state, to any person
pursuant to the provisions of any contract for any public improvement made between any
such person and the state or any agency, commission or department thereof, or any
county, municipality or school district in the state, shall constitute a trust fund in the
hands of such person as such contractor, until all claims for labor, materials and other
charges incurred in connection with the performance of such contract shall have been
fully paid.
This provision applies only to those who have furnished labor and materials to the project
through direct contract with the prime contractor. Universal Supply Co. v. Martell Const. Co.,
156 N.J. Super. 327, 332 (N.J. Super. Ct. App. Div. 1978). Those who have furnished labor or
materials for the project through contract with any subcontractors down the ladder are not
protected by N.J.S.A. 2A:44-148. Id.
In their request for interpleader, Plaintiff JFC argues that the funds at issue are considered
trust funds under N.J.S.A. 2A:44-148 as they are New Jersey state funds paid for labor and
material on a state project. Amended Compi. ECF No. 4
¶ 7. While it is correct that the funds at
issue are trust funds under this definition, the ambit of protection afforded by N.J.S.A. 2A:44148 does not include Santos due to the fact that the company had no direct contractual
relationship with the prime contractor, JFC. The fact that Porchetta was a subcontractor, and not
a primary contractor, on the bike path project is not in dispute. Also not in dispute is the fact that
Santos dealt solely with Porchetta and was at no time party to a contract with JFC. Consequently,
any outstanding funds due to Santos are not trust funds under N.J.S.A. 2A:44-148 and are not
protected from levy by the Internal Revenue Service.
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2. The United States is entitled to a lien on the funds owed by JfC to Porchefta
The United States is entitled to a lien upon all property and rights to property belonging to
any person liable to pay tax who neglects or refuses to pay that tax. 26 U.S.C.
§ 6321. Porchetta
has not attempted to dispute that they owe the United States over $2.2 million in unpaid
employment and income taxes. Notice of Levy, ECF No. 23-4. As a result of Porchetta’s unpaid
taxes, the United States is entitled to a lien on the $27, 945 owed to Porchetta by JFC.
The undisputed facts of this case demonstrate first that $antos cannot make a claim to the
disputed funds as trust funds paid by New Jersey for state project, and second that the United
States is entitled to a lien on the funds as a result of Porchetta’s unpaid taxes. Summary judgment
is appropriate.
CONCLUSION
Defendant United States’ motion for summary judgment is granted. The $27,945 held by
the registry of the Court should be disbursed to the United States. An appropriate order follows.
Date:
ia
United St s Senior District Judge
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