UNITED STATES OF AMERICA v. BALICE et al

Filing 167

OPINION AND ORDER administratively terminating 119 Motion for Summary Judgment subject to renewal at the proper time ; denying Motions For Summary Judgment 133 , 135 , and 140; and it is further OREDERED that no further motions for summary judgm ent shall be brought without prior leave of the Magistrate Judge assigned to the case, on a schedule to be set by the Magistrate Judge. Such leave may be sought informally by letter or telephone conference. Further motions for summary judgment brought without leave will be denied summarily, for that reason alone. Signed by Judge Kevin McNulty on 10/11/2016. (seb)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

Civ. No. 14-3937 (KM)(JBC)

UNITED STATES OF AMERICA,
Plaintiff,

OPINION & ORDER

v.
MICHAEL BALICE,
Defendant.

The United States has filed this action to reduce to judgment defendant
Michael Balice’s tax liability for several years, and to foreclose on a property at
70 Maple Avenue in Metuchen, New Jersey. Another party named as a
defendant is Amboy Bank, which holds a lien arising from a home equity line of
credit (HELOC). Now before the court are two motions for summary judgment:
(1) Motion (ECF no. 119) of the United States against Amboy Bank,
seeking summary judgment that the priority of Amboy Bank’s lien is limited to
the amount of “$5,087.07, minus any repayment of pre-cutoff principal made
between July 9, 2015 and the date that any foreclosure proceeds are
distributed in this case.” (US Brf. at 6)
(2) “Defendant Michael Balice’s Motion for Summary Judgment on TaxYears 1992, 1993, 1996, 2001, for Lack of subject-matter jurisdiction of the
Court Under IRC

§ 6502 by a Tolling of the Ten Year Statute of Limitations on

Tax Collections.” (ECF no. 133) Certain contentions in supplemental filings
(ECF nos. 135, 140) are considered as part of the summary judgment motion.
I have written several opinions in this case. (See ECF nos. 71, 102, 152)
Because I here write for the parties, familiarity with the background is
assumed. For the reasons stated herein, the motion of the United States is
administratively terminated, and those of defendant Balice are denied.
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A. Motion of United States for summary judgment against Amboy Bank
In a prior opinion on a summary judgment motion filed by Amboy Bank,
I held as a matter of law that Amboy’s lien has priority over the tax lien of the
United States only to the extent of the outstanding balance on the home equity
line of credit as of July 12, 2005, plus any additional sums advanced
thereafter, but before August 27, 2005. At the time, the amount of the priority
lien could not be determined. Now, the United States has moved for summary
judgment (ECF no. 119), stating that discovery has now furnished the basis for
calculation of the amount of the priority lien, which is said to be “$5,087.07,
minus any repayment of pre-cutoff principal made between July 9, 2015 and
the date that any foreclosure proceeds are distributed in this case.” (US Brf.,
ECFno. 119-1 at6)
Amboy Bank does not dispute the material facts set forth in the motion
of the United States. Rather, Amboy contends that the United States has failed
to establish certain other prerequisites for entry of judgment: “(a) that its Notice
of Tax Liens.., have legally attached to the subject property; (b)

...

method of calculating the amount due to Amboy is correct; and (c)

that its
...

that all of

the Notices [of Tax Liens] relate back to the earliest filed Notice on July 12,
2005

...

.“

(Amboy Brf., ECF no. 123 at 5) Also at issue, says Amboy, is the

validity of Balice’s transfer of the property to a Trust that is said to be a
nominee. Because the Court has not yet ruled on these issues, Amboy
contends, “summary judgment is inappropriate.” (Id.)
In reply, the United States stresses that its motion was confined to a
single issue. (ECF no. 127) Essentially, it concedes Amboy’s point that other
issues remain to be decided, and that “[a]fter the discovery period is complete,
the United States intends to move for summary judgment against the taxpayer
in this action and to show that the transfer at issue was fraudulent and/or
made to a nominee. If at that time the United States is unable to prove that its
liens attach to the subject property, it will be unable to foreclose and Amboy’s
interest will be unaffected by this suit.” (US Reply, ECF no. 127 at 1—2)

2

Accordingly, “the United States does not oppose a stay of the present motion
until after the Court resolves the issue of attachment.” (Id. at 2 n. 1)1
The United States perhaps sowed the seeds of this misunderstanding by
stating in the introductory paragraph of its brief that “[t]he sole dispute
between the United States and Amboy is the amount of Amboy’s lien that takes
priority over the federal tax liens held by the United States.” (US Brf., ECF no
119-1 at 3) Although perhaps literally true, the statement carried the
implication that the United States sought immediate entry of judgment against
Amboy Bank, and Amboy responded accordingly.
The motion of the United States (ECF’ no. 119) is premature. It will be
administratively terminated, subject to renewal at the close of discovery. The
parties are cautioned that piecemeal motions seeking resolution of individual
sub-issues are ordinarily not helpful. Any further summary judgment motions
will be filed only with prior leave of the Magistrate Judge, on a schedule set by
the Magistrate Judge. Such leave may be sought informally by letter or
telephone conference.
B.

Motion of Balice for summary judgment as to tax years
1992, 1993, 1996, and 2001
I next consider Mr. Balice’s motion for summary judgment against

the United States, in which he argues that the statute of limitations has
run on tax years 1992, 1993, 1996, 2001. (ECF no. 133)
It is important to understand that the United States is seeking
distinct forms of relief. For tax periods 1998 and 2005, the government
seeks to reduce the tax assessments to judgment. The United States does
not, however, seek entry of judgment based on the Balices’ tax debts for
1992, 1993, 1996, and 2001. For those tax years, the government had
already obtained final judgments against Balice before filing this action.
Mr. Balice has filed on “Objection to Reply of the United States.” (ECF no. 136)
In it, he states that $250,000 in tax payments have not been taken into account.
Given my administrative termination of the motion, these contentions need not be
considered now.
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Based on all of the tax years—i.e., those that are the subject of the prior
judgment, as well as those as to which judgment is sought in this
action—the United States seeks to foreclose on the property at 70 Maple
Avenue in Metuchen, New Jersey. Tax years 1992, 1993, 1996, and 2001
are included only as part of the basis of the foreclosure count. And
liability for those four tax years is resjudicata. (See Opinion, ECF no.
152 at 3—4)
The statute of limitations argument is therefore rejected, and
summary judgment on that basis as to tax years 1992, 1993, 1996, and
2001 is denied.
C.

Miscellaneous Contentions as to Tax Year 1998
Mr. Balice has made additional filings. (ECF nos. 135, 140)

Because the United States responds to them as motions for summary
judgment, and I will treat them as such.
Both of these filings relate to tax year 1998. Mr. Balice contends
that tax withholding in the amount of $10,162 satisfied the tax deficiency
that he reported on his return. That is true as far as it goes; the
government admits it, and acknowledges that it has been credited.
Count 1, however, is not limited to that particular assessment; it
seeks all amounts owing for tax year 1998. The IRS determined that the
tax return had understated Mr. Balice’s income, and assessed additional
tax to cover the deficiency. Count 1 alleges that those additional
amounts, not the $10,162 deficiency, are owed for tax year 1998. Mr.
Balice’s motion therefore is not to the point, because it does not address
those additional amounts. Summary judgment is denied.
Mr. Balice also argues that the second assessment of his 1998
income taxes, which occurred in 2010, violated the three-year statute of
limitations set forth in 26 U.S.C.

§ 6501. I have already disposed of this

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contention in my opinion denying one of Mr. Balice’s motions to dismiss.
(ECF no. 152 at

3_4)2

For the reasons stated there—essentially, resjudicata and the
statutory tolling of the period because Balice had understated his income
by more than 25%, see 26 U.S.C.

§ 650 1(e)(1)—summary judgment on

this basis is denied.
ORDER
IT IS THEREFORE, this 11th day of October, 2016
ORDERED, as follows:
1.

The motion of the United States (ECF no. 119) for summary

judgment is ADMINISTRATIVELY TERMINATED, subject to renewal at
the proper time.
2.

The motions (ECF’ Nos. 133, 135, 140) of defendant Michael

Balice for summary judgment are DENIED.
3.

No further motions for summary judgment shall be brought

without prior leave of the Magistrate Judge assigned to the case, on a schedule
to be set by the Magistrate Judge. Such leave may be sought informally by
letter or telephone conference. Further motions for summary judgment brought
without leave will be denied summarily, for that reason alone.

f/
)
I -_M( /
Kevin McNulty
-/1

(

United States District Judge.

2
That Memorandum opinion and order (ECF no. 152), dated July 20, 2016, had
not been filed when this summary judgment motion was filed.

5