UNITED STATES OF AMERICA V. LOVELY
Filing
37
ORDER signed by JUDGE LORETTA C. BIGGS on 03/18/2019; that Defendant's Motion to Dismiss, (ECF No. 7 ), is DENIED; that Defendant's Motion for More Definite Statement, (ECF No. 17 ), is DENIED; and that Defendant's Second Motion to Dismiss, (ECF No. 20 ), is DENIED. (Samuel-Priestley, Tina)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
UNITED STATES OF AMERICA,
Plaintiff,
v.
MARK A. LOVELY,
Defendant.
)
)
)
)
)
)
)
)
)
)
1:18CV102
ORDER
The United States of America (“Plaintiff” or the “United States”) initiated this action
on February 15, 2018, to “reduce to judgment federal income tax assessments . . . and civil
penalties” against Defendant Mark Lovely. (ECF No. 1 at 1.) Before the Court are three
motions filed by Defendant who proceeds pro se in this matter: (i) two motions to dismiss,
(ECF Nos. 7, 20); and (ii) a motion for more definite statement, (ECF No. 17). For the reasons
set forth below, each of Defendant’s motions will be denied.
I.
BACKGROUND
The Complaint alleges that Defendant is a taxpayer who resides in Kernersville, North
Carolina against whom unpaid federal income tax liabilities and civil penalties have been
assessed by a delegate of the Secretary of the Treasury. (ECF No. 1 ¶¶ 4, 6.) According to
the Complaint, Defendant owes $90,913 in unpaid federal income taxes and $81,452 in civil
penalties for filing frivolous tax returns. (Id. ¶¶ 6, 12.) Plaintiff seeks a judgment its favor
against Defendant for these unpaid assessments. (Id. at 4–5.) In addition to Defendant’s three
motions currently before the Court, Defendant has filed a pleading captioned, in pertinent
part, “Answer, Jurisdictional Challenge, and Demand for Disclosure.” (ECF No. 4.) This
filing fails to directly respond to the allegations in Plaintiff’s Complaint; rather, it appears to
present a series of arguments regarding this Court’s jurisdiction to hear this matter. (See id.)
Thus, before addressing Defendant’s motions currently before the Court, the Court will first
address the issue of subject matter jurisdiction.
II.
SUBJECT MATTER JURISDICTION
Subject matter jurisdiction is a threshold issue that relates to the court’s power to hear
a case and must be decided before a determination on the merits of the case. Constantine v.
Rectors & Visitors of George Mason Univ., 411 F.3d 474, 479–80 (4th Cir. 2005). A motion
challenging jurisdiction is generally made pursuant to Rule 12(b)(1) of the Federal Rules of
Civil Procedure and raises the question of “whether [the plaintiff] has a right to be in the
district court at all and whether the court has the power to hear and dispose of [the] claim.”
Holloway v. Pagan River Dockside Seafood, Inc., 669 F.3d 448, 452 (4th Cir. 2012). The burden of
proving subject matter jurisdiction rests with the plaintiff. Adams v. Bain, 697 F.2d 1213, 1219
(4th Cir. 1982).
“Federal courts are courts of limited jurisdiction. They possess only that power
authorized by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co of Am., 511 U.S. 375,
377 (1994). “The United States Code confers subject matter jurisdiction on the federal district
courts in two ways—where there is federal question jurisdiction and where there is diversity
jurisdiction.” Holbrook v. W. Va. Reg’l Jail & Corr. Facility Auth., No. 3:16-cv-03705, 2016 WL
7645588, at *6 (S.D.W. Va. Dec. 6, 2016) (citing 28 U.S.C. §§ 1331, 1332), report and
2
recommendation adopted, 2017 WL 55872 (S.D. W. Va. Jan. 4, 2017). “[A] party seeking to
adjudicate a matter in federal court must allege and, when challenged, must demonstrate the
federal court’s jurisdiction over the matter.” Strawn v. AT & T Mobility LLC, 530 F.3d 293,
296 (4th Cir. 2008).
Here, Plaintiff cites four federal statutory provisions as a basis for jurisdiction by this
Court: (1) 28 U.S.C. § 1340; (2) 28 U.S.C. § 1345; (3) 26 U.S.C. § 7401; and (4) 26
U.S.C. § 7402(a). (ECF No. 1 ¶ 1.) These provisions provide, in relevant part, the following:
(1)
“[D]istrict courts shall have original jurisdiction of
any civil action arising under any Act of Congress
providing for internal revenue,” 28 U.S.C. § 1340;
(2)
“[D]istrict courts shall have original jurisdiction of
all civil actions, suits or proceedings commenced by
the United States,” id. § 1345;
(3)
“No civil action for the collection or recovery of
taxes, or of any fine, penalty, or forfeiture, shall be
commenced unless the Secretary authorizes or
sanctions the proceedings and the Attorney General
or his delegate directs that the action be
commenced,” 26 U.S.C. § 7401; and
(4)
“[T]he district courts of the United States . . . shall
have such jurisdiction . . . to render such judgments
and decrees as may be necessary or appropriate for
the enforcement of the internal revenue laws,”
id. § 7402(a).
This is an action brought by the United States requesting that this Court reduce to
judgment federal tax liabilities and civil penalties assessed against Defendant. (See ECF No. 1
at 1.) The statutory provisions outlined above are clear, pertain directly to the issues alleged
in Plaintiff’s Complaint, and confer upon this Court the power to hear this matter.
3
Accordingly, the Court finds that it has federal question subject matter jurisdiction over this
case.
Defendant does not appear to contest that 28 U.S.C. §§ 1340 and 1345 grant this Court
statutory authority to enter orders and decrees in favor of the United States from a civil or
criminal proceeding regarding a debt specifically involving internal revenue. (See ECF No. 4
at 2-3.) In addition, although Defendant fails to address the application of 26 U.S.C. §§ 7401
and 7402(a) to this matter, this Court has subject matter jurisdiction over this case pursuant
to the plain text of these statutes. See United States v. Carter, Civ. A. No. 3:15cv161, 2015 WL
9593652, at *5 (E.D. Va. Dec. 31, 2015) (“The remedy that the United States seeks, entry of
judgment in the amount of unpaid assessments and penalties, is clearly ‘necessary or
appropriate’ to ‘enforce [ ]’ the internal revenue laws of the United States.” (alteration in
original) (quoting 26 U.S.C. § 7402(a)), aff’d, 669 F. App’x 682 (4th Cir. 2016) (Mem.).
Further, to the extent that Defendant attempts to attack the constitutionality of the
federal statutes cited by Plaintiff, “a court presumes that Congress [in enacting such statutes]
has complied with the Constitution.” United States v. Comstock, 627 F.3d 513, 518 (4th Cir.
2010) (citing United States v. Morrison, 529 U.S. 598, 607 (2000)). As such, a court will “invalidate
a congressional enactment only upon a plain showing that Congress has exceeded its
constitutional bounds.” United States v. Bollinger, 798 F.3d 201, 207 (4th Cir. 2015) (quoting
Morrison, 529 U.S. at 607). “[T]he burden of showing a statute to be unconstitutional is on the
challenging party, not on the party defending the statute.” N.Y. State Club Ass’n v. City of New
York, 487 U.S. 1, 17 (1988) (emphasis omitted). Defendant attempts to patch together a host
of incomprehensible arguments and citations that do nothing to demonstrate that this Court
4
lacks jurisdiction or that the statutes cited by Plaintiff are unconstitutional. (See ECF No. 4 at
1–4, 10–11.) Defendant’s arguments include, among other things, that: (1) this Court has no
jurisdiction to enforce a debt in Forsyth County, North Carolina; (2) the United States is a
federal corporation; (3) Defendant is neither an inhabitant of the District of Columbia, nor a
resident of the State of North Carolina, nor a United States Citizen, nor “a person subject to
the exclusive jurisdiction of Congress.” (Id. at 3–4.) According to Defendant, he is “an
American [c]itizen of one of the several [s]tates[,] . . . not a 14th Amendment U.S. citizen.” (Id.
at 4.) However, Defendant has provided no authoritative support to persuade this Court that
it lacks subject matter jurisdiction and this Court finds none. Nor is it this Court’s obligation
to convince Defendant of its subject matter jurisdiction over this case.
Having satisfied itself that it has subject matter jurisdiction over this action, the Court
now proceeds to address Defendant’s three pending motions. See Elyazidi v. SunTrust Bank,
780 F.3d 227, 232 (4th Cir. 2015) (“The limits of subject matter jurisdiction pose a threshold
issue that th[e] court must investigate before addressing the merits [of the case].” (internal
quotation marks omitted)).
III.
MOTION FOR MORE DEFINITE STATEMENT
On August 20, 2018, Defendant filed a motion captioned “Motion for More Definite
Statement in Order Denying Motion to Stay,” (ECF No. 17), requesting relief related to an
August 16, 2018 Order filed by the Court, (ECF No. 16). Specifically, Defendant requests
that the Court: (1) “[s]upply [the] parties with a more definite answer showing case law and
statutory support and Findings and Conclusions by the Court,” and (2) “[i]f the Court finds
that it lacks [s]ubject-[m]atter [j]urisdiction, then please dismiss the case with the relief spelled
5
out in the Motion for Summary Judgement.” 1 (ECF No. 17 at 2.) To the extent this motion
requests that the Court provide detailed findings of fact and law as part of its Order denying
Defendant’s Motion to Stay, this Court declines to do so. First, as authority for the relief
sought, Defendant cites Rule 52(a)(1) and (2) of the Federal Rules of Civil Procedure, which
address orders arising from either a trial or an injunction, (ECF No. 17 at 1), neither of which
were the subject of the Court’s August 16, 2018 Order, (see ECF No. 16). Rather, Defendant
seeks a more definite statement of an Order denying a stay of a state court foreclosure
proceeding. 2 Rule 12(e) of the Federal Rules of Civil Procedure allows a party to “move for a
more definite statement of a pleading to which a responsive pleading is allowed.” Fed. R. Civ.
P. 12(e) (emphasis added). This rule does not provide authority for a litigant to move for a
more definite statement of a court order. See id.
Second, Rule 52(a)(3) provides that “[t]he Court is not required to state findings or
conclusions when ruling on a motion under Rule 12 or 56 or, unless these rules provide
otherwise, on any other motion.” Fed. R. Civ. P. 52(a)(3) (emphasis added). Third, the decision
to grant or deny a stay, which was the subject of the Court’s Order, is within the discretion of
the Court. Landis v. N. Am. Co., 299 U.S. 248, 254–55 (1936). “The party seeking a stay must
justify it by clear and convincing circumstances outweighing potential harm to the party against
whom it is operative.” Williford v. Armstrong World Indus., Inc., 715 F.2d 124, 127 (4th Cir. 1983).
The Court notes that, at the time Defendant filed his motion for a more definite statement, there
was no summary judgment motion filed by Defendant properly before the Court.
1
Defendant’s motion to stay assumed that this Court had the power to provide the requested relief.
However, the Court notes that generally, “federal courts do not interfere in state court foreclosure
proceedings.” Houey v. Carolina First Bank, 890 F. Supp. 2d 611, 620 (W.D.N.C. 2012) (citing cases).
2
6
In its Order denying a stay the Court, having considered, among other things, the arguments
by both parties, concluded that Defendant failed to provide any basis for the relief sought by
Defendant. (See ECF No. 16.) Accordingly, Defendant’s motion for a more definite statement
will likewise be denied.
IV.
MOTIONS TO DISMISS
Defendant filed two motions to dismiss this action. (ECF Nos. 7, 20.) The first
motion, filed on May 7, 2018, is captioned “Defendant’s Motion to Dismiss with Prejudice
This Case for Petitioner’s Fraud on the Court, Failure to State a Claim Upon Which Releif
[sic] Can Be Granted (12b6) [sic], and Unclean Hands.” (ECF No. 7 (emphasis omitted).)
The second motion, filed on November 19, 2018, is captioned “Defendant’s 2nd Motion to
Dismiss with Prejudice This Case for Petitioner’s Fraud on the Court, Failure to State a Claim
Upon Which Releif [sic] Can Be Granted (12b6) [sic], and Unclean Hands.” (ECF No. 20
(emphasis omitted).) Both motions appear identical with the exception of a minor change in
the caption. Each motion also attaches a Memorandum of Law which requests the same relief,
advances essentially the same arguments, and cites much of the same purported authority. (See
generally ECF Nos. 7, 20.) The Court will therefore address these motions together.
A motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure
“challenges the legal sufficiency of a complaint,” including whether it meets the pleading
standard of Rule 8(a)(2). Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009). Rule 8(a)(2)
requires a complaint to contain “a short and plain statement of the claim showing that the
pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2), thereby “giv[ing] the defendant fair notice
of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550
7
U.S. 544, 555 (2007) (citation omitted). To survive a Rule 12(b)(6) motion to dismiss, “a
complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief
that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550
U.S. at 570). A complaint may fail to state a claim upon which relief can be granted in two
ways: first, by failing to state a valid legal cause of action, i.e., a cognizable claim, see Holloway,
669 F.3d at 452; or second, by failing to allege sufficient facts to support a legal cause of action,
see Painter’s Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir. 2013).
To survive dismissal under Rule 12(b)(6), Plaintiff’s Complaint must state a claim that
is plausible on its face. Accepting as true the factual allegations in the Complaint and drawing
all reasonable inferences in Plaintiff’s favor, this Court concludes that the United States has
stated a claim that is plausible on its face. Specifically, the Complaint alleges: (1) that federal
income taxes and civil penalties have been assessed against Defendant by a delegate of the
Department of Treasury; (2) that Defendant has failed to pay the assessed taxes and civil
penalties; and (3) that as a result, Defendant is indebted to the United States in the amounts
of $90,913 in unpaid federal income taxes and $81,452 in unpaid civil penalties. (ECF No. 1
¶¶ 4, 6–7, 9–10, 12–13, 15–16.)
In both motions to dismiss, Defendant argues that: (1) the Internal Revenue Service
(“IRS”) is “a private-sector business,” and “NOT a U.S. Government Agency,” (ECF No. 7
at 2; ECF No. 20 at 2); (2) it is fraudulent for Plaintiff to represent that the IRS is part of the
United States of America when it is a private sector business and that the IRS’s claims are
those of the United States when the claims are those of a private sector business, (ECF No. 7
at 3; ECF No. 20 at 3); and (3) Plaintiff “comes into this Court with unclean hands,” (ECF
8
No. 7 at 3; ECF No. 20 at 3). The Court concludes that none of Plaintiff’s arguments have
merit. In support of Defendant’s primary argument that the IRS is not a government agency,
Defendant first cites a pleading filed by the Government in Diversified Metal Products, Inc. v. TBow Co. Trust, 158 F.R.D. 660 (D. Idaho 1994) (No. 93-405-E-EJI). (ECF No. 10-1.) While
the Court may consider decisions of other courts as persuasive authority, 3 a pleading filed by
a party in a separate, unrelated lawsuit has no authoritative value here. Defendant next cites,
as authority for his argument, Public Law 94-564, a statute passed in 1976 regarding
amendments to the treaty which established the International Monetary Fund. (ECF No. 7 at
2; ECF No. 10-2; ECF No. 20 at 2.) Neither of the documents cited by Defendant provide
any persuasive authority to support a conclusion by this Court that the IRS is not a government
agency.
In contrast, Plaintiff cites both case law and statutory authority which support its
position that the IRS is, indeed, an agency of the United States government. (See ECF No. 9
at 1–2.) As recognized by the Supreme Court, “[t]he Secretary of the Treasury and the
Commissioner of Internal Revenue are charged with the responsibility of administering and
enforcing the Internal Revenue Code.” United States v. LaSalle Nat’l Bank, 437 U.S. 298, 308
(1978) (citing 26 U.S.C. §§ 7801, 7802). See United States v. Cleveland Indians Baseball Co., 532
U.S. 200, 219 (2001) (“Congress has delegated to the [Commissioner], not to the courts, the
task of prescribing all needful rules and regulations for the enforcement of the Internal
See Ashghari-Kamrani v. United Servs. Auto. Ass’n, Civ. A. No. 2:15-cv-478, 2016 WL 8253884, at *1
(E.D. Va. Mar. 18, 2016) (“Courts commonly consider decisions rendered in other jurisdictions for a
variety of reasons, such as persuasiveness or reasoning process.”).
3
9
Revenue Code.” (alteration in original) (quoting Nat’l Muffler Dealers Ass’n v. United States, 440
U.S. 472, 477 (1979))). Title 26 of the Code of Federal Regulations provides as follows:
The Internal Revenue Service is a bureau of the
Department of the Treasury under the immediate
direction of the Commissioner of Internal Revenue. The
Commissioner has general superintendence of the
assessment and collection of all taxes imposed by any law
providing internal revenue. The Internal Revenue Service
is the agency by which these functions are performed.
26 C.F.R. § 601.101(a). This regulation therefore “authorizes the Internal Revenue Service to
implement Title 26 of the United States Code,” i.e., the internal revenue code. Stafford v.
Comm’r, 146 F.3d 868 (5th Cir. 1998) (unpublished table decision). Thus, “[r]esponsibility for
administration and enforcement of the revenue laws is vested in the Secretary of the Treasury,”
and “[t]he Internal Revenue Service . . . is organized to carry out those responsibilities for the
Secretary.” United States v. Euge, 444 U.S. 707, 710 n.3 (1980). Accordingly, the Court agrees
with Plaintiff’s assertion that the IRS is a government agency.
Further, Defendant’s argument that the IRS is not a government agency, has been
raised and summarily rejected in other courts. See e.g., Nevius v. Tomlinson, No. 2:13-CV-04228NKL, 2014 WL 1631385, at *2 (W.D. Mo. Apr. 24, 2014) (describing the plaintiff’s argument
that “the IRS is not a government agency” as “plainly without merit”); Young v. I.R.S., 596 F.
Supp. 141, 147 (N.D. Ind. 1984) (granting summary judgment in favor of the government and
rejecting plaintiff’s claim that the Internal Revenue Service is a private corporation, rather than
a government agency); see also United States v. Fern, 696 F.2d 1269, 1273 (11th Cir. 1983)
(“Clearly, the Internal Revenue Service is a ‘department or agency’ of the United States.”).
10
Because Defendant’s primary contention fails and is the basis on which he makes his
second and third arguments, these latter arguments likewise necessarily fail.
Both of
Defendant’s motions to dismiss will therefore be denied.
V.
CONCLUSION
This Court appreciates its obligation to hold documents filed by pro se litigants to less
stringent standards than those drafted by lawyers and therefore must liberally construe such
filings. See Erickson v. Pardus, 551 U.S. 89, 94 (2007); Haines v. Kerner, 404 U.S. 519, 520 (1972).
This does not, however, require the court to “act as an advocate for a pro se litigant.” Gordon
v. Leeke, 574 F.2d 1147, 1152 (4th Cir. 1978); see also Adler v. Anchor Funding Servs., LLC, No.
3:10cv515, 2011 WL 1843226, at *2 (W.D.N.C. May 16, 2011) (explaining that while a pro se
complaint should be construed liberally, courts cannot assume the role of advocate “and
cannot develop claims which the plaintiff failed to clearly raise on the face of the Complaint”
(citing Gordon, 574 F.2d at 1151)). Nor does this obligation require the Court to entertain
arguments that simply have no merit. See Bell v. Bell Family Tr., Civ. A. No. 13-0639, 2013 WL
9805802, at *5 (W.D. La. Sept. 16, 2013) (“The fact that filings are pro se offers a [litigant] no
impenetrable shield, for one acting pro se has no license to . . . clog the judicial machinery with
meritless litigation.” (internal quotation marks omitted)), report and recommendation adopted, 2013
WL 9805803 (W.D. La. Oct. 11, 2013). Accordingly, this Court concludes that each of
Defendant’s motions lack merit and will be denied.
11
For the reasons stated herein, the Court enters the following:
ORDER
IT IS THEREFORE ORDERED that Defendant’s Motion to Dismiss, (ECF No. 7),
is DENIED.
IT IS FURTHER ORDERED that Defendant’s Motion for More Definite Statement,
(ECF No. 17), is DENIED.
IT IS FURTHER ORDERED that Defendant’s Second Motion to Dismiss, (ECF No.
20), is DENIED.
This, the 18th day of March, 2019.
/s/ Loretta C. Biggs
United States District Judge
12
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?