United States of America v. Ivens (TV1)
Filing
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ORDER granting 34 Motion to Allow Additional Time; denying without prejudice 14 Motion for Contempt. Signed by Magistrate Judge C Clifford Shirley, Jr on 9/12/2014. (KMK, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE
UNITED STATES OF AMERICA, et al.,
Petitioners,
v.
MARK IVENS,
Respondent.
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No. 3:12-CV-107-TAV-CCS
MEMORANDUM AND ORDER
This case is before the undersigned pursuant to 28 U.S.C. § 636, the Rules of this Court,
and Standing Order 13-02.
On March 11, 2014, the United States and Revenue Agent Velvet Cole (hereinafter
collectively the “United States”) filed a Motion to Hold Respondent Mark Ivens in Contempt of
Court [Doc. 14]. The United States alleged that Mr. Ivens had failed to fulfill his document
production duties prescribed by the Agreed Order entered by the Chief District Judge on May 22,
2012. The United States maintained that, despite numerous meetings with Mr. Ivens, Mr.
Ivens’s tax returns for years 2005 to 2012 and supporting documentation for the returns remained
deficient. Mr. Ivens did not file a timely response to the Motion for Contempt.
On April 25, 2014, the Chief District Judge referred the Motion for Contempt to the
undersigned, and on April 29, 2014, the Court entered an Order setting a show cause hearing for
May 27, 2014. On May 20, 2014, Mr. Ivens filed a Motion to Continue Show Cause Hearing
[Doc. 22]. The Court granted the request and continued the hearing to June 26, 2014. [Doc. 24].
On June 26, 2014, the parties appeared before the undersigned to address the Motion for
Contempt. At that time, the Court determined that it would be most efficient to address the
expansive allegations of non-compliance one year at a time.
Thus, the Court began by
addressing tax year 2007, and after hearing from the parties, the Court entered an Order that
contained specific guidelines and directives regarding the production for the tax year 2007. The
Court set the following deadlines: Mr. Ivens would have until August 4, 2014 to produce the
documentation regarding his 2007 income and expenses; the Government would review the
production and then file a written response, stating whether and in what way the production was
deficient, by August 15, 2014; and Mr. Ivens would have until August 25, 2014, to correct any
deficiencies in his document production. At that time, the Motion for Contempt was held in
abeyance.
On August 4, 2014, Mr. Ivens moved the Court to extend his time for producing the
documentation. In support of his request, Mr. Ivens stated that he “wa[s] unable to locate some
of the records he needed” and that documentation for “particular months” in 2007 “may be
missing . . . but that has not yet been determined with any certainty.” [Doc. 29]. The Court
found Mr. Ivens’s position unpersuasive, because the Court had built additional time for
production into its original schedule, i.e. the August 25, 2014 deadline. The Court found that
Mr. Ivens’s vague allegations did not support granting him additional time beyond August 25,
2014, which at that point was eighteen (18) days away.
On August 15, 2014, the United States filed a response to Mr. Ivens’s production
detailing the deficiencies in Mr. Ivens’s production. [Doc. 33]. Mr. Ivens did not file any
response to the United States’s submission. Instead, on August 27, 2014, he filed a Motion to
Allow Counsel Additional Time to Produce Documents, stating that Mr. Ivens had failed to
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comply with the deadline of August 25, 2014, because his counsel was ill on August 25 and
because his counsel had a custody matter set in a local juvenile court on August 26. In the
Motion for Additional Time, counsel for Mr. Ivens submitted that he would produce the
appropriate documents to the United States Attorney’s Office on August 29, 2014.
Upon the filing of this second motion for extension, the undersigned elected to set a
telephonic hearing and status conference on September 5, 2014. The Clerk of Court sent notice
on August 29, 2014, setting the conference. At that time, Attorney Steve Merritt appeared on
behalf of Mr. Ivens. Despite the gravity of the relief requested by the United States, Mr. Ivens
declined to participate in the conference.
Assistant United States Attorney Loretta Harber
participated on behalf of the United States.
At that time, counsel for Mr. Ivens presented a number of bases for the lack of
production, including: a lack of cooperation from First Tennessee Bank; a failure of Mr. Ivens’s
banks to produce documentation about Mr. Ivens’s income; a failure of counsel’s office staff to
review production from Capital Bank; and a lack of understanding of the Court’s previous Order.
The Court found all of these excuses to be unpersuasive. With regard to First Tennessee, it
appeared that Mr. Ivens, himself, had failed to actually ask the bank for documentation regarding
his accounts, as opposed to having counsel or counsel’s staff ask for the documents. The attempt
to blame the banks for not producing income information was not persausive, because banks are
not charged with keeping taxpayers’ income documentation, i.e. W-2s, 1099s, and pay stubs.
With regard to blaming staff for shortcomings, the Court again reminded Mr. Merritt that casting
such blame was unacceptable. See McKenzie v. U.S. Cellular Corp., No. 3:12-CV-627, Doc. 20
at 4 (April 3, 2014) (admonishing Mr. Merritt that he is responsible for complying with his
obligations as counsel “and must not blame support staff for such failures”). Finally, counsel did
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not identify any specific ambiguity in the Court’s previous Order, and the Court reminded
counsel that, to the extent there was any ambiguity, he should have sought clarification prior to
allowing the almost sixty (60) days extended for production to elapse.
In addition, the Court found that Mr. Ivens’s counsel was woefully underprepared for the
conference before the undersigned. When asked which documents had been produced to the
United States, he could not respond with any specificity. When asked what documents had been
produced pursuant to service of subpoenas – for example, pursuant to the subpoena served upon
Capital Bank – counsel for Mr. Ivens responded that he had not yet opened the documents that
had been sent to him. When asked to identify the account numbers1 for which production had or
had not been completed, counsel for Mr. Ivens responded that he was in his car and did not have
his files in front of him. The Court admonished counsel that it would not tolerate such excuses
or similar excuses – i.e. interference from a matter pending in another court, general and typical
family obligations, an IT failure, or general office matters – for a lack of preparation in the
future.
For its part, the United States opposed Mr. Ivens’s Motion to Allow Additional Time, but
the United States maintained that it wanted to obtain as much of the documentation from Mr.
Ivens as possible. Ms. Harber stated that the United States fears that Mr. Ivens will fail to
produce documentation in this proceeding, but he will then produce the documentation in a later
prosecution or enforcement action. Ms. Harber explained that ultimately the United States
would like to question Mr. Ivens under oath and obtain testimony under oath that he has
produced all of the documentation available to him. The United States argued that Mr. Ivens has
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Identification by account numbers was necessary, because Mr. Ivens and his related entities have numerous
accounts at certain banks, and thus, the Court and parties cannot simply refer to an account as, for example, “the
First Tennessee account.”
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demonstrated an obvious disregard for his obligations under the Chief District Judge’s Order and
his obligations pursuant to the Order of the undersigned.
Having heard from the parties, the Court FINDS and ORDERS as follows:
1. Almost six months have elapsed since the United States filed its Motion for Contempt.
During that time, the history of this issue and Mr. Ivens’s alleged productions and
remaining non-compliance has evolved considerably.
The Court finds that any
considerations of Mr. Ivens’s alleged contempt should be reflected in a concise and
summarized new pleading – which should include the nature and extent of Ivens’s
production, the nature and extent of his current non-compliance, the Court’s continued
attempts to obtain Mr. Ivens’s cooperation, and the alleged persistence of his failure to
comply. This revised filing will ultimately aid the undersigned and the Chief District
Judge in determining whether Mr. Ivens should be held in contempt of court without
having to resort to numerous historical pleadings and delination of what matters have
been complied with and which ones have not. Accordingly, this Motion for Contempt
[Doc. 14] is DENIED WITHOUT PREJUDICE, to allow re-filing of another motion
for contempt consistent with the foregoing.
2. The Motion to Allow Additional Time [Doc. 34] is GRANTED, as follows. Mr. Ivens
SHALL fully comply with the document production regarding tax year 2007 as
requested by the United States and outlined in the Court’s previous Order [Doc. 26] on or
before September 26, 2014. This deadline will not be extended further absent a detailed
showing of the most extraordinary and atypical circumstances.
3. Counsel for Mr. Ivens SHALL deliver a copy of this Memorandum and Order to Mr.
Ivens immediately.
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4. After September 26, 2014, the United States and its counsel SHALL review the final
production from Mr. Ivens. If the production is sufficient, the parties shall confer and
immediately move on to production for another tax year and continue until all of the
production is completed. If the production is not sufficient, the United States may file an
amended and renewed motion for contempt.
If the United States finds that it is
appropriate to re-file its motion for contempt and the issue is referred to the undersigned,
the Court will set a timely evidentiary hearing to permit the United States to elicit
relevant testimony from Mr. Ivens and/or other witnesses.
5. Mr. Ivens is REMINDED of the severity of the allegations against him and
ADMONISHED that if he continues to defy the Orders of this Court he is likely to be
found in contempt of Court and to be subjected to substantial fines and/or incarcerated.
IT IS SO ORDERED.
ENTER:
s/ C. Clifford Shirley, Jr.
United States Magistrate Judge
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