United States of America v. Kegley et al

Filing 23

ORDER DENYING DEFENDANT KEGLEY'S MOTION TO DISMISS FRCP 12(B)(1), (2), (3), AND (6); denying 15 Motion to Dismiss. Signed by Senior Judge Edward F. Shea. (CV, Case Administrator)

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WASHINGTON

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CV-13-5053-EFS

Plaintiff,

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No.

UNITED STATES OF AMERICA,

ORDER DENYING DEFENDANT KEGLEY’S
MOTION TO DISMISS FRCP 12(B)(1),
(2), (3), AND (6)

v.
RICHARD D. KEGLEY, RAMON ZAMORA,
ZAP BOXING CLUB YOUTH CENTER, ERIN
CAPITAL MANAGEMENT, WALLWA WALLA
COUNTY, RICHARD of YHVH, Office of
the First Presiding Patriarch,
JAMIE OF YHVH, Office of the First
President Patriarch, ERIN CAPITAL
MANAGEMENT, and WALLA WALLA
COUNTY,
Defendants.

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Before the Court, without oral argument, is Defendant Richard D.

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Kegley’s pro se Motion to Dismiss FRCP 12(b)(1), (2), (3), and (6).

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ECF No. 15.

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opposes

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authority, the Court is fully informed.

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below, the Court denies Mr. Kegley’s motion.

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A.

the

Plaintiff United States of America (“United States”)
motion.

After

reviewing

the

record

and

relevant

For the reasons set forth

Background

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On May 1, 2013, the United States filed a Complaint seeking:

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1) to reduce to judgment the unpaid federal income tax and
civil tax penalty assessments made against Richard D.
Kegley; 2) to obtain a judicial determination that (a)

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ORDER - 1

Richard of YHVH, Office of the First Presiding Patriarch,
(b) Jamie of YHVH, Office of the First Presiding Patriarch,
and (c) Zap Boxing Club and Youth Center are the alter egos
or nominees of Richard D. Kegley; 3) to have purported
transfers of certain real property declared fraudulent as
against the United States; 4) to foreclose on federal tax
liens encumbering certain real property located in Walla
Walla County, Washington, and; [sic] 5) to have the
proceeds from the foreclosure sale distributed to the
parties in amounts determined by the Court.

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ECF No. 1 at 1-2.

Walla Walla County and Mr. Kegley filed answers.

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ECF Nos. 4 & 14.

On October 23, 2013, Mr. Kegley filed the instant

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motion to dismiss.

ECF No. 15.

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B.

Authority and Analysis

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Mr. Kegley asks the Court to dismiss the lawsuit against him
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because: 1) he is not a taxpayer as defined under Title 26; 2) the
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Secretary of Treasury has not determined him to be a taxpayer pursuant
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to 28 U.S.C. § 2201(a); 3) he did not commit any acts within the state
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of Washington as defined by RCW 82.04.200; 4) neither he nor the
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subject property are within the judicial district of this Court; 5) he
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has not made any prior agreements with the Internal Revenue Service
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(IRS) or this Court as to any means of payment of any claims, as is
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required by the Uniform Commercial Code; 6) his rights under the
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Declaration of Independence and the U.S. Constitution provide him with
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inviolable

rights;

7)

this

lawsuit

is

barred

by

the

statute

of

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limitations set out in 28 U.S.C. § 2462; and 8) the alleged transfers
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of property involve a matter of value exchange, which is a political
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issue and not within this Court’s purview.
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argument in turn.
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ORDER - 2

The Court addresses each

First, there is no question given the language of the federal

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tax

statutes

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“person” and that he can be treated as a taxpayer if he in fact owes

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taxes under Title 26 of the United States Code.

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(applying

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estimated tax . . . .”); see also United States v. Romero, 640 F.2d

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1014, 1016 (9th Cir. 1981) (“Romero’s proclaimed belief that he was

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not a ‘person’ and that the wages he earned as a carpenter were not

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‘income’ is fatuous as well as obviously incorrect.”); United States

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v. Studley, 783 F.2d 934, 937 n.3 (9th Cir. 1986) (“We note that this

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[non-taxpayer] argument has been consistently and thoroughly rejected

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by

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conducting an analysis under Federal Rule of Civil Procedure 12(b)(6)

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the Court must accept as true the Complaint’s assertion that Mr.

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Kegley owes the United States taxes, the Court denies Mr. Kegley’s

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motion to dismiss in this regard.

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F.3d 1235, 1247-48 (9th Cir. 2013) (recognizing that on a motion to

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dismiss the court presumes the facts alleged in the complaint are

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true).

every

to

and

the

“[a]ny

branch

of

cases

person

the

analyzing

required

government

them

under

for

that

Mr.

Kegley

is

a

See 26 U.S.C. § 7203

this

title

decades.”).

to

pay

Because

any

when

See Brown v. Elec. Arts, Inc., 724

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Second, Mr. Kegley’s argument that the Court does not have the

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authority to determine whether he is a person who owes taxes to the

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United States because the Secretary of the Treasury has not defined

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him as a taxpayer is without merit.

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language in 28 U.S.C. 2201(a) to argue that this Court lacks the

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authority to determine if Mr. Kegley is a taxpayer:

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ORDER - 3

Mr. Kegley relies on the bolded

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In a case of actual controversy within its jurisdiction,
except with respect to Federal taxes other than actions
brought under section 7428 of the Internal Revenue Code of
1986, a proceeding under section 505 or 1146 of title 11,
or in any civil action involving an antidumping or
countervailing duty proceeding regarding a class or kind of
merchandise of a free trade area country (as defined in
section 516A(f)(10) of the Tariff Act of 1930), as
determined by the administering authority, any court of the
United States, upon the filing of an appropriate pleading,
may declare the rights and other legal relations of any
interested party seeking such declaration, whether or not
further relief is or could be sought. Any such declaration
shall have the force and effect of a final judgment or
decree and shall be reviewable as such.
28 U.S.C. § 2201(a) (emphasis added).

This statute does not apply to

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the instant lawsuit, and does not necessitate that the Secretary of

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Treasury make a determination that Mr. Kegley is a taxpayer.

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2201(a) is part of the Declaratory Judgment Act.

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States is not asking the Court to issue a declaratory judgment under §

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2201(a).

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Kegley’s

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assessments pursuant to 26 U.S.C. § 7403.

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asks the Court to “[d]etermine and declare that the federal tax liens

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described [in the Complaint] attach to all property and rights to

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property of Richard D. Kegley,” ECF No. 1 at 15 (emphasis added), the

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United States seeks this relief pursuant to § 7403, and not § 2201(a).

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While determining whether Mr. Kegley owes the claimed assessments to

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the United States, the Court will need to make several determinations

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regarding the tax liens and property transfers, however, the Court

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will not be entering declaratory judgment pursuant to § 2201(a).

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Kegley’s motion to dismiss is denied in this regard.

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U.S.C. § 7402(a) (“The district courts of the United States at the

ORDER - 4

Section

Here, the United

Rather, the United States seeks a judgment to enforce Mr.
unpaid

federal

income

tax

and

unpaid

civil

tax

penalty

Although the United States

Mr.

See also 26

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instance of the United States shall have such jurisdiction to . . . to

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render such judgments and decrees as may be necessary or appropriate

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for the enforcement of the internal revenue laws. . . .”); 28 U.S.C. §

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1345 (“Except as otherwise provided by Act of Congress, the district

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courts shall have original jurisdiction of all civil actions, suits or

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proceedings commenced by the United States . . . .”); 28 U.S.C. § 1340

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(“The district courts shall have original jurisdiction of any civil

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action

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revenue . . . .”).

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arising

under

any

Act

of

Congress

providing

for

internal

Third, Mr. Kegley posits that he did not commit any acts within

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the state of Washington as defined by RCW 82.04.200.

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82.04 applies to Washington’s business and occupation tax, and RCW

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82.04.200 defines “in this state” and “within this state” as including

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all federal areas lying within the exterior boundaries of the state.

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The Court understands that Mr. Kegley’s third argument is related to

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his fourth argument, which is that Mr. Kegley does not reside, nor is

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the subject property located, on federal property within this Court’s

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judicial district.

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the Eastern District of Washington because 1) the Complaint alleges

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that all Defendants reside in Walla Walla and the subject property is

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located in Walla Walla, 2) Walla Walla is located in Walla Walla

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County, and 3) Walla Walla County is within this Court’s judicial

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district.

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personal jurisdiction over Mr. Kegley given that he resides in Walla

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Walla.

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court’s personal jurisdiction over a person who resides in the state

These arguments lack merit.

28 U.S.C. §§ 1390 & 1391(b).

RCW Chapter

Venue is proper in

Likewise, the Court has

See Pennoyer v. Neff, 95 U.S. 714, 733 (1877) (recognizing a

ORDER - 5

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in which

the court sits), overturned in

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part in other

regard

by

Shaffer v. Heitner, 433 U.S. 186 (1977).

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Fifth, Mr. Kegley asks the Court to dismiss this lawsuit because

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he has not made any prior agreements with the IRS or this Court as to

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any means of payment of any claims as he believes is required by the

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Uniform Commercial Code.

The Court’s jurisdiction is over the claims

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in this

dependent upon

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agreement relating to the means of payment with the IRS or the Court.

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Rather as is explained above, as a federal district court, this Court

lawsuit

the

is not

subject-matter

Mr. Kegley making a prior

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possesses

jurisdiction

to

hear

the

tax-related

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claims in this lawsuit.

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determine whether payment is owed by Mr. Kegley to the United States.

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Mr. Kegley’s motion is denied in this regard.

If and when appropriate, the Court will

Sixth, Mr. Kegley claims he possesses inviolable rights under

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the Declaration of Independence and the U.S. Constitution.

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agrees with this basic constitutional principle.

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has

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lawsuit from proceeding against him.

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regard.

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failed

to

articulate

why

his

The Court

However, Mr. Kegley

constitutional

rights

bar

this

His motion is denied in this

Seventh, Mr. Kegley argues this lawsuit is barred by a seven-

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year statute of limitations in 28 U.S.C. § 2462.

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without

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U.S.C. § 6502, not 28 U.S.C. § 2462.

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court proceeding to collect on a tax assessment be brought within ten

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years after the tax assessment.

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the assessments on July 11, 2005 (§ 6700-penalty assessments), and

merit

ORDER - 6

because

the

applicable

This argument is

statute-of-limitations

is

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Section 6502 requires that any

The Complaint alleges the IRS made

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February 13, 2006 (income-tax assessments).

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States’

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limitations.

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Cir. 1991); Lamb v. United States, 977 F.2d 1296, 1297 (8th Cir.

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1992).

claims

are

timely

filed

within

Accordingly, the United
the

ten-year

statute

of

See Mullikin v. United States, 952 F.2d 920, 927-28 (6th

Mr. Kegley’s motion is denied in this regard.

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Finally, Mr. Kegley posits that the alleged property transfers

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involve a matter of exchange of value that is a political issue and

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not within this Court’s purview.

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above, this Court possesses personal jurisdiction over Mr. Kegley, has

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subject-matter jurisdiction over the tax-assessment related claims,

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and is the proper venue for this lawsuit.

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transferred for value or for fraudulent purposes is a matter that is

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properly before the Court.

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in this regard.

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C.

This argument is futile.

As stated

Whether the property was

Accordingly, Mr. Kegley’s motion is denied

Conclusion
For the above given reasons, IT IS HEREBY ORDERED:

Mr. Kegley’s

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pro se Motion to Dismiss FRCP 12(b)(1), (2), (3), and (6), ECF No. 15,

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is DENIED.

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IT IS SO ORDERED.

The Clerk’s Office is directed to enter this

Order and provide copies to Mr. Kegley and counsel.
DATED this

26th

day of November 2013.

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s/ Edward F. Shea
EDWARD F. SHEA
Senior United States District Judge

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