SARAH W. HAYS, United States Magistrate Judge.
On January 11, 2002, Lee Ronald Dahmer and Judith Ann Dahmer filed a Complaint for the Recovery of Unlawful Assessments and Collections and Claim for Damages for Lawless Conduct. In their Complaint, plaintiffs set forth the "Nature of the Action" as follows:
1. This is an action instituted pursuant to and jurisdiction arises under the provisions of
Title 28 U.S.C. § 1346 (a)(1), which provides for the recovery of any internal revenue tax alleged to have been erroneously or illegally assessed or collected, or any penalty claimed to have been collected without authority or any sum alleged to have been excessive or in any manner wrongfully collected under the internal revenue laws.
2. This action also seeks damages under
26 U.S.C. § 7433 incurred as a result of the reckless and/or intentional violation of provisions of the IRS Code and Regulations.
3. This action also seeks damages under
42 U.S.C. § 1983 for injuries incurred in violation of federally protected rights by individuals acting under the color of federal law depriving Plaintiffs of their constitutional rights.
(Plaintiffs' Complaint at 1-2) (emphasis in original)
On March 8, 2002, the United States of America and Carl Tierney, the "federal defendants," filed a Motion to Dismiss or, in the Alternative, for Summary Judgment. Defendants make four arguments: (1) res judicata bars the relitigation of the plaintiffs' claims concerning their 1987 federal income tax liabilities; (2) plaintiffs have failed to exhaust their administrative remedies or to fully pay their 1987 income taxes and their suit must be dismissed for lack of jurisdiction; (3) this action is barred by the tax anti-injunction act and must be dismissed; and (4) the individual federal defendant is entitled to absolute immunity in this civil action.
On March 25, 2002, plaintiffs filed a Motion for Preliminary Injunction to prevent any seizure of property or levy upon plaintiffs' salaries, wages, other income or property pending the outcome of this case. Plaintiffs argue that they are entitled to a preliminary injunction because the government is trying to collect on assessments that are time-barred and fraudulent.
On April 30, 2002, plaintiffs filed a document entitled "Plaintiffs' Reply to Federal Defendants' Reply Suggestions in the Alternative Request Permission to Amend or Supplement Complaint." Plaintiffs state that they believe that defendants' motion to dismiss is based upon procedural defects that plaintiffs may have made in preparing their complaint and not upon the factual evidence which plaintiffs have provided to the Court. Therefore, plaintiffs request permission to amend their complaint in order to correct any procedural defects.
I. DEFENDANTS' MOTION TO DISMISS OR MOTION FOR SUMMARY JUDGMENT
A. Standards For Evaluating A Motion For Summary Judgment
Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). Summary judgment should be granted only where the evidence is such that no reasonable jury could return a verdict for the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). Thus, the moving party must demonstrate that no genuine issues of material fact remain to be resolved. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
In determining whether the moving party is entitled to summary judgment, the Court must resolve all controversies in favor of the non-moving party, take the nonmovant's evidence as true and draw all justifiable inferences in favor of that party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). See also Reeves v. Sanderson Plumbing Prods Inc., 530 U.S. 133, 150 (2000)("the court must draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence"); Kopp v. Samaritan Health Sys., Inc., 13 F.3d 264, 269 (8th Cir. 1993)("At the summary judgment stage, we resolve all disputed facts and draw all inferences in favor of the plaintiff.") In opposing a motion for summary judgment, the nonmovant "may not rest on mere allegations or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986).
B. Uncontroverted Material Facts
Although plaintiffs have filed objections to defendants' motion, plaintiffs have failed to dispute defendants' Statement of Material Facts as required by the Local Rules for the United States District Court for the Western District of Missouri. Accordingly, the following facts are deemed admitted for purposes of this motion:
See Local Rule 56.1(a) ("All facts set forth in the statement of the movant shall be deemed admitted for the purpose of summary judgment unless specifically controverted by the opposing party.")
1. In a notice of deficiency dated April 30, 1992, the Commissioner of Internal Revenue notified the plaintiffs, Lee Ronald Dahmer and Judith Ann Dahmer ("plaintiffs" or "taxpayers"), of the deficiencies determined by the Internal Revenue Service in plaintiffs' federal income taxes for the 1986 and 1987 tax years.
2. The amounts of the deficiencies set forth in the statutory notice described above were $48,395 (1986) and $54,303 (1987).
3. One year later, on April 30, 1993, the taxpayers stipulated to the entry of a Decision by the United States Tax Court in the case entitled Lee Ronald Dahmer and Judith Ann Dahmer v. Commissioner of Internal Revenue, Docket No. 17017-92.
4. The Decision entered by the Tax Court on May 19, 1993, provided, in pertinent part, that "there is a deficiency in income tax due from the petitioners for the taxable year 1987 in the amount of $54,303.00."
5. As reflected on the IRS certificate of assessments and payments for the taxpayers for the 1987 tax year, additional federal income taxes in the amount of $54,303.00 were assessed against them on June 25, 1993.
6. A notice of federal tax lien was filed against the taxpayers with the Recorder of Deeds for Vernon County, Missouri, with respect to the tax assessment described in the preceding paragraph on November 21, 1994.
7. On December 12, 1997, the United States of America commenced a civil action against the taxpayers in the United States District Court for the Western District of Missouri to collect their unpaid 1987 federal income tax liabilities.
8. The civil action commenced on December 12, 1997, was captioned
United States of America v. Lee Ronald Dahmer, Judith Ann Dahmer, Bluebird Trust, Cardinal Trust, and Citizens National Bank, Case No. 97-5122-CV-SW-8 (W.D. Missouri) ("the prior civil action"). The complaint was signed by Carl J. Tierney, a trial attorney in the Tax Division of the U.S. Department of Justice.
9. The prior civil action (
United States v. Dahmer) sought to reduce the tax assessment made against the taxpayers for additional federal income taxes for the 1987 tax year to judgment, to set aside certain fraudulent transfers of real property made by the taxpayers to the Bluebird Trust and the Cardinal Trust, and to foreclose the tax liens of the United States against the taxpayers' real property located in Vernon County, Missouri.
10. Judge Fenner granted the Government's motions for partial summary judgment and summary judgment in an order entered in the prior civil action (
United States v. Dahmer) on March 31, 1999. The Court entered judgment against the taxpayers for the unpaid balance of the assessments made against them for the 1987 tax year, set aside the fraudulent conveyances of the taxpayers' real property to the Bluebird and Cardinal Trusts, and ordered the tax liens of the United States foreclosed as against the taxpayers' real property in Vernon County, Missouri.
United States v. Dahmer,
1999 WL 357926 (W.D. Mo. Mar. 31, 1999),
affd,
230 F.3d 1364 (8
th Cir. 2000).
11. The Order entered by this Court in the prior civil action (
United States v. Dahmer) on March 31, 1999, provided, in pertinent part, as follows:
III. Dahmers' Motion for Dismissal
The Dalimers move for dismissal pursuant to Rule 12(b), Federal Rules of Civil Procedure arguing that the Secretary [of the Treasury] failed to make the requisite tax assessment of their federal income taxes for the year ending December 31, 1987 prior to the running of the three-year statute of limitations as required under
26 U.S.C. § 6501 (a). As discussed in Section II, the Dahmers are barred from raising a statute of limitations defense because they failed to raise it in their earlier Tax Court proceedings.
Shades Ridge Holding Co., Inc. v. United States [89-2 USTC ¶ 9472],
880 F.2d 342, 344 (11th Cir. 1989) (affirmative defenses, such as statute of limitations, must be raised initially in tax court). Accordingly, the Dahmers' motion to dismiss will be denied.
United States v. Dahmer, 1999 WL 357926 at *4.
12. The Order entered in the prior civil action (
United States v. Dahmer) also provided, in pertinent part, that:
IV. Dahmers' Motion for Reconsideration
The Dahmers move the Court to reconsider its September 28, 1998 Order in which the Court denied the Dahmers' motion to dismiss for lack of jurisdiction. The Dahmers state that the Court misconstrued the "`lack of jurisdiction' contention in [their] motion to dismiss" and that the "jurisdictional challenge was directed to the United States for violations of procedure by the IRS." Any procedural violations by the IRS could have and should have been raised by the Dahmers in their Tax Court proceedings and is barred by
res judicata from relitigation in this Court.
United States v. Dahmer, 1999 WL 357926 at *4
13. After the judgment entered by this Court in the prior civil action (
United States v. Dahmer) was affirmed on appeal (
230 F.3d 1364), the taxpayers filed their "Defendants' Request for a Bill of Review" on October 3, 2000.
14. On page 2 of the "Defendants' Request for a Bill of Review" in the prior civil action (
United States v. Dahmer), the taxpayers alleged that they had "newly discovered evidence that substantiates allegations that the government committed both fraud upon the court and fraud upon the defendants when representing to the court that a timely and proper assessment had been made against the Dahmers."
15. On page 4 of the "Defendants' Request for a Bill of Review," the taxpayers allege that they contacted Victoria Osborn, a "Forensic Accountant," and asked her to "examine the transactions in their case."
16. On page 8 of the "Defendants' Request for a Bill of Review," the taxpayers alleged that "[t]he government . . . did not have a legal and enforceable assessment" against them for the 1987 tax year.
17. On page 9 of the "Defendants' Request for a Bill of Review," the taxpayers asserted that the federal income tax assessment made against them for the 1987 tax year was made during the first week of November, 1993. The taxpayers also claimed that the assessment date set forth in the complaint in the prior civil action (
United States v. Dahmer) and the IRS certified certificates of assessments and payments had been "backdated."
18. On October 20, 2000, the Government filed its response to the "Defendants' Request for a Bill of Review." The United States' Response to Defendants' Request to Reopen Case pointed out (on page 3) that the taxpayers had failed to contest any of the material facts set forth in the Government's motion for summary judgment, including the date on which additional taxes were assessed against the taxpayers for the 1987 tax year (June 25, 1993).
19. On November 27, 2000, this Court entered an "Order Denying Defendants' Request for a Bill of Review."
20. On January 11, 2002, the taxpayers commenced the present civil action against the United States, trial attorney Carl J. Tierney, and certain "John Does."
21. The "Complaint for the Recovery of Unlawful Assessments and Collections and Claim for Damages for Lawless Conduct" in the present civil action alleges, in Count I, that "[t]he Defendants made assessments of tax, in the amount of $53,553.00 plus statutory additions, against Plaintiffs, for tax period [ending] December 31, 1987, which assessments were time-barred and fraudulent because the assessments were made beyond the statute of limitations and the Defendants intentionally backdated the assessment date, in the master file record, to read June 25, 1993, instead of the actual date of October 18, 1993."
22. Taxpayers further allege that "[t]he Defendants' actions of failing to abate the tax in question, and of undertaking enforced collection action, have caused immediate and irreparable harm to the Plaintiff [sic], and is in violation of the deficiency procedures set out in the Internal Revenue Code."
23. In Count II of the complaint, titled "Unlawful Acts of Collection Officers," the taxpayers allege that "[t]he assessment and collection of the tax at issue is in disregard of the tax laws, as the assessment is time-barred because it was made beyond the statute of limitations and fraudulent because Defendants intentionally backdated the assessment date in the master file record, to read June 25, 1993, when the assessments were not made until October 18, 1993. The [sic] was intentionally done to conceal Defendants [sic] reckless and intentional conduct."
24. In Count III of the complaint, the taxpayers claim that notices of federal tax lien were improperly filed against them with respect to the additional federal income taxes assessed against them for the 1987 tax year because those assessments were untimely made.
25. In Count IV of the complaint, the taxpayers allege that "Defendants, through its agency the Internal Revenue Service, and John Doe and Jane Doe, employed by the IRS, have recklessly and intentionally violated the Plaintiffs [sic] Constitutional rights to due process, under the claim of federal authority."
(Suggestions in Support of the Federal Defendants' Motion to Dismiss or, in the Alternative, for Summary Judgment at 3-10)
C. Discussion
As set forth by Judge Fenner in United States v. Dahmer, 1999 WL 357926 (W.D. Mo. Mar. 31, 1999), aff'd, 230 F.3d 1364, 2000 WL 1146323 (8th Cir. Aug. 15, 2000):
Under the doctrine of
res judicata, an issue litigated in front of a competent judicial forum cannot be relitigated in a separate proceeding. The parties and their privies are bound not only as to every matter presented to the court, but also as to every matter that might have been brought before the court. The doctrine of
res judicata applies to all final orders issued by a court of competent jurisdiction including, of course, the United States Tax Court.
1999 WL 357926 at *3 (citations omitted). See also Montana v. United States, 440 U.S. 147, 153 (1979) (a "right, question or fact distinctly put in issue and directly determined by a court of competent jurisdiction . . . cannot be disputed in a subsequent suit between the same parties or their privies . . . .") (quoting Southern Pacific R. Co. v. United States, 168 U.S. 1, 48-49 (1897)).
Plaintiffs' Complaint sets forth the following facts upon which plaintiffs base all of their claims in this lawsuit:
13. On January 27, 1991, the Plaintiffs and Defendants entered into a legal extension of the assessment statute expiration date, to equal December 31, 1991.
14. On April 30, 1992, Defendants willfully and intentionally issued a time-barred "Statutory Notice of Deficiency" for tax period 1986 and 1987. The notice of deficiency was time-barred because it was not issued before December 31, 1991, which is in violation of
26 U.S.C. § 6501(c)(4) . . . .
15. Plaintiffs timely filed a petition for redetermination with the Tax Court in accordance with
26 U.S.C. § 6213. On May 19, 1993, Tax Court Decision upheld the time-barred "Statutory Notice of Deficiency."
16. The Plaintiffs waived the restrictions provided by
26 U.S.C. § 6213(a)(1) and
6503(a)(1) of the Code. As a result of the waiver, the new assessment statute expiration date is July 18, 1993. The Defendants were required to make the assessment by July 18, 1993 . . . .
17. On October 18, 1993, which was 90 days beyond the legal assessment date, the Defendants made a time-barred and fraudulent assessment. The Defendants backdated the assessment date to June 25, 1993, in the Plaintiffs' master file records, to conceal the fraudulent assessment. The Defendant illegally extended the assessment statute expiration date, from the legal date of July 18, 1993 to October 16, 1993, which allowed the computer to make the fraudulent assessment.
(Plaintiffs' Complaint at 4)
Plaintiffs' claims in this lawsuit boil down to two allegations of wrongdoing by defendants, i.e. that defendants issued a time-barred "Statutory Notice of Deficiency" and that defendants fraudulently backdated the assessment. Both allegations of wrongdoing raised by plaintiffs were before Judge Fenner in the previous litigation. With respect to plaintiffs' allegation that defendants issued a time-barred "Statutory Notice of Deficiency," the Dahmers moved for dismissal before Judge Fenner because the statute for assessment expired on December 31, 1991. See Claimants' Motion for Dismissal at 2, United States v. Dahmer, No. 97-5122-CV-SW-8 (Oct. 15, 1998). Judge Fenner ruled that the Dahmers were barred from raising a statute of limitations defense because they failed to raise it in their earlier Tax Court proceedings. See United States v. Dahmer, 1999 WL 357916, *4 (W.D. Mo. Mar. 31, 1999), aff'd, 230 F.3d 1364, 2000 WL 1146323 (8th Cir. Aug. 15, 2000).
Plaintiffs presented their claim that defendants fraudulently backdated the assessment to Judge Fenner in a Request for a Bill of Review. Defendants' Request for a Bill of Review provides, "The Dahmers have newly discovered evidence that substantiates allegations that the Government committed both fraud upon the court and fraud upon the defendants when representing to the court that a timely and proper assessment had been made against the Dahmers." See Defendants' Request for a Bill of Review at 2, United States v. Dahmer, No. 97-5122-CV-SW-4 (Oct. 3, 2000). The "newly discovered evidence" was based upon Victoria Osborn's review of the Dalimers' master file. Id. at 4. In its Response to Defendants' Request to Reopen Case, the Government argued that the Dahmers' evidence that the June 25, 1993 assessment was entered into the IRS administrative computer records in October 1993 provided no evidence of fraud because an assessment occurs on the date an authorized official signs a summary record of assessment containing the taxpayer's assessment rather than the date the assessment is posted to the IRS computerized record system. See United States' Response to Defendants' Request to Reopen Case at 1-3, United States v. Dahmer, No. 97-5122-CV-SW-4 (Oct. 20, 2000). Judge Fenner ruled this issue by stating, "the Court . . . having fully considered Defendants' Request for a Bill of Review . . . in which [the Dahmers] request the reopening of this case on alleged newly discovered evidence of fraud, DENIES said request to reopen for all of the reasons stated in the United States' Response to Defendants' Request to Reopen Case." Order Denying Defendants' Request for a Bill of Review,United States v. Dahmer, No. 97-5122-CV-SW-4 (Nov. 27, 2000).
The issues litigated before Judge Fenner cannot be relitigated in this proceeding. Defendants are, therefore, entitled to summary judgment on the basis of res judicata. Given the Court's finding that defendants are entitled to summary judgment based on the doctrine of res judicata, it is not necessary to examine defendants' other arguments for dismissal of this case.
II. PLAINTIFFS' REQUEST FOR PERMISSION TO AMEND COMPLAINT
In their Reply to Federal Defendants' Reply Suggestions [or] in the Alternative Request [for] Permission to Amend or Supplement Complaint, plaintiffs state that they believe that defendants' motion to dismiss is based upon procedural defects that plaintiffs may have made in preparing their complaint and not upon the factual evidence which plaintiffs have provided to the Court. Therefore, plaintiffs request permission to amend their complaint in order to correct any procedural defects. Given the Court's finding that defendants are entitled to summary judgment because the issues presented in plaintiffs' complaint have previously been litigated and not because of any defect in the way the issues were presented by plaintiffs in their complaint, plaintiffs' request for permission to amend or supplement their complaint is denied.
III. PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION
In their Motion for Preliminary Injunction, plaintiffs argue that they are entitled to a preliminary injunction pending the outcome of this case because the government is trying to collect on assessments that are time-barred and fraudulent. Given the Court's finding that defendants are entitled to summary judgment, plaintiffs' motion for preliminary injunction is denied.
III. CONCLUSION
For the reasons set forth above, it is
ORDERED that the Federal Defendants' Motion to Dismiss or, in the Alternative, for Summary Judgment (doc #7) is granted. It is further
ORDERED that plaintiffs' Motion for Preliminary Injunction (doc #14) is denied. It is further
ORDERED that plaintiffs' Request [for] Permission to Amend or Supplement Complaint (doc #22) is denied.