United States District Court, W.D. Kentucky, Louisville Division
THOMAS B. RUSSELL, Senior District Judge.
This matter is before the Court upon the motion for summary judgment of the United States of America ("the Government"). (Docket No. 13.) Defendant Orionmegan Properties, LLC ("Orionmegan") has responded, (Docket No. 15), as has Defendant Eichhorn Stained Glass, Inc. ("Eichhorn"), (Docket No. 16). The Government has replied. (Docket No. 21.) In addition, Eichhorn has submitted a surreply. (Docket No. 22). Orionmegan has done the same. (Docket No. 23.) Fully briefed, this matter is ripe for adjudication. For the reasons explained below, the Government's Motion will be GRANTED IN PART and DENIED IN PART.
The Government commenced this civil action on October 1, 2013, to reduce to judgment its tax assessments and liens against Eichhorn. In Count I of its complaint, the Government seeks to reduce to judgment the Federal Insurance Contribution Act ("FICA") and Federal withholding tax assessed against Eichhorn for certain quarters between 2000 and 2004-specifically, the third and fourth quarters of 2000; all four quarters of 2001, 2002, and 2003; and the first quarter of 2004. The Government contends that it repeatedly filed notices of federal tax liens with the Jefferson County Clerk for these assessments, with fourteen such notices filed over a ten-year period. (See Docket No. 13-24 at 4.) Despite these notices, Eichhorn has not paid FICA and Federal withholding tax assessments. The Government's motion for summary judgment alleges that Eichhorn owes $285, 898.75 in total, plus statutory additions. (Docket No. 13-24 at 3.) In Count II, the Government seeks to foreclose the corresponding federal tax liens against Eichhorn's alleged 58% interest in a three-story commercial building in Louisville, Kentucky ("the East Broadway Property"). The Government wishes to sell the real property, with any amounts attributable to Eichhorn's federal tax liens to be applied to Eichhorn's outstanding liabilities. (Docket No. 1 at 2.)
From 1990 to 2010, Eichhorn operated a custom design glass studio at the East Broadway Property. (Docket No. 1 at 5.) On December 18, 1997, Eichhorn, along with Southern Light, Inc. ("Southern Light") and Rex Lagerstorm ("Lagerstrom"), entered into a contract ("the Building Association Contract") to purchase the East Broadway Property from Woosley Monuments, Inc. ("Woosley") for $165, 000. On the date of the sale, Woosley conveyed the property to the three buyers in exchange for a $165, 000 mortgage. According to the buyers' agreement, Eichhorn held 58% ownership of the building, with Southern Lights and Lagerstrorm owning 26% and 16%, respectively. (Docket No. 1 at 5-6.) The contract stipulates that each of the three buyers would be liable to Woosley for monthly mortgage payments in proportion to its percentage ownership. (Docket No. 1 at 6.) The instrument also provided for a party's default on the contract, explaining that the relevant percentages of ownership would increase or decrease based on the specific circumstances causing default.
On May 12, 2005, Southern Lights transferred its interest in the property to Light Speed Photo, Inc. ("LSP"). LSP then transferred its interest to Orionmegan Properties, LLC ("Orionmegan") on April 30, 2008. (Docket No. 1 at 6.) On July 21, 2011, Lagerstorm quitclaimed his 16% interest in the property to Orionmegan. (Docket No. 1 at 6.) As a result of these conveyances, Eichhorn continues to own 58% of the property, with Orionmegan owning the remaining 42%.
Because Orionmegan claims an interest in the property at issue, the Government named it a codefendant in this lawsuit pursuant to 26 U.S.C. § 7403. Orionmegan filed an answer to the complaint and a crossclaim against Eichhorn on November 19, 2013. In its answer, Orionmegan denies the Government's allegation that Eichhorn owns a 58% interest in the East Broadway Property, arguing that a much smaller percentage is at stake. Orionmegan's crossclaim seeks to determine Eichhorn's percentage of ownership, if any, in the property at issue. (Docket No. 4.)
At the March 26, 2014 status conference regarding this matter, the Court directed the Government to file a motion for summary judgment addressing two issues. First, is the Government entitled to judgment as a matter of law regarding the tax assessments made by the Internal Revenue Service ("IRS") against Eichhorn? Second, do the tax liens attach to Eichhorn's interest in the East Broadway property, and if so, may the Government foreclose its liens upon that property? The Government having filed such motion and the Defendants having responded, these matters are now ripe for adjudication.
Summary judgment is appropriate where the pleadings, the discovery and disclosure materials on file, and any affidavits show "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). In determining whether summary judgment is appropriate, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
"[N]ot every issue of fact or conflicting inference presents a genuine issue of material fact." Street v. I.C. Bradford & Co., 886 F.2d 1472, 1477 (6th Cir. 1989). The test is whether the party bearing the burden of proof has presented a jury question as to each element in the case. Hansel v. Keys, 87 F.3d 795, 799 (6th Cir. 1996). The plaintiff must present more than a mere scintilla of evidence in support of his position; he must present evidence on which the trier of fact could reasonably find for him. See id. (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986)). Mere speculation will not suffice to defeat a motion for summary judgment: "[T]he mere existence of a colorable factual dispute will not defeat a properly supported motion for summary judgment. A genuine dispute between the parties on an issue of material fact must exist to render summary judgment inappropriate." Monette v. Elec. Data Sys. Corp., 90 F.3d 1173, 1177 (6th Cir. 1996), abrogated on other grounds by Lewis v. Humboldt Acquisition Corp., 681 F.3d 312 (6th Cir. 2012).
I. Because the Government's action for collection is not time-barred and no genuine issue of material fact exists, judgment will be entered in the Government's favor as to Count I.
The IRS assessed FICA and Federal withholding tax against Eichhorn in the amount of $285, 898.75 for the third and fourth quarters of 2000, all four quarters of 2001, 2002, and 2003, and the first quarter of 2004. (Docket No. 13-1, Declaration of Christopher Giesin, 6.) The Government has provided evidence of the recorded liens and the Form 4340 for each of its assessments. In response to the Government's Motion for Summary Judgment, Eichhorn contends that the tax assessments at ...