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United States v. Mooney

United States District Court, D. Minnesota

November 2, 2017

United States of America, Plaintiff,
v.
William J. Mooney, et al., Defendants.

          REPORT AND RECOMMENDATION

          LEO I. BRISBOIS UNITED STATES MAGISTRATE JUDGE

         This matter came before the undersigned United States Magistrate Judge pursuant to an order of referral, [Docket No. 103], made in accordance with the provisions of 28 U.S.C. § 636(b)(1)(B), and upon Defendants William J. Mooney and Joni T. Mooney's[1] joint Motion for Summary Judgment, [Docket No. 83]. The undersigned held a Hearing on the motion on October 5, 2017, after which the Motion was taken under advisement. (See, Minute Entry, [Docket No. 111]).

         For the reasons set forth below, the undersigned recommends that Defendants William J. Mooney and Joni T. Mooney's Motion for Summary Judgment, [Docket No. 83], be DENIED.

         I. BACKGROUND AND STATEMENT OF ALLEGED FACTS

         On July 28, 2016, the United States of America (“the United States”) initiated the present action by filing its Complaint seeking to “reduce federal tax and penalty assessments to judgment and enforce federal tax liens on property located in this district.” (Compl., [Docket No. 1]). The United States alleges that, for the period from 2002 to 2014, there are outstanding tax assessments and penalty assessments against Defendant William J. Mooney and Defendant Joni T. Mooney (collectively, “the Mooney Defendants”). (Id. at ¶¶ 6-8, 12-17). The United States also seeks to enforce federal tax liens on property which it alleges the Mooney Defendants acquired by deed in February 1982, and thereafter, conveyed in November 2004, to Defendant Harbor Holdings, Mid-Atlantic Trustees and Administrators (“Harbor Holdings”) as part of an abusive tax promotion. (Id. at ¶¶ 18-25). The United States alleges that despite the quitclaim deed transferring title to the property to Harbor Holdings, the Mooney Defendants have continued to enjoy the benefits of the property, they pay all of the costs associated with the property, and they are named as insureds on the current homeowners insurance for the property. (Id. at ¶¶ 31-33). Thus, the United States asserts that the federal tax liens against the Mooney Defendants should attach to and be enforced against this property. (Id. at ¶¶ 33-37).

         On February 2, 2017, the United States filed an Application for Entry of Default as to Harbor Holdings, [Docket No. 48], and on February 6, 2017, the Clerk of Court entered Default against Harbor Holdings, [Docket No. 50].

         On February 15, 2017, the Mooney Defendants filed a Motion for Dismissal with Prejudice, [Docket No. 51], which was referred to this Court for Report and Recommendation by United States District Judge Susan Richard Nelson. ([Docket No. 60]). The Mooney Defendants argued that the case against them should be dismissed for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1); for lack of personal jurisdiction pursuant to Rule 12(b)(2); for insufficient process and insufficient service of process upon Harbor Holdings pursuant to Rules 12(b)(4) and (5); and for failure to join Harbor Holdings pursuant to Rule 12(b)(7). (Report and Rec., [Docket No. 74], 5).

         On May 1, 2017, this Court issued its Report and Recommendation recommending denial of the Mooney Defendants' Motion for Dismissal with Prejudice in its entirety. (Id. at 15). The Mooney Defendants filed Objections to the Report and Recommendation, [Docket No. 75], and on May 31, 2017, Judge Nelson overruled the Objections, adopted the Report and Recommendation, and denied the Mooney Defendants' Motion for Dismissal. (Order, [Docket No. 78]).

         On August 22, 2017, the Mooney Defendants filed the present Motion for Summary Judgment with Prejudice, [Docket No. 83]. In the accompanying Memorandum of Law in support of their Motion, the Mooney Defendants again argue that this Court lacks subject matter jurisdiction to hear this case; they are state citizens; they have not consented to the present case; the United States Attorney prosecuting this case has no power to do so; the United States Attorney has failed to respond to certain requests made by the Mooney Defendants and this failure proves that there is no debt at issue; no liens can be enforced because certain documentation is not on file with the Morrison County Recorder's Office; and the claims in this case are barred by the applicable statute of limitations. (Mem. in Supp., [Docket No. 84], 1-15). In the days following, the Mooney Defendants also filed with the Court multiple affidavits purportedly in support of their Motion. (See, [Dockets No. 90-101, 104-05]).

         On September 12, 2017, the United States filed its Memorandum in Opposition to the Motion for Summary Judgment, [Docket No. 107]. The United States argues that this Court should deny the Mooney Defendants' Motion for Summary Judgment because they have completely failed to show that there is no genuine dispute of material fact and that they would therefore be entitled to judgment as a matter of law. (Mem. in Supp., [Docket No. 107], 2). Rather, the United States contends that the Mooney Defendants' arguments are frivolous and, even when construed liberally, have no merit. (Id. at 3-13).

         On September 22, 2017, the Mooney Defendants filed their reply (entitled an “Answer and Objection”) to the Memorandum in Opposition, [Docket No. 109].

         Judge Nelson referred the Motion to the Undersigned for Report and Recommendation. ([Docket No. 13]). The Undersigned held a Hearing on the Motion for Summary Judgment on October 5, 2017, after which the Motion was taken under advisement. (See, Minute Entry, [Docket No. 111]).

         II. THE MOONEY DEFENDANTS' MOTION FOR SUMMARY JUDGMENT, [Docket No. 83]

         A. Standards of Review

         “‘Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”'” Riddle v. Riepe, 866 F.3d 943, 946 (8th Cir. 2017) (citation omitted). The moving party bears the burden to meet this standard. Nat'l Credit Union Admin. Bd. v. CUMIS Ins. Society, Inc., 241 F.Supp.3d 934, 938 (D. Minn. 2017). In considering a motion for summary judgment, “[t]he Court must view the evidence and the inferences that may reasonably be drawn from the evidence in the light most favorable to the nonmoving party.” Id.

         B. Analysis

         As set forth above, the Mooney Defendants raise multiple issues in the Motion for Summary Judgment presently before the Court. (See, generally, Mem. in Supp., ...


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