Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

United States v. Carter

United States District Court, E.D. Virginia, Richmond Division

September 18, 2017

UNITED STATES OF AMERICA, Plaintiff,
v.
LEWIS F. CARTER, et al. Defendants.

          MEMORANDUM OPINION

          M. HANNAH LAUCK UNITED STATES DISTRICT JUDGE.

         This matter comes before the Court on the Defendants Lewis F. Carter ("Carter"), Mary Carter ("Mary"), and Bobby Carter's ("Bobby") (collectively, "the Carters"), all proceeding pro se, [1]multiple pending motions to dismiss purportedly brought under Federal Rules of Civil Procedure 12(b)(1), [2] 12(b)(2), [3]12(b)(6), [4] and 12(h)(3)[5] (collectively, the "Motions to Dismiss"), (ECF Nos. 7, 8, 9, 18); the Carters' Motion to "Take Judicial Notice of Law" (the "Judicial Notice Motion"), (ECF No. 17); the United States' Motion for Summary Judgment, (ECF No. 21); the Carters' "Demand for Due Process Hearing" (the "Due Process Demand"), (ECF No. 29); and, the Carters' "Second Demand for Due Process Hearing" (the "Second Due Process Demand"), (ECF No. 35).

         The United States responded to the Carters' first three motions to dismiss. (ECF No. 12.) The Carters did not reply, and the time to do so has expired. The United States did not respond to the Carters' fourth-filed motion to dismiss, the Carters' Judicial Notice Motion, the Carters' Demand for Due Process Hearing, or the Carters' Second Due Process Demand, and the time to do so has expired. The Carters responded to the United States' Motion for Summary Judgment, (ECF Nos. 25, 26, 27), and the United States replied, (ECF No. 31.) The Court dispenses with oral argument because the materials before it adequately present the facts and legal contentions, and argument would not aid the decisional process. Accordingly, all matters are ripe for disposition. The Court exercises jurisdiction pursuant to 28 U.S.C. §§ 1340[6] and 1345, [7] 26 U.S.C. § 7402(a), [8] and 26 U.S.C. § 7403.[9]

         For the reasons that follow, the Court will: (1) deny the Carters' Motions to Dismiss; (2) deny as moot the Carters' Judicial Notice Motion; (3) deny without prejudice the United States' Motion for Summary Judgment; and, (4) deny as moot the Carters' Due Process Demand and Second Due Process Demand.

         I. Factual and Procedural Background

         A. Factual Background

         This case arises from the United States' efforts to collect eleven years of unpaid taxes, penalties, and interest from Carter. On March 16, 2015, the United States filed a complaint to reduce to judgment tax assessments for the tax years 1997-2000, 2002-2006, and 2008-2009. United States v. Lewis Carter, No. 3:l5cvl6l, 2015 WL 9593652 (E.D. Va. Dec. 31, 2015) ("Carter 7"). On December 31, 2015, the Court granted summary judgment for the United States on Carter's tax liabilities. (Carter I, Final O. 1, ECF No. 56.) On January 14, 2016, the Court entered an amended order that Carter's unpaid federal tax debt, "in the amount of $309, 718.95, as of January 5, 2015, plus statutory additions accruing thereafter until paid, " be entered against Carter. (Carter I, Amended O. 2, ECF No. 75.)

         After the final judgment was entered against him, Carter peppered the Court with a number of filings. See United States v. Carter, No. 3:15cv161, 2016 WL 1752761, at *1 n.1 (E.D. Va. Apr. 29, 2016) (listing the "twenty-one filings before the Court, " including "two Motions to Alter or Amend a Judgment... and a Motion to Void the Order of the Court"). Carter also appealed the Court's grant of summary judgment and denial of his "multiple postjudgment motions, " and on October 20, 2016, the United States Court of Appeals for the Fourth Circuit affirmed in an unpublished per curiam decision. United States v. Carter, 669 F.Appx. 682 (4th Cir. 2016).

         On August 15, 2016, the United States filed the instant Complaint, seeking to "foreclose the federal tax liens against certain real properties with respect to Lewis Carter's tax and penalty liabilities" for the tax years 1997-2000, 2002-2006, and 2008-2009. (Compl. ¶ 1, ECF No. 1.) The United States joined as defendants Mary, Bobby, and the Virginia Department of Taxation (the "VDOT"). The United States joined Mary and Bobby because it believed both Mary and Bobby may "own an interest in one of the properties" on which the United States seeks to foreclose. (Compl. ¶¶ 5, 6.) The United States joined the VDOT because it believed the VDOT "may claim an interest in the real properties ... by virtue of a state tax lien" on which the United States seeks to foreclose. (Compl. ¶ 7.)

         In its Complaint, the United States alleges that, after the Court's grant of summary judgment in the prior case, federal tax liens attached to three real properties in which Carter held an interest. The United States seeks to foreclose on the following three properties, all of which are located in Westmoreland County, Virginia: (1) a property located at 1807 Oldhams Road, Hague, Virginia (the "Oldhams Road Property"); (2) 0.17 acres, which became part of the Oldhams Road Property (the "Oldhams Road Addition"); and, (3) five additional parcels of property identified only by tax map identification numbers, (the "Five Parcels").

         According to the Complaint, Carter and Mary acquired the Oldhams Road Property as tenants by the entireties on August 4, 1988.[10] Carter and Mary acquired the Oldhams Road Addition as tenants by the entireties on July 9, 1997. And Carter and Bobby acquired the Five Parcels as joint tenants via bequest from Laxter Carter when he died on October 30, 2007.

         The United States avers that it "is entitled to foreclose the foregoing tax liens, sell the real properties, and distribute the proceeds in accordance with the rights of the parties determined herein, with the amounts attributable to Lewis Carter's interest to be paid to the United States and applied against his federal tax liabilities." (Compl. ¶ 18.) The United States seeks judgment that it "has valid and subsisting federal tax liens ... and rights to ... the real properties described" in the Complaint, (Compl. ¶ A), and asks the Court to order that the federal tax liens attach to the properties, that the properties be foreclosed and sold, and that the proceeds of the sale "be distributed in accordance with the rights of the parties determined herein, with the amounts attributable to Lewis Carter's interest to be paid to the United States and applied against his federal income tax liabilities." (Compl. ¶ B.)

         B. Procedural Background

         On August 15, 2016, the United States filed its Complaint, seeking to "foreclose the federal tax liens against certain real properties with respect to Lewis Carter's tax and penalty liabilities" for the tax years 1997-2000, 2002-2006, and 2008-2009, and joining Mary, Bobby, and the VDOT. (Compl. 1, ¶¶ 4-7.) The Carters jointly filed three motions to dismiss, [11] and the United States responded to those three motions in one filing. The Carters then filed four motions asking the Court to take judicial notice of the Constitution, the Federal Rules of Evidence, and several decisions of the Supreme Court of the United States. (See ECF Nos. 10, 11, 13, 14.) The Court denied those motions as moot. (Mem. O., ECF No. 16.) After the United States filed its response to their first three motions to dismiss, the Carters filed a fourth motion to dismiss.[12] On that same day, the Carters filed the Judicial Notice Motion, titled "Motion to Take Judicial Notice of Law in the District Court's Own Decision, Just Previously Taken in Case No: 3:l5-cv-161." The United States did not respond to either the Fourth Motion to Dismiss or the Judicial Notice Motion.

         Before the Court ruled on the Carters' motions to dismiss and before discovery commenced, the United States filed a Motion for Summary Judgment.[13] This motion prompted another flurry of filings by the Carters. Specifically, the Carters filed: (1) "Defendant's Objection and Motion to Strike;" (2) "Defendant's Second Objection to Plaintiffs Motion for Summary Judgment;" (3) "Defendant's Third Objection to Plaintiffs Motion For Summary Judgment For Failure To Establish the Subject-Matter Jurisdiction Of the District Court;" (4) "Defendant's DEMAND For due process Hearing;" and, (5) "Defendant's Demand for Trial by Jury, " (ECF No. 30). The United States responded to the Carters' objections and motions to strike, and the Carters' jury demand, (ECF No. 32).

         II. Analysis: Motions to Dismiss

         The gravamen of the Carters' Motions to Dismiss is that the Court lacks jurisdiction to order the enforcement of federal income taxes. The Carters also argue that the Court cannot exercise personal jurisdiction over Mary and Bobby because they were not parties to the previous action.[14] The Court will analyze each issue separately.

         A. Analysis: Motion to Dismiss for Lack of Subject-Matter Jurisdiction

         1. Legal Standard

         In a motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) challenging the Court's subject-matter jurisdiction, the burden rests with the plaintiff, as the party asserting jurisdiction, to prove that federal jurisdiction is proper. See Int'l Longshoremen's Ass'n v. Va. Int'l Terminals, Inc., 914 F.Supp. 1335, 1338 (E.D. Va. 1996) (citing McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189 (1936); Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982)). A motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(1) can attack subject-matter jurisdiction in two ways. First, a Rule 12(b)(1) motion may attack the complaint on its face, asserting that the complaint fails to state a claim upon which subject-matter jurisdiction can lie. See Int'l Longshoremen's Ass'n, 914 F.Supp. at 1338; see also Adams, 697 F.2d at 1219. In such a challenge, a court assumes the truth of the facts alleged by plaintiff, thereby functionally affording the plaintiff the same procedural protection he or she would receive under Rule 12(b)(6)[15] consideration. See Int'l Longshoremen's Ass'n, 914 F.Supp. at 1338; see also Adams, 697 F.2d at 1219.

         A Rule 12(b)(1) motion may also challenge the existence of subject-matter jurisdiction in fact, apart from the pleadings. See Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991); Int'l Longshoremen's Ass'n, 914 F.Supp. at 1338; see also Adams, 697 F.2d at 1219. In such a case, because a party challenges the court's "'very power to hear the case, '" the trial court is free to weigh evidence to determine the existence of jurisdiction. Int'l Longshoremen's Ass'n, 914 F.Supp. at 1338 (quoting Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977)). No presumptive truthfulness attaches to the plaintiffs allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims. See Int'l Longshoremen's Ass'n, 914 F.Supp. at 1338; see also Adams, 697 F.2d at 1219.

         If the facts necessary to determine jurisdiction intertwine with the facts central to the merits of the dispute, a court should find that jurisdiction exists and resolve any factual dispute on the merits because the jurisdictional attack would then closely mirror a challenge on the merits. United States v. North Carolina, 180 F.3d 574, 580 (4th Cir. 1999); Adams, 697 F.2d at 1219. A court need not examine jurisdiction in that manner when a plaintiff asserts the claim solely for the purpose of obtaining jurisdiction or when a plaintiff raises a wholly insubstantial and frivolous claim. Bell v. Hood, 327 U.S. 678, 682-83 (1946).

         2. The Carters' Arguments

         The Carters raise many of the same arguments against subject-matter jurisdiction that Carter previously raised in Carter I. See, e.g., United States v. Carter, No. 3:15cv161, 2015 WL 9593652, at *4-6 (E.D. Va. Dec. 31 2015) (discussing Carter's arguments that the Court lacks jurisdiction), affd, 669 F.App'x 682 (2016). In the Motions to Dismiss, the Carters argue that the United States lacks the constitutional power to levy or enforce a direct income tax. The Carters assert that the "court strips itself of all subject-matter jurisdiction that it may lawfully establish and take over the entire civil action under the statute claimed to enforce the direct tax imposed in practice by the IRS'[s] defacto operations outside of any true statutory authority." (First Mot. Dismiss ¶ 17, ECF No. 7.) The essence of the Carters' argument that the Court lacks subject-matter jurisdiction is that

[t]he enforcement by the federal courts of the practiced (and argued) direct taxation of the American people, is still prohibited and is constitutionally unenforceable in the federal courts under the extant prohibitions and mandates of Article I, Section 2, clause 3, and Article I, Section 9, clause 4 of the U.S. Constitution which prohibit ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.