United States District Court, E.D. Virginia, Norfolk Division
UNITED STATES MAGISTRATE JUDGE'S REPORT AND
J. KRASK, UNITED STATES MAGISTRATE JUDGE.
matter is before the Court on plaintiffs motion for default
judgment as to defendant Ric Anthony Palmer. ECF No. 7. This
matter was referred to the undersigned United States
Magistrate Judge pursuant to a February 13, 2018 referral
order from United States District Judge Arenda L. Wright
Allen. ECF No. 9; see also 28 U.S.C. §
636(b)(1)(B); Fed.R.Civ.P. 72(b); E.D. Va. Local Civ. R. 72.
For the reasons discussed below, the undersigned recommends
that the Court GRANT plaintiffs motion for
April 20, 2017, the United States filed a complaint against
defendant Ric Anthony Palmer ("Palmer"), seeking,
among other things, to reduce to judgment and collect federal
income taxes assessed against him for five tax years.
Complaint ("Compl."), ECF No. 1 at 1. On June 30,
2017, the United States filed a proof of service, accompanied
by a declaration from the process server, indicating that the
summons and complaint were served on June 1, 2017. ECF Nos.
5, 5-1. In the absence of any appearance by Palmer or the
filing of a response to the complaint, the United States
requested, and the Clerk entered, a default as to Palmer on
July 17, 2017. ECF No. 6. On September 8, 2017, the United
States moved for entry of a default judgment. ECF No. 7.
Palmer has not responded to the motion and the time for doing
so has expired.
the Court's referral order, on February 15, 2018, the
undersigned issued an order directing that a hearing be
scheduled on the motion for default judgment on or before
March 19, 2018 and that the United States file a pre-hearing
brief addressing the sufficiency of service of process. ECF
No. 10 at 1-2 (also directing that a copy of the order be
sent to the address specified for plaintiff in the previously
filed proof of service, ECF No. 5). On March 9, 2018, the
United States filed a brief contending that the government
properly served Palmer with the summons and complaint. ECF
No. 11. On March 14, 2018, the Court issued a notice of
hearing on the motion for entry of default judgment and
directed that the notice be mailed to Palmer at the Virginia
Beach address noted in the process server's declaration
filed by the United States. ECF No. 12; ECF No. 5-1.
Court held an evidentiary hearing on March 19, 2018, at which
counsel for the United States appeared. ECF No. 13. Neither
Palmer nor any representative appeared on his behalf. At the
hearing, the United States presented testimony from two
witnesses (process server Douglas W. Wemer, Jr., and Internal
Revenue Service ("IRS") Revenue Officer Lynette
Summerton) and the Court admitted one exhibit into evidence.
The Complaint, Tax Assessments, and Statutory
one-count complaint seeks to reduce to judgment and collect
federal income tax assessments against Palmer and contains
the following allegations. Compl. at 1. Palmer, a resident of
Virginia Beach, VA, failed to file federal income tax returns
for tax years 2004, 2006, 2007, 2008, and 2012. Id.
at ¶¶ 4-5. As a result, the IRS prepared returns
for Palmer and a delegate of the Secretary of the Treasury
prepared assessments against him for federal income tax and
statutory additions to tax (such as accrued interest and
penalties). Id. at ¶ 5; see 26 U.S.C.
§ 6601(a) (providing for accrual of interest on unpaid
taxes); 26 U.S.C. § 6020(b)(1) (authorizing the
Secretary to prepare returns when a taxpayer does not file
them). As of April 17, 2017, the unpaid balance of the
assessments and accrued interest and penalties against Palmer
totaled: (1) $114, 070.48 for 2004; (2) $38, 544.97 for 2006;
(3) $6, 426.49 for 2007; (4) $11, 723.13 for 2008; and (5)
$588.73 for 2012. Id. The aggregate amount due as of
April 17, 2017 was $171, 353.80, plus statutory additions to
tax as provided by law. Id. at ¶ 6. The
complaint seeks a judgment declaring that Palmer is indebted
to the United States for such sum, with additions as
authorized by statute continuing until payment occurs, as
well as the costs associated with prosecuting this suit.
Id. at 2-3.
substantiate the factual information contained in the
complaint, the United States appended to its motion for
default judgment a sworn and signed declaration from IRS
Revenue Officer Jeffrey D. Willingham
("Willingham"), who worked on the Palmer matter and
had access to IRS records pertaining to his reported income
tax and related obligations. ECF No. 7-1 at ¶¶ 1-3.
Willingham's declaration confirms that Palmer failed to
file federal income tax returns for the five years specified
in the complaint. Id. at ¶ 4. Willingham
further states that the IRS prepared tax returns for Palmer
for those years, based upon the income Palmer received for
each of the years in question. Id. Following the
preparation and examination of such returns, Willingham
recites that a delegate of the Secretary of the Treasury
lodged assessments against Palmer for federal income tax and
statutory additions thereto identical to those set forth in
the complaint and that the aggregate amount due as of April
17, 2017, after applying any payments, is the $171, 353.80
sum, plus statutory additions, sought in the complaint.
Id. To further corroborate such sums,
Willingham also attached true copies of IRS transcripts for
Palmer's taxpayer account for each of the tax years in
question. Id. at 3-16. These transcripts contain,
among other things, selected information from the tax returns
prepared by the IRS for the years in question, information
about the account balances, interest, and any penalties due
as of April 17, 2017, and a chronological history of
transactions pertaining to Palmer's account for each tax
year at issue. Id.
Service of Process
filing the complaint, the United States filed a proof of
service, along with a signed declaration from process server
Douglas W. Wemer, Jr. ("Wemer"). ECF Nos. 5, 5-1.
Under penalty of perjury, Wemer recites that his employer,
after being retained by the United States Department of
Justice, assigned him to serve the summons and complaint upon
Palmer at the Virginia Beach residential address noted in the
declaration. ECF No. 5-1 at ¶¶ 1-2 (reciting the
same residential address listed for the defendant in the
summons and the style of the case on page one of the
complaint). Wemer, who is over 18 years of age, reports that
from May 15 to June 1, 2017, he made seven attempts to
personally serve Palmer at his residence. Id. at
¶¶ 4, 6. These efforts were unsuccessful.
Id. at ¶¶ 7-13.
Wemer went to the residential address on May 16, 2017,
however, he met a woman who answered the door, identified
herself as Palmer's mother, and stated that Palmer no
longer resided there and "she did not know where he
was." Id. at ¶ 8. At the hearing, Wemer
elaborated upon this encounter, stating that he asked if
Palmer was home and advised that he had legal documents to
give to him, at which point the mother exhibited a change of
attitude towards him. He also testified that the mother
stated that she had no way to contact Palmer. Rather than
attempting to serve her, Wemer testified that he returned to
his car and sought direction from his supervisor, who
directed by telephone that he continue to attempt to
personally serve Palmer for another week.
declaration further recites that he returned to the same
residential address on five subsequent occasions, only to
find that no one was home (on four occasions) and no one
would answer the door (on the last occasion). Id. at
¶¶ 9-13. On the last occasion on June 1, 2017,
Wemer went to the same address, observed a vehicle parked in
the driveway, and heard the voice of an adult male speaking
to someone else inside the house. Id. at ¶ 13.
During the hearing, Wemer elaborated that he heard adult
males speaking to one another inside the house and that,
after he knocked on the door, their conversation stopped.
While reporting that he then heard shuffling noises, Wemer
testified that no one came to the door. In response, Wemer
testified that he announced his presence by providing his
name and noting that he was there to serve legal documents on
Palmer. Wemer testified that he again consulted
telephonically with his supervisor about how to proceed.
After doing so, Wemer then taped the summons and complaint to
the front door. Id. Thereafter, Wemer also mailed a
copy of the summons and complaint to the same residential
address. Id. Although his declaration does not
specify the date, Wemer testified to mailing the documents
shortly after posting service on the door and doing so before
signing the declaration on June 26, 2017.
the March 19, 2017 hearing, the United States also elicited
testimony from IRS Revenue Officer Lynette Summerton
("Summerton"). Summerton testified that, prior to
Wemer's efforts to serve process, she was assigned to
visit the same Virginia Beach residential address noted above
to try to locate Palmer. While sitting in her car outside of
that location on February 14, 2017, Summerton observed a man
drive up in a truck, get out, and walk towards the house.
Summerton identified herself to the man, who identified
himself as Palmer, and accompanied him inside to discuss the
IRS's effort to collect the assessed taxes and the
balance due on his taxpayer account. During this discussion,
Summerton noted biographical (social security number and date
of birth) and other information voluntarily supplied by
Palmer on an IRS form 443-A (a collection information
statement). See Government Exhibit ("GX")
1, ECF No. 14. Summerton testified that Palmer advised her
that he and his girlfriend, Robin Hansell, co-owned and
resided together at the house. See GX 1 at 1-2
(noting "address owned by [b]oth"). Palmer advised
that they bought the house in 2015, using funds obtained from
Hansell's trust fund. Id. at 2-3. During their
discussion, Palmer admitted to knowing that the IRS was
seeking to collect unpaid taxes from him and knowing that the
IRS intended to file returns for him, due to a telephone call
with an IRS representative. Summerton testified that she and
Palmer discussed ways he could resolve the matter with the
IRS and she supplied the name and telephone number for the
IRS revenue officer (in Florida) with responsibility over his
matter. She testified that Palmer stated that he would call
this person the next day and she departed the residence.
of its March 9, 2018 brief regarding service of process, the
United States attached a sworn and signed declaration from
Michael J. Martineau, a trial attorney from the Tax Division
of the United States Department of Justice assigned to this
case. ECF No. 11-1. Both the Martineau declaration, and
exhibits B, C, D, and E attached thereto, contain information
about the ownership of the Virginia Beach residential address
where Wemer taped the summons and complaint. Id.
B to the Martineau declaration is a copy of a deed conveying
the real property at such address to Ric Anthony Palmer and
Robin Hansell, "as joint tenants by the entirety with
the right of survivorship, " that was recorded with the
Circuit Court of Virginia Beach on August 11, 2015.
Id. at 11-14.
C to the Martineau declaration, a March 8, 2017 real estate
tax account information statement apparently obtained from a
City of Virginia Beach public website, indicates that the
Treasurer's Office lists "Palmer Rick Anthony"
as the owner of the property located at the residential
address referred to above and whose property tax bills for
2016 and 2017 totaled $1, 352.54 and $2, 445.72,
respectively. Id. at 16.
D to the Martineau declaration reflects that, on February 28,
2017, the United States recorded a tax lien at the Circuit
Court of Virginia Beach against the property located at the
residential address noted above to attempt to recover federal
income taxes, interest, and penalties due from Palmer for the
tax years discussed above. Id. at 18-19.
E to the Martineau declaration reflects that, soon after the
filing of this tax lien, on April 19, 2017, a "quit
claim deed of gift" was filed in the circuit court
records, which purported to convey the real property at the
residential address noted above from Ric Palmer
("I/R/T/A Rick Anthony Palmer") and Robin Hansell
to Robin Hansell. Id. at 21-23. The third page of
this deed of gift indicates that Ric ...