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United States v. Bigg

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

December 2, 2019

MICHAEL J. BIGG, et al., Defendants.



         Michael J. Bigg failed to file tax returns for tax years 2002 through 2008. In April, 2015, the government filed this action against Bigg and his radiology practice, Monument Radiology, P.C ("Monument"), to collect on Bigg's tax liability. Due to Bigg's failure to file tax returns, the government calculated Bigg's tax liability based on automated substitutes for returns ("ASFRs").[1]Because both the defendants failed to respond or defend against this action, the Court entered default judgments against Bigg and Monument based on the amount calculated in the ASFRs.

         Bigg has now moved to set aside the default judgments on behalf of himself and Monument under Federal Rule of Civil Procedure 60(b)(6). Because Bigg fails to meet his burden under Rule 60(b)(6), the Court will deny the motion.

         I. BACKGROUND

         Bigg, a British citizen, moved to Virginia with his wife in 1982. He worked as a hospital radiologist for thirteen years before losing his job. Bigg then attended Harvard Law School and practiced law for a few years. His law firm eliminated his position in 2001.

         After losing his job at the law firm, Bigg faced numerous personal struggles and had trouble finding steady work. He began drinking heavily and suffered from "bouts of depression." (Dk. No. 30, at 5.) Beginning in 2002, Bigg stopped filing tax returns. When Bigg sold his home in Great Falls, Virginia, in 2003, the sale appeared to generate a sizeable amount of taxable income based on the reporting the IRS used to complete Bigg's ASFR.[2] Bigg contends that he always intended to catch up on filing his taxes, but that "life-altering event[s]" continuously overwhelmed him and prevented him from doing so.[3] (Id.)

         In 2012, Bigg bought Monument, a radiology business in Richmond, Virginia, that faced "severe financial trouble" and "a mountain of debt." (Id. at 6-7.) Bigg says that he did not know about those troubles until August, 2012, because the office manager who stayed on staff after the acquisition concealed Monument's financial affairs. The IRS served Monument with a Notice of Levy, Salary, and Other Income for Bigg's wages and other income on August 16, 2012. Monument did not comply with the levy.

         In September, 2014, Bigg found a letter from the IRS affixed to the front door of his house in which the IRS threatened to seize his assets.[4] Bigg contacted a tax resolution firm in October, 2014, that reassured him that it would address the tax issues. The firm, however, did nothing to resolve the issues. Bigg continued to drink heavily and "believes he may have suffered a mental breakdown." (Id. at 8).

         The government filed this action in April, 2015, and personally served Bigg, individually and as president of Monument, with a copy of the summons and the complaint.[5] The Clerk entered default against Bigg and Monument on May 21, 2015, when neither defendant responded to the complaint. In October, and November, 2015, the government mailed a copy of its motion for default judgments and two Roseboro notices to Bigg at his residence and Monument's office.

         On December 7, 2015, the Court entered default judgment against Bigg in the amount of $1, 182, 573.00, plus statutory interest, and against Monument in the amount of $371, 529.06, plus statutory interest. The government garnished Monument's insurance payments from 2016 until the satisfaction of Monument's debt in September, 2019. Bigg also received a letter by FedEx regarding discovery related to this case in April, 2017. Since the Court entered the default judgments, Bigg has tried to file belated tax returns for 2002 through 2008. He contends that those returns show that the IRS owes him $40, 000.

         II. ANALYSIS

         Federal Rule of Civil Procedure 60(b)(6) allows a court to relieve a party from a final judgment for "any ... reason that justifies relief." Fed.R.Civ.P. 60(b)(6). To obtain relief, the moving party must first show (1) that he or she filed the motion in a timely manner, (2) that he or she has a meritorious defense, and (3) that granting relief will not unfairly prejudice the opposing party. Aikens v. Ingram, 652 F.3d 496, 501 (4th Cir. 2011). Unlike relief under Rule 60(b)(1) through (3), Rule 60(b)(6) does not require a party to file his or her motion within one year. Pioneer Inv. Servs. Co. v. Brunswick Assoc. Ltd. P'ship, 507 U.S. 380, 393 (1993).

         The moving party must also show "'extraordinary circumstances' suggesting that the party is faultless in the delay." Id. Importantly, the provisions under Rule 60 "are mutually exclusive," so a party cannot seek relief under Rule 60(b)(6) that it should have sought under another provision. Id. Further, when the moving party does not establish extraordinary circumstances, a court may deny the motion without analyzing the threshold requirements. See Gelin v. Baltimore County, No. CV ADC-16-3694, 2019 WL 1546849, at *8 (D. Md. Apr. 9, 2019) ("Ordinarily, the Court would first analyze whether Plaintiffs met the threshold requirements to bring a Rule 60(b) motion. However, because the Court finds that Plaintiffs have failed to establish... extraordinary circumstances justifying relief pursuant to Rule 60(b)(6)..., such analysis is unnecessary.").

         Essentially, Bigg argues that the Court should grant him and Monument relief because (1) he did not know about the litigation-or at least his personal turmoil prevented him from responding to the action; and (2) enforcing the judgments based on the inaccurate returns would "offend any notion of justice." (Dk. No. 30, at 12.) The parties make numerous other arguments regarding whether the defendants have established the threshold requirements under Rule 60(b). The Court, ...

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