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.

SHOTGUN DELIVERY, INC. v. U.S.

January 20, 2000

SHOTGUN DELIVERY, INC., PLAINTIFF
V.
UNITED STATES OF AMERICA, DEFENDANT.



The opinion of the court was delivered by: Conti, Senior District Judge.

ORDER RE UNITED STATES' MOTION FOR SUMMARY JUDGMENT

I. INTRODUCTION

In the above-captioned case, Plaintiff Shotgun Delivery, Inc., ("Shotgun") brings an action against Defendant United States of America ("United States"), for the recovery "of internal revenue taxes which it claims have been wrongfully assessed and collected. The United States has filed a counterclaim against Shotgun to reduce this matter to judgment and collect the assessed but as yet unpaid internal revenue taxes, penalties and interest for which Shotgun is liable under Section 3121(a) of the Internal Revenue Code ("IRC").

II. BACKGROUND

Shotgun is a California corporation, engaged in the business of providing courier services for point-to-point deliveries. Drivers employed by Shotgun generally use their own vehicles to make pick-ups and deliveries. These drivers would notify Shotgun of when they were available to work and would then be radio dispatched on an as needed basis.

Shotgun charged its customers based on distance, time required for delivery, waiting time and weight. The total amount a customer was charged for any one job was called a "tag rate." Usually, Shotgun would charge a customer a fixed amount per mile for delivery. The distance between pick-up and delivery locations was determined based on Shotgun's experience and the California Public Utility Commission's point-to-point mileage book. On certain deliveries Shotgun would "double-up," in that if there were several requests for pick-up and delivery in the same cities, then Shotgun would charge each customer for the full distance between the pick-up and delivery locations while only being required to use a single driver to make the one trip.*fn1 However, drivers for Shotgun were not allowed to double-up on rush deliveries. Further, Shotgun would also charge an additional amount for overweight items or rush deliveries.

During the relevant years 1991-1992, Shotgun drivers were paid on a commission basis. See, Moore Declaration, Exh. C. Drivers received 40% of the tag rate for each delivery job they completed.*fn2 After submitting their hours worked, distance traveled and tag rates charged, Shotgun's drivers were paid via two separate checks. The first check was a wage check for hours worked calculated at $4.25 per hour for regular time and $6.38 per hour for overtime. The second check, referred to as reimbursement of expenses/lease fee,*fn3 was the 40% commission minus the wage check. The sum of the two checks would always equal 40% of the tag rate for all the jobs each driver completed. Shotgun did not treat the second check as constituting wages but rather reimbursement and therefore did not make withholdings for income tax or employment taxes nor did it report the amounts on its employee-drivers' W-2 Forms.

During an audit of Shotgun, the Internal Revenue Service ("IRS") determined that the monies disbursed in these second checks had been improperly classified as reimbursement instead of wages. Subsequently, on or around September 2, 1996 the IRS issued an assessment of employment taxes (Forms 940 and 941), penalties and interest in the amount of $453,186.95 against Shotgun for all four quarters of both 1991 and 1992, pursuant to § 62 of the IRC. See 26 U.S.C. § 62(1999). Shotgun paid $18,000.00 toward these assessments. On April 22, 1997 Shotgun filed a claim with the IRS for a refund of $7,000.00. This claim was denied on August 29, 1997. On March 6, 1998 Shotgun filed a claim with the IRS for a refund of $11,000.00. This claim was denied on June 9, 1998.

On December 18, 1998, Shotgun filed its complaint against the United States seeking a refund of $18,000.00 paid to the IRS. The United States answered and counter-claimed against Shotgun seeking judgment and full payment of the assessed taxes, interest and penalties. Shotgun contends that the IRS assessment was incorrect because its reimbursement system constituted a valid accountable plan under § 62 of the Internal Revenue Code ("IRC"). The United States counters that the IRS assessment was correct and that Shotgun's reimbursement system did not in fact constitute a valid accountable plan.

Now before the Court is the United States' Motion for Summary Judgment on its counterclaim.

III. LEGAL STANDARD

Summary judgment is proper only when there is no genuine issue of material fact and, when viewing the evidence in the light most favorable to the nonmoving party, the movant is clearly entitled to prevail as a matter of law. See Fed.R.Civ.P. 56(c); Cleary v. News Corp., 30 F.3d 1255, 1259 (9th Cir. 1994). Once a summary judgment motion is made and properly supported, the nonmoving party may not rest on the mere allegations of its pleadings, but must set forth specific facts showing that there is a genuine issue for trial. See FedR. Civ.P. 56(e); Celotex Corp. v. Myrtle Nell Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265(1986). In addition, to withstand a proper motion for summary judgment, the nonmoving party must show that there are "genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

If the factual context makes the nonmoving party's claim implausible, that party must come forward with more persuasive evidence than would otherwise be necessary to show that there is a genuine issue for trial. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Moreover, if the nonmoving party has the burden of proof on a given issue, the moving party can prevail by demonstrating ...


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.