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United States v. Lang

July 25, 2008

UNITED STATES OF AMERICA, PLAINTIFF,
v.
KENDELL LANG; KENDELL LANG, AS MOTION TO STRIKE CROSS-PERSONAL REPRESENTATIVE OF THE ESTATE OF COMPLAINT PATRICIA LANG; CASCADE PROFESSIONAL TRUST, KENDELL LANG, TRUSTEE; WHITE MEMORIAL MEDICAL CENTER; STATE OF CALIFORNIA, FRANCHISE TAX BOARD, DEFENDANTS.



The opinion of the court was delivered by: Hon. Jeffrey T. Miller United States District Judge

ORDER GRANTING MOTION FOR SUMMARY JUDGMENT; DENYING MOTION TO DISMISS; GRANTING

Plaintiff, the United States of America ("IRS"), moves for summary judgment on all claims alleged in its First Amended Complaint ("FAC"). The IRS also moves to strike the cross-complaint contained within Defendant Kendell Lang's amended answer. Defendant Kendall Lang, in his individual capacity, as Personal Representative of Patricia Lang, and as trustee of the Cascade Professional Trust, opposes the motion and separately moves to dismiss the FAC. Pursuant to Local Rule 7.1(d)(1), this matter is appropriate for decision without oral argument. For the reasons set forth below, the court grants the motion for summary judgment in its entirety, denies the motion to dismiss, and grants the motion to strike the cross-complaint. The Clerk of Court is instructed to enter judgment in favor of Plaintiff and against Defendant on all claims.

BACKGROUND

On December 4, 2006, the IRS commenced this action by filing a "Complaint to Reduce Federal Tax Assessments to Judgment and to Foreclose Federal Tax Liens." The FAC, filed on August 15, 2007, names as Defendants: Kendell Lang; the Estate of Patricia Lang, Kendell Lang, as personal representative of the estate; and Cascade Professional Trust, Kendell Lang as trustee of the Trust. (FAC ¶¶5-7). Named in the FAC are three other parties who have yet to appear in this action.*fn1

The first three claims for relief seek to reduce certain tax assessments to judgment against Kendell Lang, in his personal capacity and as personal representative of the estate of Patricia Lang, for tax years 1993 and 1995, the first cause of action, in the total amount of $270,789.69, (FAC ¶15); for tax years 1999, 2000, 2001, 2002 and 2004, the second cause of action, in the total amount of $93,714.80, (FAC ¶18); and for tax year 2002, the third cause of action, in the total amount of $35,872.87. (FAC ¶21). The fourth cause of action seeks an order (1) finding that the Cascade Professional Trust holds title to the real property at issue, located at 2605 Lone Jack Road, Encinitas, California (the Subject Property"), as the nominee of Kendell Lang; (2) foreclosing the federal tax liens encumbering the Subject Property held by the Cascade Professional Trust; and (3) allowing for a sale of the Subject Property to satisfy the federal tax liens and other creditors' liens. The Subject Property is alleged to be the principal residence of Kendell Lang. (FAC ¶26).

On February 23, 2007 the court denied Defendants' motion to dismiss. Following the death of Kendell Lang's spouse, on April 26, 2007 the court granted the parties' joint motion to substitute Kendell Lang as the Personal Representative of Patricia Lang. Following discovery, IRS now moves for summary judgment on all claims alleged in the FAC.

DISCUSSION

Legal Standards

A motion for summary judgment shall be granted where "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c); Prison Legal News v. Lehman, 397 F.3d 692, 698 (9th Cir. 2005). The moving party bears the initial burden of informing the court of the basis for its motion and identifying those portions of the file which it believes demonstrates the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). There is "no express or implied requirement in Rule 56 that the moving party support its motion with affidavits or other similar materials negating the opponent's claim." Id. (emphasis in original). The opposing party cannot rest on the mere allegations or denials of a pleading, but must "go beyond the pleadings and by [the party's] own affidavits, or by the 'depositions, answers to interrogatories, and admissions on file' designate 'specific facts showing that there is a genuine issue for trial.'" Id. at 324 (citation omitted). The opposing party also may not rely solely on conclusory allegations unsupported by factual data. Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989).

The court must examine the evidence in the light most favorable to the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962). Any doubt as to the existence of any issue of material fact requires denial of the motion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). On a motion for summary judgment, when "'the moving party bears the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence were uncontroverted at trial.'" Houghton v. South, 965 F.2d 1532, 1536 (9th Cir. 1992) (emphasis in original) (quoting International Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1264-65 (5th Cir. 1991), cert. denied, 502 U.S. 1059 (1992)).

The Tax Assessment Counts

"In an action to collect tax, the government bears the initial burden of proof. The government, however, may satisfy this initial burden by introducing into evidence its assessment of taxes due. Normally, introduction of the assessment establishes a prima facie case." Oliver v. United States, 921 F.2d 916, 919 (9th Cir. 1990) (citations omitted). The Certificates of Assessments and Payments are entitled to a presumption of correctness so long as they are supported by a minimal factual foundation. See Palmer v. Internal revenue Service, 116 F.3d 1309, 1312 (9th Cir. 1997).

Tax Year 1993, Kendell and Patricia Lang

On this claim, the Government comes forward with evidence consisting of (1) the Certificate of Assessments and Payments for 1993, (Kim Decl., Exh. 1); (2) the partial abatement of taxes requested by Kendell and Patricia Lang, (Piazza Decl., Exh. 1); and (3) the workpapers detailing the calculation of tax deficiency and assessment. Id. This evidence satisfies the Government's ...


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