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United States v. Shiozawa

United States District Court, Ninth Circuit

June 28, 2013



LUCY H. KOH, District Judge.

Plaintiff United States ("Plaintiff") brings this civil action to reduce to judgment outstanding federal tax assessments against Defendant Shiro Shiozawa under 26 U.S.C. §§ 7401, 7402. Before the Court are two motions: (1) Defendant's Motion to Dismiss, see ECF No. 26, and (2) Plaintiff's Motion for Summary Judgment, see ECF No. 44. Having considered the parties' submissions, the relevant law, and the parties' arguments at the June 27, 2013 hearing, the Court DENIES Defendant's Motion to Dismiss and GRANTS Plaintiff's Motion for Summary Judgment.


Defendant Shiro Shiozawa ("Defendant") owned and operated Shiro's Auto Body, Inc. from November 1979 to November 2012. See Declaration of Charles Parker ("Parker Decl."), ECF No. 44-6, Ex. A ("Shiozawa Dep.") at 17:7-15, 22:1-5, ECF No. 44-7. Defendant admits that insurance companies paid Defendant for services provided between 1994 and 2008. See id. at 57:17-22; Declaration of Howard Baldwin ("Baldwin Decl."), ECF No. 44-1, Exs. 26, 28, 30, 32, 34, 36, 38, 40, 42, 44, 46, 48. Defendant also acknowledges that he did not file personal tax returns nor otherwise report his income, including the insurance company payments, between 1994 and 2008. See Shiozawa Dep. at 56:21-23, 57:17-22. At the June 27, 2013 hearing, Defendant reiterated that he had never filed a tax return between 1994 and 2008. The IRS calculated Defendant's tax liabilities based on the unreported insurance company payments and pension checks Defendant received. See Baldwin Decl. Exs. 25, 27, 29, 31, 33, 35, 37, 39, 41, 43, 45, 47. These calculations resulted in assessments being made against Defendant. See id. ¶¶ 7-19. After interest was added, the unpaid balance of assessed taxes, penalties, and interest as of April 2, 2012 is as follows:

Unpaid Balance of Assessed Taxes, Kind of Tax Tax Period Assessment Date Penalties, and Interest as of April 2, 2012 1040 1994 August 26, 2002 $55, 252.65 1040 1995 August 26, 2002 $129, 162.58 1040 1996 August 26, 2002 $128, 201.45 1040 1997 August 26, 2002 $150, 467.64 1040 1998 August 26, 2002 $177, 129.88 1040 1999 May 17, 2004 $193, 152.93 1040 2000 May 17, 2004 $139, 605.98 1040 2001 May 17, 2004 $113, 503.07 1040 2002 December 13, 2004 $91, 142.08 1040 2003 February 9, 2009 $117, 316.67 1040 2004 December 29, 2008 $134, 027.69 1040 2008 May 2, 2011 $306, 919.49 Total = $1, 735, 771.11

Id. ¶¶ 4, Exs. 13-24; ECF No. 1 ("Compl.") ¶¶ 7-8.


On April 23, 2012, Plaintiff filed its Complaint in this matter. On January 2, 2013, Defendant filed his Motion to Dismiss. See ECF No. 26 ("Mot. to Dismiss"). Plaintiff filed its Opposition on January 16, 2013. See ECF No. 33 ("Opp'n to MTD"). Defendant filed his Reply on January 23, 2013. See ECF No. 34 ("Reply to MTD").

Pursuant to the Court's scheduling order, on May 23, 2013, Plaintiff filed its Motion for Summary Judgment. See ECF No. 44 ("Mot. for SJ"); ECF No. 22 (Case Management Order). On June 10, 2013, Defendant filed his Opposition. See ECF No. 46 ("Opp'n to SJ"). On June 18, 2013, Plaintiff filed its Reply. See ECF No. 45 ("Reply to SJ").

The Court held a hearing on both motions on June 27, 2013.


A. Motion to Dismiss

A motion to dismiss for failure to state a claim under Rule 12(b)(6) tests the legal sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Pursuant to Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss an action for failure to allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations omitted). For purposes of ruling on a Rule 12(b)(6) motion, the Court "accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party." Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008) (citations omitted).

Nonetheless, the Court need not accept as true allegations contradicted by judicially noticeable facts, and the "[C]ourt may look beyond the plaintiff's complaint to matters of public record" without converting the Rule 12(b)(6) motion into one for summary judgment. Shaw v. Hahn, 56 F.3d 1128, 1129 n.1 (9th Cir.), cert. denied, 516 U.S. 964 (1995); see Van Buskirk v. Cable News Network, Inc., 284 F.3d 977, 980 (9th Cir. 2002); Schwarz v. United States, 234 F.3d 428, 435 (9th Cir. 2000). Nor is the Court required to "assume the truth of legal conclusions merely because they are cast in the form of factual allegations.'" Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (quoting W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981)). Moreover, mere "conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss." Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004) (citations omitted); accord Iqbal, 556 U.S. at 678-79.

B. Summary Judgment

Under Federal Rule of Civil Procedure 56(a), "[t]he [C]ourt shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Material facts are those that may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is "genuine' if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." See id. "[I]n ruling on a motion for summary judgment, the judge must view the evidence presented through the prism of the substantive evidentiary burden." Id. at 254. The question is "whether a jury could reasonably find either that the [moving party] proved his case by the quality and quantity of evidence required by the governing law or that he did not." Id. (emphasis removed). "[A]ll justifiable inferences must be drawn in [the nonmovant's] favor.'" See United Steelworkers of Am. v. Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir. 1989) (en banc) (quoting Liberty Lobby, 477 U.S. at 255).

The moving party bears the initial responsibility for informing the district court of the basis for its motion and identifying those portions of the pleadings, depositions, interrogatory answers, admissions and affidavits, if any, that it contends demonstrate the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A party opposing a properly supported motion for summary judgment "may not rest upon the mere allegations or denials of [that] party's pleading, but... must set forth specific facts showing that there is a genuine issue for trial." See Liberty Lobby, 477 U.S. at 256 (citing Fed.R.Civ.P. 56(e)). The opposing party need not show the issue will be resolved conclusively in its favor. See id., 477 U.S. at 248-49. All that is necessary is submission of sufficient evidence to create a material factual dispute, thereby requiring a jury or judge to resolve the parties' differing versions at trial. See id.

"Where the moving party will have the burden of proof on an issue at trial, the movant must affirmatively demonstrate that no reasonable trier of fact could find other than for the moving party." Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007) (citing Celotex, 477 U.S. at 323). On an issue for which the opposing party will have the burden of proof at trial, the party moving for summary judgment need only point out "that there is an absence of evidence to support the nonmoving party's case." Celotex, 477 U.S. at 325. Once the moving party meets its initial burden, the nonmoving party must ...

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