United States District Court, E.D. California
ORDER
KENDALL J. NEWMAN UNITED STATES MAGISTRATE JUDGE
INTRODUCTION
In this
civil action, the United States seeks a determination that
assessments of defendant Donald M. Wanland, Jr’s
federal tax liabilities for certain tax years between
1996-2003 were not discharged in bankruptcy, and also seeks
to reduce such tax assessments to a judgment. (ECF
No.1.)[1]
Presently
pending before the court is defendant’s “motion
for summary judgment, motion for judgment, and motion to
dismiss complaint.” (ECF No. 78.) The United States has
opposed the motion, and defendant filed a reply brief. (ECF
Nos. 82, 85.) After carefully considering the written
briefing, the court’s record, and the applicable law,
the court DENIES the motion.
DISCUSSION
Defendant’s
motion purports to seek summary judgment, judgment on the
pleadings, and/or dismissal of the action pursuant to Federal
Rules of Civil Procedure 12(c), 16(f), 37(c), 41(b), and 56.
However, when properly construed, the motion actually seeks
reconsideration of prior court orders addressing two legal
issues: (1) whether the United States’ complaint is
barred by res judicata; and (2) whether the action should be
dismissed due to the United States’ purported ongoing
discovery abuses.[2] Upon requesting reconsideration of a prior
order, a party must show, inter alia, “what
new or different facts or circumstances are claimed to exist
which did not exist or were not shown upon such prior motion,
or what other grounds exist for the motion.” E.D. Cal.
L.R. 230(j). For the reasons discussed below, the court
concludes that defendant has not made an adequate showing
that reconsideration is warranted as to either issue. Each
legal issue is addressed separately below.
Res
Judicata
Over
two years ago, in the context of defendant’s motion to
dismiss the action pursuant to Federal Rule of Civil
Procedure 12(b)(6), the court rejected defendant’s
argument that the complaint is barred by the doctrine of res
judicata. (ECF Nos. 22, 27.) The court explained that:
Defendant essentially reasons that his June 8, 2011
bankruptcy discharge included the tax liabilities at issue in
this action, and that the United States is therefore
collaterally estopped from raising the issue of whether or
not the taxes were dischargeable in this action. That
argument lacks merit, because a discharge under 11 U.S.C.
§ 727 “does not discharge an individual debtor
from any debt-for a tax…with respect to which the
debtor made a fraudulent return or willfully attempted in any
manner to evade or defeat such tax….” 11 U.S.C.
§ 523(a)(1)(C).
(ECF No. 22 at 6.) The court further observed that,
“although the Ninth Circuit has apparently not squarely
addressed the issue, other courts have persuasively held,
based on an analysis of the applicable statutes and
bankruptcy rules, that the United States is not required to
obtain a ruling on the non-dischargeability of a tax debt
pursuant to section 523(a)(1)(C) in the underlying bankruptcy
case to prevent its discharge.” (Id.)
Debts listed in §§ 523(a)(2), (a)(4) and (a)(6) are
automatically discharged in bankruptcy unless a creditor
objects to their dischargeability by filing an adversary
proceeding. Fed.R.Bankr.P. 4007 (advisory committee notes). A
creditor who wishes to object to the dischargeability of a
debt under §§ 523(a)(2), (a)(4) or (a)(6) must file
a complaint within sixty (60) days of the first scheduled
meeting of creditors. Fed.R.Bankr.P. 4007(c)…Those
debts excluded from discharge not listed in §§
523(a)(2), (a)(4) or (a)(6), including certain tax debts, are
automatically excepted from discharge…As a result, a
complaint to determine the dischargeability of a debt, other
than a debt listed in §§ 523(a)(2), (a)(4) or
(a)(6), may be filed at any time. Fed.R.Bankr.P. 4007(b).
(ECF No. 22 at 6 [quoting In re Walls, 496 B.R. 818,
825-26 (N.D. Miss. 2013) (citation omitted); see also In
re Range, 48 Fed. App’x 103, at *5 & n.2 (5th
Cir. 2002) (unpublished)].) The court noted that:
[T]he operative complaint alleges sufficient facts to permit
the court to draw a reasonable inference that defendant
willfully attempted to evade or defeat payment of the tax
liabilities at issue. Accepting such factual allegations as
true for purposes of a motion to dismiss under Rule 12(b)(6),
it follows that these taxes would not have been automatically
discharged upon issuance of the discharge under 11 U.S.C.
ยง 727. Defendant does not contend that the bankruptcy
court actually made any specific findings regarding the
dischargeability of these tax liabilities as part of an
adversary proceeding in the bankruptcy action. As such, at
least based on the present ...