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.

Davis v. United States

United States District Court, D. Colorado

March 6, 2018

KELLY D. DAVIS, Plaintiff,
v.
UNITED STATES OF AMERICA, Defendant.

          OPINION AND ORDER GRANTING GOVERNMENT'S MOTION FOR SUMMARY JUDGMENT

          MARCIA S. KRIEGER, CHIEF UNITED STATES DISTRICT JUDGE.

         THIS MATTER comes before the Court pursuant to Mr. Davis' Motion for Summary Judgment (# 49), the Government's response (# 50), and Mr. Davis' reply (# 52); and the Government's Motion for Summary Judgment (# 48), Mr. Davis' response (# 51), the Government's reply (# 53), and Mr. Davis' sur-reply (# 54).

         FACTS

         The pertinent facts of this case are undisputed. Between 2005 and 2009, Mr. Davis and Allyce Card were co-owners of WVC, a construction contractor. Mr. Davis was the President of WVC and managed the company's field operations. Ms. Card was WVC's bookkeeper and managed its finances and office staff. WVC withheld money from employee paychecks to satisfy federal payroll tax obligations, but it did not pay those funds over to the Government. Instead, it diverted those funds to pay operating expenses, creditors, and, apparently, personal obligations of Mr. Davis and Ms. Card.

         The parties agree that Mr. Davis became aware of WVC's failure to remit withheld payroll taxes to the Government by early 2009, and further agree that, although WVC continued to operate throughout the remainder of 2009, Mr. Davis never caused WVC to rectify the tax delinquencies with the federal government. The Government assessed nearly $1 million in tax penalties against Mr. Davis, personally, pursuant to 26 U.S.C. § 6672 for non-payment of the employment taxes. Mr. Davis commenced this action to challenge those assessments. He seeks a declaration that he owes nothing to the Government; the Government has counterclaimed for a determination under § 6672 that Mr. Davis owes the penalties.

         Both sides have moved (# 48, 49) for summary judgment in their favor.

         ANALYSIS

         A. Standard of review

         Rule 56 of the Federal Rules of Civil Procedure facilitates the entry of a judgment only if no trial is necessary. See White v. York Intern. Corp., 45 F.3d 357, 360 (10th Cir. 1995). Summary adjudication is authorized when there is no genuine dispute as to any material fact and a party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). Substantive law governs what facts are material and what issues must be determined. It also specifies the elements that must be proved for a given claim or defense, sets the standard of proof and identifies the party with the burden of proof. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Kaiser-Francis Oil Co. v. Producer's Gas Co., 870 F.2d 563, 565 (10th Cir. 1989). A factual dispute is “genuine” and summary judgment is precluded if the evidence presented in support of and opposition to the motion is so contradictory that, if presented at trial, a judgment could enter for either party. See Anderson, 477 U.S. at 248. When considering a summary judgment motion, a court views all evidence in the light most favorable to the non-moving party, thereby favoring the right to a trial. See Garrett v. Hewlett Packard Co., 305 F.3d 1210, 1213 (10th Cir. 2002).

         If the movant has the burden of proof on a claim or defense, the movant must establish every element of its claim or defense by sufficient, competent evidence. See Fed. R. Civ. P. 56(c)(1)(A). Once the moving party has met its burden, to avoid summary judgment the responding party must present sufficient, competent, contradictory evidence to establish a genuine factual dispute. See Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir. 1991); Perry v. Woodward, 199 F.3d 1126, 1131 (10th Cir. 1999). If there is a genuine dispute as to a material fact, a trial is required. If there is no genuine dispute as to any material fact, no trial is required. The court then applies the law to the undisputed facts and enters judgment.

         If the moving party does not have the burden of proof at trial, it must point to an absence of sufficient evidence to establish the claim or defense that the non-movant is obligated to prove. If the respondent comes forward with sufficient competent evidence to establish a prima facie claim or defense, a trial is required. If the respondent fails to produce sufficient competent evidence to establish its claim or defense, then the movant is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).

         This case involves cross-motions for summary judgment. "Because the determination of whether there is a genuine dispute as to a material factual issue turns upon who has the burden of proof, the standard of proof and whether adequate evidence has been submitted to support a prima facie case or to establish a genuine dispute as to material fact, cross motions must be evaluated independently." In re Ribozyme Pharmaceuticals, Inc., Securities Litig., 209 F.Supp.2d 1106, 1112 (D. Colo. 2002); see also Atlantic Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138, 1148 (10th Cir. 2000); Buell Cabinet Co. v. Sudduth, 608 F.2d 431, 433 (10th Cir. 1979) ("Cross-motions for summary judgment are to be treated separately; the denial of one does not require the grant of another."). However, because, as set forth herein, all material facts are undisputed, the Court need simply recite those facts and then apply the law to them.

         B. Merits

         The Government's claim is brought pursuant to 26 U.S.C. § 6672, which provides that “any person required to collect, truthfully account for, and pay over any [payroll] tax . . . who willfully fails to . . . pay over such tax [shall] . . . be liable to a penalty equal to the total amount of the tax [not paid over].” The claim has two elements: (i) that the defendant is a “responsible person” - that is, responsible within the business for ensuring the proper payment of the taxes, and (ii) that he or she willfully failed to pay over the tax money to the government.[1] The taxpayer bears the burden of proving by a preponderance of the evidence that he is either: (i) not a “responsible person, ” or (ii) that his failure to pay taxes was not willful. U.S. v. Hodges, 684 Fed.Appx. 722, 728 (10th Cir. 2017); Byrne v. U.S., 857 F.3d 319, 327 (6th Cir. 2017). 1. Responsibility Mr. Davis' first argument is that it was Ms. Card - and only Ms. Card - that was responsible for WVC's (non-)payment of payroll taxes, and therefore he is not a “responsible” person under Section 6672. A person is “responsible” for payment of taxes if that person is required to collect, account for, or pay over taxes withheld from employees' wages. Bradshaw v. U.S., 83 F.3d 1175, 1178 (10th Cir. 1995). A responsible person will generally be a managing officer or employee, and there may be more than one responsible person in an entity. Denbo v. U.S., 988 F.2d 1029, 1032 (10th Cir. 1993). The question is not who had the most control over company finances, but simply whether the person in question had significant control over the payment of taxes - more specifically, whether the person had “the actual authority or ability, in view of his status within the corporation, to pay the taxes owed.” Smith v. U.S., 555 F.3d 1158, 1165 (10th Cir. 2009). Responsibility turns on whether the person in question had ...


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.