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United States v. Cabelka

United States District Court, N.D. Texas, Wichita Falls Division

January 10, 2018

UNITED STATES OF AMERICA, Plaintiff,
v.
LARRY CECIL CABELKA, Defendant.

          FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

          HAL R. RAY, JR. UNITED STATES MAGISTRATE JUDGE

         Before the Court is Plaintiff United States' Motion for Summary Judgment (ECF No. 72) with Brief (ECF No. 73) and Appendix (ECF Nos. 74-76) in support, filed August 14, 2017; Defendant's Response to Plaintiff's Motion for Summary Judgment (ECF No. 188), filed November 22, 2017; and Plaintiff's Reply to Defendant's Response (ECF No. 193), filed December 6, 2017. On January 4, 2018, Defendant filed “Defendant Larry Cabelka's Motion to File a Surreply to Reply Filed by Plaintiff” (ECF No. 208) and Plaintiff filed a Response in opposition to Defendant's “Motion to File a Surreply” (ECF No. 213) on January 9, 2018. In reviewing the evidence for this Findings, Conclusions, and Recommendation, the undersigned considered the supplemental pleadings and evidence offered by the Defendant in opposition to the Plaintiff's Motion for Summary Judgment. ECF No. 215.

         United States District Judge Reed O'Connor referred this case to the undersigned for pretrial management by Order entered on February 2, 2017. ECF No. 32. After considering the pleadings of the parties, the summary judgment evidence, and applicable law, the undersigned RECOMMENDS that Judge O'Connor GRANT Plaintiff United States' Motion for Summary Judgment (ECF No. 72).

         I. BACKGROUND

         Plaintiff United States of America brought this action against Defendant Larry Cecil Cabelka (“Defendant”) on October 19, 2016, to reduce to judgment over $25.6 million in federal income tax liabilities. ECF No. 1 at 1, 3. On November 23, 2016, Defendant filed his Original Answer and Crossclaim (ECF No. 7), alleging that Rebecca Thorp, Jared Cabelka, Bonnie Cabelka, Amanda Slate, Price Farms, LLC, Kent P. Price, Logsdon Farms, Inc., Chad Logsdon, and Billy Logsdon should be parties to the action. Logsdon Farms, Inc., Chad Logsdon, and Billy Logsdon (ECF No. 11), Amanda Slate (ECF No. 24), and Rebecca Thorp (ECF No. 29) all filed motions to dismiss. Each of the movants sought dismissal of Defendant's “crossclaims” under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). On February 24, 2017, the undersigned entered Findings, Conclusions, and Recommendation to dismiss Logsdon Farms, Inc., Chad Logsdon, Billy Logsdon, and Amanda Slate. ECF No. 33. Judge O'Connor accepted in full the FCR and dismissed Defendant's claims against the aforementioned parties. ECF No. 34.

         The United States filed the instant Motion for Summary Judgment on August 14, 2017. ECF No. 72. By Court order, Defendant received an extension of time to file his response, and he filed his response on October 31, 2017. ECF No. 155. Defendant subsequently requested and was granted the opportunity to supplement his response, and filed supplemental documents on November 14, 2017 (ECF No. 173) and on November 22, 2017 (ECF Nos. 188-189). The United States then filed its reply to Defendant's pleadings on December 6, 2017. ECF No. 193.

         On November 16, 2017, Price Farms, LLC and Kent P. Price filed a motion to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). ECF No. 179. The undersigned entered a Findings, Conclusions, and Recommendation to dismiss on December 13, 2017 (ECF No. 202), and Judge O'Connor accepted in full the FCR and dismissed Defendant's claims against Price Farms, LLC and Kent P. Price. ECF No. 206. On November 20, 2017, Jared and Bonnie Cabelka filed a motion to dismiss under Federal Rules of Civil Procedure 12(b)(2), 12(b)(4), 12(b)(5), and 12(b)(6). ECF No. 182. The undersigned entered the Findings, Conclusions, and Recommendation to dismiss both Jared and Bonnie Cabelka on December 21, 2017 (ECF No. 204), and Judge O'Connor accepted in full the FCR and dismissed Defendant's claims against both Jared Cabelka and Bonnie Cabelka. ECF No. 211. Rebecca Thorp filed a motion to dismiss under Federal Rules of Civil Procedure 12(b)(1), 12(b)(6), and 12(b)(7) (ECF No. 190), which the undersigned construed as a motion for summary judgment. The undersigned recommended that Judge O'Connor grant summary judgment to Rebecca Thorp in a Findings, Conclusions, and Recommendation dated January 8, 2018. ECF No. 210.

         II. LEGAL STANDARD

         A. Summary Judgment Standard

         Summary judgment is appropriate when, viewing the evidence and all justifiable inferences in the light most favorable to the non-moving party, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Hunt v. Cromartie, 526 U.S. 541, 549 (1999). The appropriate inquiry for the Court to make is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).

         The party moving for summary judgment has the initial burden to prove there is no genuine issue of material fact for trial. Provident Life & Accident Ins. Co. v. Goel, 274 F.3d 984, 991 (5th Cir. 2001). To meet this burden, the movant must identify those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).

         In response, the nonmovant “may not rest upon mere allegations contained in the pleadings, but must set forth and support by summary judgment evidence specific facts showing the existence of a genuine issue for trial.” Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998) (citing Anderson, 477 U.S. at 255-57). Once the moving party makes a properly supported motion for summary judgment, the nonmoving party must look beyond the pleadings and designate specific facts in the record to show that there is a genuine issue for trial. Stults v. Conoco, Inc., 76 F.3d 651, 655 (5th Cir. 1996).

         The party opposing summary judgment is required to identify specific evidence in the record and to articulate the precise manner in which that evidence supports his claim. Ragas, 136 F.3d at 458. The citations to evidence must be specific, and “a party must support each assertion by citing each relevant page of its own or the opposing party's appendix.” Local Civil Rules of the Northern District of Texas 56.5(c). Rule 56 does not impose a duty on the court to “sift through the record in search of evidence” to support the non-movant's opposition to the motion for summary judgment. See Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915-16 & n.7 (5th Cir. 1992). “Only disputes over facts that might affect the outcome of the suit under the governing laws will properly preclude the entry of summary judgment.” Anderson, 477 U.S. at 248. Disputed fact issues that are “irrelevant and unnecessary” will not be considered by a court in ruling on a summary judgment motion. Id. If the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to its case and on which it will bear the burden of proof at trial, summary judgment must be granted. Celotex, 477 U.S. at 322-23.

         B. Pro Se Standard

         “Pro se plaintiffs are held to a less stringent pleading standard than documents drafted by attorneys and are entitled to a liberal construction, allowing all reasonable inferences that can be drawn from their pleadings.” Morgan v. Fed. Exp. Corp., 114 F.Supp.3d 434, 436 (S.D. Tex. 2015) (citing Haines v. Kerner, 404 U.S. 519, 521 (1972)). Nevertheless, pro se plaintiffs must “still comply with the rules of civil procedure and make arguments capable of withstanding summary judgment.” Ogbodiegwu v. Wackenhut Corr. Corp., 202 F.3d 265 (5th Cir. 1999) (citing Grant v. Cellular, 59 F.3d 523, 524 (5th Cir. 1995)). And “while courts liberally construe the pleadings of pro se litigants, courts are not obligated under Federal Rule of Civil Procedure 56 [ ] to search the record to find evidence supporting a party's opposition to a summary judgment motion.” Murray v. Int'l Bus. Machines Corp., No. 3:14-CV-1809-M BF, 2015 WL 4635776, at *1 (N.D. Tex. Aug. 4, 2015) (citations omitted).

         III.ANALYSIS

         A. Issues Raised in Defendant's Response to Plaintiff's Motion for Summary Judgment.

         It is an undisputed fact that Defendant has failed to file any federal income tax returns with the Internal Revenue Service (“IRS') since the tax year 1990. The United States alleges that Defendant is indebted to the United States in the amount of $26, 400, 532.02 as of June 30, 2017, for the tax years 1997-2003 and 2005 -2009. ECF No. 72. Plaintiff argues that proper notices of the tax assessments and demands for payment were sent to Defendant, and that the Defendant “failed, neglected, or refused to voluntarily pay his income tax liabilities.” Id. at 3. In his response, Defendant alleges that the statute of limitations ran on the tax assessments against him, that he never received proper notice of the tax assessments, and that the IRS Forms 4340 were improperly completed. ECF No. 155 at 1-2.

         In response to the procedural issues raised in Defendant's response, Plaintiff argues that it properly sent Defendant a notice of deficiency as required under Section 6212(a), (b)(1) of the Internal Revenue Code (“IRC”). ECF No. 193 at 12. To evidence proper notice, Plaintiff provided a Declaration of IRS Revenue Office David Dodgen (“Dodgen”) indicating that the statutory notice of deficiency or letter noticing Defendant of an examination audit deficiency were sent to Defendant to his last known address. ECF No. 74-4. The United States provides the following evidence to demonstrate proper notice was given to the Defendant regarding the tax assessments at issue in this case: (1) the deposition of Susan Yates (“Yates”), a former IRS agent who worked on Defendant's case, who testified the agency sent the notice of deficiency to three separate addresses (ECF No. 193-2 at 9); (2) a copy of the notice of deficiency dated June 22, 2005, sent to “Larry C. Cabelka, Post Office Box 295, Megargel, Texas 76370” (ECF No. 76-9); (3) a copy of the notice of deficiency dated June 22, 2005 sent to “Larry C. Cabelka, 232 Northeast 46th, Lawton, Oklahoma 73501” (ECF No. 76-1); and (4) a copy of the notice of deficiency dated June 22, 2005 sent to “Larry C. Cabelka, Post Office Box 10120, Lawton, OK 73507” (ECF No. 76-8).

         In response, Defendant argues that he has “never signed for any of the audit notices or notices for assessment” and that the Plaintiff fails to provide evidence of proof of service. ECF No. 155 at 12. Defendant also challenges the deposition testimony of Yates, arguing that the testimony she made about contacting the Defendant at a number some time in 2005 was not registered to him until 2007. ECF No. 155 at 12. However, this conflicting statement does not establish that Defendant did not receive notice of the tax assessments against him. “Section 6212 does not require the IRS to prove that [the Defendant] received the notice, only that it was mailed to [his] last known addresses.” McCarty v. United States, 929 F.2d 1085, 1088 (5th Cir. 1991) (internal quotations and citations omitted). The government has submitted sufficient evidence to establish that it sent the Defendant the required notices under the IRC.

         With regard to the Defendant's statute of limitations defense, the Court finds that the Plaintiff's lawsuit was timely filed pursuant to Section 6502(a)(1) of the IRC. See United States v. Fernon, 640 F.2d 609, 611-12, n.7 (5th Cir. 1981) (holding that the United States is subject to the ten-year statute of limitations found in ยง 6502(a)(1) of the IRC). The United States provides that the instant lawsuit was filed less than ten years after the oldest assessments were made in 2006. ECF No. 74-1. Further, Defendant does not identify specific ...


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