Opinion
Civil No. 02-1191 (DWF/SRN).
May 21, 2003
Dale G. Mays and Sylvia M. Wilhelmi, Attorneys for Plaintiffs, Pro se.
Jennifer K. Brown, Esq., Attorney for Defendant.
REPORT AND RECOMMENDATION
The above entitled matter came before the undersigned United States Magistrate Judge on Defendant's Motion for Partial Summary Judgment (Doc. No. 18); and on Plaintiffs' Motion to Extend Time for the Government to Respond (Doc. No. 6). This matter has been referred to the undersigned for resolution of pretrial matters pursuant to 28 U.S.C. § 636 and Local Rule 72.1.
For the reasons set forth below, Defendant's motion should be granted.
I. BACKGROUND
Plaintiffs untimely filed their joint income tax return (Form 1040) for 1995 on April 12, 1999. (Stip. 1-2). In April of 2000, Plaintiffs filed an amended return (Form 1040X) for 1995 wherein they claimed entitlement to a refund of $5,499.86. (Stip. 4-6). The only tax payments made for 1995 consisted of taxes withheld from Plaintiffs' wages by their employers in the amount of $28,905.59. (Def.'s Ex. A). The Internal Revenue Service (IRS) denied Plaintiffs 2000 refund claim regarding the 1995 return.
The parties stipulated to certain facts in the Rule 26(f) Report.
Defendant herein moves for partial summary judgment arguing that the limitations of 26 U.S.C. § 6511(b)(2)(A) bar Plaintiffs' 1995 refund claim.
On or about June 9, 2000, Plaintiffs filed suit against the IRS claiming that it was unjustly withholding their 1994 income tax refund.Mays et al. v. Internal Revenue Serv., 00-CV-1411 (Minn. 2000) (MJD/JGL) (Mays I). On or about May 31, 2002, Plaintiffs filed the instant suit also claiming that the IRS is unjustly withholding Plaintiffs' 1994, 1995, 1996, 1997, and 1998 income tax refunds. Mays et al. v. Internal Revenue Serv., 02-CV-1191 (Minn. 2002) (DWF/SRN) (Mays II). On February 13, 2003, Mays I was dismissed with prejudice for failure to obey the Court's Order. Plaintiff has subsequently appealed the dismissal of Mays I to the Eight Circuit Court of Appeals, Appellate Doc. No. 03-1989.
Defendant herein moves for partial summary judgment arguing that Plaintiffs' 1994 refund claim should be dismissed as duplicative of the same claim in Mays I. Plaintiffs submitted a two sentence response requesting that the Court stay this case pending their appeal ofMays I.
The response was only signed by Dale Mays.
II. 1995 TAX REFUND CLAIM
On a motion for summary judgment, the moving party bears the burden to produce such evidence to establish that there are no genuine issues of material fact and that the movant is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A nonmoving party, however, may not simply rely on its pleadings where the moving party points out "an absence of evidence to support the nonmoving party's case," or supports its position with evidence. Id. at 325. All evidence will be viewed in the light most favorable to the nonmoving party. E.g., Vette Co. v. Aetna Casualty Surety Co., 312 F.2d 1076, 1077 (8th Cir. 1980). Pro se pleadings are more liberally construed than those drafted by an attorney. See Smith v. St. Bernards Regional Med. Ctr., 19 F.3d 1254, 1255 (8th Cir. 1994).
A. Discussion 26 U.S.C. § 6511 governs the timeliness of filing claims for tax refunds. Section 6511(a) and (b)(1) explain that a claim for refund must be filed "within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever of such periods expires the later." Section 6511(b)(2)(A) governs the amount of refund a taxpayer may recover by reference to a specific period of time. There is no dispute that Plaintiffs complied with § 6511(a) and (b)(1). Therefore, only § 6511(b)(2)(A) is at issue in this matter.
"Internal Revenue Code [26 U.S.C.] § 6511(b)(2)(A) imposes a ceiling on the amount of credit or refund to which a taxpayer is entitled as compensation for an overpayment of tax. . . ." Baral v. United States, 528 U.S. 431, 432 (2000). Section 6511(b)(2)(A) provides as follows:
If the claim was filed by the taxpayer during the 3-year period prescribed in subsection (a), the amount of the credit or refund shall not exceed the portion of the tax paid within the period, immediately preceding the filing of the claim, equal to 3 years plus the period of any extension of time for filing the return.
Thus, § 6511(b)(2)(A) prescribes a "look back period" of three years from the date of the filing of the refund claim. Baral, 528 U.S. at 433-34; see generally Van Sant v. United States, No. 97-363, 2001 WL 1729633, at *4-5 (D.C. Dec. 28, 2001) (discussing the structure of § 6511(a) and (b)(2)). If no tax for the applicable year's return was paid during the "look back period," then any refund is completely barred even if the tax was wrongly withheld. See United States v. Dalm, 494 U.S. 596, 602 (1990) ("[U]nless a claim for refund of a tax has been filed within the time limits imposed by § 6511 , a suit for refund, regardless of whether the tax is alleged to have been `erroneously,' `illegally,' or `wrongfully collected,' . . . may not be maintained in any court."); Van Sant, 2001 WL 1729633, at *5-6; Manka v. United States, 105 F. Supp.2d 490, 491-92 (E.D. Va. 2000); Porter v. I.R.S., 1999 WL 1090822, at *2-4 (S.D. Iowa Sept. 2, 1999).
Accordingly, in determining the "look back period," the date the tax was paid and the date the refund claim was filed become of critical importance. Pursuant to 26 U.S.C. § 6513(b)(1), taxes withheld by employers are deemed paid on the due date of the taxpayer's income tax return or the 15th day of the fourth month following the close of the taxpayer's taxable year. Baral, 528 U.S. at 432, 435. Where a return or refund claim is filed after its due date, the return or refund claim is deemed filed on the date it is actually received, not the date it was mailed. Manka, 105 F. Supp.2d at 492; Porter, 1999 WL 1090822, at *3.
Here, Plaintiffs filed their claim for refund of overpayment of tax for 1995 on April 15, 2000. Thus, the "look back period" begins on April 15, 2000 and looks backward in time three years to April 15, 1997.
There is no evidence that Plaintiffs applied for or received an extension.
In order to be eligible for a refund, Plaintiffs must have paid their 1995 taxes within the § 6511(b)(2)(A) "look back period." As stated, Plaintiffs only tax payment for 1995 was the $28,905.59 withholding by Plaintiffs' employer, (Gov't Ex. A), and these taxes were deemed paid on April 15, 1996. 26 U.S.C. § 6513(b)(1); Baral, 528 U.S. at 432, 435. Since Plaintiffs' 1995 taxes were not paid within the "look back period" (April 15, 2000 through April 15, 1997), the ceiling on Plaintiffs' requested refund of $5,499.86 is zero ($0). E.g., Baral, 528 U.S. at 436. Therefore, Plaintiffs cannot maintain suit against Defendant, and Plaintiffs' 1995 refund claim should be dismissed.
III. 1994 REFUND CLAIM
Mays I was filed in this Court on June 9, 2000. Originally, Dale Mays was the only plaintiff in Mays I. However, on March 21, 2001, the parties stipulated to add Sylvia M. Wilhelmi as a plaintiff. Mays I, Doc. No. 19. The sole claim in Mays I was whether Plaintiffs were entitled to an income tax refund for 1994. (Compl. Mays I). Mays I was plagued by "what can be charitably described as difficulties in obtaining discovery from Plaintiffs." Mays I, Jan. 10, 2003 Order, at 1. On November 28, 2001, the Court, per the Honorable Michael J. Davis, ordered Plaintiffs to respond to discovery and produce documents under the peril of having requests deemed admitted and the lowering or barring of any refund. Status reports were submitted on February 22, April 10, and September 17, 2002. Meanwhile, Plaintiffs commenced the instant lawsuit, Mays II, on May 31, 2002 alleging, in relevant part, that they were entitled to a refund of 1994 income taxes. On or about January 13, 2003, in Mays I Judge Davis denied Defendant's motion to dismiss for failure to prosecute but ordered Plaintiffs to respond to the September 17, 2002 status report and submit responses under the peril that Plaintiffs' case would be dismissed if they failed to comply. On or about February 13, 2003, Judge Davis dismissed Plaintiffs' complaint in Mays I with prejudice for failure to comply with his January 13, 2003 Order.
A. Discussion
"[D]uplicative litigation in federal courts should be avoided."Missouri ex rel. Nixon v. Prudential Health Care Plan. Inc., 259 F.3d 949, 953 (8th Cir. 2001); accord Colorado River Water Conserv. Dist. v. United States, 424 U.S. 800, 817 (1976). A plaintiff "ha[s] no right to maintain two separate actions involving the same subject matter at the same time in the same court and against the same defendant." Walton v. Eaton Corp., 563 F.2d 66, 70 (3d Cir. 1977); accord Prudential, 259 F.3d at 954 ("Plaintiffs may not pursue multiple federal suits against the same party involving the same controversy at the same time."). Accordingly, "[t]he well-established rule is that in cases of concurrent jurisdiction, `the first court in which jurisdiction attaches has priority to consider the case.'" United States Fire Ins. Co. v. Goodyear Tire Rubber Co., 920 F.2d 487, 488 (8th Cir. 1990).
Mays I and Mays II are two separate actions, instituted in the same court, against the same Defendant, at the same time, and involve the same subject matter. The only claim in Mays I concerned whether Plaintiffs were entitled to a refund of their 1994 income tax. A claim in Mays II involves the exact same 1994 refund issue as the claim in Mays I; indeed, the complaint in Mays II states that the same 1994 refund issue is already the subject of litigation in Mays I ("[T]he IRS has not properly credited refunds for 1994 (currently under litigation-see United States District Court, District of Minnesota, Civil No. 00-1411 (MJD/JGL))") (Compl. Mays II). Mays I and Mays II involve the exact same parties. At the time Mays II was filed, Mays I was still proceeding in the district court. As noted and subsequent to Defendant's motion herein,Mays I was dismissed with prejudice for Plaintiffs' repeated derelictions and failure to comply with the Court's Order and judgment was entered.Mays I, February 13, 2003 Order. Mays I is on appeal to the Eighth Circuit.
Plaintiff has no right to maintain the claim in this case (Mays II) relating to the 1994 refund as it is the exact same claim, against the exact same Defendant, in the same court, and both claims are proceeding at the same time. A number of overwhelming considerations dictate this result. First, were this Court to allow Plaintiffs to maintain their identical 1994 refund claim in this suit, Plaintiffs could escape the consequences of ignoring the Mays I Court's Orders. This, in turn, could result in inconsistent judgments, not to mention destroying comity between Judges of the same district. Orthman v. Apple River Campground, Inc., 765 F.2d 119, 121 (8th Cir. 1985) ("Generally, the doctrine of federal comity permits a court to decline jurisdiction over an action when a complaint involving the same parties and issues has already been filed in another district."). Second, allowing the 1994 refund claim in this suit would plainly waste judicial resources as that claim has been decided. Third, allowing the 1994 refund claim in this suit would foster the troubling practice of simply filing an new case to take another bite at the apple when a plaintiff senses it is losing or has lost on a particular issue. See Walton, 563 F.2d at 71 ("[T]he district court [must] carefully insure that the plaintiff does not use the tactic of filing two substantially identical complaints to expand the procedural rights he would have otherwise enjoyed."). Even worse, a plaintiff could, once a dispositive motion is presented, file a new case as a safety measure. Fourth, if the Eighth Circuit reverses and remandsMays I, the United States District Court for the District of Minnesota would have the exact same claim against the exact same Defendant pending before two different Judges. Id. ("There is no reason why a court should be bothered or a litigant harassed with duplicating lawsuits on the same docket.") (internal quotations omitted) (quoting Sutcliffe Storage Warehouse Co. v. United States, 162 F.2d 849, 851 (1st Cir. 1947)).
The Court recognizes that subsequent to Defendant filing its motion herein Mays I was dismissed and is now in the Eighth Circuit, but this does not affect the force of the rule. Prudential, 259 F.3d at 954 ("It makes little sense to proscribe district-district duplication but not district-circuit duplication, as both forms of duplication require the unnecessary expenditure of scarce federal judicial resources.").
Therefore, Plaintiffs' 1994 refund claim in this suit should be dismissed. The 1994 refund claim should be dismissed with prejudice so as to be in accord with Judge Davis' order and even if this Court dismissed Plaintiffs' 1994 refund claim without prejudice, a subsequent 1994 refund claim would be barred by res judicata as Mays I was dismissed with prejudice. See Walton, 563 F.2d at 70-71, 71 n. 4. Based upon the foregoing, and all the files, records and proceedings herein,
IT IS HEREBY RECOMMENDED that:
1. Defendant's Motion for Partial Summary Judgment (Doc. No. 18) should be GRANTED. Plaintiffs' 1994 and 1995 refund claims should be DISMISSED WITH PREJUDICE.
2. Plaintiffs' Motion to Extend Time for the Government to Respond (Doc. No. 6) should be DENIED AS MOOT. This motion was made in connection with Defendant answering Plaintiffs complaint and is mooted by Defendant's answer.
Under D. Minn. LR 72.1(c)(2) any party may object to this Report and Recommendation by filing with the Clerk of Court, and serving all parties by June 2, 2003 a writing which specifically identifies those portions of this Report to which objections are made and the basis of those objections. Failure to comply with this procedure may operate as a forfeiture of the objecting party's right to seek review in the Court of Appeals.