Joseph A. Delvecchio v. Internal Revenue Service ( 2010 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 09-12400 ELEVENTH CIRCUIT
JANUARY 8, 2010
Non-Argument Calendar
JOHN LEY
________________________
ACTING CLERK
D. C. Docket Nos. 07-14127-CV-DLG,
07-14249-CV-DLG
JOSEPH A. DELVECCHIO,
CAROL DELVECCHIO,
Petitioners-Appellants,
versus
INTERNAL REVENUE SERVICE,
Respondent-Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(January 8, 2010)
Before BARKETT, HULL and WILSON, Circuit Judges.
PER CURIAM:
Joseph and Carol DelVecchio (collectively, the DelVecchios), proceeding
pro se, appeal the district court’s grant of summary judgment to the Internal
Revenue Service (IRS) and its denial of their cross-motions for summary judgment
on their Freedom of Information Act (FOIA) claims and quiet title action. On
appeal, the DelVecchios argue that (1) the district court erred by finding that the
IRS conducted a good-faith search reasonably calculated to uncover documents
responsive to their FOIA records request, and (2) the court erred by finding, with
regard to their quiet title action, that their challenge to the procedural validity of a
2001 tax assessment was barred by res judicata.1 After a thorough review of the
briefs and the record, we affirm the judgment of the district court.
I.
The present appeal stems from a civil audit of the DelVecchios’ tax returns
for 1987 and 1988 that the IRS undertook in early 1990. The IRS sent the
DelVecchios a notice of deficiency (NOD) in 1994 calculating a tax deficiency of
$29,400 for 1987 and $16,699 for 1988, based primarily on underreported income.
The DelVecchios filed a Tax Court petition challenging the NOD and seeking
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The DelVecchios also argue, in passing, that the court ignored their rights to due process
and equal protection under the Fourteenth Amendment. Thus, they have abandoned any claim in
this respect. See Bayro v. Reno, 142 F.3d 1377, 1379 (11th Cir. 1998) (per curiam) (“[W]hen a party
lists an issue for appellate review but does not discuss that question in their argument, they have
abandoned it.”). In addition, they argue for the first time that the court failed to address “the
question of the IRS liens relative to the jointly held Florida homesteaded property” based on the
rights and obligations of married couples under Florida law and, accordingly, they have forfeited
this claim. See Wright v. Hanna Steel Corp., 270 F.3d 1336, 1342 (11th Cir. 2007) (holding that we
generally will not consider forfeited issues raised for the first time on appeal in civil cases).
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redetermination of the deficiencies. In 2001, following a civil trial, the Tax Court
sided with the IRS in DelVecchio v. Comm’r (“DelVecchio I”), 81 T.C.M.
1712 (2001), and found, in relevant part, that the DelVecchios had understated
their tax liabilities by underreporting their net income and failing to report a 1988
capital gain. The DelVecchios appealed. We affirmed in DelVecchio v. Comm’r,
37 F. App’x 979 (11th Cir. 2002) (table).
The IRS assessed the deficiencies and interest on November 13, 2001. The
assessment against Carol totaled $129,600 for 1987 and $110,905 for 1988, and the
assessment against Joseph totaled $189,137 for 1987 and $177,448 for 1988.
Commencing efforts to collect these taxes, the IRS sent the DelVecchios notices of
federal tax liens against them and demands for payment to this effect. In 2002, the
IRS mailed the DelVecchios a document entitled “Final Notice – Notice of Intent
to Levy and Notice of Your Right to a Hearing.” The DelVecchios invoked their
right to a hearing, challenging, in relevant part, the IRS’s legal authority to levy
any of their assets. Following a hearing, the IRS Office of Appeals issued a
“Notice of Determination Concerning Collection Action(s),” which, inter alia,
sustained the proposed levy and found the assessments legally supported and
timely made.
Then, the DelVecchios petitioned the Tax Court for review, arguing, in part,
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that the 1994 assessment upheld in DelVecchio I was premature because it
occurred during a prohibited 90-day window following the issuance of the NOD
and that, accordingly, the premature 1994 assessment invalidated the later
November 2001 assessment. In its opinion in DelVecchio v. Comm’r (“DelVecchio
II”), 88 T.C.M. 295 (2004), the Tax Court found that, assuming arguendo
that the IRS made a premature assessment in 1994, such error was harmless in light
of the “timely and validly made” assessment in November 2001. Thus, it
concluded that the DelVecchios failed to show “any irregularity in the assessment
procedure which would raise a question about the validity of the assessment,” and
that, accordingly, the November 2001 assessment was valid.
The DelVecchios appealed and we ultimately held that there was “no
reversible error in the Tax Court’s determination that [their] 1987 and 1988 income
tax liabilities were timely and validly assessed in 2001,” and that, “because
adherence to statutory procedures was properly verified, there was no error in the
decision to allow collection of the income tax liabilities to proceed.” DelVecchio v.
Comm’r, 166 F. App’x 431, 432 (11th Cir. 2006) (per curiam) (unpublished).
In March 2007, while the IRS’s collection efforts continued, the
DelVecchios submitted the instant FOIA request to the agency, seeking, inter alia,
their “Individual Master File” (IMF and “non Individual Master File”) for the 1987
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and 1988 tax years and all documents supporting the November 2001 assessment
against them.
The IRS responded to the DelVecchios’ FOIA request by seeking additional
time in which to reply. The DelVecchios filed the instant pro se FOIA complaint.
In an effort to forestall collection efforts by the agency, the DelVecchios also filed
a pro se suit in state court, seeking to quiet title to certain real property subject to a
tax lien, arguing that “the IRS [had] no assessment against [them]” under
applicable law. Following removal by the IRS, the district court consolidated the
two cases for the purposes of discovery.
Shortly after the DelVecchios filed their complaint, the IRS provided them
with approximately forty pages of responsive documents. A declaration by IRS
Disclosure Specialist Joyce E. Broughton represented that she followed standard
agency procedure in responding to the DelVecchios’ FOIA request and that she
withheld no responsive documents.
II.
We review “a district court’s grant of summary judgment in a FOIA case de
novo, viewing all facts and reasonable inferences in the light most favorable to the
non-moving party, and applying the same standard used by the district court.”
Miccosukee Tribe of Indians of Fla. v. United States, 516 F.3d 1235, 1243 (11th
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Cir. 2008) (citation omitted). In addition, we construe pro se pleadings liberally.
Alba v. Montford, 517 F.3d 1249, 1252 (11th Cir.), cert. denied, 129 S. Ct. 632
(2008).
“Generally, FOIA cases should be handled on motions for summary
judgment, once the documents in issue are properly identified.” Miccosukee, 516
F.3d at 1243 (quotation omitted). “Summary judgment is appropriate if the
pleadings, depositions, admissions on file, together with the affidavits, show that
there is no genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.” Id. (quoting Fed. R. Civ. P. 56(c)).
The FOIA, 5 U.S.C. § 552, was designed “to encourage public disclosure of
information so citizens may understand what their government is doing.”
Miccosukee, 516 F.3d at 1244 (quotation omitted). Accordingly, it “gives federal
district courts the jurisdiction ‘to enjoin [an] agency from withholding agency
records and to order the production of any agency records improperly withheld.’”
GTE Sylvania, Inc. v. Consumers Union of U.S., Inc., 445 U.S. 375, 384, 100 S. Ct.
1194, 1200 (1980) (quoting 5 U.S.C. § 552(a)(4)(B)).
The agency bears the burden of showing “‘beyond a material doubt . . . that
it has conducted a search reasonably calculated to uncover all relevant
documents.’” Miccosukee, 516 F.3d at 1248 (quoting Ray v. U.S. Dep’t of Justice,
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908 F.2d 1549, 1558 (11th Cir. 1990), rev’d on other grounds sub nom. U.S. Dep’t
of State v. Ray, 502 U.S. 164, 112 S. Ct. 541 (1991)). It “need not show that its
search was exhaustive.” 908 F.2d at 1558. The agency may meet this burden by
producing relatively detailed and nonconclusory affidavits submitted in good faith
by responsible officials. Id. (citation omitted). “If the government agency meets
its burden of proving that its search was reasonable, then the burden shifts to the
requester to rebut the agency’s evidence by showing that the search was not
reasonable or was not conducted in good faith.” Id.
In Ray we quoted the Eighth Circuit with approval:
[T]he fact that a document once existed does not mean that it now
exists; nor does the fact that an agency created a document necessarily
imply that the agency has retained it. Thus, the [agency] is not
required by [FOIA] to account for documents which the requester has
in some way identified if it has made a diligent search for those
documents in the places in which they might be expected to be found;
it is not necessary ‘to create a document that does not exist in order to
satisfy a [FOIA] request.’
908 F.2d at 1559 (quoting Miller v. U.S. Dep’t of State, 779 F.2d 1378, 1385 (8th
Cir. 1985)).
Construing the DelVecchios’ brief liberally, we discern several arguments:
(1) essential facts were in dispute, including the adequacy of Broughton’s
declaration; (2) the IRS did not conduct a proper FOIA search; (3) the IRS never
provided the requested Tax Court documents; and (4) the DelVecchios were
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injured by an untimely reply to their FOIA request.
We reject these arguments. First, with regard to Broughton’s declaration,
the IRS showed that her mistaken reference to the 1994 declaration was a harmless
typographical error not otherwise repeated in the record. Second, the DelVecchios
failed to present anything more than unsupported conclusory allegations to show
that the IRS conducted its search improperly or in bad faith. As stated above, the
IRS in fact provided forty pages of documents. Third, the IRS correctly replied
that it was not required to produce Tax Court documents. Fourth, the
DelVecchios’ timeliness challenge was moot because the IRS did in fact provide
them documents. In sum, the district court did not err by granting summary
judgment to the IRS on the DelVecchios’ FOIA claims because the IRS submitted
an uncontradicted declaration demonstrating that it followed standard procedures
in responding to their request and that it provided them with all the responsive
documents that it located, and because the DelVecchios provided nothing more
than unsupported conclusory assertions to show that the IRS’s search was
unreasonable or conducted in bad faith.
III.
A district court’s decision to bar a claim on grounds of res judicata presents
a question of law that we review de novo. Ragsdale v. Rubbermaid, Inc., 193 F.3d
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1235, 1238 (11th Cir. 1999) (citations omitted). Moreover, we may affirm the
decision of the district court “on any ground supported by the record.” Am. Gen.
Life Ins. Co. v. Schoenthal Family, LLC, 555 F.3d 1331, 1343 (11th Cir. 2009)
(citation omitted).
Under federal law, “the United States may be named a party in any civil
action or suit in any district court . . . to quiet title to . . . real or personal property
on which the United States has or claims a mortgage or other lien.” 28 U.S.C.
§ 2410(a). This statute authorizes a taxpayer to challenge the procedural validity
of a tax lien but not the merits of the underlying assessment. Stoecklin v. United
States, 943 F.2d 42, 43 (11th Cir. 1991).
The district court allowed this action to proceed solely under the federal
quiet title statute, and it granted the IRS’s motion to dismiss in all other respects.
The district court properly found that the DelVecchios could not use Florida law to
challenge the validity of the tax lien because federal statutes controlled. See, e.g.,
United States v. Brosnan, 363 U.S. 237, 240, 80 S. Ct. 1108, 1110 (1960) (“Federal
tax liens are wholly creatures of federal statute. . . . Consequently, matters directly
affecting the nature or operation of such liens are federal questions, regardless of
whether the federal statutory scheme specifically deals with them or not.”).
The doctrine of res judicata, or claim preclusion, bars a litigant from raising
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claims that were raised or could have been raised in a prior action if: “(1) the prior
decision was rendered by a court of competent jurisdiction; (2) there was a final
judgment on the merits; (3) the parties were identical in both suits; and (4) the prior
and present causes of action are the same.” Davila v. Delta Air Lines, Inc., 326
F.3d 1183, 1187 (11th Cir. 2003) (quotation omitted). For purposes of res judicata,
the prior and present causes of action are the same if they arise “out of the same
nucleus of operative fact, or [are] based upon the same factual predicate.” Id.
(quotation omitted).
Even if the causes of action in the present and prior actions differ, the
doctrine of collateral estoppel, or issue preclusion, precludes a court “from
relitigating an issue when the identical issue has been litigated between the same
parties and the particular matter was fully litigated and determined in a contest that
results in a final decision of a court of competent jurisdiction.” Aldana v. Del
Monte Fresh Produce N.A., Inc., 578 F.3d 1283, 1291 (11th Cir. 2009) (quotation
omitted). This doctrine requires that the issue “was a critical and necessary part of
the prior proceeding.” Bryant v. Jones, 575 F.3d 1281, 1303 (11th Cir. 2009).
We conclude that the district court did not err by granting summary
judgment to the IRS on the DelVecchios’ quiet title action. It is undisputed that
(1) the Tax Court had jurisdiction in DelVecchio II and we had jurisdiction over the
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DelVecchios’ appeal from that action; (2) a final judgment on the merits exists
from that proceeding; and (3) both that proceeding and the current matter
ultimately concerned identical parties—namely, the DelVecchios and the IRS.
The DelVecchios previously challenged the procedural validity of their 2001
tax assessment before the Tax Court and this Court in DelVecchio II as a critical
and necessary part of those proceedings, and we previously held that the 2001 tax
assessment was procedurally valid. A fair reading of the record shows that both
DelVecchio II and the instant action stem from the “same nucleus of operative fact”
and “the same factual predicate.”
But even if one concludes that the DelVecchios’ present and prior litigation
involves two different causes of action—with the former proceeding under the Tax
Code and the latter proceeding under 28 U.S.C. § 2410—their attempt to re-raise
an identical issue is barred by collateral estoppel. The DelVecchios cannot obtain
a second bite of the apple by recasting their complaint around a 2005 notation in
Carol’s individual non Individual Master File showing only that the IRS
transferred her liabilities stemming from the November 2001 assessment to another
account, or an April 2008 transcript authenticated by IRS personnel that reflects
the same point. Thus, we affirm the district court’s ruling without reconsidering
the merits of the DelVecchios’ underlying claims against the federal tax lien.
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AFFIRMED.
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