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United States v. Warfield

United States District Court, D. Massachusetts

April 5, 2017

UNITED STATES OF AMERICA, Plaintiff,
v.
MARJORIE E. WARFIELD, Defendant.

          MEMORANDUM AND ORDER ON PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

          F. Dennis Saylor IV, United States District Judge

         This is an action to recover an erroneously issued tax refund, brought pursuant to 26 U.S.C. § 7405(b). In 2001, defendant Marjorie Warfield and her husband, John Warfield, filed a joint income tax return for the year 2000. They claimed a refund in the amount of $20, 340, which was used to offset a separate liability of John's. In 2003, Marjorie and John then each filed additional income tax returns for the year 2000, this time each claiming a status of “married filing separately.” Marjorie's return showed an overpayment of $26, 110, which was then issued to her in a refund check. It is undisputed that the refund was erroneously issued. For a short time, Marjorie made installment payments to pay back the erroneously issued refund. After those payments stopped, the United States brought this action to recover the refund.

         The United States has now moved for summary judgment. The only dispute is whether Marjorie has already paid back the erroneously issued refund by overpayments made on her tax returns between 2004 and 2016. For the reasons stated below, plaintiff's motion for summary judgment will be granted.

         I. Background

         A. Factual Background

         The following facts are either undisputed or taken in the light most favorable to the non-moving party.

         On October 4, 2001, defendant Marjorie Warfield and her husband, John Warfield, filed a joint income tax return for the year 2000. (Warfield Dep. at 29-30; Shepardson Decl. ¶ 2).[1]They reported no liability and sought a refund in the amount of $20, 340 based on their withholding. (Shepardson Decl. ¶ 3). That refund was used to offset a separate liability of John Warfield-specifically, a civil penalty assessed under 26 U.S.C. § 6672 for the tax period ending December 31, 1999. (Id.).

         In June 2003, Marjorie and John each filed individual tax returns, each claiming the status of “married filing separately, ” also for the tax year 2000. (Id. ¶ 4; Warfield Dep. at 29-30). Marjorie's second tax return claimed an overpayment in the amount of $26, 110 and sought a refund, which was paid to her by a check dated August 8, 2003. (Shepardson Decl. ¶ 5; Warfield Dep. at 31). Marjorie received that check, signed it, and deposited it into the account of the attorneys who represented her at the time. (Warfield Dep. at 31-32). The check cleared the Federal Reserve Bank on August 27, 2003. (Shepardson Decl. ¶ 5).

         Marjorie was not entitled to that refund, and the check was issued to her by mistake. (Shepardson Decl. ¶ 6). After noticing the mistake, an Internal Revenue Service (“IRS”) center in Andover, Massachusetts, attempted to collect the erroneously issued refund. (Id.). Marjorie did not dispute that she had received the funds. She returned approximately $5, 040 by periodic installment payments of $420. (Id.). She then entered into an installment agreement with the IRS to pay back the remaining balance. (Id.). On July 18, 2005, she also agreed, by executing a Form 907, to extend the time period to August 1, 2006, during which the United States could bring an erroneous refund action. (Pl. Ex. 3). Marjorie ceased making installment payments in December 2005. (Id.).

         Marjorie filed a petition for bankruptcy in 2007. The bankruptcy proceedings continued through 2015. (Id.). For the years 2006 through 2014, she filed tax returns with overpayments totaling $66, 804, with the apparent intent that those funds would be used to pay back the outstanding balance. (Id., Def. Exs. 2-10). According to her, she could not communicate that intention to the IRS because of communication limitations imposed as a result of the ongoing bankruptcy proceedings. (Def. SMF ¶ 7).

         B. Procedural Background

         The United States filed this action on August 1, 2006, seeking return of the amounts owed. On July 9, 2009, the action was dismissed without prejudice pending the completion and termination of the bankruptcy proceedings. Following the conclusion of those proceedings, the United States moved to reopen this action on January 12, 2016. That motion was granted, and this action was reopened on January 20, 2016. The United States has now moved for summary judgment in its favor.

         II. Legal Standard

         The role of summary judgment is to “pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.” Mesnick v. General Elec. Co.,950 F.2d 816, 822 (1st Cir. 1991) (quoting Garside v. Osco Drug, Inc.,895 F.2d 46, 50 (1st Cir. 1990)). Summary judgment is appropriate when the moving party shows that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A genuine issue is “one that must be decided at trial because the evidence, viewed in the light most flattering to the nonmovant . . . would permit a rational fact finder to resolve the issue in favor of either party.” Medina-Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990) (citation omitted). In evaluating a summary judgment motion, the court indulges all reasonable inferences in favor of the nonmoving party. See O'Connor v. Steeves,994 F.2d 905, 907 (1st Cir. 1993). When “a properly supported motion for summary judgment is made, the adverse party must set forth specific facts showing that there is ...


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