Opinion
Civil Action No. 2:03-0339
March 4, 2004
PROPOSED FINDINGS AND RECOMMENDATION
Pending is Defendant's Motion to Dismiss (docket sheet document # 5). This matter was referred to the undersigned United States Magistrate Judge for submission of proposed findings and a recommendation for disposition, pursuant to 28 U.S.C. § 63G(b)(1)(B).
STANDARD OF REVIEW
Defendant has filed a Motion to Dismiss pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. "For purposes of a motion to dismiss, the Complaint must be construed in a light most favorable to the plaintiff and its allegations taken as true. Only when it appears that the plaintiff could prove no set of facts in support of [her] claim which would entitle [her] to relief should the motion be granted." Brook Davis Co. v. Charleston Nat'l Bank. 443 F. Supp. 1175 (S.D. W. Va. 1977).
In challenging jurisdiction, "a Rule 12(b)(1) motion may attack the complaint on its face asserting simply that the complaint `fails to allege facts upon which subject matter jurisdiction can be based." GTE South Inc. v. Morrison, 957 F. Supp. 800 (E.D. Va. 1997). Additionally, "[on] a motion to dismiss for lack of jurisdiction, the Court is not constrained to consider only the allegations of the complaint, but may consider materials outside the pleadings. Such materials may be considered without converting a Rule 12(b)(1) motion to a motion for summary judgment." Kansas City Life Ins. Co. v. Citicorp Acceptance Co., 721 F. Supp. 106 (S.D. W. Va. 1989) (citations omitted).
PROCEDURAL HISTORY
On or about February 15, 1992, the Internal Revenue Service (the "IRS") levied approximately $5,000 from a joint bank account titled in the names of Plaintiff and her mother. (Pl.'s Compl., ¶ 1). The levy related to income tax liabilities that Plaintiff and her ex-husband owed from the 1987 tax year. (Id., ¶ 2). The IRS refunded the levied funds by way of two checks issued on or about December 14, 1992 and December 21, 1992. (Id., ¶ 3). Plaintiff contends that her ex-husband received the checks, forged her endorsement on the checks and stole the refund monies, (Id.) Plaintiff asserts that the IRS is required to reimburse her for the allegedly stolen refund checks.
On or about April 19, 1999, over six years after the IRS issued the refund checks, Plaintiff filed an administrative claim (Form 3911-Taxpayer Statement Regarding Refund) for reimbursement of the allegedly stolen checks. (Id., Ex, 4A and 4B). On or about April 17, 2001, the IRS sent Plaintiff a Notice of Disallowance of Claim. (Id. Ex. 12B). The Notice states that Plaintiff could file a lawsuit with the United States District Court having jurisdiction or with the United States Court of Federal Claims within two years of the mailing date of the Notice. (Id.) Plaintiff filed the instant Complaint on April 17, 2003. (# 2).
On October 21, 2003, the IRS filed its Motion to Dismiss (# 5) and a memorandum in support thereof (# 6). A status and scheduling conference was held on November 18, 2003, at which time Plaintiff was advised of her right and obligation to respond to the defendant's motion. On November 19, 2003, the undersigned issued an Order and Notice again advising Plaintiff of her right and obligation to respond to the defendant's motion, and setting deadlines for the response and the defendant's reply. (# 8).
On December 18, 2003, Plaintiff filed an Answer to the Motion to Dismiss (# 11) and a Response to the Motion to Dismiss with supporting exhibits. (# 12). On January 8, 2004, the IRS filed its Reply. The matter is now ripe for determination.
ANALYSIS
The IRS contends that Plaintiff's Complaint should be dismissed because her administrative claim for reimbursement was untimely. Specifically, the IRS asserts as follows:
Title 31 U.S.C. § 3343 directs the Secretary of the Treasury, in limited circumstances, to issue replacement funds to individuals whose Treasury Department checks were lost or stolen. However, 31 U.S.C. § 3702 (c)(1) provides that "[a]ny claim on account of a Treasury check shall be barred unless it is presented to the agency that authorized the issuance of such check within 1 year after the date of issuance of the check." Plaintiff failed to meet this jurisdictional requirement. The Service issued the refund check on or about December 14, 1992, but plaintiff did not present her claim for replacement checks to the Service until approximately seven years later. (See Pl. Comp. 4A and 4B, copies attached). The plain language of § 3702(c)(1) bars plaintiff's claim as untimely.
(# 6 at 2).
The IRS cites Circuit Court of Appeals cases in support of its position: Your Insurance Needs Agency, Inc. v. United States, 274 F.3d 1001, 1007 (5th Cir. 2001) (barring an untimely claim for replacement checks under § 3702(c)(1)) and Lau v. United States, 50 Fed. Appx. 407, 2002 WL 31477757, * 1 (Fed. Cir., Nov. 6, 2002) (holding that 5 3702(c)(1)'s requirement to present a claim within one year applies even when the check's endorsement was forged), In Lau. the Court further held that communications with the IRS after the one-year period had expired did not toll the statutory period, and dismissed the plaintiff's complaint for lack of jurisdiction. 50 Fed. Appx. at 407.
The IRS also cites to several district court cases barring late claims for replacement checks. See Clark v. United States, 206 F. Supp.2d 954, 958 (N.D. Ind. 2002); Rodek v. United States, 962 F. Supp. 34, 35-37 (D. Del. 1997) and Omuna v. Rossotti, 90 A.F.T.R.2d (RIA) 7224, 2002 WL 31689456, *2 (M.D.Ga.). Based upon this case law and the plain language of the statute, the IRS contends that the District Court lacks subject matter jurisdiction over Plaintiff's claim, and that Plaintiff has failed to state a claim upon which relief can be granted. Accordingly, the IRS seeks dismissal of the Complaint, pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure.
On December 18, 2003, Plaintiff filed a two-page Answer to the Motion to Dismiss (# 11), as well as a 7-page Response to the Motion to Dismiss, with supporting exhibits, (# 12). The Response includes a chronology of Plaintiff's communications with the IRS and others concerning the tax levy and her claim for replacement checks. The Response indicates that Plaintiff first learned of the tax levy on or about February 7, 1992, when she attempted to make a deposit to her account, (# 12 at 1). The Response further indicates that Plaintiff's first communication with the IRS concerning this matter was in April of 1992. (Id. at 2), However, Plaintiff did not seek replacement checks by filing Form 3911 until April 19, 1999. (Id. at 3).
In her Answer to the Motion to Dismiss, Plaintiff alleges that she was not aware that refund checks had been issued until 1999 and, consequently, she was "not capable of failing under notice or observation; capable of being known, perceive or apprehended; capable of failing under judicial notice," (# 11 at 1). It appears that Plaintiff is arguing that, because she was not aware until 1999, that the IRS had issued refund checks, an extension of the statute of limitations is warranted.
Plaintiff's Answer (# 11 at 1) also argues that the April 17, 2001 Notice of Disallowance of Claim issued by the IRS extended the statute of limitations for a period of two years, because the Notice states that a lawsuit could be filed in a United States District Court having jurisdiction over the claim within two years of the mailing date of the Notice. (See # 2, Ex. 12B).
On January 8, 2004, the IRS filed a Reply in support of its Motion to Dismiss. (# 13). In the Reply, the IRS reiterates its position that Plaintiff's claim is barred under § 3702(c)(1), and that Plaintiff's lack of knowledge concerning the issuance of the refund checks does not toll the statute of limitations. The IRS further asserts that the Notice of Disallowance did not extend the statute of limitations, citing to the holding in Video Training Source v. United States, 991 F. Supp. 1256 (D, Co, 1998), for guidance.
In Video Training Source, the plaintiff claimed a tax refund pursuant to 28 U.S.C. § 1346, and argued for an equitable extension of the statute of limitations, which had previously expired. The plaintiff unsuccessfully argued that the IRS was "equitably estopped" from asserting the statute of limitations as a defense because the Notice of Disallowance stated that the taxpayer "may file a lawsuit" against the United States within two years of the mailing of the Notice. 991 F. Supp. at 1262-63. The United States argued that the Notice merely informed the taxpayer of its "right to file a civil action within two years of the IRS's denial of a timely refund claim, rather than an untimely refund claim." Id. at 1263 (emphasis in original). The court agreed with the government and dismissed the Complaint.
Upon review of the documentation submitted by Plaintiff, and the applicable statutory and case law, the undersigned proposes that the presiding District Judge FIND that Plaintiff did not submit her administrative claim for replacement checks within the one-year period following the issuance of the original refund checks. Accordingly, the undersigned further proposes that the presiding District Judge FIND that Plaintiff's administrative claim was untimely under 31 U.S.C. § 3702 (c)(1) and, therefore, this Court lacks subject matter jurisdiction over the claim. The Court need not address this issue under Rule 12(b)(6).
For the reasons stated herein, it is respectfully RECOMMENDED that the presiding District Judge GRANT Defendant's Motion to Dismiss for lack of jurisdiction under Rule 12(b)(1) of the Federal Rules of Civil Procedure, and dismiss this action from the docket of the Court.
The parties are notified that this "Proposed Findings and Recommendation" is hereby FILED, and a copy will be submitted to the Honorable Charles H. Haden II, United States District Judge. Pursuant to the provisions of Title 28, United States Code, Section 636(b)(1)(B), and Rules 6(e) and 72(a), Federal Rules of Civil Procedure, the parties shall have three days (mailing) and ten days (filing of objections) from the date of filing this "Proposed Findings and Recommendation" within which to file with the Clerk of this Court, specific written objections, identifying the portions of the "Proposed Findings and Recommendation" to which objection is made, and the basis of such objection. Extension of this time period may be granted for good cause shown.
Failure to file written objections as set forth above shall constitute a waiver of de novo review by the District Court and a waiver of appellate review by the Circuit Court of Appeals, Snyder v, Ridenour, S 89 F.2d 1363 (4th Cir. 1989); Thomas v. Arn, 474 U.S. 140 (1985); Wright v. Collins, 766 F.2d 841 (4th Cir. 1985); United States v. Schronce, 727 F.2d 91 (4th Cir. 1984). Copies of such objections shall be served on the opposing party, Judge Haden and this Magistrate Judge.
The Clerk is directed to file this "Proposed Findings and Recommendation" and to mail a copy of the same to Plaintiff and counsel of record.