Annotations- Attorney
Fees
6332 Annotations: Attorney’s
Fees-Levy
Penalty for Failure to Surrender
Property: Attorney's Fees
[97-2 USTC ¶50,984] Janine Gawryl v.
Steven Swan, d/b/a Home Pride Real Estate, et al U.S. District
Court, Dist. N.H., Civ. 97-381-JD, 10/22/97
[Code
Secs. 6332 and 7402 ]
Notice of levy: Notice to third party: Real estate broker:
Commission: Priority of IRS claim: Costs.--Real estate purchasers
who received an IRS notice of levy regarding the tax liability of their
real estate broker were obligated to pay the broker's commission to the
IRS. They were not entitled to recover their costs in an action to
determine who should receive the commission because the action was
unnecessary. They would have been protected from any lawsuit if they had
honored the notice of levy and followed its instructions to pay the
funds to the IRS.
Janine Gawryl,
Steven Swan, pro se.
ORDER
DICLERICO,
JR., Chief Judge:
In this
interpleader action removed from the state court, the plaintiff seeks to
have to the court determine the respective rights of the defendants to a
$2,000 real estate commission. Defendant, Steven Swan d/b/a Home Pride
Real Estate ("Swan"), was a broker in a real estate
transaction in which he was owed $2,000 by his clients, the purchasers,
John and Charlotte O'Brien. Prior to the closing that was held on May 9,
1997, the defendant, Internal Revenue Service ("IRS") acting
through its officer, Defendant Dorothea Cleary, served a notice of levy
on the O'Briens pursuant to 26 U.S.C. §6332(a) in order to collect a
tax liability owed by Swan. While the O'Briens were obligated to turn
the funds ($2,000) over to the IRS, they instead opted to turn them over
to their lawyer, the plaintiff in this case, in order to have the court
determine to whom the funds should be paid.
The parties do
not dispute that $750 of the disputed funds are due to Thomas Lyons (who
is not a party to this case) for his work on the real estate
transaction. Swan, however, claims that the balance of $1250 should be
ordered paid over to him.
The court
finds that the notice of levy served upon the O'Briens was proper.
Therefore, the lien of the IRS takes priority over any other claim to
the disputed funds. This court does not have jurisdiction in the context
of this action to adjudicate any competing claims between Swan and the
IRS but can only determine the priority of liens. 28 U.S.C. §2410(a).
There are other statutory provisions which permit Swan to bring such a
challenge if certain jurisdictional requirements are met. See 26
U.S.C. §7422 and 28 U.S.C. §1346(a).
Therefore, the
court orders the plaintiff to pay the sum of $750 to Thomas Lyons, and
the sum of $1250 to the IRS pursuant to the instructions contained in
the notice of levy. The
United States
' motion for judgment on the pleadings (document no. 4) is granted.
Defendant Swan's motion for judgment on the pleadings (document no. 6)
has been considered by the court as an objection to the government's
motion for judgment on the pleadings.
The
plaintiff's amended motion for reimbursement of costs (document no. 10)
is denied. The O'Briens had a duty to honor the notice of levy served on
them by the IRS and had they done so they would have been protected by
law from any lawsuit (28 U.S.C. §6332(e)). It was not necessary for
their attorney to seek a bill of interpleader, and therefore the IRS
should not be required to pay plaintiff's costs. See also
Manchester
Fed. Savings and Loan Assoc. v. Emery-Waterhouse Co., 102 N.H. 233,
153 A.2d 918 (1959). SO ORDERED
