Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Danduran v. United States

United States District Court, D. North Dakota

March 12, 2019

Lawrence Danduran, Plaintiff,
v.
United States of America, Defendant and Third-Party Plaintiff,
v.
Cheryl Huntzinger, Third-Party Defendant.

          ORDER DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

          DANIEL L. HOVLAND, CHIEF JUDGE UNITED STATES DISTRICT COURT

         Before the Court is Plaintiff Lawrence Danduran's motion for summary judgment filed on November 1, 2018. See Doc. No. 30. The Defendant, United States of America, filed a response in opposition to the motion on November 21, 2018. See Doc. No. 42. The Plaintiff filed a reply brief on November 28, 2018. See Doc. No. 45. For the reasons set forth below, the motion for is denied.

         I.BACKGROUND

         This is an action for refund of tax penalties assessed for failure to remit to the IRS employment taxes withheld from employees' wages. Danduran and Third-Party Defendant Cheryl Huntzinger (“Huntzinger”) each owned a 50 percent interest in Mill Pump & Cheers, LLC (“Mill Pump”), a former North Dakota limited liability company. Mill Pump operated a convenience store located in New Rockford, North Dakota, from July 2010 until April 2014.

         Danduran was never an officer of Mill Pump but rather was a co-owner. The business was run as a partnership. Mill Pump did not have a board of directors, did not issue stock to its owners, and did not give titles to its owners. Danduran's initial contributions to Mill Pump consisted of a $45, 000 loan and labor to complete renovations of the building in which the convenience store operated.

         Once Mill Pump began operating the convenience store, Danduran primarily handled fuel management, maintenance, and inventory. Danduran and Huntzinger jointly managed the day-to-day operations of Mill Pump after the store initially opened. Danduran and Huntzinger both had signature authority on Mill Pump's checking account. Danduran signed for and acquired Mill Pump's liquor license and tobacco license. Huntzinger wrote the vast majority of the checks to Mill Pump's creditors. Danduran signed checks to vendors when necessary. Danduran relied on Huntzinger to file employment tax returns, pay employment taxes, prepare payroll, and to collect and remit trust fund taxes. Mill Pump employed several persons to operate the convenience store. Huntzinger was primarily responsible for calculating or preparing Mill Pump's payroll checks and tax withholdings. Huntzinger signed and filed the payroll tax returns for Mill Pump.

         Danduran established the relationship with Mill Pump's fuel vendor and ensured that all payments from Mill Pump were made to the fuel vendor. Mill Pump's relationship with its fuel vendor was dependent on a personal guarantee, provided by Danduran, that the fuel vendor's bills would be paid. Danduran calculated amounts due to the fuel vendor, and directed Huntzinger to make payments in the correct amount.

         Sometime in 2011 or 2012, Danduran and Huntzinger had a “falling-out” and Danduran found another job in sales at a car dealership. After he took the car dealership job, Danduran continued to come to Mill Pump most days to handle fuel management and maintenance. Danduran received both a salary from Mill Pump and monthly repayments on the personal loan he made to renovate the store and purchase inventory.

         Mill Pump, like all employers, was required by law to withhold federal income and Federal Insurance Contributions Act (FICA) taxes, which include Social Security and Medicare taxes, from its employees' wages and pay the withheld wages over to the IRS. The amounts withheld from employee wages are commonly referred to as “trust fund taxes” because the employee's income and FICA taxes are said to be held in trust by the employer for the United States. See 26 U.S.C. § 7501. The trust fund taxes, along with the employer's own FICA obligations (collectively, “employment taxes”), are reported quarterly on a Form 941 (i.e., Employer's Quarterly Federal Tax Return). Mill Pump was required by law to make periodic deposits of employment taxes in an appropriate federal depository in accordance with federal deposit regulations. See 26 U.S.C. § 6302; 26 C.F.R. § 31.6302-1.

         Mill Pump failed to pay its federal income and FICA taxes, which include Social Security and Medicare taxes, withheld from its employees' wages for: (1) the third and fourth quarters of 2010; (2) the first, second, third, and fourth quarters of 2011; (3) the first, second, third, and fourth quarters of 2012; and (4) the first quarter of 2013 (collectively, the “tax periods at issue”). The persons responsible for collecting, accounting for, and paying over trust fund taxes withheld from employees' wages, who willfully fail to do so, are liable for a penalty in the amount of tax withheld but not paid over. See 26 U.S.C. § 6672.

         On March 24, 2014, the IRS assessed against Danduran a trust fund recovery penalty under 26 U.S.C. § 6672 for the tax periods at issue. On August 7, 2014, Danduran paid the full amount assessed plus interest in the amount of $56, 280.44. On June 19, 2015, Danduran filed a Form 843 Claim for Refund and Request for Abatement for the tax periods at issue. On October 20, 2015, the IRS sent Danduran notice that his claim for refund and abatement was disallowed. On November 18, 2015, Danduran filed an appeal with the IRS Appeals Office. Danduran's appeal was denied in September 2016.

         On July 28, 2017, Danduran filed suit against the United States demanding a refund of the penalties under 26 U.S.C. § 6672 assessed to Danduran for the tax periods at issue. The Government filed an answer on October 18, 2017. On October 19, 2017, the Government filed a third-party complaint against Cheryl Huntzinger seeking a judgment against her for any amounts it is required to refund to Danduran. The Clerk's entry of default was made against Huntzinger on February 5, 2018. Danduran moved for summary judgment on November 1, 2018. The motion has been fully briefed. Trial is scheduled for May 14, 2019.

         II. STANDARD OF REVIEW

         Summary judgment is appropriate when the evidence, viewed in a light most favorable to the non-moving party, indicates that no genuine issues of material fact exist and that the moving party is entitled to judgment as a matter of law. Davison v. City of Minneapolis, Minn., 490 F.3d 648, 654 (8th Cir. 2007); see Fed.R.Civ.P. 56(a). Summary judgment is not appropriate if there are factual disputes that may affect the outcome of the case under the applicable substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue of material fact is genuine if the evidence would allow a reasonable jury to return a verdict for the non-moving party. Id. The ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.