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.

LABOWITZ v. UNITED STATES

December 21, 1972

Joseph LABOWITZ, Plaintiff,
v.
UNITED STATES of America, Defendant. UNITED STATES of America, Third-Party Plaintiff, v. Dennis SCHUSTER, Third-Party Defendant


Levet, District Judge.


The opinion of the court was delivered by: LEVET

OPINION, FINDINGS OF FACT and CONCLUSIONS OF LAW

LEVET, District Judge.

 Plaintiff in this controversy, Joseph Labowitz ("Labowitz"), is suing the United States of America for a refund of a partial payment of an assessment, in the amount of $13,813.61 against Joseph Labowitz and/or Dennis Schuster, for the unpaid withholding taxes of the Maspeth Steel Co., Inc. ("Maspeth") for the quarterly periods ending September 30, 1960, June 30, 1961, September 30, 1961. Labowitz alleges that although he has paid a portion of the assessment on behalf of Maspeth, he is not, in fact, a person responsible for such payments under 26 U.S.C. §§ 6671, 6672 (I.R.C.1954) and, therefore, should have those funds refunded and the assessments against him vacated.

 The United States has counterclaimed for the amount due under the assessment, alleging that Labowitz is a responsible person under Section 6672, and for the unassessed interest and the cost and disbursements of this action. In addition, the United States has filed a third-party complaint against Dennis Schuster who the United States also alleges is a responsible person under the above-said sections of the Internal Revenue Code. Schuster, *fn1" by his non-appearance, has incurred a default judgment.

 After hearing the testimony of the parties, examining the exhibits and the proposed findings of fact and conclusions of law submitted by counsel, this court makes the following findings of fact and conclusions of law:

 FINDINGS OF FACT

 1. This court has jurisdiction over the subject matter and the parties under 28 U.S.C. §§ 1346(a) (1), 1340 and 1345.

 2. Joseph Labowitz had been associated with Samuel and Sons Iron and Steel Co., Inc. ("Samuel and Sons") since the early 1940's. (4.) *fn2" Samuel and Sons was engaged in the purchase and sale of iron and steel scrap and salvage.

 3. In 1958 Labowitz became an officer and principal stockholder of Samuel and Sons. (6, 7.)

 4. In early 1960, Samuel and Sons purchased a job site, known as Maspeth, on Grand and Maspeth Avenues in Queens, New York. On or about March 24, 1960, Samuel and Sons purchased the steel and wooden structures, to be removed from the Maspeth site for $150,000. (9, 10.)

 5. On or about the time Sanuel and Sons entered the Maspeth salvage contract to remove the steel and wooden structures from the Maspeth site, two other corporations were formed at the direction of Labowitz. (106-107.) The first of these corporations, incorporated on March 25, 1960, was Schuster and Son Wrecking Corporation (Schuster and Son). (Ex. J.)

 On April 5, 1960 Maspeth was formed, again by the same attorney who incorporated Schuster and Son, and at the direction of Labowitz. (106, 107; Ex. K.)

 Subsequent to the creation of the Schuster and Maspeth corporations, Samuel and Sons entered into a contract with Schuster and Son with respect to the removal of the steel and wooden structures from the Maspeth site. (15; Ex. 1.)

 6. Maspeth was formed primarily to obtain lower interest rates for the Maspeth contract. (29, 72, 94.)

 7. Maspeth allegedly became the subcontractor of Schuster and Son with respect to the Maspeth contract for removal of the steel and wooden structures at the Maspeth site. (Plaintiff's complaint, page 3.)

 8. During the time the Maspeth salvage contract was in progress both the Schuster and Maspeth Corporations had their offices in the same offices as the Samuel and Sons corporate offices at 214 Kent Avenue, Brooklyn, New York. However, no rent was ever paid by either the Schuster and Son or Maspeth Corporations to Samuel and Sons for the occupation of those premises. (30, 31.) Nor was there any lease between Samuel and Sons and the Schuster and Son or Maspeth Corporations for said occupation. (32.)

 9. Labowitz did some, if not all, of the hiring of the Maspeth employees for the Maspeth salvage contract. (137.) Labowitz also had control over these employees at the Maspeth site. (157.)

 10. There are no records as to who the officers or stockholders of either the Maspeth or Schuster and Son Corporations were, nor is there any record of any organizational meetings or issuance of stock certificates. (112, 113.)

 11. Labowitz did not advance funds to Maspeth. I find that the use of Samuel and Sons funds for the payment of Maspeth's liabilities was not due to Maspeth's "financial difficulties" (plaintiff's pretrial brief, page 2) but because neither Schuster nor Maspeth in fact had any capitalization. (112, 113.) Labowitz, with the use of the funds of Samuel and Sons, therefore had complete control over any and all funds available to Maspeth (136) and made all decisions regarding the payments of debts or creditors of ...


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.