The opinion of the court was delivered by: PLATT
Defendants Thomas Carney, Jr. and Arlene Carney have moved to dismiss plaintiff's complaint. For the reasons that follow, defendants' motion must be denied.
For purposes of a motion to dismiss, the facts alleged in the complaint are accepted as true. Cameron v. Fogarty, 705 F.2d 676, 678 (2d Cir. 1983), cert. denied, 481 U.S. 1016, 95 L. Ed. 2d 501, 107 S. Ct. 1894 (1987). As alleged, therefore, these are the relevant facts.
The United States commenced this action, pursuant to 26 U.S.C. §§ 7401 and 7403, seeking to reduce federal tax assessments against defendant Thomas Carney, Jr., to set aside two fraudulent conveyances of real property and to foreclose on federal tax liens on two parcels of real property. The complaint alleges that Carney Electric Construction Corporation ("Carney Electric") willfully failed to pay withholding taxes for the tax periods ending September 30, 1977, December 31, 1977, March 31, 1978, June 30, 1978, September 30, 1981, March 31, 1982, June 30, 1982, September 30, 1982 and December 31, 1982. On September 10, 1984, the Secretary of the Treasury Department then filed an assessment against Thomas Carney, Jr., as a responsible person of Carney Electric, pursuant to the terms of 26 U.S.C. § 6672, in the amount of $ 128,302.12. According to the complaint, Thomas Carney, Jr. received notice of the assessment and demand for payment.
To date, Thomas Carney, Jr. has failed to pay the assessment and the current amount of assessment is now $ 231,727.44 plus statutory additions from March 15, 1990. Since the assessments were not paid, on February 5, 1985 and March 13, 1990, federal tax liens were filed with the Nassau County Clerk's Office against all property owned by Thomas Carney, Jr. The government commenced the instant action on September 9, 1990.
The complaint seeks to set aside two conveyances of real property made by Thomas Carney, Jr. prior to the date of the tax assessments. The complaint alleges that on August 1, 1978, Thomas Carney, Jr., who was the record owner of a parcel of land located at 42 Hewlett Point Avenue, East Rockaway, New York ("42 Hewlett parcel"), deeded all of his rights, title and interest in this property to his wife, Arlene Carney. On that same date, the deed reflecting the transfer of the 42 Hewlett parcel was recorded in the Nassau County Clerk's Office. The government contends that this conveyance was for less than fair and adequate consideration and since it took place at a time when Thomas Carney, Jr., was insolvent, or rendered insolvent because of this transfer, and he was indebted to the United States, it was designed to defraud or to hinder the United States, a creditor.
The complaint makes a similar allegation with regard to real property owned by Thomas and Arlene Carney, as tenants by the entirety, located at 44 Hewlett Point Avenue, East Rockaway, New York ("44 Hewlett parcel). With regard to the 44 Hewlett parcel, it is alleged that on August 1, 1978, Thomas deeded all of his rights in this property to Arlene for less than fair and adequate consideration and that the purpose of this conveyance was also to defraud or hinder the United States, a creditor of Thomas Carney, Jr. This transfer was also recorded on August 1, 1978. After the two transactions took place, the complaint alleges that Arlene Carney mortgaged the two properties thereby damaging the government's interests in the two parcels of land. The government now seeks to reduce the assessments to judgment, to set aside the two conveyances and to foreclose on the tax liens filed on the two parcels.
A motion to dismiss for failure to state a claim, pursuant to Rule 12(b)(6), may not be granted "unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). For purposes of such a motion, the allegations must be construed generously and all inferences drawn in favor of the pleader. Cosmas v. Hassett, 886 F.2d 8, 11 (2d Cir. 1989).
A. Statute of Limitations
Initially, this Court must determine whether the Federal Debt Collection Procedure Act ("FDCPA"), 28 U.S.C. §§ 3001-3308, applies to this action. The effective date of the FDCPA is May 29, 1991, however, the FDCPA applies to actions "pending on the effective date of this Act" on a claim for a debt. 28 U.S.C. § 3631(b)(1)(A). "Debt" is defined as "an amount owing to the United States on account of an . . . assessment." 28 U.S.C. § 3002(3)(B). Since this action was pending at the time the FDCPA became effective and this action involves the government's attempt to recover on an assessment, it would appear that the FDCPA applies to this action. The government, however, argues that the FDCPA does not apply, while the Carneys argue that it does govern this action.
The government argues that when Congress passed the FDCPA, it did not intend to restrict the government's ability to collect tax liabilities under available State law provisions. In support of its argument, the ...