impose contempt sanctions on him. Werner eventually turned over to the Receiver certain of his assets, including a 1990 Porsche automobile that had been listed in his bankruptcy petition and four pieces of art work belonging to the Casa Trust. Werner also appealed the dismissal of his second bankruptcy petition.
While the Duttle plaintiffs' struggled to execute their judgment against Werner, and approximately at the time Werner filed his first bankruptcy petition, the government began to gain interest in pursuing a claim against Werner. Beginning in November of 1987, the government had assessed the Werners for unpaid federal income taxes, interest and penalties for the tax years 1976 through 1988. The government filed notices of federal tax liens reflecting those assessments on October 4, 1989 and May 30, 1990 with the Register of the City of New York, thus perfecting its tax liens. Zipkin Decl. P 6. On October 1, 1992, the government moved for a preliminary injunction, requesting the court to enjoin the Receiver from liquidating or paying out any Werner assets until the court determined whether the government or the Duttle plaintiffs held a priority lien on the assets of the Casa Trust. Because any decision on the preliminary injunction could be mooted by a reversal of my dismissal of Werner's bankruptcy petition, I asked the parties to agree to preserve the status quo regarding the government's claim to the assets held by the Receiver, which would permit me to hold the government's motion in abeyance pending the Second Circuit's decision. The parties began to negotiate a stipulation to this effect, but before it was executed, the Duttle parties informed the court that they had reached a settlement. The government objected to the settlement, and filed a motion to intervene. I entered an order approving the settlement, and denying the government's motion to intervene, on March 18, 1993. Although the stipulation preserving the status quo with regard to the government's claims was never signed, the Receiver did not liquidate or distribute any assets in violation of the proposed stipulation.
On June 29, 1993, the government filed this independent action. In October of 1993, the parties filed the instant motions. On January 19, 1994, the court entered a stipulation and order reducing to judgment the government's tax assessments against the Werners in an amount of $ 7,097,075.44. However, disagreement remains as to whether the government may collect this amount by executing its liens against the Casa Trust and Receiver assets.
Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to win as a matter of law." Fed. R. Civ. P. 56(c); Citizens Bank of Clearwater v. Hunt, 927 F.2d 707, 710 (2d Cir. 1991). In deciding a summary judgment motion, the court must resolve ambiguities and draw inferences against the moving party. Anderson v. Liberty Lobby Inc., 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986) (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59, 26 L. Ed. 2d 142, 90 S. Ct. 1598 (1970)). The moving party bears the initial burden of demonstrating that there exists no material issue of fact and that he or she is entitled to judgment as a matter of law. See Brady v. Colchester, 863 F.2d 205, 210 (2d Cir. 1988). The movant may carry this burden by demonstrating the absence of evidence to support the non-movant's claims. See Celotex Corp. v. Catrett, 477 U.S. 317, 325, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). Once this burden is met, a nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts," Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986). Moreover, the nonmovant may not merely rest on the allegations contained in the pleadings, but must "set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 248.
I. Defendants' Motion For Summary Judgment
Defendants do not explicitly contest Werner's ownership of the Casa Trust and Receiver assets.
Rather, their motion for summary judgment is grounded on the claim that the government's attempt to foreclose its tax liens against the Casa Trust assets is barred by the statute of limitations of the Federal Debt Collection Act, 28 U.S.C. § 3001 et seq. (1993) ("the Act").
According to defendants, the Act bars any claim by the government to avoid a debtor's transfer of legal title to another unless an action is commenced within six years after the transfer is made, or within two years after the transfer reasonably could have been discovered. Because the Casa Trust was created in 1984, and because the government has known about it since January of 1985,
defendants argue, any attempt to reach the Casa Trust assets is barred by the Act's statute of limitations.
Defendants' contention is without merit. Although the Federal Debt Collection Act generally provides "the exclusive civil procedures for the United States to recover judgment on a debt," 28 U.S.C. § 3001(a), its exclusivity is explicitly subject to the following limitation:
To the extent that another Federal law specifies procedures for recovering on a claim or a judgment for a debt arising under such law, those procedures shall apply to such claim or judgment to the extent those procedures are inconsistent with this chapter.