The opinion of the court was delivered by: THOMAS J. MCAVOY
MEMORANDUM-DECISION & ORDER
The plaintiffs, John Madan and the National Bank of Olyphant, have brought the instant action against the United States of America, the defendant, to recover attorneys fees expended in an underlying action to quiet title. In the previous dispute, the court granted the defendant's motion for summary judgment in its entirety, but dismissed the plaintiffs' claim for attorney's fees without prejudice, and allowed a resubmission of the application for fees. Madan v. United States, 850 F. Supp. 148 (N.D.N.Y. 1994). That application is presently before the court. Having carefully considered the submissions of the parties and the applicable law, the court concludes that attorney's fees would not properly be granted under these circumstances. The application of the plaintiffs is, therefore, denied.
In the underlying action, the court resolved cross-motions for summary judgment on an action to quiet title by denying the plaintiffs' motion and granting the defendant's. The court granted the government's motion on two grounds: First, the court lacked jurisdiction to hear the lawsuit pursuant to 28 U.S.C. § 2409(a), given that the government filed a certificate with the Broome County clerk's office confirming that the United States claimed no interest in the property. Second, because the government, indeed, filed that certificate, the lawsuit was moot. Madan, 850 F. Supp. at 151-52.
In its Memorandum-Decision and Order, however, the court dismissed the plaintiffs' claim for attorney's fees without prejudice, and allowed plaintiffs leave to resubmit the application for fees. On June 17, 1994, plaintiff moved for attorney's fees pursuant to either 28 U.S.C. § 2412 or 26 U.S.C. § 7430, "as-applicable." Pls. App. at 1.
(A) THE STATUTE THAT APPLIES TO PLAINTIFF'S MOTION
In the underlying action, the court noted that "after further review of the law, it now seems clear that the plaintiffs are claiming attorney's fees under 26 U.S.C. § 7430 and not 28 U.S.C. § 2412." Madan, 850 F. Supp. at 152. The court's observations notwithstanding, however, the plaintiff has, in the pending application, requested "attorneys fees and costs pursuant to either 28 U.S.C. § 2412 or 26 U.S.C. § 7430 as applicable." Pls. App. at 1.
A threshold question, then, requires a determination of which of the two statutes applies to the plaintiffs' application for attorney's fees, and whether the two statutes can properly be pleaded concurrently.
By its very terms, section 2412 of title 28 is not applicable to proceedings to which 26 U.S.C. § 7430 applies: "The provisions of this section shall not apply to any costs, fees, and other expenses in connection with any proceeding to which section 7430 of the Internal Revenue Code of 1986 applies." 28 U.S.C. § 2412 (e); see also Prudential-Bache Securities. Inc. v. Tranakos, 593 F. Supp. 783, 786 (D.C. Ga. 1984). Accordingly, because 26 U.S.C. § 7430 supplants 28 U.S.C. § 2412, the court will consider plaintiff's motion as if made pursuant to § 7430 alone.
(B) PLAINTIFFS' MOTION UNDER 26 U.S.C. § 7430
In order for the plaintiffs in this action to be able to collect attorney's fees and costs under section 7430 of Title 26, they must, obviously, meet the requirements of the statute. As the court noted in the underlying action, section 7430 requires (1) that the plaintiffs exhaust their available administrative remedies within the Internal Revenue Service, 26 U.S.C. § 7430(b)(1); (2) that the plaintiffs be, in fact, "prevailing parties" within the meaning of 26 U.S.C. § 7430(c)(4)(A); and (3) that the requested attorney's fees and costs are reasonable litigation costs as defined by 26 U.S.C. § 7430(c). The burden of establishing entitlement to fees and costs under the statute rests with the plaintiffs. Madan, 850 F. Supp. at 152; see Zinniel v. Commissioner of Internal Revenue, 883 F.2d 1350, 1356 (7th Cir. 1989).
The government has conceded, for purposes of this action only, that the plaintiffs have exhausted their administrative remedies. Def. Memo. at 13 n. 8; Def. Resp. at 3 n. 5. Thus, ...