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Hirko v. United States

March 16, 2006

ELISABETH HIRKO, PLAINTIFF,
v.
UNITED STATES OF AMERICA, STEVEN CANTOR AND K.E.M. ENTERPRISES INC., DEFENDANTS.
UNITED STATES OF AMERICA, CROSS-CLAIM PLAINTIFF,
v.
STEVEN CANTOR, CROSS-CLAIM DEFENDANT, AND JOYCE MILILLO, ADDITIONAL DEFENDANT ON THE CROSS-CLAIM.



The opinion of the court was delivered by: Hurley, District Judge

MEMORANDUM OF DECISION AND ORDER

Plaintiff Elisabeth Hirko ("Plaintiff") filed the instant action to quiet title to real property located at 275 Timber Point Road, East Islip, New York (the "Premises") upon which the defendant/cross-claim plaintiff the United States of America ("Defendant" or the "United States") has filed a tax lien. Defendant has moved for summary judgment pursuant to Federal Rule of Civil Procedure 56. For the reasons that follow, Defendant's motion is granted.

BACKGROUND

The material facts, drawn from the Complaint and the parties' Local 56.1 Statements, are undisputed unless otherwise noted. By deed dated March 31, 1993, Plaintiff's then-husband Steven Cantor ("Cantor") transferred his interest in the Premises to Plaintiff. At the time of the transfer, Plaintiff and Cantor held joint title to the Premises. The deed provides that the transfer was "in consideration of Ten Dollars and other valuable consideration paid by [Plaintiff]." (Def.'s Ex. A.)

In March 1993, Cantor was the sole shareholder and officer of Cantor Bros. Glass Corp. ("CBGC"). As of March 1993, CBGC had not paid over to the Internal Revenue Service (the "IRS") $47,992.90 in income and Federal Insurance Contributions Act ("FICA") taxes withheld from the wages of CBCG's employees for the tax period ending September 30, 1992. On February 6, 1995, the IRS made a single assessment in the amount of $122,305.28 against Cantor pursuant to 26 U.S.C. § 6672 as a responsible person of CBGC who wilfully failed "to collect, truthfully account for and pay over" income and FICA taxes withheld from the wages of CBGC's employees. This assessment encompassed Cantor's liability for the tax period ending September 30, 1992, as well as Cantor's liability for the tax periods ending December 31, 1993 and June 30, 1994. On February 24, 1997, the IRS filed a Notice of Federal Tax Lien against the Premises. Plaintiff does not dispute the validity of the tax lien.

The United States contends that the transfer of the Premises by Cantor to Plaintiff was fraudulent as to the United States under sections 273 and 276 of the New York Debtor and Creditor Law and should therefore be set aside to the extent necessary to satisfy the United States' claim against Cantor under section 6672 of the Internal Revenue Code with regard to the tax period ending September 30, 1992. Plaintiff opposes the motion, arguing that the United States has failed to establish that the transfer was made without fair consideration and that pursuant to section 278 of the New York Debtor and Creditor Law, the United States is barred from proceeding against her because she is a "bona fide purchaser."

DISCUSSION

I. Applicable Law and Legal Standards

Summary judgment pursuant to Federal Rule of Civil Procedure 56 is only appropriate where admissible evidence in the form of affidavits, deposition transcripts, or other documentation demonstrates the absence of a genuine issue of material fact, and one party's entitlement to judgment as a matter of law. See Viola v. Philips Med. Sys. of N. Am., 42 F.3d 712, 716 (2d Cir. 1994). The relevant governing law in each case determines which facts are material; "only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). No genuinely triable factual issue exists when the moving party demonstrates, on the basis of the pleadings and submitted evidence, and after drawing all inferences and resolving all ambiguities in favor of the non-movant, that no rational jury could find in the non-movant's favor. Chertkova v. Conn. Gen'l Life Ins. Co., 92 F.3d 81, 86 (2d Cir. 1996) (citing Fed. R. Civ. P. 56(c))).

To defeat a summary judgment motion properly supported by affidavits, depositions, or other documentation, the non-movant must offer similar materials setting forth specific facts that show that there is a genuine issue of material fact to be tried. Rule v. Brine, Inc., 85 F.3d 1002, 1011 (2d Cir. 1996). The non-movant must present more than a "scintilla of evidence," Delaware & Hudson Ry. Co. v. Consolidated Rail Corp., 902 F.2d 174, 178 (2d Cir. 1990) (quoting Anderson, 477 U.S. at 252), or "some metaphysical doubt as to the material facts," Aslanidis v. U.S. Lines, Inc., 7 F.3d 1067, 1072 (2d Cir. 1993) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)), and cannot rely on the allegations in his or her pleadings, conclusory statements, or on "mere assertions that affidavits supporting the motion are not credible." Gottlieb v. County of Orange, 84 F.3d 511, 518 (2d Cir. 1996) (internal citations omitted).

The district court, in considering a summary judgment motion, must also be "mindful of the underlying standards and burdens of proof," Pickett v. RTS Helicopter, 128 F.3d 925, 928 (5th Cir. 1997) (citing Anderson, 477 U.S. at 252), because the evidentiary burdens that the respective parties will bear at trial guide district courts in their determination of summary judgment motions. Brady v. Town of Colchester, 863 F.2d 205, 211 (2d Cir. 1988). Where the non-moving party will bear the ultimate burden of proof on an issue at trial, the moving party's burden under Rule 56 will be satisfied if he can point to an absence of evidence to support an essential element of the non-movant's claim. Id. at 210-11. Where a movant without the underlying burden of proof demonstrates that the non-moving party's evidence is insufficient as a matter of law, the burden shifts to the non-movant to offer "persuasive evidence that [her] claim is not 'implausible.' " Brady, 863 F.2d at 211 (citing Matsushita, 475 U.S. at 587).

II. The Validity of the Conveyance

A. Applicable Law

At the outset, the Court notes that the validity of the conveyance at issue is governed by state law. See United States v. McCombs, 30 F.3d 310, 323 (2d Cir. 1994) (noting that "'federal . . . courts must look to state law'" to ascertain whether a taxpayer has a property interest in property subjected to a federal tax lien") (quoting Aquilino v. United States, 363 U.S. 509, ...


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