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Hudson Valley Bronzing & Hair Salon, Inc. v. United States


June 9, 2006


The opinion of the court was delivered by: Gary L. Sharpe, District Judge


I. Introduction

Presently before the Court is a complaint filed pro se by Richard Ulloa. The complaint is brought by Ulloa in the name of Hudson Valley Bronzing & Hair Salon, Inc. ("Hudson Valley Salon") to challenge a levy issued by the Internal Revenue Service ("IRS") to recover unpaid employer taxes. Dkt. No. 1.*fn1 According to the complaint, the IRS did not afford Hudson Valley Salon a collection due process hearing as required by 26 U.S.C. § 6330 prior to issuing the levy against its account at the Mid-Hudson Valley Federal Credit Union. Dkt. No. 1 and ex. A.*fn2 Ulloa has also filed a motion encaptioned "Motion to Stay," by which he appears to seek injunctive relief. Dkt. No. 3. The statutory filing fee for this action has been paid.

II. Discussion

Courts have a duty to construe pro se complaints liberally, see Nance v. Kelly, 912 F.2d 605, 606 (2d Cir. 1990) (per curiam) (citation omitted), and should exercise "extreme caution . . . in ordering sua sponte dismissal of a pro se complaint before the adverse party has been served and both parties (but particularly the plaintiff) have had an opportunity to respond," Anderson v. Coughlin, 700 F.2d 37, 41 (2d Cir. 1983) (citations omitted). Nonetheless, courts have a responsibility to determine that a claim is not frivolous before permitting a plaintiff to proceed. See Fitzgerald v. First East Seventh St. Tenants Corp., 221 F.3d 362, 363 (2d Cir. 2000) (district court may dismiss frivolous complaint sua sponte notwithstanding fact that the plaintiff has paid statutory filing fee); Wachtler v. County of Herkimer, 35 F.3d 77, 82 (2d Cir. 1994) (district court has power to dismiss case sua sponte for failure to state a claim (quotation omitted)); Thomas v. Scully, 943 F.2d 259, 260 (2d Cir. 1991) (per curiam) (district court has power to dismiss a complaint sua sponte for failure to state a claim as long as the court gives the plaintiff notice and an opportunity to be heard (citations omitted)).

"[I]t is settled law that a corporation cannot generally appear in federal court except through its lawyer." Jacobs v. Patent Enforcement Fund, Inc. 230 F.2d 565, 569 (2d Cir. 2000) (citing Rowland v. California Men's Colony, 506 U.S. 194, 201-02 (1945)). Cf. Knoefler v. United Bank of Bismarck, 20 F.3d 347, 348 (8th Cir. 1994) (trustee lacks standing as a pro se litigant to prosecute claims on behalf of the trust); Iannaccone v. Law, 142 F.3d 553, 559 (2d Cir. 1998) (executor of estate may not maintain an action on behalf of the estate seeking damages for the alleged conversion of estate assets). Thus, although litigants in federal court have a statutory right to choose to act as their own counsel, see 28 U.S.C. § 1654, "an individual who is not licensed as an attorney may not appear on another person's behalf in the other's cause." Machadio v. Apfel, 276 F.3d 103, 106 (2d Cir. 2002) (citation omitted).

As noted, the named plaintiff in this action is Hudson Valley Salon. The complaint was signed by Richard Ulloa, who also identifies himself as the plaintiff. The relationship, if any, between Ulloa and Hudson Valley Salon or Hudson Valley Cut & Bronzing Salon, Inc. (the entity against which the levy was issued) is not disclosed in the complaint.*fn3 It does not appear that Ulloa is a licensed attorney. Consequently, even assuming, arguendo, that Ulloa is an officer or even the sole stockholder of the corporate plaintiff, he may not maintain this action pro se on its behalf.

The Court has also considered whether Ulloa may maintain this action in his own name and concludes that he may not. To have standing, "at an irreducible minimum, Art. III requires the party who invokes the court's authority to 'show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant,' ... and that the injury 'fairly can be traced to the challenged action' and 'is likely to be redressed by a favorable decision'...." Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 472 (1982) (citations omitted).

The tax levy challenged herein was issued against a corporation, and Ulloa does not have standing to pursue the corporation's claims in his own name. The claims set forth in the complaint belong to the corporate taxpayer and may only be asserted by the corporation.

Accordingly, for the reasons set forth above, the complaint is dismissed. In light of the dismissal of the complaint, the motion to stay the execution of the tax levy must also be denied.*fn4 In light of Ulloa's pro se status, the Clerk is directed to refrain from entering judgment dismissing this action for a period of thirty (30) days in order to afford Ulloa the opportunity to obtain counsel to appear on behalf of the corporation.

III. Conclusion

WHEREFORE, for the reasons set forth above, it is hereby ORDERED, that the complaint is dismissed. The Clerk shall refrain from entering judgment for a period of thirty (30) days from the filing date of this Order in order to permit Ulloa to obtain counsel to appear in this action on behalf of Hudson Valley Salon, and it is further

ORDERED, that the motion to stay (Dkt. No. 3) is denied, and it is further ORDERED, that upon the timely filing of a notice of appearance by counsel for plaintiff, the Clerk return the file to the Court for further consideration, and it is further

ORDERED, that if Ulloa fails to timely comply with the terms of this Decision and Order, the Clerk enter judgment dismissing this action, without prejudice, without further order of this Court, and it is further

ORDERED, that the Clerk serve a copy of this Decision and Order on Ulloa by regular mail.


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