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Mottahedeh v. United States

United States Court of Appeals, Second Circuit

July 28, 2015

ANGELA LAVI MOTTAHEDEH, as Trustee of the Trust Agreement dated November 8, 1993, Plaintiff-Appellant,
v.
UNITED STATES OF AMERICA, Defendant-Appellee

Argued June 16, 2015

Appeal from an order of the United States District Court for the Eastern District of New York (Hurley, J.). Appellant filed a complaint against the United States pursuant to 26 U.S.C. § 7426 seeking compensation for an alleged wrongful levy. The district court granted appellee's motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) because appellant's claim was not filed until after the expiration of the nine-month statute of limitations for such wrongful levy claims set forth in 26 U.S.C. § 6532(c). The district court rejected appellant's arguments that her complaint was rendered timely (1) because she had previously filed a timely action in response to a prior notice of levy pertaining to the same property, and (2) because the property in question was never sold. The district court also denied appellant's request to equitably toll the statute of limitations period for her claim, and denied appellant's motion for leave to amend her complaint in order to add a claim requesting a tax refund pursuant to 28 U.S.C. § 1346(a) . For the reasons set forth below, we AFFIRM.

MICHAEL LEVINE, Levine & Associates, P.C., Scarsdale, NY, for Plaintiff-Appellant.

ANTHONY T. SHEEHAN, (Joan I. Oppenheimer, on the brief), for Caroline D. Ciraolo, Principal Deputy Assistant Attorney General, Washington, DC, for Defendant-Appellee.

Before: CALABRESI, STRAUB, and LIVINGSTON, Circuit Judges.

OPINION

Page 348

Debra Ann Livingston, Circuit Judge :

On July 23, 2012, Appellant Angela Lavi Mottahedeh, acting in her capacity as trustee of an irrevocable trust (the " Trust" ), filed a complaint against the United States pursuant to 26 U.S.C. § 7426, seeking a judgment of $2,915,000 in compensation for an alleged wrongful levy by the Internal Revenue Service (" IRS" ). The Government filed a motion to dismiss Appellant's July 2012 complaint, which the district court (Hurley, J. ) granted pursuant to Federal Rule of Civil Procedure 12(b)(1).

The district court held that it was without jurisdiction to review Appellant's claim because she filed it more than nine months after the IRS served her with the relevant notice of levy. Mottahedeh v. United States, 33 F.Supp.3d 210, 213-15 (E.D.N.Y. 2014); see 26 U.S.C. § 6532(c)(1) (" [N]o

Page 349

suit or proceeding under section 7426 shall be begun after the expiration of 9 months from the date of the levy or agreement giving rise to such action." ). The district court denied Appellant's motion for leave to amend her complaint to add a claim for a tax refund pursuant to 28 U.S.C. § 1346, reasoning that such claims are unavailable to plaintiffs who could have brought a claim under § 7426 but for the expiration of the statute of limitations. We agree that Appellant's § 7426 claim was time barred and that Appellant could not have brought a claim under § 1346.

BACKGROUND

A. Facts[1]

In 1993, Parviz Lavi (" Lavi" ) created the Trust for the benefit of his daughter, Angela Lavi Mottahedeh, and her two brothers, Edmund and Edward Lavi. Mottahedeh was appointed trustee. In 1998, Lavi conveyed to the Trust 19 shares of stock in Old Cedar Development Corporation (the " Old Cedar Stock" ). Prior to that conveyance, the IRS had served Lavi and his wife with a notice of deficiency alleging income tax deficiencies for the tax years 1979 and 1980, as well as an audit statement showing unpaid tax liability for the years 1979 through 1982. In August 1998, the IRS obtained a tax court judgment against Lavi for the amounts he and his wife owed for the tax years 1979 and 1980. In addition, in 2003, ...


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