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Vidurek v. Koskinen

United States District Court, S.D. New York

July 25, 2018



          Vincent L. Briccetti United States District Judge.

         Plaintiffs John Vidurek and Kimberly Vidurek, proceeding pro se, bring this action against defendants the Internal Revenue Service ("IRS"), former IRS commissioner John Koskinen, [1] current IRS employees Brenda Dial, John/Jane Doe, [2] Jonnie Melendez, Maryellen Benecke, Linda Piatek, [3] and Jeanette Willet (collectively, the "Federal Defendants"); Daniel Schulman, president and CEO of PayPal Holdings Inc.;[4] Guy Chiarello, president of First Data Merchant Services LLC;[5] Mary Madden, president and CEO of Hudson Valley Federal Credit Union ("HVFCU"); Michael Quinn, president and CEO of Rhinebeck Savings Bank ("RSB"); and Jack Dorsey, president and CEO of Square Inc., [6] for claims arising out of assessments of and attempts to collect federal income taxes from plaintiffs.

         Plaintiffs assert claims for violations of various federal criminal statutes, specifically, conspiracy against civil rights (18 U.S.C. § 241), deprivation of civil rights under color of law (id. § 242), mail fraud (id. § 1341), making false statements (id. § 1001), and the Racketeer Influenced and Corrupt Organizations Act ("RICO") (id. § 1961, et seq.). Plaintiffs also assert state law claims for "trespass on the case," fraud, negligence, vindictive recklessness, abuse of process, and harassment. (Compl. at 2).[7]

         In addition, plaintiffs bring constitutional claims for due process violations and unreasonable seizure pursuant to 42 U.S.C. § 1983, and for conspiracy to violate civil rights under 42 U.S.C. §§ 1985 and 1986. Plaintiffs also appear to seek civil damages for unauthorized tax collection.

         Now pending are four motions: (i) Michael Quinn's motion to dismiss the complaint under Rule 12(b)(6) and for an order enjoining plaintiffs from filing future complaints against him and his employer (Doc. #5); (ii) Guy Chiarello's motion to dismiss the complaint under Rules 12(b)(5) and 12(b)(6) (Doc. #8); (iii) Mary Madden's motion to dismiss the complaint under Rule 12(b)(5) and motion for judgment on the pleadings under Rule 12(c) (Doc. #21); and (iv) Federal Defendants' motion to dismiss the complaint under Rules 12(b)(1), 12(b)(5), and 12(b)(6). (Doc. #35).

         For the following reasons, the motions of Quinn, Chiarello, and the Federal Defendants to dismiss the complaint, as well as Madden's motion for judgment on the pleadings, are GRANTED. Quinn's motion for a filing injunction is also GRANTED.

         The Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331.


         The following factual background is drawn from the complaint and the documents attached as exhibits thereto, which the Court may consider in deciding the pending motions. See Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002). For the purpose of deciding the pending motions, the Court accepts as true all well-pleaded factual allegations in the complaint and draws all reasonable inferences in plaintiffs' favor, as summarized below.

         I. Plaintiffs' Tax History

         Plaintiffs assert they are not subject to federal tax assessment or collection by the IRS. Plaintiffs allege "the IRS is a foreign corporate trust created in [the] Philippines" and/or Puerto Rico, and the Internal Revenue Code "is not law," but "only defines a contract between the IRS and an individual," and "applies only to the Philippines, Puerto Rico, District of Columbia, Virgin Islands, Guam, Northern Mariana Islands, territories, and insular possessions, for such items as narcotics, alcohol, tobacco, and firearms." (Compl. at 34-35).

         On March 26, 2012, the IRS sent Vidurek[8] a "Proposed Individual Income Tax Assessment," which stated the IRS had no record of having received an individual tax return from Vidurek for the 2009 tax year and calculated Vidurek owed $119, 012.13. (Compl. Ex. 1). On July 2, 2012, the IRS sent Vidurek a "Notice of Deficiency" in the amount of $81, 413.00 for the 2009 tax year. (Compl. Ex. 2).

         On July 13, 2012, Vidurek sent the IRS a "Notice and Demand," in which he contested the Notice of Deficiency, demanded the IRS correct its files as to Vidurek, and listed various potential causes of action against the IRS. (Compl. Ex. 3).

         By letter dated August 15, 2012, the IRS informed Vidurek it was reviewing his correspondence and would contact him within forty-five days with a reply. Plaintiff received no response.

         Vidurek then received an IRS notice dated December 17, 2012, stating he owed $124, 762.43 for the 2009 tax year, which he was required to pay by January 2, 2013, to avoid additional penalty and interest charges. In response, on January 11, 2013, Vidurek sent a "Second Notice and Demand" to the IRS, asserting he was not liable for the assessed taxes because the Internal Revenue Code "is not the law" and there is no contract between the IRS and Vidurek, again demanding the IRS correct their files, and again threatening legal action. (Compl. Ex. 6).

         Also on January 11, 2013, Vidurek sent a Freedom of Information Act request to the IRS for his individual master files for tax years 2009 through 2012, as well as other documents. On February 5, 2013, Vidurek received a full response to his request. The IRS provided the individual master files, but, plaintiffs allege, not the necessary program or information to decode them.

         The IRS sent Vidurek another notice, dated January 21, 2013, stating the amount Vidurek owed for 2009 had increased to $125, 528.52. Thereafter, Vidurek sent the IRS a letter and affidavit dated January 25, 2013, stating he never received the $236, 911.00 in reported taxable income that was the basis of the Proposed Assessment.

         The IRS then sent Vidurek a "Notice of intent to levy" dated April 8, 2013, which indicated that if Vidurek did not call the IRS or pay $127, 136.99 by April 18, 2013, the IRS might levy any state tax refund to which Vidurek was entitled and take possession of other property, the proceeds of which would be applied to the amount the IRS stated Vidurek owed. (Compl. Ex. 11). In response, Vidurek sent a "Fo[u]rth Notice to Correct Records," dated April 10, 2013. (Compl. Ex. 12).

         The IRS sent Vidurek a "Final Notice" of "Intent to Levy and Notice of Your Right to a Hearing," dated April 15, 2013. (Compl. Ex. 13). On April 22, 2013, Vidurek responded to the IRS by letter, again asserting the IRS had no authority to tax him. On April 29, 2013, the IRS sent Vidurek notice that the IRS would be in contact with third parties in an attempt to collect the unpaid taxes. Vidurek responded to the IRS, objecting to any attempt to collect taxes from him.

         On May 7, 2013, the IRS sent Vidurek a "Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320," which indicated a federal tax lien had been filed with the Dutchess County Clerk in the amount of $124, 762.43. (Compl. Ex. 20).

         On May 15, 2013, the IRS issued a summons to RSB and HVFCU. The summonses required RSB and HVFCU to "[p]rovide copies of all opening account records and bank statements in which John E. Vidurek ... is listed as a signatory from January 1, 2007 through December 31, 2008 and January 1, 2010 through December 31, 2012." (Compl. Ex. 21). On May 25, 2013, plaintiffs sent a notice and demand to both RSB and HVFCU, registering plaintiffs' objection and affirmatively withholding plaintiffs' consent for the banks to provide information to the IRS.

         On August 7, 2013, the IRS sent Vidurek a determination letter, which stated plaintiffs were not required to file a tax return for the 2009 tax period. On September 2, 2013, the IRS sent plaintiffs a notice that, after eliminating or decreasing most taxes, penalties, interest, and fees previously levied, Vidurek owed $80.64 for the 2009 tax year. In addition, the IRS provided a "Certificate of Release of Lien" dated September 18, 2013, for the amount of $124, 762.43. (Compl. Ex. 26).

         Approximately one year later, on August 25, 2014, the IRS sent Vidurek an Income Tax Examination Changes form for changes to Vidurek's taxes owed for 2008 and signed by "Tax Examiner-MS 4388."[9] (Compl. Ex. 28). On October 27, 2014, the IRS sent plaintiff another deficiency notice claiming $1, 507 for 2008, signed by both the IRS Commissioner and defendant Brenda Dial, an IRS service agent.

         On November 8, 2014, Vidurek sent defendants Layne Carver, Brenda Dial, and IRS Commissioner John Koskinen a notice and demand. Vidurek's notice asserted the attempt to collect taxes and penalties for 2008 was time-barred, and he would not contest the tax determination in a court because "under the Constitution Article III Section 2[, ] Article III courts lack jurisdiction to hear tax cases . . . [and] tax court[s] .. . can provide no remedy for People." (Compl. Ex. 30). Vidurek also contested the $80.64 deficiency for the 2009 tax year. In response, on November 14, 2015, defendant Jonnie Melendez, an intake advocate at the Taxpayer Advocate Service of the IRS, wrote to Vidurek and declined to address each argument raised in the November 8, 2014, letter because they "appealed] to be frivolous and have no basis in law." (Compl. Ex. 31).

         Several months later, on July 11, 2016, the IRS sent a letter of intent to seize Vidurek's assets as payment for $2, 745.05 owed for 2008. The letter warned that the IRS might seize Vidurek's property on or after August 10, 2016, if it did not receive payment. The letter informed Vidurek he could appeal by requesting a Collection Due Process hearing. From November 23, 2016, to August 23, 2017, the IRS intercepted a portion of Vidurek's monthly social security payments and applied them toward Vidurek's taxes owed for 2008. (See Compl. Exs. 33, 36, 37, 42).

         On June 13, 2017, defendant Maryellen Benecke, on behalf of the IRS, sent Vidurek a notice, asserting he had not filed a tax return for 2014 and scheduling a meeting to discuss the remaining outstanding tax payment. On June 15, 2017, Vidurek declined the meeting and asserted he was "not a person liable." (Compl. Ex. 35). On August 1, 2017, Vidurek received another letter requesting he meet with the IRS, this time from defendant Linda Piatek. Again, Vidurek declined the meeting, insisting his tax status for 2009 "was the same for 2014." (Compl. Ex. 40).

         On August 23, 2017, the IRS issued summonses to defendants RSB and HVFCU, in addition to other institutions. The issuing officer listed on all of the summonses was Linda Piatek and the approving officer was defendant Jeanette Willet. The summonses required the institutions to appear before Piatek, give testimony, and produce books and records relating the Vidureks' tax liability. Plaintiffs allege RSB and HVFCU shared plaintiffs' financial information without informing plaintiffs and without plaintiffs' consent.

         Plaintiffs allege the IRS subjected Vidurek to heightened scrutiny in connection with the above tax assessments and collection actions because Vidurek is a Tea Party organizer, and IRS agents "singled [him] out for political reasons, with intent to punish." (Compl. at 3).

         Plaintiffs further allege they "never gave consent or jurisdiction to defendants to summons personal information, protected under the [Fourth] Amendment, from any financial institutions or any other third parties. . . . Plaintiff(s) forbad[e] defendants from summonsing information from third parties." (Compl. at 33).

         II. Prior Actions Brought by Vidurek and Plaintiffs

         On June 27, 2013, a case plaintiffs filed in New York State Supreme Court, Dutchess County, was removed to federal court and assigned to this Court. ("Vidurek v. Miller, 13 Civ. 4476 (S.D.N.Y.), Doc. #1). Plaintiffs asserted largely the same claims regarding the 2008 tax lien described above. Contrary to plaintiffs' assertion that the case settled, the Court dismissed the case by Order dated February 27, 2014. (Id., Doc. #38).

         On March 13, 2015, Vidurek filed a complaint in this district against the Clerk of Court and a John Doe defendant alleging the Clerk of Court, having received a complaint from Vidurek to begin a new action against Koskinen, failed to file the complaint and returned the papers to Vidurek. Vidurek v. Krajick, 15 Civ. 2175 (S.D.N.Y.). On September 4, 2015, the case was dismissed because plaintiff failed to pay the court filing fees or complete a request to proceed in forma pauperis. (Id., Doc. #4).

         Also on March 13, 2015, Vidurek filed a complaint against defendants Koskinen, Dial, Melendez and other IRS employees for claims arising from the same 2008 tax lien described above. Vidurek v. Koskinen. 15 Civ. 2188 (S.D.N.Y.). On May 11, 2015, the case was dismissed because plaintiff failed to pay the court filing fees or complete a request to proceed in forma pauperis, (Id., Doc. #5).

         On October 4, 2017, plaintiffs filed an action against all defendants named in the instant case and arising out of the same facts. Vidurek v. IRS, 17 Civ. 7971 (S.D.N.Y.). By Order dated November 30, 2017, Chief Judge McMahon dismissed plaintiffs' case because (i) by letter dated November 16, 2017, plaintiffs requested the court reassign the action to White Plains; (ii) plaintiffs already had filed the instant case (17 Civ. 9064) on November 20, 2017, and therefore the prior case was duplicative; and (iii) by letter dated November 17, 2017, but docketed on November 30, plaintiffs asserted they wished to withdraw the case. (Id. Doc. #7).


         I. Legal Standard

         A. Subject Matter Jurisdiction

         "[F]ederal courts are courts of limited jurisdiction and lack the power to disregard such limits as have been imposed by the Constitution or Congress." Durant, Nichols. Houston, Hodgson. & CorteseCosta, P.C. v. Dupont. 565 F.3d 56, 62 (2d Cir. 2009) (internal quotation marks omitted). "A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it." Nike. Inc. v. Already. LLC, 663 F.3d 89, 94 (2d Cir. 2011) (internal quotation marks omitted). The party invoking the Court's jurisdiction bears the burden of establishing that jurisdiction exists. Conyers v. Rossides, 558 F.3d 137, 143 (2d Cir. 2009).

         When, as here, the case is at the pleading stage, in deciding a motion to dismiss under Rule 12(b)(1), the Court "must accept as true all material facts alleged in the complaint and draw all reasonable inferences in the plaintiffs favor." Id. "However, argumentative inferences favorable to the party asserting jurisdiction should not be drawn." Buday v. N.Y. Yankees P'ship, 486 Fed.Appx. 894, 895 (2d Cir. 2012) (summary order) (quoting Atl. Mut. Ins. Co. v. Balfour Maclaine Int'l Ltd., 968 F.2d 196, 198 (2d Cir. 1992)) (internal quotation marks omitted).[10] When a factual challenge to the Court's jurisdiction has been raised, "the court may resolve [any] disputed jurisdictional fact issues by referring to evidence outside of the pleadings, such as affidavits." Zappia Middle E. Constr. Co. v. Emirate of Abu Dhabi, 215 F.3d 247, 253 (2d Cir. 2000).

         B. Insufficient Service of Process

         When a defendant moves for dismissal under Rule 12(b)(5), the Court must first address the preliminary questions of service and personal jurisdiction. Hertzner v, U.S. Postal Serv., 2007 WL 869585, at *3 (E.D.N.Y. Mar. 20, 2007). When considering a motion to dismiss pursuant to 12(b)(5) for insufficient service of process, courts must look to matters outside the complaint to determine whether it has jurisdiction. Mende v. Milestone Tech., Inc., 269 F.Supp.2d 246, 251 (S.D.N.Y. 2003). "'Conclusory statements that a defendant was properly served are insufficient to overcome a defendant's sworn affidavit that he was never served with process.'" Id. When a defendant raises a Rule 12(b)(5) challenge, plaintiff bears the burden of proving service of process was adequate. Id.

         C. Failure to State a Claim

         In deciding a Rule 12(b)(6) motion, the Court evaluates the sufficiency of the operative complaint under the "two-pronged approach" articulated by the Supreme Court in Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). First, plaintiffs legal conclusions and "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements," are not entitled to the assumption of truth and are thus not sufficient to withstand a motion to dismiss. Id. at 678; Hayden v. Paterson, 594 F.3d 150, 161 (2d Cir. 2010). Second, "[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Ashcroft v. Iqbal, 556 U.S. at 679.

         To survive a Rule 12(b)(6) motion, the allegations in the complaint must meet a standard of "plausibility." Id. at 678; Bell Atl. Corp. v. Twombly, 550 U.S. 544, 564 (2007). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. at 678. "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id.

         The Court must liberally construe submissions of pro se litigants, and interpret them "to raise the strongest arguments that they suggest." Triestman v. Fed. Bureau of Prisons, 470 F.3d 471, 474 (2d Cir. 2006) (per curiam) (internal quotation marks and citation omitted). Applying the pleading rules permissively is particularly appropriate when, as here, a pro se plaintiff alleges civil rights violations. See Sealed Plaintiff v. Sealed Defendant, 537 F.3d 185, 191 (2d Cir. 2008). "Even in a pro se case, however . . . threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Chavis v. Chappius, 618 F.3d 162, 170 (2d Cir. 2010) (internal quotation marks and citation omitted). Nor may the Court "invent factual allegations" plaintiff has not pleaded. Id.

         D. Judgment on the Pleadings At any time after the pleadings close and before trial commences, a party may move for judgment on the pleadings under Rule 12(c). See Citibank, N.A. v. Morgan Stanley & Co. Int'l,PLC, 724 F.Supp.2d 407, 414 (S.D.N.Y. 2010). "The standard for addressing a Rule 12(c) motion for judgment on the pleadings is the same as that for a Rule 12(b)(6) motion to dismiss ...

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