Domer L. ISHLER, Plaintiff, v. COMMISSIONER OF INTERNAL REVENUE, United States of America, et al., Defendants., United States District Court, N.D. Alabama, Northeastern Division., 442 F.Supp.2d 1189, Civil Action No. CV-05-S-1108-NE., July 5, 2006
Domer L. ISHLER, Plaintiff, v. COMMISSIONER OF INTERNAL REVENUE, United States of America, et al., Defendants.
United States District Court, N.D. Alabama, Northeastern Division.
442 F.Supp.2d 1189
Civil Action No. CV-05-S-1108-NE.
July 5, 2006.
Cheryl Baswell-Guthrie, Baswell-Guth╜rie PC, Huntsville, AL, for Plaintiff.
Lynne M. Murphy, U.S. Department of Justice, Tax Division, Washington, DC, Daniel Kaufmann, Gary C. Huckaby, Brad╜ley Arant Rose & White, Huntsville, AL. for Defendants.
SMITH, District Judge.
Plaintiff, Domer L. Ishler, asserts claims against three defendants: (1) the Commis╜sioner of Internal Revenue for the United States of America ("the Commissioner"); (2) John L. Richardson, an agent for the Internal Revenue Service ("IRS"); 1 and (3) Nissei Sangyo America, Ltd. ("NSA"). 2 Plaintiff bases federal subject matter jurisdiction on 28 U.S.C. ╖╖ 1331, 3 1346, 4 1361, 5 2201 6 and 2202, 7 as he alleges statutory violations, asserts claims against officials of the United States government, and re╜quests declaratory relief. All of plaintiff's claims arise out of a dispute over his liabil╜ity for federal income taxes on certain revenue generated in a business deal in╜volving defendant NSA.
1. ═ Plaintiff sues Richardson in both his indi╜vidual capacity, and in his official capacity as an IRS agent.
2. ═ See doc. no. 1 (Complaint).
3. ═ 28 U.S.C. ╖ 1331 states that "[t]he district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States."
4. ═ 28 U.S.C. ╖ 1346(a)(1) states:
(a) The district courts shall have original jurisdiction, concurrent with the United States Court of Federal Claims, of:
(1) Any civil action against the United States for the recovery of any internal-reve╜nue tax alleged to have been erroneously or illegally assessed or collected, or any penal╜ty claimed to have been collected without authority or any sum alleged to have been excessive or in any manner wrongfully col╜lected under the internal-revenue laws[.]
28 U.S.C. ╖ 1346(b)(1) states:
Subject to the provisions of chapter 171 of this title, the district courts, together with the United States District Court for the District of the canal Zone and the District Court of the Virgin Islands, shall have exclusive jurisdic╜tion of civil actions on claims against the United States, for money damages, accruing on and after January 1, 1945, for injury or loss of property or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.
5. ═ 28 U.S.C. ╖ 1361 states that "[t]he district courts shall have original jurisdiction of any action in the nature of mandamus to compel an officer or employee of the United States or any agency thereof to perform a duty owed to the plaintiff."
6. ═ 28 U.S.C. ╖ 2201 states, in pertinent part:
(a) In a case of actual controversy within its jurisdiction, except with respect to Federal taxes other than actions brought under section 7428 of the Internal Revenue Code of 1986 , a proceeding under section 505 or 1146 of title 11, or in any civil action involving an anti╜dumping or countervailing duty proceeding regarding a class or kind of merchandise of a free trade area country (as defined in section 516A(f)(10) of the Tariff Act of 1930), as deter╜mined by the administering authority, any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any inter╜ested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.
28 U.S.C. ╖ 2201(a) (emphasis supplied).
7. ═ Section 2202 states that "[f]urther neces╜sary or proper relief based on a declaratory judgment or decree may be granted, after reasonable notice and hearing, against any adverse party whose rights have been deter╜mined by such judgment." 28 U.S.C. ╖ 2202.
Plaintiff's pro se complaint 8 states three explicit causes of action: (1) a claim for a declaratory judgment that plaintiff is enti╜tled to a federal income tax credit for funds withheld by NSA from the proceeds of a business deal involving plaintiff and NSA; (2) a claim for "damages for breach of trust or fiduciary duty" against Richard╜son and the IRS; and (3) an "informal claim for refund or credit" from the IRS for taxes allegedly withheld by NSA. 9 In addition, the complaint-certainly no mod╜el of clarity-contains allegations that could be construed as alleging the follow╜ing, not specifically-enumerated claims: (1) fraud against all defendants; 10 (2) breach of contract against NSA; 11 (3) civil con╜spiracy against all defendants; 12 and (4) a claim for treble damages against NSA un╜der a state statute that plaintiff describes as the "Alabama Salesman Protection Act." 13 Plaintiff requests entry of an order requiring the Commissioner to issue him a tax credit, entry of an order allowing dis╜covery, and damages in the total amount of $185,000,000. 14 Richardson and the Com╜missioner jointly filed a motion to dismiss plaintiff's claims against them pursuant to subsections (b)(1), (b)(2), (b)(5), and (b)(6) of Federal Rule of Civil Procedure 12. 15 NSA also moved to dismiss plaintiff's claims against it pursuant to Rules 12(b)(1) and 12(b)(6). 16 These motions presently are before the court.
8. ═ Plaintiff recently hired counsel. See doc. no. 27 (Notice of Appearance by Cheryl Baswell-Guthrie on behalf of plaintiff). Howev╜er, he filed his complaint, and all other plead╜ings pertinent to this opinion, as a pro se litigant. Plaintiff's attorney has not sought to amend any of plaintiff's pleadings or briefs after appearing as counsel of record.
9. ═ Complaint, at 16-19.
10. ═ See id . at ╤╤ 1, 31.
11. ═ See id . at ╤ 1.
12. ═ See id . at ╤╤ 2, 31.
13. ═ Id . at ╤ 51. This court could not locate an Alabama statute entitled the "Alabama Sales╜man Protection Act." Thus, the court assumes plaintiff must be referring to the Alabama Sales Representative's Commission Contracts Act, Ala.Code ╖╖ 8-24-1 et seq. (1975). The pertinent provisions of that Act state:
Sales representative commission contracts; commission due.
(a) The terms of the contract between the principal and sales representative shall de╜termine when a commission is due.
(b) If the time when the commission is due cannot be determined by a contract between the principal and sales representa╜tive, the past practices between the parties shall control, or if there are no past prac╜tices, the custom and usage prevalent in this state for the business that is the subject of the relationship between the parties shall control.
(c) All commissions that are due at the time of termination of a contract between a sales representative and principal shall be paid within thirty days after the date of termination. Commissions that become due after the termination date shall be paid within thirty days after the date on which the commissions become due.
Ala.Code ╖ 8-24-2 (1975). The damages pro╜vision of the Act states that "[a] principal who fails to pay a commission as required by Sec╜tion 8-24-2 is liable to the sales representa╜tive in a civil action for three times the dam╜ages sustained by the sales representative plus reasonable attorney's fees and court costs." Ala.Code ╖ 8-24-3 (1975).
14. ═ See Complaint, at ╤╤ 77-82. Plaintiff re╜quests $25,000,000 in damages from the Commissioner; $150,000,000 from NSA; and $10,000,000 from Richardson.
15. ═ Doc. no. 7. Federal Rule of Civil Procedure 12(b) states, in pertinent part:
Every defense, in law or fact, to a claim for relief in any pleading, whether a claim, coun╜terclaim, cross-claim, or third-party claim, shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motion: (1) lack of juris╜diction over the subject matter, (2) lack of jurisdiction over the person, . . . (5) insuffi╜ciency of service of process, [or] (6) failure to state a claim upon which relief can be grant╜ed . . . .
16. ═ Doc. no. 8.
I. STANDARDS OF REVIEW
A. Rule 12(b)(6): Failure to State a Claim Upon Which Relief Can Be Granted
The Federal Rules of Civil Procedure require only that a complaint contain a " ▒short and plain statement of the claim' that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) (quoting Fed.R.Civ.P. 8(a)(2)). Consequently, a complaint should not be dismissed for failing to state a claim upon which relief can be granted "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley, 355 U.S. at 45-46; 78 S.Ct. 99. Even so, pleadings must be "something more than an ingenious academic exercise in the con╜ceivable." Marsh v. Butler County, 268 F.3d 1014, 1037 (11th Cir.2001) (en banc). Although notice pleading may not require that the pleader allege a "specific fact" to cover every element, or allege "with preci╜sion" each element of a claim, the Eleventh Circuit has explained that the complaint must "contain either direct or inferential allegations respecting all the material ele╜ments necessary to sustain a recovery un╜der some viable legal theory." Roe v. Aware Woman Center for Choice, Inc., 253 F.3d 678, 683 (11th Cir.2001).
When ruling on a Rule 12(b)(6) motion, the court must accept all well-pleaded facts as true, and construe them in the light most favorable to the non-moving party. Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984); see also, e.g., Brooks v. Blue Cross and Blue Shield of Florida, 116 F.3d 1364, 1369 (11th Cir.1997); Quality Foods de Centro America, S.A. v. Latin American Agribusiness Dev. Corp., S.A., 711 F.2d 989, 994-95 (11th Cir.1983). Further, "[a] complaint may not be dismissed because the plaintiff's claims do not support the legal theory he relies upon since the court must determine if the allegations provide for relief on any possible theory." Brooks, 116 F.3d at 1369 (emphasis in original) (citation omitted).
Additionally, the Eleventh Circuit has observed that "[a] statute of limitations defense may be raised on a motion to dismiss for failure to state a claim for which relief can be granted under Fed. R.Civ.P. 12(b)(6), when the complaint shows on its face that the limitations peri╜od has run." Avco Corp. v. Precision Air Parts, Inc., 676 F.2d 494, 495 (11th Cir. 1982).
B. Rule 12(b)(1): Lack of Subject Matter Jurisdiction
Federal district courts are tribunals of limited jurisdiction, " ▒empowered to hear only those cases within the judicial power of the United States as defined by Article III of the Constitution,' and which have been entrusted to them by a jurisdictional grant authorized by Congress." Universi╜ty of South Alabama v. The American Tobacco Co., 168 F.3d 405, 409 (11th Cir. 1999) (quoting Taylor v. Appleton, 30 F.3d 1365, 1367 (11th Cir.1994)). Accordingly, an "Article III court must be sure of its own jurisdiction before getting to the mer╜its" of any action. Ortiz v. Fibreboard Corp., 527 U.S. 815, 831, 119 S.Ct. 2295, 144 L.Ed.2d 715 (1999) (citing Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 88-89, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998)); see also, e.g., Galindo-Del Valle v. Attorney General, 213 F.3d 594, 598 n. 2 (11th Cir.2000) (observing that federal courts are "obligated to inquire into subject matter jurisdiction sua sponte whenever it may be lacking."), cert. denied, 533 U.S. 949, 121 S.Ct. 2590, 150 L.Ed.2d 749 (2001); University of South Alabama, 168 F.3d at 410 ("[A] court should inquire into whether it has subject matter jurisdic╜tion at the earliest possible stage in the proceedings.").
C. Rule 12(b)(2): Lack of Personal Jurisdiction
When ruling upon a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction in the absence of an evidentiary hearing,
the plaintiff must establish a prima facie case of personal jurisdiction over a non╜resident defendant. A prima facie case is established if the plaintiff presents enough evidence to withstand a motion for directed verdict. The district court must accept the facts alleged in the com╜plaint as true, to the extent they are uncontroverted by the defendant's affi╜davits. Finally, where the plaintiff's complaint and the defendant's affidavits conflict, the district court must construe all reasonable inferences in favor of the plaintiff.
Robinson v. Giarmarco & Bill , P.C., 74 F.3d 253, 255 (11th Cir.1996) (quoting Ma╜dara v. Hall, 916 F.2d 1510, 1514 (11th Cir.1990)) (citations omitted); see also, e.g., Morris v. SSE, Inc., 843 F.2d 489, 492 (11th Cir.1988).
D. Rule (12)(b)(5): Insufficiency of Service of Process
Plaintiff bears the burden of estab╜lishing that service was properly effected pursuant to Federal Rule of Civil Proce╜dure 4. See Prewitt Enterprises, Inc. v. Organization of the Petroleum Exporting Countries, 224 F.R.D. 497, 501 (N.D.Ala. 2002) (Clemon, J.), aff'd, 353 F.3d 916 (11th Cir.2003).
E. Pro Se Litigants
Parties who appear pro se are af╜forded a leniency not granted to those who are represented by counsel. See, e.g., Hughes v. Rowe, 449 U.S. 5, 9, 101 S.Ct. 173, 66 L.Ed.2d 163 (1980) ("It is settled law that the allegations of [a pro se com╜plaint filed by a state prisoner], ▒however inartfully pleaded,' are held to ▒less strin╜gent standards than formal pleadings drafted by lawyers.' ") (quoting Haines v. Kerner, 404 U.S. 519, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972)); Harmon v. Berry, 728 F.2d 1407, 1409 (11th Cir.1984) (same); Woodall v. Foti, 648 F.2d 268, 271 (5th Cir.1981) 17 ("A pro se complaint, however inartfully drafted, must be held to less rigorous standards than the formal plead╜ings prepared by lawyers and can only be dismissed for failure to state a claim if it appears ▒beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.' ") (quoting Haines).
17. ═ In Bonner v. City of Prichard , 661 F.2d 1206, 1209 (11th Cir.1981) (en banc), the Eleventh Circuit adopted as binding precedent all Fifth Circuit decisions handed down prior to the close of business on September 30, 1981.
Even so, the leniency accorded pro se litigants is not unqualified. As the Sixth Circuit has written:
While courts must apply "less stringent standards" in determining whether pro se pleadings state a claim for which re╜lief can be granted, Estelle v. Gamble, 429 U.S. 97, 106, 97 S.Ct. 285, 292, 50 L.Ed.2d 251 (1976), pro se plaintiffs are not automatically entitled to take every case to trial. As this court has noted, the lenient treatment generally accorded to pro se litigants has limits. Jourdan v. Jabe, 951 F.2d 108, 110 (6th Cir.1991). Where, for example, a pro se litigant fails to comply with an easily understood court-imposed deadline, there is no basis for treating that party more generously than a represented litigant. Id .
Pilgrim v. Littlefield, 92 F.3d 413, 416 (6th Cir.1996).
II. THE ALLEGATIONS OF PLAINTIFF'S COMPLAINT
During the time period relevant to his complaint, plaintiff served as Chief Execu╜tive Officer of Twentieth Century Market╜ing ("TCM"), a company engaged in the business of locating manufacturers of elec╜tronic products in Asian nations and find╜ing markets for the sale of those products within the United States. In 1985, Ishler (on behalf of TCM) began to negotiate with NSA to locate and purchase audio cassette tape mechanisms from a Chinese company for installation in the stereo sys╜tems of new Chrysler automobiles. Chrysler agreed to purchase the cassette mechanisms over a period of at least three years.
During the negotiation period of TCM's contract with NSA, TCM also partnered with Camaro Trading Company of Hong Kong ("Camaro") to assist in obtaining the cassette mechanisms for sale to Chrysler. The arrangement with Camaro was benefi╜cial to TCM, because Camaro was "in a position to provide and promote financing, clerical, and inspection work, and the nec╜essary services to purchase and sell prod╜ucts from China." 18 Chrysler paid NSA directly for the cassette mechanisms it purchased, and NSA agreed to pay Cama╜ro a five-percent (5%) sales commission on its sales proceeds from Chrysler. Camaro, in turn, agreed to share a portion of this commission with TCM. Between the years 1984 and 1990, this agreement generated approximately $90,000,000 to $100,000,000 in revenue for NSA.
18. ═ Complaint, at ╤ 16.
On March 31, 1989, NSA terminated its agreement with Camaro. 19 Plaintiff states the reason for the termination was NSA's desire to increase profits by eliminating Camaro as a broker, and thereby eliminat╜ing Camaro's five-percent commission fee. The Notice of Termination delivered to Camaro by NSA stated:
19. ═ See id. at Appendix A-2 (Notice of Termi╜nation). Federal Rule of Civil Procedure 12(b) provides that, when ruling on a 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted, and
matters outside the pleadings are presented to and not excluded by the court, the mo╜tion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given rea╜sonable opportunity to present all material made pertinent to such a motion by Rule 56.
Even so, there are several circumstances in which a court may consider matters outside the pleadings when ruling upon a 12(b)(6) motion to dismiss, without formally convert╜ing it to a Rule 56 motion for summary judg╜ment. See, e.g., Harris v. Ivax Corp., 182 F.3d 799, 802 n. 2 (11th Cir.1999) (observing that there are some circumstances in which "the usual rules for considering 12(b)(6) motions are . . . bent").
One occasion that allows for deviation from the rules is when copies of documents are attached to a plaintiff's complaint. Id . ("Or╜dinarily, the full text of [a document] would not be part of the record under review for a dismissal under Fed.R.Civ.P. 12(b)(6) unless it was attached to the complaint .") (emphasis supplied) ( citing 5B Charles A. Wright & Ar╜thur Miller, Federal Practice and Procedure ╖ 1356, at 590-92 (1969)); see also Brooks v. Blue Cross and Blue Shield of Florida, 116 F.3d 1364, 1368 (11th Cir.1997) (observing that 12(b)(6) motions are "limited primarily to the face of the complaint and attachments thereto ") ( emphasis added). Thus, consider╜ing the appendices to plaintiff's complaint does not require the court to convert the pending motions to dismiss to motions for summary judgment.
When we made the Agreement with you, you let us assume that you were an Alabama corporation when in fact, as we have just discovered, you are a Hong Kong corporation. Thereafter, we asked you at least twice about income-tax withholding, and you said that we had no withholding obligation, but you failed to furnish us with IRS Form 4224 (Exemption from Withholding of Tax on Income Effectively Connected with the Conduct of a Trade or Business in the United States). As you well know, we have not made any withholdings from the commissions paid to you nor, of course, have we filed IRS Form 1042 (Annual Withholding Tax Return for U.S. Source Income of Foreign Persons) or IRS Form 1042S (Foreign Person's U.S. Source Income Subject to With╜holding) as to any of those commissions.
Our tax lawyers have concluded that under these circumstances your status as a foreign corporation, in the absence of Form 4424, required us to make the 30% withholding applicable under U.S. tax laws, IRC ╖ 881(a), even though that status was unknown to us, and that ac╜cordingly our failure to do so, or to make the requisite IRS filings, has ex╜posed us to liability to the IRS. That exposure would compromise not only the amounts not withheld, plus interest, but statutory penalties as well. At this juncture, we see the exposure as being in the high six figures.
You have thus obligated us and ren╜dered us liable to the Internal Revenue Service, in breach of paragraph 13(a) of the Agreement, and we hereby termi╜nate the Agreement as provided in para╜graph 12(a)(iii), effective at once. 20
20. ═ Complaint, at Appendix A-2 (Notice of Ter╜mination). Paragraph 13(a) of the Sales Rep resentative Agreement between Camaro and NSA stated:
The relationship created by this Agreement is that [of] principal and selling agent. [Ca╜maro] is an independent contractor and not an employee of [NSA]. [Camaro] shall not, without prior written consent of [NSA], have any right or authority, express or implied, to create or assume any obligation of any kind or nature whatsoever on behalf of [NSA], or to accept legal process, or make any warranty or representation on behalf of [NSA], or obli╜gate or render [NSA] liable in any manner whatsoever.
Doc. no. 11 (NSA's brief in support of mo╜tion to dismiss), Exhibit C ("Sales Represen╜tative Agreement"), at ╤ 13(a). Paragraph 12(a)(iii) stated:
Either party may terminate this Agreement immediately upon written notice in the event that the other party shall breach any term or condition of this Agreement, shall become insolvent, shall make an assignment for the benefit of creditors, shall take advantage of any insolvency act or statute, shall commit an act of bankruptcy, shall have filed against it a petition in bankruptcy or insolvency or for the appointment of a receiver or trustee of all or a portion of its property, which petition shall not be dismissed within ten (10) days to bond or make payment on any execution upon a judgement [sic] against it, or either party shall attempt, without prior written consent of the other party, to assign all or any part of this Agreement, or any rights accruing hereafter. Id . at ╤ 12(a)(iii).
Another occasion allowing for deviation from the requirement to convert a 12(b)(6) motion to one for summary judgment arises when a defendant attaches to its motion to dismiss a document that is central to the claims in a plaintiff's complaint, and the con╜tents of that document are not in dispute. In such cases, the court may refer to the docu╜ment without converting the motion into one for summary judgment. Harris , 182 F.3d at 802 n. 2 (observing that "a document central to the complaint that the defense appends to its motion to dismiss is also properly consid ered, provided that its contents are not in dispute"). Stated differently, a court may consider such documents as
part of the pleadings for purposes of Rule 12(b)(6) dismissal, and the defendant's at╜taching such documents to the motion to dismiss will not require conversion of the motion into a motion for summary judg╜ment. Venture Assoc . Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir.1993) ("Documents that a defendant attaches to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff's complaint and are central to her claim.") . . . .
Brooks, 116 F.3d at 1369. Plaintiff referred to the Sales Representative Agreement in his complaint, and the Agreement is central to plaintiff's claim. Additionally, the contents of the Agreement are not in dispute. Thus, the court may consider the Agreement without converting the pending motions to dismiss into motions for summary judgment.
NSA also filed a lawsuit for declaratory judgment in the courts of the state of Alabama. On September 3, 1993, the Su╜preme Court of Alabama affirmed the dec╜laration of the lower court that no enforce╜able contract existed between NSA and Camaro. 21
21. ═ See Complaint, at ╤ 22; doc. no. 11 (NSA's brief in support of motion to dismiss), at Exhibit A (copy of opinion by the Alabama Supreme Court in Camaro Trading Co. v. Nis╜sei Sangyo America, Ltd., 628 So.2d 463 (Ala. 1993)). See also supra, note 20.
For a time, NSA continued to pay Ca╜maro the commissions due to it from NSA's prior sales to Chrysler. Then, on April 12, 1989, NSA sent Camaro a letter bearing the heading "Notice of Set-Off and Deficiency." The letter stated:
Please refer to our Notice of Ter╜mination dated March 31, 1989 ("Ter╜mination Date"), whereunder we ter╜minated the January 1, 1987 Sales Representative Agreement ("Agree╜ment") between you and ourselves (without in any way conceding that such Agreement is, or ever was, valid or enforceable against us), and noti╜fied you that we would take appropri╜ate steps to collect any damages we may suffer for having failed, through your actions, to withhold U.S. taxes from the commissions paid to you un╜der the Agreement. In computing the damages due to us, we intend to take into account your unpaid commissions on sales made prior to the Termi╜nation Date-though there is no legal requirement that we do so.
Accordingly, this is to notify you that we will retain those commissions to off╜set, at least partially, our own liability for the taxes not withheld. At present, we estimate that such commissions (assuming, for this purpose only, that any commissions are legally due to you) would total approximately $400,000, based on forecasted deliveries through the end of July.
Of course, we cannot predict how the IRS will decide the matter, though in self-protection we will try to induce them, on one basis or another, to accept less than the full amount owed, and we hope that a compromise will be avail╜able. Then, when our IRS situation has been resolved, we will seek reimburse╜ment from you, through legal proceed╜ings if necessary, for any assessment beyond the commissions legally due to you and retained by us, plus our other damages, costs and expenses including attorneys' fees.
We are bringing the entire matter to the attention of the U.S. taxing authori╜ties at once, so as to make some attempt to lessen our exposure to the IRS, and hence yours to us, and also to try to prevent any damage to our reputation and standing with the IRS. Your own liability for payment of U.S. taxes is, of course, a totally separate matter and does not affect our withholding obli╜gation. If you conclude that you are not liable for any U.S. taxes and are entitled to a refund of the amounts withheld, any action to be taken at or with the IRS to obtain such a refund is your responsibili╜ty and will have to be taken by you. 22
22. ═ Complaint, at Appendix A-2 (Notice of Set-Off and Deficiency).
Plaintiff characterizes this letter as an admission by NSA that it owes Camaro more than $400,000 in accrued commissions. 23 He also alleges that NSA's with╜holding of $400,000 created an "IRS Trust Fund," held by NSA to satisfy his (and Camaro's) tax liability. 24 Plaintiff relies on Section 7501 of the Internal Revenue Code, which states that
23. ═ See Complaint, at ╤ 24. Plaintiff states this amount now has increased to "at least $1.5 million to $2.5 million." Id . at ╤ 29.
24. ═ See id.
[w]henever any person is required to collect or withhold any internal revenue tax from any other person and to pay over such tax to the United States, the amount of tax so collected or withheld shall be held to be a special fund in trust for the United States. The amount of such fund shall be assessed, collected, and paid in the same manner and sub╜ject to the same provisions and limita╜tions (including penalties) as are applica╜ble with respect to the taxes from which such fund arose.
26 U.S.C. ╖ 7501(a). NSA never paid the withheld commissions to Camaro, TCM, or plaintiff, and "it has never been deter╜mined" that NSA paid the money over to the IRS. 25
25. ═ Id. at ╤╤ 26-27.
The IRS conducted a criminal investiga╜tion and audit of plaintiff and TCM for the 1988 and 1989 tax years, and assessed taxes on $2,000,000 in commissions actually paid by NSA to Camaro during those years. TCM received $650,000 of that amount as a "sub-commission" under its contract with Camaro, and TCM paid in╜come taxes on the $650,000 sum. Plaintiff asserts that this payment satisfied all of his (and TCM's) federal tax liability. Nonetheless, in 2002, the United States Tax Court upheld the assessments imposed upon plaintiff and TCM for taxes on the full $2,000,000 in commission fees. The Tax Court also declared that plaintiff should be held individually responsible for Camaro's tax liability. 26 The IRS refuses to acknowledge the existence of any trust funds created by NSA's withholdings, and it denies that it ever received any money from NSA to satisfy Camaro's tax liability. Thus, the IRS insists that plaintiff is liable for income taxes on all of Camaro's com╜missions, even though NSA already with╜held funds from those commissions to pay taxes. 27
26. ═ Id . at ╤ 31. See also doc. no. 11 (NSA's brief in opposition to motion to dismiss), at Exhibit B (March 28, 2002 opinion of the United States Tax Court). See also supra, note 20.
27. ═ Complaint, at ╤╤ 32, 33.
In 1990, plaintiff's attorney made a de╜mand that the IRS provide plaintiff a tax credit in the amount of the funds withheld by NSA. The IRS never responded to this demand in any manner, and it has refused to respond to any of plaintiff's inquiries about the credit.
Defendant John Richardson, an agent for the IRS, was assigned to investigate plaintiff's case in 1990. In order to ar╜range a meeting with plaintiff and his counsel on March 28, 1990, Richardson assured plaintiff that the criminal investi╜gation against him had been closed, and that only a civil investigation remained. Despite this representation, however, the criminal charges against plaintiff were re╜opened several months later, and plaintiff eventually was incarcerated. 28 Richardson also refused to close the civil investigation file on plaintiff, even though he knew that NSA had withheld funds from Camaro that, plaintiff alleges, should have been used to satisfy Camaro's tax liability. Ad╜ditionally, Richardson failed to honor, or even to investigate, plaintiff's demand for a tax credit in the amount of the funds with╜held by NSA. Richardson also failed to acknowledge an offer by plaintiff's attor╜ney to hold $400,000 in escrow for payment to the United States pending settlement of the civil proceedings against plaintiff, as long as NSA also paid into escrow the commissions it withheld from Camaro. Plaintiff claims that Richardson engaged in this conduct with the purposes of destroy╜ing TCM as a business, and of ruining plaintiff financially.
28. ═ The materials submitted by the parties do not indicate the length of plaintiff's incarcera╜tion, or the criminal statute under which he was prosecuted.
The IRS also investigated NSA for fraudulent conduct during the years 1984-1989. The IRS agreed not to prosecute NSA for approximately $100,000,000 in taxes due, and instead allowed NSA to shift the focus of the investigation to plain╜tiff, TCM, and Camaro.
Plaintiff alleges that the total amount sought from him by the IRS, including penalties and interest, is $4,000,000. 29 The IRS apparently has instituted collection proceedings against plaintiff, 30 and plaintiff apparently requested and received a col╜lection due process hearing concerning his 1988-89 income tax liability with the IRS Appeals Office. 31 On May 4, 2005, he re╜ceived a Notice of Determination from the Appeals Office, setting forth the decision on the collection due process hearing. The Notice stated: "The Internal Revenue Ser╜vice may proceed with whatever collection action they deem appropriate since you did not provide the necessary financial infor╜mation for review or offer any alternative to collection that could be accepted at this time." 32 The Notice also informed plain╜tiff: "If you want to dispute this determi╜nation in court, you must file a petition with the United States Tax Court for a redetermination within 30 days from the date of this letter." 33 Plaintiff did not file a petition with the Tax Court, but instead filed his complaint with this court on May 31, 2005.
29. ═ Complaint, at ╤ 54.
30. ═ 26 U.S.C. ╖ 6331(a) grants the I.R.S. the right to levy on a taxpayer's property in order to collect on an unpaid tax liability. That section states:
If any person liable to pay any tax ne╜glects or refuses to pay the same within 10 days after notice and demand, it shall be lawful for the Secretary to collect such tax (and such further sum as shall be sufficient to cover the expenses of the levy) by levy upon all property and rights to property (except such property as is exempt under section 6334) belonging to such person or on which there is a lien provided in this chapter for the payment of such tax. Levy may be made upon the accrued salary or wages of any officer, employee, or elected official, of the United States, the District of Columbia, by serving a notice of levy on the employer (as defined in section 3401(d)) of such officer, employee, or elected official. If the Secretary makes a finding that the collection of such tax is in jeopardy, notice and demand for immediate payment of such tax may be made by the Secretary and, upon failure or refusal to pay such tax, collection thereof by levy shall be lawful without regard to the 10-day period provid╜ed in this section.
26 U.S.C. ╖ 6331(a).
31. ═ 26 U.S.C. ╖ 6330 provides the right to such a hearing, stating, in pertinent part:
(a) Requirement of notice before levy.-
(1) In general .-No levy may be made on any property or right to property of any per╜son unless the Secretary has notified such person in writing of their right to a hearing under this section before such levy is made. Such notice shall be required only once for the taxable period to which the unpaid tax specified in paragraph (3)(A) relates.
32. ═ Complaint, Appendix A-1 (Notice of Deter╜mination), at unnumbered page 2.
33. ═ Id . at unnumbered page 1 (emphasis sup╜plied).
A. Motion to Dismiss by the Commis╜sioner of Internal Revenue and John L. Richardson in His Official Capacity
Richardson and the Commissioner argue that this court lacks jurisdiction over Ish╜ler's claims, and that they are entitled to sovereign immunity. 34
34. ═ Richardson and the Commissioner also ar╜gue that plaintiff's complaint should be dis╜missed for insufficiency of service of process under Federal Rule 12(b)(5). The court need not consider this argument, because, as set forth infra , plaintiff's claims against these de╜fendants are due to be dismissed on other grounds. However, if the court were consid╜ering the issue, it would be inclined not to dismiss the claims of a pro se plaintiff for failure to serve, especially considering that Federal Rule 4(i)(3) states that a court should "allow a reasonable time to serve process under Rule 4(i) for the purpose of curing the failure to serve" officers or employees of the United States government.
1. Lack of Jurisdiction
The Commissioner is correct that plaintiffs claims-to the extent they may be construed as an appeal of the collection due process determination by the IRS-are not properly before this court. 35 Pursu╜ant to 26 U.S.C. ╖ 6330, a taxpayer wish╜ing to appeal an IRS collection due process determination must do so in the Tax Court, unless the Tax Court does not have jurisdiction of the underlying tax liability, in which event the appeal may be made to a United States District Court. See 26 U.S.C. ╖ 6330. 36 The Tax Court does pos╜sess jurisdiction of disputes relating to in╜come taxes. See 26 C.F.R. ╖ 601.102(b)(1)(I). Thus, a panel of the Eleventh Circuit has held that "[t]he tax court has exclusive jurisdiction over chal╜lenges to an IRS determination of income tax liability." Peterson v. Kreidich , 139 F ed.Appx. 134, 135-36 (11th Cir.2005)( per curiam ) (emphasis supplied) (citing 26 U.S.C. ╖╖ 6212(a), 6213(a), 7442; 26 C.F.R. ╖╖ 301.6330-1(f)(2)(Q-F3 & A-F3), 601.102(b)(1)(i)). This exclusive jurisdic╜tion extends to disputes over due process violations arising out of the collection of income taxes. See Peterson, 139 Fed. Appx. at 136 (citing Voelker v. Nolen, 365 F.3d 580, 581 (7th Cir.2004); Marino v . Brown, 357 F.3d 143, 146 (1st Cir.2004); Martin v. C.I.R., 756 F.2d 38, 40 (6th Cir.1985)).
35. ═ Plaintiff makes no argument on this point in his brief.
36. ═ The Notice of Determination plaintiff re╜ceived from the IRS specifically informed plaintiff that, if he wished to "dispute this determination in court, [he] must file a peti╜tion with the United States Tax Court for a redetermination within 30 days from the date of this letter." Complaint, Exhibit A-1 (No╜tice of Determination).
Here, plaintiff's Count Two falls within the exclusive jurisdiction of the Tax Court. In the first paragraph of his com╜plaint, plaintiff acknowledges that his claims, " in part ," regard "the May 4, 2005, Internal Revenue Service, Appeals Office . . . Notice of Determination Concerning Collection Action(s)." 37 Count Two, enti╜tled "Damages for Breach of Trust or Fi╜duciary Duty," fits this characterization precisely. It states:
37. ═ Complaint, at ╤ 1 (emphasis supplied).
70. Ishler avers that the Internal Revenue Service has been engaged in a continuing conspiracy of deprivation of due process, statutory rights, and rights identified in the United States Supreme Court and lower federal court decisions.
71. Ishler avers that the most recent deprivation occurred when IRS appeals agent Celestine Morgan, of Birmingham, Alabama, Collection Due Process Hear╜ing Officer, failed by either refusal or neglect to take into consideration the certified and attested fact that NSA had withheld $400,000.00 plus all subsequent commissions, as identified in a letter produced by NSA dated April 12, 1989.
Ishler avers that despite NSA's de╜clared withholding of the specific sum of $400,000.00 and all of the remaining commissions due to Ishler/TCM/Camaro as a result of NSA's sales to Chrysler, the Internal Revenue Service has never taken any action against NSA, even af╜ter Ishler made a demand and claim for credit for the funds withheld by NSA. 38
38. ═ Id . at ╤╤ 70-72 (emphasis supplied).
This claim clearly seeks review of the deci╜sion by the Collection Due Process Hear╜ing officer. As the Tax Court possesses exclusive jurisdiction over this claim, it is due to be dismissed from this court.
Construed most favorably to plaintiff, his other claims-those for a declaratory judgment, an informal claim of refund, fraud, and civil conspiracy-cannot be con╜sidered solely as appeals of the collection due process determination. Even so, some of those claims-those for money damages against the Commissioner, and against Richardson in his official capacity-are barred by the doctrine of sovereign immunity.
2. Sovereign immunity
"The United States, as sovereign, is im╜mune from suit save as it consents to be sued." United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 85 L.Ed. 1058 (1941) (citations omitted). All waivers of the nation's sovereign immunity must be "unequivocally expressed," and all ex╜pressed waivers will be strictly construed. United States v. Nordic Village, Inc. , 503 U.S. 30, 33, 112 S.Ct. 1011, 117 L.Ed.2d 181 (1992); see also id. at 34, 112 S.Ct. 1011 (recognizing the "traditional principle that the Government's consent to be sued ▒must be construed strictly in favor of the sovereign,' . . . and not ▒enlarge[d] . . . be╜yond what the language requires' ") (cita╜tions omitted) (bracketed alterations in original); Library of Congress v. Shaw, 478 U.S. 310, 318, 106 S.Ct. 2957, 92 L.Ed.2d 250 (1986) ("In analyzing whether Congress has waived the immunity of the United States, we must construe waivers strictly in favor of the sovereign . . . and not enlarge the waiver ▒beyond what the language requires.' ") (citations omitted). When it applies, sovereign immunity is "a complete bar to lawsuits" against the Unit╜ed States. State of Fla., Dept. of Business Regulation v. U.S. Dept. of Interior, 768 F.2d 1248, 1251 (11th Cir.1985).
The protection of sovereign immu╜nity generally extends to claims against the United States, agencies of the United States government, and employees of those agencies sued in their official capaci╜ties. See, e.g., Simons v. Vinson, 394 F.2d 732, 736 (5th Cir.1968) ("The immunity of the sovereign, however, extends to its agencies . . . and to the officers of these agencies."); Kozera v. Spirito, 723 F.2d 1003, 1008-09 (1st Cir.1983) ("A federal officer sued for damages in her official capacity is immune from suit absent an express consent to suit or waiver of immu╜nity.") (citation omitted). As the Eleventh Circuit has stated:
In analyzing the use of any sovereign immunity defense, the first question is whether the doctrine applies at all: Is the action a suit against the United States as a sovereign? The answer is obtained by examining the nature of the relief which may be provided. Alabama Rural Fire Insurance Co. v. Naylor, 530 F.2d 1221, 1225 (5th Cir.1976). See Larson v. Domestic & Foreign Commerce Corp. , 337 U.S. 682, 687 n. 6, 69 S.Ct. 1457, 1460 n. 6, 93 L.Ed. 1628 (1949). An action is one against the United States as a sovereign where the judgment sought is to be satisfied from monies of the federal Treasury, or where the judgment interferes with public administration, or where the judgment's effect is to compel or restrain the government's actions. Dugan v. Rank, 372 U.S. 609, 620, 83 S.Ct. 999, 1006, 10 L.Ed.2d 15 (1963); Alabama Rural Fire Insurance Co. v. Naylor, 530 F.2d at 1225.
Panola Land Buyers Ass'n v. Shuman, 762 F.2d 1550, 1555 (11th Cir.1985). 39
39. ═ An exception to this general principle ex╜ists when the suit alleges: "(1) action by officers beyond their statutory powers and (2) even though within the scope of their authori╜ty, the powers themselves or the manner in which they are exercised are constitutionally void." Dugan, 372 U.S. at 621-22, 83 S.Ct. 999 (citing Malone v. Bowdoin, 369 U.S. 643, 647, 82 S.Ct. 980, 8 L.Ed.2d 168 (1962)). Plaintiff does not allege that either of these exceptions applies here.
Here, plaintiff seeks monetary damages from Richardson in his official and individual capacities. He seeks both monetary damages and injunctive relief from the Commissioner, in his official ca╜pacity only. Any judgment on plaintiff's claims for monetary damages against the Commissioner and Richardson, in their re╜spective official capacities, would be satis╜fied out of the federal treasury. Addition╜ally, plaintiff's claims for injunctive relief against the Commissioner seek to compel the Commissioner to take action on behalf of the IRS. 40 Thus, all of plaintiff's claims against the Commissioner (both for money damages, and for equitable relief), as well as plaintiff's claims for money damages against Richardson in his official capacity, are, in reality, claims against the United States. These claims will be barred by the sovereign immunity of the United States, unless a waiver of immunity applies.
40. ═ Plaintiff seeks a declaration that the Com╜missioner be required "to credit Ishler with any funds withheld by NSA from Ish╜ler/TCM/Camaro, including the accrued in╜creased amount of such funds at the appropri╜ate interest rate commencing at the time the funds were withheld up to the present . . . ." Complaint, at ╤ 77.
Plaintiff relies on 26 U.S.C. ╖╖ 7214(a)(2), 7432(a), and 7433(a) to sup╜port a waiver of sovereign immunity in this case. First, section 7214 is a criminal statute, and thus cannot be relied upon to provide the basis for a waiver of sovereign immunity in this civil case. 41
41. ═ 26 U.S.C. ╖ 7214(a) provides, in pertinent part:
(a) Unlawful acts of revenue officers or agents. -Any officer or employee of the United States acting in connection with any reve╜nue law of the United States-
. . . . . .
(2) who knowingly demands other or great╜er sums than are authorized by law, or receives any fee, compensation, or reward, except as by law prescribed, for the per╜formance of any duty,
. . . . . .
shall be dismissed from office or discharged from employment and, upon conviction thereof, shall be fined not more than $10,000, or imprisoned not more than 5 years, or both. The court may in its discre╜tion award out of the fine so imposed an amount, not in excess of one-half thereof, for the use of the informer, if any, who shall be ascertained by the judgment of the court. The court also shall render judgment against the said officer or employee for the amount of damages sustained in favor of the party injured, to be collected by execu╜tion.
26 U.S.C. ╖ 7214(a) (emphasis in original).
Section 7432 also does not provide an applicable waiver of immunity. That section, relating to an IRS agent's failure to release a tax lien, states in pertinent part:
(a) In general .-If any officer or em╜ployee of the Internal Revenue Service knowingly, or by reason of negligence, fails to release a lien under section 6325 on property of the taxpayer, such tax╜payer may bring a civil action for dam╜ages against the United States in a dis╜trict court of the United States.
26 U.S.C. ╖ 7432(a) (boldface emphasis in original, italicized emphasis supplied). Section 6325 states, in pertinent part:
(a) Release of lien .-Subject to such regulations as the Secretary may pre╜scribe, the Secretary shall issue a certifi╜cate of release of any lien imposed with respect to any internal revenue tax not later than 30 days after the day on which-
(1) Liability satisfied or unen╜forceable. - The Secretary finds that the liability for the amount assessed, together with all interest in respect thereof, has been fully satisfied or has become legally unenforceable; or
(2) Bond accepted. -There is fur╜nished to the Secretary and accepted by him a bond that is conditioned upon the payment of the amount as╜sessed, together with all interest in respect thereof, within the time prescribed by law (including any exten╜sion of such time), and that is in accordance with such requirements relating to terms, conditions, and form of the bond and sureties thereon, as may be specified by such regulations.
26 U.S.C. ╖ 6325(a) (boldface emphasis in original; italicized emphasis supplied).
Section 7432 clearly does not apply to plaintiffs claims in this suit. As an initial matter, plaintiff did not file suit against the United States, as the statute requires, but against officials of the United States government. Further, and more impor╜tantly, plaintiff has not shown that he has fully satisfied his income tax liability. To the contrary, the present dispute arises out of the fact that plaintiff has not paid taxes. Plaintiff also has not shown that his tax liability has been declared legally unenforceable by any administrative, legis╜lative, or judicial entity. To the contrary, the United States Tax Court upheld plain╜tiff's tax liability, 42 and that decision was affirmed by the Eleventh Circuit Court of Appeals. 43
42. ═ See doc. no. 11, at Exhibit B.
43. ═ Id. at Exhibit F.
Additionally, plaintiff has failed to com╜ply (or at least to demonstrate his compli╜ance) with the administrative prerequisites to bringing a suit under ╖ 7432. The reg╜ulations implementing ╖ 7432 require a plaintiff to file, and to receive a decision upon, an administrative claim before filing suit in federal court. See 26 C.F.R. ╖ 301.7432-1(e). 44 Plaintiff has offered no proof, or even an allegation, that he has filed an administrative claim, much less that he has received a decision on such a claim. Therefore, he cannot maintain a claim under 26 U.S.C. ╖ 7432(a), and he is not entitled to assert a waiver of sovereign immunity based on that statute. See, e.g., Shaw, 478 U.S. at 318, 106 S.Ct. 2957 (stating the general principle that all waiv╜ers of sovereign immunity must be strictly construed).
44. ═ The full text of the pertinent portion of the regulation reads:
(e) No civil action in federal district court prior to filing an administrative claim-
(1) Except as provided in paragraph (e)(2) of this section, no action under para╜graph (a) of this section shall be maintained in any federal district court before the earli╜er of the following dates:
(i) The date a decision is rendered on a claim filed in accordance with paragraph (f) of this section; or
(ii) The date 30 days after the date an administrative claim is filed in accordance with paragraph (f) of this section.
(2) If an administrative claim is filed in accordance with paragraph (f) of this sec╜tion during the last 30 days of the period of limitations described in paragraph (i) of this section, the taxpayer may file an action in federal district court anytime after the administrative claim is filed and before the expiration of the period of limitations, without waiting for 30 days to expire or for a decision to be rendered on the claim.
26 C.F.R. ╖ 301.7432-1(e) (emphasis in original).
Neither can plaintiff rely on the waiver of sovereign immunity provided by 26 U.S.C. ╖ 7433. That section, relating to unauthorized collection actions, states in pertinent part:
(a) In general. -If, in connection with any collection of Federal tax with respect to a taxpayer, any officer or employee of the Internal Revenue Ser╜vice recklessly or intentionally, or by reason of negligence disregards any pro╜vision of this title, or any regulation promulgated under this title, such tax╜payer may bring a civil action for dam╜ages against the United States in a dis╜trict court of the United States. Except as provided in section 7432, such civil action shall be the exclusive remedy for recovering damages resulting from such actions.
26 U.S.C. ╖ 7433 (boldface emphasis in original, italicized emphasis supplied).
Again, the court points out that plaintiff asserts his ╖ 7433 claim against officials of the United States government, not against the United States. In addition, plaintiff's claim does not challenge actions taken by an IRS employee during collection of his tax liability. Indeed, there is no indication that the IRS actually has begun collection actions. Plaintiff apparently has begin giv╜en notice that such actions are impending, and he has received a collection due process hearing. His present lawsuit is, in part, an attempt to appeal that hearing, but there is no indication that the IRS has begun to collect on the debt.
Instead, plaintiff's claim challenges the assessment of the tax itself. Such a claim is not cognizable under ╖ 7433. In this regard, the court finds the holding of the Fifth Circuit in Shaw v. United States , 20 F .3d 182 (5th Cir.1994) to be persuasive. There, the court held that
[t]he plain language of [╖ 7433] is well supported by the statute's legislative history. Although in its early form the statute granted taxpayers the right to sue "for damages in connection with the determination or collection of any Fed╜eral tax," H.R. Conf. Rep. No. 100-1104, 100th Cong., 2d Sess. 228 (1988), re╜printed in 1988 U.S.C.C.A.N. 4515, 5288 (emphasis added), Congress later delet╜ed that portion of the statute that re╜ferred to determination of taxes. As the Conference Agreement states, ╖ 7433 "is limited to reckless or intentional dis╜regard in connection with the collection of taxes. An action under this provision may not be based on alleged reckless or intentional disregard in connection with the determination of tax." H.R. Conf. Rep. No. 100-1104, 100th Cong., 2d Sess. 229 (1988), reprinted in 1988 U.S.C.C.A.N. 4515, 5289 (emphasis add╜ed). Therefore, based upon the plain language of the statute, which is clearly supported by the statute's legislative history, a taxpayer cannot seek damages under ╖ 7433 for an improper assess╜ment of taxes. See also Miller v. United States, 763 F.Supp. 1534, 1543 [(N.D.Cal.1991)] (noting the difference between an assessment activity and a collection activity). In this case, although the IRS improperly assessed tax liability against Mrs. Shaw, it did not engage in improper collection proce╜dures. Thus, Mrs. Shaw cannot collect damages under ╖ 7433.
Shaw, 20 F.3d at 184 (emphasis in original) (footnote omitted). See also Gandy Nurs╜ery, Inc. v. United States, 412 F.3d 602, 607 (5th Cir.2005) ("We have previously determined that ╖ 7433 is not the proper vehicle for recovering damages relating to an improper assessment of taxes.") (em╜phasis in original). As plaintiff has no cognizable claim under ╖ 7433, the waiver of sovereign immunity provided by that statute does not apply. See Brewer v. Commissioner, Internal Revenue, 430 F.Supp.2d 1254, 1258-60 (S.D.Ala.2006) (holding that a plaintiff who could not state a viable claim under ╖ 7433 also could not avail itself of that statute's waiver of sover╜eign immunity). 45
45. ═ Additionally, plaintiff has failed to satisfy the administrative prerequisites to bringing a ╖ 7433 claim. The regulations implementing ╖ 7433 state, in pertinent part:
(d) No civil action in federal district court prior to filing an administrative claim-
(1) Except as provided in paragraph (d)(2) of this section, no action under para╜graph (a) of this section shall be maintained in any federal district court before the earli╜er of the following dates:
(i) The date the decision is rendered on a claim filed in accordance with paragraph (e) of this section; or
(ii) The date six months after the date an administrative claim is filed in accor╜dance with paragraph (e) of this section.
(2) If an administrative claim is filed in accordance with paragraph (e) of this sec╜tion during the last six months of the period of limitations described in paragraph (g) of this section, the taxpayer may file an action in federal district court any time after the administrative claim is filed and before the expiration of the period of limitations.
26 C.F.R. ╖ 301.7433-1(d) (emphasis in original). Plaintiff has offered no proof, or even an allegation, that he has complied with these administrative prerequisites.
The waiver of immunity set forth in the Federal Tort Claims Act, 28 U.S.C. ╖╖ 1346(b), 2671 et seq. ("FTCA"), also does not apply. Although the FTCA usu╜ally does provide a waiver of the nation's sovereign immunity, Phillips v. United States, 260 F.3d 1316, 1318 (11th Cir.2001), there is an exception to that waiver for tax-related claims. 28 U.S.C. ╖ 2680 states, in pertinent part, that the FTCA does not apply to "[a]ny claim arising in respect of the assessment or collection of any tax or customs duty . . . ." 28 U.S.C. ╖ 2680(c). This provision has been inter╜preted broadly, and its purpose is to pro╜tect the United States from suits arising out of any of its tax-related activities. See Capozzoli v. Tracey, 663 F.2d 654, 657 (5th Cir. Dec.1981) ("[I]n enacting Section 2680(c) of the FTCA, Congress intended to insulate the IRS from tort liability stem╜ming from any of its revenue-raising activ╜ities."); Quickley v. United States , No. CIVA1:04CV1454-TWT, 2004 WL 2827880 (N.D.Ga. Oct.20, 2004) ("[Section 2680(c)] has been given a broad interpretation and applies to suits for damages stemming from activities undertaken to collect tax╜es."). As plaintiff's claims in this suit re╜late to the Commissioner's assessment of income tax liability, those claims fall under the ╖ 2680(c) exception to the FTCA's waiver of sovereign immunity.
Finally, the waiver of sovereign immunity for a tax refund suit does not apply. 28 U.S.C. ╖ 1346(a)(1) provides this waiver, stating:
(a) The district courts shall have orig╜inal jurisdiction, concurrent with the United States Court of Federal Claims, of:
(1) Any civil action against the United States for the recovery of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected, or any penalty claimed to have been collected without authority or any sum alleged to have been ex╜cessive or in any manner wrongfully collected under the internal-revenue laws[.]
28 U.S.C. ╖ 1346(a)(1). As a prerequisite to filing suit under ╖ 1346(a)(1), a taxpayer must first pay to the IRS the full amount of the contested tax assessment. Flora v. U.S. , 362 U.S. 145, 175-77, 80 S.Ct. 630, 4 L.Ed.2d 623 (1960). Plaintiff has not done so and, thus, cannot avail himself of the ╖ 1346(a)(1) waiver.
The court concludes, nevertheless, that, construing plaintiff's pleadings in the light most favorable to him, and with the leniency afforded to pro se litigants, anoth╜er waiver of sovereign immunity is applica╜ble. Plaintiff states in his complaint that he "does not concede that the United States is immune from suit in equity to determine the proper, lawful, and equita╜ble manner in which the commissions due and owing to Ishler/TCM and Camaro, withheld by NSA, should be adjudged to have been paid with respect to Ishler/TCM and Camaro." 46
46. ═ Complaint, at ╤ 76 (emphasis supplied).
Plaintiff is correct that the protection of sovereign immunity generally does not ex╜tend to actions against the United States (or its agencies and employees) seeking non-monetary relief. Section 702 of the Administrative Procedure Act ("APA") states:
A person suffering legal wrong be╜cause of agency action, or adversely af╜fected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof. An action in a court of the United States seeking relief other than money dam╜ages and stating a claim that an agency or an officer or employee thereof acted or failed to act in an official capacity or under color of legal au╜thority shall not be dismissed nor re╜lief therein be denied on the ground that it is against the United States or that the United States is an indispens╜able party . The United States may he named as a defendant in any such ac╜tion, and a judgment or decree may be entered against the United States: Pro╜vided, That any mandatory or injunctive decree shall specify the Federal officer or officers (by name or by title), and their successors in office, personally re╜sponsible for compliance. Nothing here╜in (1) affects other limitations on judicial review or the power or duty of the court to dismiss any action or deny relief on any other appropriate legal or equitable ground; or (2) confers authority to grant relief if any other statute that grants consent to suit expressly or impliedly forbids the relief which is sought.
5 U.S.C. ╖ 702 (italicized emphasis in orig╜inal, boldface emphasis supplied). This provision has been construed broadly, and it applies to all actions for non-monetary relief against the United States, not just actions actually pled under the APA. See Florida Marine Contractors v. Williams, No. 2:03CV229-T-30SPC, 2004 WL 964216, *2-3 (M.D.Fla. April 22, 2004) ("[T]he waiver of sovereign immunity con╜tained in Section 702 of the APA is a general waiver of sovereign immunity without a limitation on whether a cause of action under the APA is also pled.") (citing Panola, 762 F.2d at 1555; Sheehan v. Army and Air Force Exchange Service, 619 F.2d 1132, 1139 (5th Cir.1980), over╜ruled on other grounds by Army & Air Force Exchange Service v. Sheehan, 456 U.S. 728, 102 S.Ct. 2118, 72 L.Ed.2d 520 (1982)). Plaintiff requests a declaration that he is entitled to a tax credit for the commissions withheld by NSA, and an in╜junction requiring plaintiff to issue the credit. This claim seeks relief other than money damages based on the actions or inactions of the Commissioner. 47 There╜fore, plaintiff's equitable claim against the Commissioner is not barred by sovereign immunity.
47. ═ This is true even though plaintiff requests that the IRS be required to give him a credit for a substantial sum of money. In Bowen v. Massachusetts, 487 U.S. 879, 108 S.Ct. 2722, 101 L.Ed.2d 749 (1988), the Supreme Court elucidated the meaning of the term "money damages," as it is used in the APA. The Court noted that "[t]he fact that a judicial remedy may require one party to pay money to anoth╜er is not a sufficient reason to characterize the relief as ▒money damages.' " Id. at 893, 108 S.Ct. 2722. Instead,
"[t]he term ▒money damages,' 5 U.S.C. ╖ 702, we think, normally refers to a sum of money used as compensatory relief. Dam╜ages are given to the plaintiff to substitute for a suffered loss, whereas specific reme╜dies ▒are not substitute remedies at all, but attempt to give the plaintiff the very thing to which he was entitled.' D. Dobbs, Hand book on the Law of Remedies 135 (1973). Thus, while in many instances an award of money is an award of damages, ▒[o]ccasionally a money award is also a specific remedy.' "
Id. at 895, 108 S.Ct. 2722 (quoting Maryland Dept. of Human Resources v. Dept. of Health and Human Services, 763 F.2d 1441, 1446 (D.C.Cir.1985)). Here, although plaintiff does assert a claim for compensatory damages from the United States, his equitable claims (for declaratory, and, possibly, injunctive, re╜lief) request that he be credited with money to which he already is allegedly entitled.
In summary, all of plaintiff's claims for monetary damages against both the Com╜missioner and from Richardson, in his offi╜cial capacity, are barred by sovereign im╜munity. Sovereign immunity does not bar plaintiff's monetary claims against Rich╜ardson in his individual capacity, however, nor plaintiff's equitable claims against the Commissioner.
3. Declaratory Judgment Act
Even though sovereign immu╜nity does not bar plaintiffs equitable claims against the Commissioner, this court still lacks jurisdiction over those claims. Plaintiff bases his claim for de╜claratory relief on the Federal Declaratory Judgment Act, 28 U.S.C. ╖ 2201, which explicitly excludes tax-related claims. Sec╜tion 2201 states:
(a) In a case of actual controversy with╜in its jurisdiction, except with respect to Federal taxes other than actions brought under section 7428 of the Inter╜nal Revenue Code of 1986 ,  a proceed╜ing under section 505 or 1146 of title 11, or in any civil action involving an anti╜dumping or countervailing duty proceed╜ing regarding a class or kind of mer╜chandise of a free trade area country (as defined in section 516A(f)(10) of the Tar╜iff Act of 1930), as determined by the administering authority, any court of the United States, upon the filing of an ap╜propriate pleading, may declare the rights and other legal relations of any interested party seeking such declara╜tion, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.
48. ═ Plaintiff does not attempt to make an argu╜ment under section 7428, which concerns tax-exempt charitable organizations. See 26 U.S.C. ╖ 7428.
28 U.S.C. ╖ 2201(a) (emphasis supplied). The purpose of the tax exception is "to insulate the determination, assessment, and collection of taxes from pre-enforce╜ment judicial interference." Turner v. In╜ternal Revenue Service, No. Civ.A.02-0650-CG-C, 2002 WL 31556462, *1 (S.D.Ala. Oct.8, 2002). Thus, it is "well settled that a declaratory judgment cannot be issued in a tax case." Horne v. United States, 519 F.2d 51, 52 (5th Cir.1975) (find╜ing that a taxpayer's request that an as╜sessment of tax deficiency be declared void was impermissible under the Declaratory Judgment Act). See also Melton v. Kurtz, 575 F.2d 547, 548 (5th Cir.1978) (rejecting taxpayer's request for a declaration that certain federal tax statutes are unconstitu╜tional and an injunction to prevent the Commissioner from assessing and collect╜ing taxes from him); Turner, 2002 WL 31556462, at *1 (rejecting taxpayer's re╜quest for a "declaratory judgment deter╜mining the amount of his tax liability and an injunction prohibiting the IRS from collecting the taxes during the pendency of the suit"); Sands v. United States, No. 94-0537-CIV, 1995 WL 552308, *5-6 (S.D.Fla. June 19, 1995) (rejecting taxpayer's re╜quest for a declaration that he was "never obligated or liable for any unpaid taxes for the years 1984, 1987 or 1990; and further declaring that any and all assessments, liens or notices of lien or levy arising from any such purported taxes were null and void and of no effect whatsoever").
Plaintiff's request for a declaration that he is entitled to an income tax credit for the amount of the commission funds with╜held by NSA is a request "with respect to Federal taxes." As a result, this court lacks jurisdiction over the declaratory judgment claim (Count One of plaintiff's complaint). See Turner, 2002 WL 31556462, at *1 (court lacks jurisdiction over a claim for declaratory relief in a tax case); West v. United States, No. Civ.1:00-CV-1800-JO, 2001 WL 1103229, *7 (N.D.Ga. July 30, 2001) (same).
In addition, to the extent plaintiff seeks injunctive relief against the Commissioner, that claim also is barred, as the court's declaration that plaintiff is entitled to a tax credit would be a prerequisite to any injunction requiring the Commissioner to is╜sue that credit. See Turner, 2002 WL 31556462, at *2 (dismissing claim for in╜junctive relief when the underlying claim for declaratory relief also was dismissed).
The court concludes the bar against de╜claratory claims in tax cases (and injunc╜tions arising from those declaratory claims) extends to Count Three of plain╜tiff's complaint, as well as to Count One. There is no discernable difference between the relief sought in Count One, and the relief sought in Count Three. In Count One, plaintiff requests a declaration that he is entitled to an income tax credit for the funds withheld by NSA. In Count Three, he makes an "Informal Claim for Refund or Credit." More specifically, he states:
74. Ishler alleges that a demand for credit of the NSA withheld taxes was sent to the Internal Revenue Service, and that such credit should be applied against any claims of liability for taxes due on NSA commission income with╜held from Ishler/TCM. Documents ref╜erencing the formal and informal de╜mand for tax credit are attached hereto, as Appendix A-5.
75. Despite NSA's declared with╜holding of the specific sum of $400,000.00, and all of the remaining commissions due and owing to Ishler, TCM and/or the facilitator, Camaro, as a result of NSA's sales to Chrysler, the Internal Revenue Service has never in╜stituted any action with respect to the demand for credit to Ishler of the NSA withheld IRS trust funds.
76. Ishler does not concede that the United States is immune from suit in equity to determine the proper, lawful, and equitable manner in which the com╜missions due and owing to Ishler/TCM and Camaro, withheld by NSA, should be adjudged to have been paid with re╜spect to Ishler/TCM and Camaro.
Complaint, at ╤╤ 74-76. In both of these claims, plaintiff seeks a determination that he is entitled to a tax credit, and an order compelling the Commissioner to issue him a credit. Counts One and Three are, in essence, the same claim.
In summary, to the extent plaintiff seeks review of the Collection Due Process Hearing by the IRS, exclusive jurisdiction over that claim rests in the Tax Court. Plaintiff's claims for money damages against the Commissioner, and against Richardson in his official capacity, are barred by sovereign immunity. Plaintiff's claims for declaratory and injunctive relief are impermissible under the Declaratory Judgment Act. Therefore, all of plaintiff's claims against the Commissioner, and against Richardson in his official capacity, are due to be dismissed. 49
49. ═ The court is uncertain why Richardson and the Commissioner did not raise collateral estoppel as a defense, as did NSA. They would have had a strong argument on this point, for the reasons set forth in ╖ III(C)(1), infra.
B. Motion to Dismiss by John Richardson in His Individual Capacity
Plaintiff's fraud and civil con╜spiracy claims against Richardson, in his individual capacity, are barred by the ap╜plicable statutes of limitations. A fraud or conspiracy claim under Alabama law must be brought within two years of the date on which the claim accrues. Ala.Code ╖ 6-2-38(l) (1975) (2005 Replacement Vol.). See Jones v. Kassouf & Co., P.C. , --- S o.2d ---, 2006 WL 1304901, *3 (Ala. May 12, 2006) (fraud); Rumford v. Valley Pest Control, Inc., 629 So.2d 623, 625 (Ala.1993) (conspiracy). A fraud claim does not ac╜crue until the plaintiff has discovered the facts constituting the fraud, or when those facts "ought to or should have been discovered; that is, the time of discovery is the time at which the party actually discovered the fraud or had facts that, upon closer examination, would have led to the discov╜ery of the fraud." Stockton v. CKPD De╜velopment Co., 936 So.2d 1065, 2005 WL 3006854, * 13 (Ala.Civ.App. Nov.10, 2005) (citing Dickens v. SouthTrust Bank of Ala╜bama, N.A., 570 So.2d 610, 612 (Ala.1990); Lader v. Lowder Realty Better Homes & Gardens, 512 So.2d 1331, 1332 (Ala.1987) (internal quotation marks omitted)); see also Ala.Code ╖ 6-2-3 (1975) (2005 Re╜placement Vol.).
Plaintiff fled this action on May 31, 2005. Thus, any claims that accrued before May 31, 2003 are time-barred. Plaintiff does not allege that Richardson took any actions related to his claims after that date. In fact, Richardson's relevant actions occurred no later than 1990 or 1991, during his investigation of plaintiff. The only events occurring after May 31, 2003 were the Eleventh Circuit's issuance of an order affirming the decision of the Tax Court 50 and the issuance by the IRS of the Notice of Determination on plain╜tiff's collection due process hearing. 51 Neither of these events involved additional actions taken by Richardson. Plaintiff nonetheless asserts his claims are timely, stating:
50. ═ Doc. no. 11, at Exhibit F.
51. ═ Complaint, at Exhibit A-1.
The United States has kept this mat╜ter in an active mode since the inception of the efforts to destroy Ishler in 1989. Ishler has only recently, after rejection of incompetent counsel, and diligent in╜quiry into the matter, discovered the fraud perpetrated against Ishler, by the Commissioner, John L. Richardson, and NSA. 52
52. ═ Doc. no. 12, at ╤ 28.
Plaintiff's argument that he "only recent╜ly" discovered Richardson's alleged fraud is unpersuasive, as plaintiff has been in╜volved in ongoing investigation and litiga╜tion concerning his tax liability for more than fifteen years. Plaintiff almost cer╜tainly had actual knowledge of Richard╜son's actions as early as 1990, when Rich╜ardson's investigation of him began. Even if he did not have actual knowledge, he had knowledge of facts sufficient to lead him to discovery of the alleged fraud.
Accordingly, plaintiff's fraud claim against Richardson is time-barred. Be╜cause his fraud claim is time-barred, his claim for conspiracy to commit fraud also is time-barred. See Boyce v. Cassese , --- So.2d ---, 2006 WL 1119285, *8 (Ala. April 28, 2006) ("We have concluded that the Boyces' claims of fraudulent misrepre╜sentation and fraudulent suppression are time-barred. For the same reasons, the Boyces' conspiracy claims against the Casseses are time-barred."). 53
53. ═ In Boyce, the Alabama Supreme Court re╜lied upon a previous decision that held, be╜cause the plaintiff's "conspiracy to defraud claim is dependent upon the underlying fraud, the statute of limitations on that claim began to run at the same as did the statute for the underlying fraud claim." Boyce, 2006 WL 1119285, at *8 (citing Kelly v. Alexander, 554 So.2d 343, 344 (Ala.1989), overruled on other grounds by Ford Motor Co. v. Neese, 572 So.2d 1255 (Ala.1990)). This is but another way of stating the familiar principle that a claim for civil conspiracy cannot proceed if the tort claim underlying the conspiracy is not viable. See, e.g., McLemore v. Ford Motor Co., 628 So.2d 548, 551 (Ala.1993) ("Because the underlying cause of action is not viable, the conspiracy claim must also fail.") (citing All ied Supply Co. v. Brown, 585 So.2d 33, 36 (Ala.1991)).
C. Motion to Dismiss by Nissei Sangyo American, Ltd.
Construing plaintiff's complaint in the light most favorable to him, plaintiff as╜serts legal claims against NSA for fraud, conspiracy, breach of contract, and viola╜tion of the Alabama Sales Representative's Commission Contracts Act, as well as equi╜table claims for a declaratory judgment and an accounting. NSA argues that plaintiff's claims against it must be dis╜missed because: (1) plaintiff is collaterally estopped from asserting all his claims; (2) plaintiff lacks standing to pursue a breach of contract claim; and (3) all claims are barred by the applicable statutes of limita╜tions.
1. Collateral estoppel
NSA first asserts that plaintiff is collaterally estopped from asserting his claims due to the preclusive effect of: the prior decision by the Tax Court; the prior decision of the Eleventh Circuit Court of Appeals, affirming the Tax Court; and the decision of the Alabama Supreme Court that no enforceable contract existed be╜tween NSA and Camaro. The analysis of this issue requires an important distinc╜tion-unrecognized, or at least unmen╜tioned, by any of the parties-between federal and state law. When considering the preclusive effect of a prior federal judgment, a court must apply federal pre╜clusion law. See, e.g., CSX Transporta╜tion, Inc. v. Brotherhood of Maintenance of Way Employees, 327 F.3d 1309, 1316-17 (11th Cir.2003) ("We now hold that federal preclusion principles apply to prior federal decisions, whether previously decided in diversity or federal question jurisdiction."). On the other hand, when considering the preclusive effect of a prior state judgment, the court must apply state preclusion law. See, e.g., Mitchell v. Humana Hospital-Shoals, 942 F.2d 1581, 1582-83 (11th Cir. 1991) ("A federal court . . . is to accord a prior state judgment the same preclusive effect as would courts of the state issuing the judgment.") (citation omitted). Thus, the preclusive effect of the decisions by the Tax Court and the Eleventh Circuit must be considered separately from the preclu╜sive effect of the decision of the Alabama Supreme Court.
a. Tax Court and Eleventh Circuit decisions
NSA first asserts that the deci╜sions of the Tax Court and the Eleventh Circuit preclude plaintiff from relitigating the issue of whether he is entitled to a credit for the $400,000 in commissions al╜legedly withheld by NSA in 1989. Be╜cause NSA argues the preclusive effect of prior federal judgments, federal preclusion principles apply. In the Eleventh Circuit,
"[c]ollateral estoppel or issue preclusion forecloses relitigation of an issue of fact or law that has been litigated and decid╜ed in a prior suit. There are several prerequisites to the application of collat╜eral estoppel: (1) the issue at stake must be identical to the one involved in the prior litigation; (2) the issue must have been actually litigated in the prior suit; (3) the determination of the issue in the prior litigation must have been a critical and necessary part of the judg╜ment in that action; and (4) the party against whom the earlier decision is as╜serted must have had a full and fair opportunity to litigate the issue in the earlier proceeding." I.A. Durbin, Inc. v. Jefferson Nat'l Bank, 793 F.2d 1541, 1549 (11th Cir.1986).
CSX Transportation, 327 F.3d at 1317. The court finds that all these requirements are satisfied with regard to the previous decisions by the Tax Court and the Elev╜enth Circuit.
First, the issue asserted by plaintiff here is identical to an issue involved in the Tax Court and Eleventh Circuit litigation. Plaintiff argues that he is entitled to a credit for the $400,000 in commissions al╜legedly withheld by NSA, and that NSA should have to either pay those withhold╜ings over to the IRS, or account for the manner in which the funds have been dis╜bursed. Stated differently, plaintiff ar╜gues that he should not have been held liable for this $400,000 tax liability. The Tax Court held that plaintiff was liable for unpaid taxes, including the $400,000 amount withheld by NSA, and the Elev╜enth Circuit upheld that decision on ap╜peal. 54
54. ═ See doc. no. 11, at Exhibits B, F. The NSA withholdings were not the only items of plain╜tiff's tax liability discussed in the opinion of the Tax Court, but they were considered nonetheless. Additionally, plaintiff stated in his complaint that, "[d]uring the course of the years from 1989 to 2005, the Tax Court and the IRS refused to admit the existence of the IRS trust funds withheld by NSA." Com╜plaint, at ╤ 32.
Further, this issue was actually litigated in the Tax Court. In Ishler's trial memo╜randum to the Tax Court, he sated:
On March 31, 1989, NSA sent Camaro a notice of termination of the Sales Rep╜resentative Agreement. Also on March 31, 1989, NSA filed a declaratory judg╜ment action in the Circuit Court of Mad╜ison County, Alabama against Camaro, seeking a declaration that the Sales Representative Agreement was void. On April 12, 1988, NSA also notified Camaro that it was withholding approxi╜mately $400,000 from Camaro's commis╜sions for purposes of offsetting any tax liability owed by NSA. Thus, NSA was sharing information with the I.R.S be╜fore NSA canceled the Sales Representative Agreement and withheld approxi╜mately $400,000 from Camaro. 55
55. ═ Doc. no. 11, Exhibit E, at 5 (emphasis in original).
Plaintiff also stated:
On April 20, 1992, Camaro presented an offer to the Revenue Agent Richard╜son. Camaro offered to put $400,000 in escrow with the I.R.S. In return, Cama╜ro requested that NSA deposit with the I.R.S. the amount that it had withheld from Camaro. Camaro apparently never received any response from the I.R.S. 56
56. ═ Id . at 7.
The Tax Court's consideration of these statements is reflected in its opinion:
NSA terminated the NSA/Camaro agreement on March 31, 1989. In the notice of termination, NSA stated that Camaro had let NSA erroneously as╜sume that Camaro was an Alabama cor╜poration when the agreement was exe╜cuted. Because Camaro was a Hong Kong corporation, NSA faced unexpect╜ed liability for a large amount of with╜holding tax under section 881(a) (plus penalties and interest). On April 12, 1989, NSA told Camaro that NSA would retain unpaid commissions otherwise due to Camaro to offset that potential tax liability. 57
57. ═ Doc. no. 11, Exhibit B. at 10-11.
Ishler raised the issue again in his ap╜pellate brief to the Eleventh Circuit, where he stated:
NSA sent Notices of Termination of the Contract and quit paying commissions. NSA claimed it was withholding $400,000.00 of Camaro's commissions to pay taxes . . . .
Ishler later learned that NSA was being investigated for failure to pay U.S. taxes . . . .
Still later, NSA claimed it was gong to offset $400,000.00 for commissions owed to Camaro against any tax liability owed to the IRS for withholding on the com╜missions . . .
NSA ultimately brought suit in Ala╜bama against Camaro. There was a ruling that NSA could get out of the contract because Camaro was not regis╜tered to do business in Alabama . . . .
At the same time the suit was going on, NSA was trying to hire Scott Taylor away from TCM . . . .
The last commission check Camaro received from NSA was in March, 1989.
Ishler incurred $350,000.00 in person╜al legal expenses as a result of the Ca╜maro-NSA litigation . . . .
Ishler pointed out to IRS counsel that NSA was withholding money from Ca╜maro that legally belonged to Camaro in order to pay withholding taxes . . . . 58
58. ═ Doc. no. 11, Exhibit D, at 11-12 (citations to the record omitted).
In the same brief, plaintiff stated:
While IRS apparently convinced the Tax Court that [funds] had escaped U.S. tax╜ation, IRS never disclosed the results of [its audit of NSA], the disposition of the $400,000 which NSA claimed it had with╜held out of the commission checks due Camaro to pay withholding tax. Ishler and TCM's knowledge of NSA's with╜holding, which was clone by NSA at the ultimate expense of Camaro, TCM, and Ishler, is enough, standing alone, to de╜feat the Commissioner's claim that Ish╜ler committed any act to evade payment of a tax obligation he knew he owed. 59
59. ═ Id . at 18.
Plaintiff also argued:
Here, even if Ishler had been grossly negligent in relying on NSA's representations that they were withholding mo╜vies from the Camaro commissions to pay the withholding tax thereon, he could not be found guilty of fraud . . . . Reliance on withholding by third parties and statements from third parties indi╜cating that the disputed taxes will be paid have defeated the Commissioner's fraud charges over and over again . . . .
This is not a case where the taxpayer filled out false withholding certificates. The withholding was claimed to have been made by an adverse third party, NSA, out of Camaro's and, ultimately, TCM's commissions. 60
60. ═ Id. at 22-23 (internal citations omitted).
Finally, Ishler argued to the Eleventh Cir╜cuit that "[t]he Commissioner should be ordered to disclose the ultimate disposition of his withholding tax controversy with NSA and Camaro." 61 The Eleventh Cir╜cuit subsequently upheld the Tax Court's decision to assess tax liability to plaintiff.
61. ═ Id. at 27.
Based on the arguments in plaintiff's briefs to the Tax Court and the Eleventh Circuit, the only reasonable conclusion is that the issue of plaintiff's entitlement to a credit for the funds withheld by NSA as commissions was actually litigated before those courts.
Additionally, the determination that plaintiff was not entitled to a tax credit for the withheld commissions was a necessary and critical part of the judgment in the Tax Court, which was upheld by the Elev╜enth Circuit. If the Tax Court had consid╜ered plaintiff to be entitled to a $400,000 credit for the withheld commissions, it would not have assessed plaintiff with tax liability for that amount.
Finally, plaintiff had a full and fair op╜portunity to litigate the issue of his entitle╜ment to a tax credit in the prior proceed╜ings. As set forth above, he raised the issue extensively in his briefs to both the Tax Court, and to the Eleventh Circuit.
Accordingly, plaintiff is collaterally es╜topped from relitigating the issue of his entitlement to a tax credit for the commis╜sions withheld by NSA. This issue forms the entire basis for plaintiff's claims for declaratory relief and for an accounting, and those claims-insofar as they seek relief against NSA-are due to be dis╜missed. On the other hand, plaintiff's claims against NSA for fraud, breach of contract, conspiracy, and violation of the Alabama Sales Representative's Commis╜sion Contracts Act all involve issues which were not litigated and determined in the prior federal litigation. Accordingly, those claims may not be dismissed on the ground they are precluded by the prior decisions of the Tax Court and the Eleventh Circuit. That ruling, however, does not answer the question of whether they are precluded by prior state court decisions.
b. Alabama Supreme Court decision
NSA also asserts plaintiff is collaterally estopped from relitigating any claims based on an alleged contract with NSA, because the Supreme Court of Alabama has decided that no enforceable contract existed between NSA and Camaro. As NSA relies on the preclusive effect of a state court judgment, state preclusion principles apply.
In Alabama, "[c]ollateral es╜toppel is an equitable defense interposed against a party attempting to relitigate an issue that has been resolved in an earlier case involving the same parties ." Ex parte Flexible Products Co. , 915 So.2d 34, 45 (Ala.2005) (emphasis supplied). A par╜ty asserting the defense must satisfy the following elements: (1) the parties in the two proceedings are identical, or in privity with one another; (2) the issues in the two proceedings are identical; (3) the issue was actually litigated in the prior proceed╜ing; and (4) resolution of the issue was necessary to the prior judgment. See id.; see also Mitchell , 942 F.2d at 1583 (relying upon Alabama law). 62
62. ═ The Alabama Supreme Court has recog╜nized that "the federal courts have held that mutuality-the requirement that the parties in both actions are the same-is no longer a prerequisite." Ex parte Flexible Products, 915 So.2d at 45. Nonetheless, "Alabama contin╜ues to require that a party may be barred from relitigating an issue, such as duty or breach, only if that issue has previously been found adversely to that same party." Id.
NSA cannot satisfy these ele╜ments, because Ishler was not a party to the Alabama Supreme Court proceeding. The parties in the Alabama case were NSA and Camaro, not NSA and Ishler. 63 Further, NSA expressly concedes that Ish╜ler and Camaro were not in privity with each other. In its brief to this court, NSA states:
63. ═ See Camaro Trading Co., Ltd. v. Nissei San╜gyo America, Ltd., 628 So.2d 463 (Ala. 1993), a copy of which is attached as Exhibit A to NSA's brief in support of its motion to dis╜miss.
NSA and Camaro were the only par╜ties to the "Sales Representative Agree╜ment." Ishler was not in privity with, or had any rights otherwise under the contract . [sic] There is nothing in the "Sales Representative Agreement" that reflects an intent on the part of NSA and Camaro to bestow any direct bene╜fits under the contract upon Ishler. In fact, Ishler has alleged that Ishler and TCM independently engaged in negotia╜tions with Camaro because of Camaro's strategic location in Southeast Asia. (Compl. at ╤ 16) Accordingly, Ishler as╜serts that he and TCM entered into an agreement with Camaro, independent of NSA, whereby Ishler/TCM and Camaro would split the NSA commissions . . . . 64
64. ═ Doc. no. 11, at 16 (emphasis supplied).
Accordingly, collateral estoppel does not bar any of plaintiff's claims which are founded on the existence of the contract between NSA and Camaro.
2. Statute of limitations
NSA also argues that plaintiff's claims for fraud, conspiracy, breach of contract, and violation of the Alabama Sales Repre╜sentative's Commission Contracts Act are barred by the applicable statutes of limita╜tions.
As discussed in ╖ III(B), supra, a fraud claim under Alabama law must be brought within two years after a plaintiff has discovered the facts constituting the fraud, or within two years after the plain╜tiff should have discovered those facts. Plaintiff states that NSA "committed fraud" by "claiming the non-existence of Camaro Trading Company," and by "lying to the Internal Revenue Service in order to avoid payment for services which were, and are currently being taken advantage of by NSA." 65 NSA first attempted to eliminate Camaro's role in its business dealings with Chrysler (or to "claim the non-existence of Camaro") in 1989, when it terminated the Sales Representative Agreement with Camaro. NSA reported the situation to the IRS soon thereafter, and an investigation ensued. Thus, the events upon which plaintiff relies to sup╜port his fraud claim occurred in the late 1980's and early 1990's, much more than two years prior to the commencement of this action.
65. ═ Doc. no. 13, at ╤╤ 16.8.3, 16.9.
Plaintiff nonetheless asserts his fraud claim is timely, because he did not come to a "full understanding" of NSA's allegedly fraudulent conduct until he received the May 4, 2005 Notice of Determination from the IRS concerning his collection due pro╜cess hearing. 66 He also asserts that the fraud "is still ongoing as the money that was withheld by NSA on the paid commis╜sions has not been paid over to the United States." 67 These arguments are unavail╜ing. The relevant question is not when plaintiff fully understood the alleged fraud, but when plaintiff discovered (or should have discovered) it. Plaintiff was aware, or at least should have been aware, of all the facts relevant to his fraud claim when NSA withheld commissions from Camaro, and when the IRS began its investigation. At the very latest, he had knowledge of all relevant facts by the time the Tax Court upheld the IRS assessment against him in March of 2002. The 2005 Notice of Deter╜mination did not notify plaintiff of any additional facts to support his fraud claim. Instead, the Notice merely informed plain╜tiff that he had not provided sufficient information for the appeals committee to render a decision. Accordingly, plaintiff's fraud against NSA claim is time-barred.
66. ═ See id . at ╤╤ 16.10, 30.
67. ═ Id. at ╤ 27.
b. Breach of contract
A breach of contract claim un╜der Alabama law must be brought within six years of the date on which the claim accrues. Ala.Code ╖ 6-2-38(9) (1975) (2005 Replacement Vol.). The claim ac╜crues on the date the contract is breached, not the date on which the plaintiff sustains actual damage as a result of the breach. AC, Inc. v. Baker, 622 So.2d 331, 333, 335 (Ala.1993) (citing Stephens v. Creel, 429 So.2d 278, 280 (Ala.1983); Lipscomb v. Tucker, 294 Ala. 246, 258, 314 So.2d 840, 850 (1975)).
The essence of plaintiff's breach of con╜tract claim is that NSA failed to pay Ca╜maro commissions, as agreed, because it withheld those commissions to satisfy its income tax liability to the IRS. 68 Setting aside the issue of whether plaintiff has standing to sue for violation of the agree╜ment between Camaro and NSA, 69 any claim based on violation of that agreement would be time-barred. NSA terminated the Sales Representative Agreement with Camaro on March 31, 1989. NSA notified Camaro that it was withholding commis╜sions to satisfy its potential income tax liability to the IRS on April 12, 1989. As these events occurred more than seven╜teen years ago, the six-year limitations period on plaintiffs breach of contract claim against NSA expired long ago.
68. ═ See Complaint, at ╤╤ 18-25, 51; see also doc. no. 13 (plaintiff's brief in opposition to NSA's motion to dismiss), at ╤╤ 15, 16.7. Plaintiff also asserts (in his brief, but not in his complaint) that he is entitled to contract damages in quantum meruit due to the fact that he and TCM actually performed the ser╜vices under the contract between NSA and Camaro, but did not receive compensation for those services. He asserts that a six-year statute of limitations also applies to this claim. See doc. no. 13, at ╤╤ 34-39. As the business relationship between NSA and Ca╜maro was terminated in 1989, and commis╜sions were withheld by Camaro that same year, a quantum meruit claim also would be time-barred.
69. ═ NSA asserts that plaintiff does not have standing to sue for violation of the agreement between it and Camaro, because he was nei╜ther a party to that agreement, nor in privity with a party. This argument appears to have merit. As plaintiff himself declares, "[t]he written/express contract was between NSA and Camaro, and Ishler/TCM are not men╜tioned in that contract." Doc. no. 13 (plain╜tiff's brief in opposition to NSA's motion to dismiss), at ╤ 37. Even so, the court need not consider that argument, because, even if plaintiff did possess the requisite standing to sue on the contract, any breach of contract claim would be barred by the statute of limi╜tations.
Plaintiff alleges that NSA con╜spired with the IRS to defraud him. A civil conspiracy claim under Alabama law must be brought within two years of the date of accrual. 70 As plaintiff's fraud claim-the claim underlying the conspira╜cy-is time-barred, his conspiracy claim against NSA also is time-barred. 71
70. ═ See ╖ III(B), supra.
71. ═ See discussion, supra , page 1212.
d. Alabama Sales Representative's Commission Contracts Act
To the extent plaintiff's com╜plaint can be construed as alleging a sepa╜rate claim under the Alabama Sales Rep╜resentative's Commission Contracts Act, Ala.Code ╖╖ 8-24-1 et seq. (1975), 72 th at claim also is time-barred. The Act does not contain a separate statute of limita╜tions provision, and this court could not locate any authority as to what the limita╜tions period should be. The court con╜cludes, however, that the statute of limita╜tions could be no longer than the six-year period for breach of contract claims codi╜fied in Ala.Code ╖ 6-2-34 (1975). Plain╜tiff's claim accrued thirty days after NSA terminated the Sales Representative Agreement with Camaro, and refused to pay further commissions under the agree╜ment, or at the latest, thirty days after commissions resulting under the contract became due. 73 Plaintiff does not argue that any commissions under the contract were due after May 31, 1999, the date six years before this case was filed. There╜fore, plaintiff cannot proceed against NSA under the Alabama Sales Representative's Commission Contracts Act.
72. ═ The better reading of the complaint is that plaintiff does not assert a separate claim un╜der the Alabama Sales Representative's Com╜mission Contracts Act, but that he relies upon the Act to support a claim for treble damages against NSA on his underlying breach of con╜tract claim. See Ala.Code ╖ 8-24-3 (1975) ("A principal who fails to pay a commission as required by Section 8-24-2 is liable to the sales representative in a civil action for three times the damages sustained by the sales representative plus reasonable attorney's fees and court costs.").
73. ═ See Ala.Code ╖ 8-24-3(c) (1975) ("All com╜missions that are due at the time of termi╜nation of a contract between a sales represen╜tative and principal shall be paid within thirty days after the date of termination. Commis╜sions that become due after the termination date shall be paid within thirty days after the date on which the commissions become due.").
In summary, plaintiff's claims against NSA for fraud, breach of contract, conspir╜acy, and violation of the Alabama Sales Representative's Commission Contracts Act all are barred by the applicable stat╜utes of limitations.
For the foregoing reasons, the motions to dismiss by defendants Commissioner of Internal Revenue, John L. Richardson, and Nissei Sangyo American, Ltd. are due to be granted. All of plaintiff's claims will be dismissed. 74 An appropriate order will be entered contemporaneously herewith.
74. ═ Plaintiff will not be allowed the opportuni╜ty to amend his complaint. See doc. no. 13 (plaintiff's brief), at ╤ 40 ("An amended com╜plaint will more thoroughly brief the Court on Ishler's rights to remedy in this case against NSA founded upon the doctrines of quantum meruit and unjust enrichment, and the fraud perpetrated by NSA."). An amendment would not cure the deficiencies in plaintiff's claims. See Burger King Corp. v. Weaver , 169 F.3d 1310, 1319 (11th Cir.1999) (futility is an adequate basis for denying leave to amend).
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