Burns v. Internal Revenue Serv., Case No. 19-cv-590-pp

FRANCIS BURNS, Plaintiff, v. INTERNAL REVENUE SERVICE, PARK JONES, BART BRELLENTHIN,SCOTT J. CAMPBELL, RECORDER OF DEEDS MILWAUKEE,SHEILA ICZKOWSKI, and TAXACT, Defendants.

Case No. 19-cv-590-pp

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN

March 9, 2020

ORDER GRANTING PLAINTIFF'S MOTION FOR LEAVE TO PROCEED WITHOUT PREPAYING THE FILING FEE (DKT. NO. 4), GRANTING DEFENDANTS' MOTION TO DISMISS (DKT. NO. 10), SCREENING REMAINING ALLEGATIONS UNDER 28 U.S.C. §1915(E)(2)(B), DENYING APPLICATION FOR TEMPORARY RESTRAINING ORDER OR STAY (DKT. NO. 12) AND DISMISSING CASE

The plaintiff, "Francis Burns c/o certain real property commonly known as 4512 South Drexel Blvd. in Chicago," filed a complaint against the Internal Revenue Service (IRS), two IRS agents, an Assistant United States Attorney, the Milwaukee Recorder of Deeds, an employee of the Associated Bank Trust and TaxAct¹. Dkt. No. 1. He seeks relief from a judgment or order under Rule 60(b)(5) in a forfeiture case closed on March 6, 2019. The plaintiff asks the court for "20-30 times the initial claim amount," liquidation of and release of the lis pendens on property located in Chicago and the settlement of a treasurybond. Id. at 6. The plaintiff has filed a motion to proceed without prepaying the filing fee. Dkt. No. 4. Before the court had an opportunity to screen the complaint, the four federal defendants (the IRS, the two agents, and the Assistant United States Attorney) filed a motion to dismiss. Dkt. No. 10. The plaintiff responded—late—to the motion by filing a copy of the motion marked up with (presumably) his handwritten notes. Dkt. No. 13. He also filed an application for temporary restraining order with this court and the Seventh Circuit Court of Appeals. Dkt. No. 12 at 5.

I. Motion to Proceed Without Prepaying the Filing Fee (Dkt. No. 4)

A district court may authorize a plaintiff to proceed without prepaying the filing fee required to start a civil lawsuit if the plaintiff submits an affidavit listing his assets, indicating that he is unable to pay the fees and stating his belief that he is entitled to the relief he seeks. 28 U.S.C. §1915(a). Section 1915 "is designed to ensure that indigent litigants have meaningful access to the courts." Neitzke v. Williams, 490 U.S. 319 324 (1989).

The plaintiff's affidavit says that he is not employed, not married and has no source of income. Dkt. No. 4. He has no property, no car, and no assets beyond $107 in the bank, but he has monthly expenses of $10,000. Id. at 3, 4. He claims to have expenses for a son in school overseas, although it is not clear whether that is included in the $10,000 monthly expenses. Id. at 4. In any event, it does not appear that the plaintiff can prepay the filing fee. The court will grant his motion to proceed without prepaying the filing fee. Dkt. No. 4.

II. Motion to Dismiss (Dkt. No. 10)

The federal defendants argue that that the plaintiff lacks standing, that they are immune from suit and that the complaint fails to state a claim. Dkt. No. 10. The defendants explain that the plaintiff is challenging a judgment entered by Judge J. P. Stadtmueller in an in rem civil forfeiture case filed against the plaintiff's residence last year, United States v. 4512 South Drexel Boulevard, Chicago, Illinois, Case No. 18-cv-1290. Id. at 1. The court assumes that the plaintiff intended the subsequently filed copy of the motion, marked up with handwritten notes, to be his brief in opposition. Dkt. No. 13.

A. Legal Standard

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) challenges the sufficiency of the complaint. A complaint must give the defendant fair notice of the claim and the grounds upon which it rests. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Although a plaintiff need not plead detailed factual allegations, he or she must do more than present "labels and conclusions, and a formulaic recitation of the elements of a cause of action." Id. The complaint must state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678, (2009) (internal quotation omitted).

B. Complaint

The complaint accuses each defendant of taking some unlawful action in connection with the in rem civil forfeiture case. For example, the plaintiff alleges that Jones filed a "frivolous affidavit" in support of the complaint, thatBrellenthin faxed the notice of lien to the "Milwaukee Recorder of Deeds" before judgment had been entered and that Campbell filed a complaint based on Jones' allegations. Dkt. No. 1 at 5. The plaintiff sued the "Milwaukee Recorder of Deeds" for entering the notice of lien prior to its approval by a judge. Id. at 7. The plaintiff sued Scheila Iczkowsi of Associated Bank for turning over funds to the IRS without personally meeting with the "alleged agent of the IRS" and relying on "a signed, in blue ink, document purporting to be from a judge." Id. Finally, the plaintiff sued the Tax Act because the 1099-B form available online does not include a data field labeled Line 13 (Bartering). Id.

In addition to damages, the plaintiff asks for liquidation and release of the lis pendens on the property located at 4512 Drexel Boulevard and "settlement of treasury bond." Id. at 6. The complaint indicated that the plaintiff had less than ten days to vacate his home; he dated the complaint April 19, 2019. Id. The plaintiff's motion for a temporary restraining order, however, stated that the government intended to evict him on June 30, 2019. Dkt. No. 12 at 2.

C. The In Rem Civil Forfeiture

The plaintiff challenges the judgment and actions in the in rem civil forfeiture against the property located at 4512 South Drexel Boulevard, Chicago, Illinois, on August 21, 2018. United States v. 4512 South Drexel Boulevard, Case No. 18-cv-1290. According to the complaint filed in that forfeiture proceeding, the property "constituted or was derived from proceeds traceable to wire fraud" committed by Francis Burns in violation of 18 U.S.C.§1343, and the government sought forfeiture under 18 U.S.C. §981(a)(1)(C). Case No. 18-cv-1290, Dkt. Nos. 1, 1-1 at ¶3. Jones filed the ten-page affidavit in support of the forfeiture, explaining that World Burns, Inc., a Wisconsin corporation, owned title to the subject property and that Francis Burns was listed as a director of World Burns, Inc., in the Articles of Incorporation (filed with the State of Wisconsin Department of Financial Institutions). Id., Dkt. No. 1-1 at ¶¶ 4, 5. Jones recounted the scheme in which the plaintiff applied for tax refunds in the estate name of Francis Burns. Id. at ¶14. Jones asserted that the claim was false because the IRS had no record of payment of any tax withholdings for the Francis Burns estate. Id. at ¶19. After several years of such activity, World Burns, Inc. purchased the Drexel property with a wire transfer from Associated Bank 5849 (an account opened two months before the purchase of the property). Id. at ¶¶35, 36. The government traced the money in the Associated Bank account to the refund checks issued as a result of Francis Burns' fraudulent filing (two deposits totaling $3,555,383.71). Id. at ¶37. The special warranty deed filed with the Cook County Illinois Recorder of Deeds Office transferred ownership of the Drexel Property to World Burns, Inc., on June 5, 2017. Id. at ¶38.

The Clerk of Court assigned the civil forfeiture to Magistrate Judge William E. Duffin, who granted the plaintiff's motion to strike the claim of World Burns, Inc. because it was not filed by an attorney. Id., Dkt. No. 17. Judge Duffin noted that Burns could appear on his own behalf to the extent he had a claim in the property. Id. at 3. The government filed a second motion tostrike a document that had been docketed as a notice of claim. Id., Dkt. No. 9. The Clerk of Court reassigned the case to Judge Stadtmueller after neither Burns nor the corporation filed a response to the government's motion to strike. Id., Dkt. No. 20 at 2. In a footnote, Judge Stadtmueller noted Burns's filings suggested that he adhered to beliefs of the sovereign citizen movement. Id. at 2, n.1.

The government moved for default judgment on February 8, 2019, id., dkt. no. 22, and Burns filed his own motion to dismiss and to compel discovery, id., dkt. nos. 25, 27. On March 6, 2019, Judge Stadtmueller denied Burns's motion to dismiss and compel, granted the government's motion for default judgment and ordered the property forfeited to the United States for the IRS to dispose of it according to law. Id., Dkt. No. 28. Judge Stadtmueller entered the default judgment that same day. Id., Dkt. No. 29.

Burns appealed, but the Seventh Circuit dismissed the appeal on August 16, 2019 after Burns failed to pay the required docketing fee. Id., Dkt. No. 44.

D. Standing

The federal defendants move to dismiss the complaint on the ground that the plaintiff lacks standing. Dkt. No. 10. They allege that World Burns, Inc. held the title to the property located at 4512 Drexel Boulevard—not the plaintiff.

The plaintiff did not respond to the defendants' standing argument. The Clerk of Court docketed his response to the motion to dismiss as "documents received" because it was nothing more than the defendants' motion withhandwritten notes in the margins. Dkt. No. 13. In his handwritten notes, the plaintiff takes issue with the capitalization in the caption of the motion, and suggests that the United States Attorney and the Assistant United States Attorney who filed the motion are nothing more than a legal fiction. Dkt. No. 10 at 9. He notes that there is no "wet ink signature," which he says suggests that the motion is "void, no contract." Id.

Article III of the Constitution limits federal judicial power to certain cases and controversies, and the "irreducible constitutional minimum of standing contains three elements." Silha v. ACT, Inc., 807 F.3d 169, 173 (7th Cir. 2015) (quoting Lujan v. Defs. of...