# FILED August 19, 1998 Cecil W. Crowson Appellate Cou rt Clerk LEROY DAMRON, ) ) Bedford Circuit Plaintiff/Appellant, ) No. 7301 ) VS. ) ) YELLOW FREIGHT SYSTEM, INC., ) Appeal No. JERI ELLISON, CAROL HERT HEL, ) 01A01-9712-CV-00724 ) Defendants/Appellee

s. )
IN THE COURT OF AP PEALS OF TENNESSEE AT NASHVILLE APPEAL FROM

THE CIRCUIT COURT OF BEDFORD COUNTY AT SHELBYVILLE, TENNESSEE HONORABLE LEE RU SSELL, JUDGE
Leroy Damron 514 Temple Ford Road Shelbyville, Tennessee 37160 PRO SE FOR PLAINTIFF/APPEL LANT
Wade B. Cowan 315 Deaderick Street Suite 1425 Nashville, Tennessee 37238-1425 ATTORNEY FOR DEFENDANTS/APPELLEES



### AFFIRMED AND REMANDED.

HENRY F. TODD PRESIDING JUDGE, MIDDL E SECTION

CONCURS: BEN H. CANTRELL, JUDGE WILLIA M B. CAIN, JUDGE-2-

LEROY DAMRON, ) ) Bedford Circuit Plaintiff/Appellant, ) No. 7301 ) VS. ) ) YELLOW FREIGHT SYSTEM, INC., ) Appeal No. JERI ELLISON, CAROL HERT HEL, ) 01A01-9712-CV-00724 ) Defendants/Appellee

s. ) 

## O P I N I O N
The plaintiff, Leroy

Damron, has appealed from a summary judg

ment dismissing his s

uit against his form

er employe

r Yellow Freig

ht Systems,

Inc., (hereafter “Yellow”) and two of its officeemployees for wages withheld because of levy process issued by the U.S. Internal Revenue Service (hereafter I

RS) to collect delin

quent income taxes a

ssess ed ag ainst plaintiff. Plaintiff presents the follo

wing issues: I. Whet her

the trial co urt erred in failing t o consider that the Notice of Levy was def ective. II. Whether

trial court erred in granting summary judgment in favor of defendant/app ellee , Yellow Freight System,Inc., on the grounds that there was no rel

ief available from state courts and Tennessee Law becaus e defendant/appellee

had immunity

under the Internal Revenue Code for turning over wages in compliance with a defective Notice of Levy issued by

the Internal Revenue Service.
On August 22 , 1994, IRS maile d to Yellow a “Notic

e of Levy ” asserting a c

laim o f $86,605.18 aga inst plaintiff for unpaid income taxes for the calendar years, 1984-1988 , inclusive
. In res pon se t o th e no tic e of l evy, Yellow forwarded to IRS the net amount of plaintiff’s paycheck
on each payd

ay therea fter. This suit seeks the recovery

from Yellow of the

amounts paid to I

RS on various groun

ds of irregular

ity of proce

dure by I RS.

On September 8, 1995, plaintiff filed this suit against Yell

ow and two of its emp

loyees. The unsworn complaint alleged in re levant part the follow ing:

7. On Sep t ember 9, 1994, Plai ntiff received

his paycheck for the pay

p eriod ending Sep

tember 2, 1994, to-3- findthat $562.12 had beendeducted and note d as a deduction per court order. 8. Plaintiff

had never been

informed, by anyone, that a c ourt order for garnishment or any other deductions were pendin g. 9. On Septe m ber 12, 1994, the Plaintiff telephonedthe Y ellow Freight pay roll department, s

poke to Carol Herthel, and asked for an explanation for the deduction. 10. Defendant

He r thel explained that the deduc tion wa s made because of a “Notice of Levy ” by the Internal Revenue Serviceshe had received by regular mail on August 29, 1994.

- - - - 14. Herthel subseq uen tly made deductions every additional week that the Plaintiff worked, never allow in g mor e th an $ 21. 62 t o be pai d we ekl y. 15. Plaintiff

did no t r eceive his copy of the “Notice” from

Yell ow Freight until September 23, 1994, by regular mail.

- - - - 19. The defendants had no legal right or obligation to: C. Honor a false ins trument. The “Notice of Levy,” form 668-A, was fraudulent on its face, and was not even the proper document to be sent an employer.

- - - - 23. Even if

t he “Notice” had been lawful, the Defendants

would have failed in their responsibility, to the Plaintiff, by not sendin

g him his the c opy of the “Notice of Levy,” and thereby giving timely notice, as required by law, so that he could cla

im any exemptio

ns.
- - - - WHEREFORE, it i s pr aye d that the Court grant the Plaintiff relief a

s follows: 1. Actual damages in the amount of two th ousand dollars. 2. Compensatory and punitive damages in the amount of one hundr

ed thousand dollar

s. 3. Reasonable

attorney fees and

costs in bringing this action.
The answer of defe

ndants genera

lly denied wrongdoing and asserted that the complaint failed to state a claim for which relief can be granted.-4- In support of their motion for summary judgment, defenda nts filedthe affidavit of Jeri Ellison s tating: 1. I am a payroll supervisor for Yellow Freight System, Inc., and a defendant in this case. 2. I have personal kno wledge of the f acts contained in this a

ffidavit. 3. Attached

as Exhibit 1 is a t rue and accura te copy of the Notice of Levy from the Internal Revenue Service received by

Yellow Freigh

t System, I

nc. on or about Aug

ust 29, 1994. 4. The payr oll deductions that Mr. Damron complains about in his c omplaint made solely as a result of Yellow Freight System, Inc.’s honoring the Notice of Le vy referred to above.
The Notice of

Levy exh ibite d to the affidavit listed federal income taxes and penalties due from plaintiff

for the y ears 1984-1988 in the total amount of $86,605.18, and required Yellow to remit to the IRS the net wages due plaintiff.

The plaintiff filed a

n unsworn respons

e to defendants’ motion for su mma ry judgment with a coll ection of l egal argument s, together with his af fidavit st ating:

1. On Frid ay, September 9, 1994, I picked up my paycheck from the guard s

hack at Yellow Freight’s terminal in Nashville, Tennessee. 2. The check

showed a deduction of $562.12 for a court order, of which I had no knowledge. 3. I called the pay

roll department o

n the next wor kda y, the following Monday, September 1 2, 19 94, and spoke to Carol Herthel, payroll clerk, who informed me that the mon ey had been tak en b ecau se o f an I RS l evy. 4. Ms. Herthel told me that she would continue to take my wages until the IRS told her to stop. 5. I was never received any notice fr om anyone about the Notice of Levy before the confiscation began. After I inquired about my

copy to Ms.

Herthel, I r

eceived it a month later. 6. Ih ave never received a copy of a n y assessment, or a N

otice of Demand F

or Tax from the I

RS.-5- 7. Yellow Freight System, Inc. never pai d me more than $21.63 for any week after September 9, 1994. 8. I repeatedly informed Yellow’s pay r oll and legaldepartments

the Notice of Levy

was fraudulent, that they made an error in taking my money , but they ignored me. 9. The above specific facts are made on the personal knowledge of the plaintiff, Leroy Damron, and indicate there is

a genuine issue

for trial.
The Trial Court sustained defe ndants’ m otion for summary judgment, and plaintiff appealed. His first issue asserts that the notice of levy was defective. He argues that the notice of levy was ineffective and should havbe been ignor ed because h e was not notified b y IRS in advancethat

the levy would be sent to Yellow; that it was not on the proper form and was not properly served. Each

of these argu ments claims a fau lt of the IRS and

not of Yellow or its employees,

except it is claimed that Yellow had a fiduc iary duty to plaintiff to req

uire IRS to enforce its debt

in strict complianc

e with all applica

ble laws and reg

ulations.

Yellow responds that it has no duty, fiduciary or otherwise to c hallenge a

ny pro cess received from the IRS if it appears on its face to be effective.

In U.S. v. Rogers , 461 US. 677, 103 S.Ct. 2132, 76 L.Ed. 2d 236 (1983), the United States Supreme Court held that claims of the nature raised by plaintiff “do not require judicial intervention” (by the employer), but that “ it is up to the taxpayer --- to go to court.”

26 USC § 6332(e) provi des that complianc

e with that o f a levy discharges that the receiver of t he l evy fr om a ny ob lig ati on o r li abi lit y to t he t axp ayer f or p aym ents to the I RS in
com pli ance wit h th e le vy.

26 U SC § 633 2(d )(1 ) pr ovi des a 50 % ofpen alt y for fai lur e to com ply w ith a le vy.-6- This Court is satisfied t hat Y ellow had and has no duty to plaintiff to ignore, resist or lit igat e th e le vy.

Plaintiff’s second and last issue asserts that the Tri al Court held that plai ntiff’s claims
werenot assertable in

a state court.Plaintiff asserts no claim that his earnings were incorrectly computed by Yellow. The discussion of plaintiff’s first issue establishes that plaintiff’s claim should be made in a suit in which IRS is joined.
It is apparent

that this controve

rsy is basic

ally betwee

n plaintiff and I

RS which isnot a party to this s

uit. TRCP Rule 19 read

s in pertinent par

t as follows: 19.01 Persons

to Be Joined if Feasible. - A person who is subject

to the jurisdiction of

the court shall be joined as a party if ( 1) in the person’s absence comple

te relief cannot be accorded among those already parties, or (2) the person claims an interest relatin

g to the subject of

the action and is so situatedthat the dis position of the action in the person’s a bsencemay (I) as a practical matter impair or impedeth e person’s ability to

protect that interest, or

(ii) leave any of the persons already pa

rties subject t o a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reasons

of the claims

inter est. If the person has notbeen so joined, the court shal l order th at the person be made a party. If the person properly sh

ould join as a plaintiff butrefuses to do so, he or she may be ma

de a defendant,

or in a proper case, an involuntar y pla intiff. This rule shall be c onstru edto allow joint tort-feasors and obligors on obligations that are joint andseveral to be sue d either jointly or s ever all y. 19.02. Determination

by Court Whenever Joinder Not Feasible . - If a person as described in

Rule 19.01(1)-(2) hereof cannot be made a party, the court shall determine whether in equity and good conscie nce the action sho uld proceed among the pa

rties bef ore it; or should be stayed or dismissed, the absent person being thus r egarded as indispe nsable. The factors to be considered by the cour t include: (1) to what extent a judgment ren dered in the person’s absence might be prejudicial to the personor those already parties; (2) the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures,the prejudice can be lessene d or a voided; (3) whether or not a judgment rendered in the person ’s absence will be adequate; and (4) whether or not the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder.-7- 19.03. Pleading Reasons for Non joi nder. - A pleading asserting a claim for relief shall state the nam

es, if known to the pleader, of any persons as described in Rul e 19.01(1)-(2) hereof who are not joined, and the reasons why they are not joined.
The complaint states no reason why IRS was not joined as an interested party. However, it is doubtful that I

RS could be joined in t

his action without its

consent.

Federalcourts have juris

d ictio n of controversie

s involving the co

llection of fede

ral taxes. 28 USCA § 1396, 47-B CJS - § 1164 pp. 498 et seq. The preferable ro ute to a complete a

nd just resolution of the controversy would be a suit within the federal jurisdiction. Although not claimed by plaintiff, he is allowed an exemption of part of his wages. 28 USCA § 6334(d).

This Court has determined that the present action cannot

be justly decided between the pres ent part ies beca use of t he ab sen ce of an i ndi spe nsa ble part y.

The judgment

of the Trial Court is affirmed w ithout prejudice to

further procee

dings in the Trial Court or other tribunal of competent jurisdiction for an inclusive adjud icat ion of the rightsand liabilities of all interested parties. Costs of this appeal are taxed against the plaintiff and his sur ety.

AFFIRMED AND REMANDED.

_________________________________ HENRY F. TODD PRESIDING JUDG E, MID DLE SECT IO N CONCURS:

_____________________________ BEN H. CANTRELL, JUDGE

_____________________________ WILLIA M B. CAIN, JUDGE-8-