FILED

August 19, 1998

Cecil W. Crowson

Appellate Court Clerk

LEROY DAMRON, )

) Bedford Circuit

Plaintiff/Appellant, ) No. 7301

)

VS. )

)

YELLOW FREIGHT SYSTEM, INC., ) Appeal No.

JERI ELLISON, CAROL HERTHEL, ) 01A01-9712-CV-00724

)

Defendants/Appellees. )

IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

APPEAL FROM THE CIRCUIT COURT OF BEDFORD COUNTY

AT SHELBYVILLE, TENNESSEE

HONORABLE LEE RUSSELL, JUDGE

Leroy Damron

514 Temple Ford Road

Shelbyville, Tennessee 37160

PRO SE FOR PLAINTIFF/APPELLANT

Wade B. Cowan

315 Deaderick Street

Suite 1425

Nashville, Tennessee 37238-1425

ATTORNEY FOR DEFENDANTS/APPELLEES

AFFIRMED AND REMANDED.

HENRY F. TODD

PRESIDING JUDGE, MIDDLE SECTION

CONCURS:

BEN H. CANTRELL, JUDGE

WILLIAM B. CAIN, JUDGE
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LEROY DAMRON, )

) Bedford Circuit

Plaintiff/Appellant, ) No. 7301

)

VS. )

)

YELLOW FREIGHT SYSTEM, INC., ) Appeal No.

JERI ELLISON, CAROL HERTHEL, ) 01A01-9712-CV-00724

)

Defendants/Appellees. )

O P I N I O N

The plaintiff, Leroy Damron, has appealed from a summary judgment dismissing his suit

against his former employer Yellow Freight Systems, Inc., (hereafter “Yellow”) and two of its

office employees for wages withheld because of levy process issued by the U.S. Internal Revenue

Service (hereafter IRS) to collect delinquent income taxes assessed against plaintiff. Plaintiff

presents the following issues:

I. Whether the trial court erred in failing to

consider that the Notice of Levy was defective.

II. Whether trial court erred in granting summary

judgment in favor of defendant/appellee, Yellow Freight

System, Inc., on the grounds that there was no relief available

from state courts and Tennessee Law because

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 mailed to Yellow a “Notice of Levy” asserting a claim of

$86,605.18 against plaintiff for unpaid income taxes for the calendar years, 1984-1988, inclusive.

In response to the notice of levy, Yellow forwarded to IRS the net amount of plaintiff’s paycheck

on each payday thereafter. This suit seeks the recovery from Yellow of the amounts paid to IRS

on various grounds of irregularity of procedure by IRS.

On September 8, 1995, plaintiff filed this suit against Yellow and two of its employees.

The unsworn complaint alleged in relevant part the following:

7. On September 9, 1994, Plaintiff received his

paycheck for the pay period ending September 2, 1994, to
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find that $562.12 had been deducted and noted as a deduction

per court order.

8. Plaintiff had never been informed, by anyone,

that a court order for garnishment or any other deductions

were pending.

9. On September 12, 1994, the Plaintiff

telephoned the Yellow Freight payroll department, spoke to

Carol Herthel, and asked for an explanation for the deduction.

10. Defendant Herthel explained that the

deduction was made because of a “Notice of Levy” by the

Internal Revenue Service she had received by regular mail on

August 29, 1994.

- - - -

14. Herthel subsequently made deductions every

additional week that the Plaintiff worked, never allowing

more than $21.62 to be paid weekly.

15. Plaintiff did not receive his copy of the

“Notice” from Yellow Freight until September 23, 1994, by

regular mail.

- - - -

19. The defendants had no legal right or obligation

to:

C. Honor a false instrument. 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 the “Notice” had been lawful, the

Defendants would have failed in their responsibility, to the

Plaintiff, by not sending him his the copy of the “Notice of

Levy,” and thereby giving timely notice, as required by law,

so that he could claim any exemptions.

- - - -

WHEREFORE, it is prayed that the Court grant the

Plaintiff relief as follows:

1. Actual damages in the amount of two thousand

dollars.

2. Compensatory and punitive damages in the

amount of one hundred thousand dollars.

3. Reasonable attorney fees and costs in bringing

this action.

The answer of defendants generally denied wrongdoing and asserted that the complaint

failed to state a claim for which relief can be granted.
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In support of their motion for summary judgment, defendants filed the affidavit of Jeri

Ellison stating:

1. I am a payroll supervisor for Yellow Freight

System, Inc., and a defendant in this case.

2. I have personal knowledge of the facts

contained in this affidavit.

3. Attached as Exhibit 1 is a true and accurate

copy of the Notice of Levy from the Internal Revenue Service

received by Yellow Freight System, Inc. on or about August

29, 1994.

4. The payroll deductions that Mr. Damron

complains about in his complaint made solely as a result of

Yellow Freight System, Inc.’s honoring the Notice of Levy

referred to above.

The Notice of Levy exhibited to the affidavit listed federal income taxes and penalties

due from plaintiff for the years 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 an unsworn response to defendants’ motion for summary judgment

with a collection of legal arguments, together with his affidavit stating:

1. On Friday, September 9, 1994, I picked up my

paycheck from the guard shack 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 payroll department on the next

workday, the following Monday, September 12, 1994, and

spoke to Carol Herthel, payroll clerk, who informed me that

the money had been taken because of an IRS levy.

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 from anyone

about the Notice of Levy before the confiscation began. After

I inquired about my copy to Ms. Herthel, I received it a month

later.

6. I have never received a copy of any

assessment, or a Notice of Demand For Tax from the IRS.
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7. Yellow Freight System, Inc. never paid me

more than $21.63 for any week after September 9, 1994.

8. I repeatedly informed Yellow’s payroll and

legal departments 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 defendants’ motion 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 ignored because he was not notified by IRS in

advance that the levy would be sent to Yellow; that it was not on the proper form and was not

properly served. Each of these arguments claims a fault of the IRS and not of Yellow or its

employees, except it is claimed that Yellow had a fiduciary duty to plaintiff to require IRS to

enforce its debt in strict compliance with all applicable laws and regulations.

Yellow responds that it has no duty, fiduciary or otherwise to challenge any process

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) provides that compliance with that of a levy discharges that the

receiver of the levy from any obligation or liability to the taxpayer for payments to the IRS in

compliance with the levy.

26 USC § 6332(d)(1) provides a 50% of penalty for failure to comply with a levy.
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This Court is satisfied that Yellow had and has no duty to plaintiff to ignore, resist or

litigate the levy.

Plaintiff’s second and last issue asserts that the Trial Court held that plaintiff’s claims

were not 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 controversy is basically between plaintiff and IRS which is not a

party to this suit. TRCP Rule 19 reads in pertinent part 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 complete relief cannot

be accorded among those already parties, or (2) the person

claims an interest relating to the subject of the action and is so

situated that the disposition of the action in the person’s

absence may (I) as a practical matter impair or impede the

person’s ability to protect that interest, or (ii) leave any of the

persons already parties subject to a substantial risk of

incurring double, multiple, or otherwise inconsistent

obligations by reasons of the claims interest. If the person has

not been so joined, the court shall order that the person be

made a party. If the person properly should join as a plaintiff

but refuses to do so, he or she may be made a defendant, or in

a proper case, an involuntary plaintiff. This rule shall be

construed to allow joint tort-feasors and obligors on

obligations that are joint and several to be sued either jointly

or severally.

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 conscience the action should

proceed among the parties before it; or should be stayed or

dismissed, the absent person being thus regarded as

indispensable. The factors to be considered by the court

include: (1) to what extent a judgment rendered in the

person’s absence might be prejudicial to the person or 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 lessened or avoided; (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.
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19.03. Pleading Reasons for Nonjoinder. - A

pleading asserting a claim for relief shall state the names, if

known to the pleader, of any persons as described in Rule

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 IRS could be joined in this action without its consent.

Federal courts have jurisdiction of controversies involving the collection of federal taxes.

28 USCA § 1396, 47-B CJS - § 1164 pp. 498 et seq. The preferable route to a complete and 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

present parties because of the absence of an indispensable party.

The judgment of the Trial Court is affirmed without prejudice to further proceedings in

the Trial Court or other tribunal of competent jurisdiction for an inclusive adjudication of the

rights and liabilities of all interested parties. Costs of this appeal are taxed against the plaintiff

and his surety.

AFFIRMED AND REMANDED.

_________________________________

HENRY F. TODD

PRESIDINGJUDGE,MIDDLESECTION

CONCURS:

_____________________________

BEN H. CANTRELL, JUDGE

_____________________________

WILLIAM B. CAIN, JUDGE
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