Court Opinion

ID: 8373978
Source: CourtListenerOpinion
Date Created: 2022-10-18 17:00:45.620614+00
Date Added: 2024-06-11T16:46:11.394577
License: Public Domain

NOT PRECEDENTIAL

                          UNITED STATES COURT OF APPEALS
                               FOR THE THIRD CIRCUIT
                                      _______

                                         No. 22-1550
                                         ___________

                         In re: DOMINICK GALLUZZO, Appellant
                         ____________________________________

                       On Appeal from the United States District Court
                                for the District of New Jersey
                          (D.N.J. Civil Action No. 2-18-cv-13435)
                           District Judge: Honorable Esther Salas
                        ____________________________________

                       Submitted Pursuant to Third Circuit LAR 34.1(a)

                                  October 14, 2022
               Before: RESTREPO, RENDELL, and FUENTES, Circuit Judges

                               (Opinion filed: October 18, 2022)
                                        ___________

                                          OPINION*
                                         ___________

PER CURIAM

         Dominick Galluzzo, proceeding pro se, appeals an order of the United States

District Court for the District of New Jersey affirming an order of the United States

Bankruptcy Court for the District of New Jersey. For the reasons that follow, we will

affirm the judgment of the District Court.

*
    This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
       The history of the bankruptcy proceeding and related litigation are set forth in

detail in the Bankruptcy Court’s decision. Briefly, Galluzzo filed a Chapter 11

bankruptcy petition in 2006. The Internal Revenue Service filed a proof of claim.

Galluzzo filed an adversary proceeding to fix the extent, validity, and priority of liens of

the IRS and other creditors on certain real property. The matter was settled. In 2008, the

Bankruptcy Court issued a Stipulation and Order, which addressed the payment of the

IRS’s and other creditors’ secured claims. Shortly thereafter, the Bankruptcy Court

issued a confirmation order approving Galluzzo’s Chapter 11 plan. The order stated that

the IRS’s secured claim would be treated as set forth in the Stipulation and Order, with

the liens to be paid within six years of the date of the tax assessment, or by November

2011. The Bankruptcy Court granted a discharge and closed the case in 2010.

       In 2012, Galluzzo petitioned the United States Tax Court to redetermine the tax

deficiency.1 The Tax Court dismissed the petition because the Commissioner of Internal

Revenue did not prove that he had issued a notice of deficiency, which was a prerequisite

to its jurisdiction. The Tax Court noted that under normal circumstances tax deficiencies

may not be assessed unless a valid notice is issued.

constitute binding precedent.
1
  Before filing suit in the Tax Court, Galluzzo had filed a District Court action
challenging his tax liability and claiming that the IRS failed to provide a notice of
deficiency. The District Court dismissed the complaint for lack of jurisdiction, finding
that Galluzzo could pursue relief in the Tax Court. See D.N.J. Civ. No. 11-cv-01607.
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       The Commissioner appealed, and argued that the Tax Court should not have

addressed whether a notice was issued because the Bankruptcy Court’s orders were res

judicata as to Galluzzo’s tax liability. We held that the Tax Court did not err in

determining facts relevant to its own jurisdiction. In so holding, we noted the “unusual

dimensions” of the Tax Court’s decision and stated that Galluzzo had “used the Tax

Court’s lack of jurisdiction to obtain, at least in the Tax Court, a favorable judgment,

essentially on the merits.” Galluzzo v. Comm’r of Internal Revenue, 564 F. App’x 656,

660 (3d Cir. 2014). Galluzzo then filed, without success, a District Court action seeking

to require the IRS to release its liens on his property.2

       In 2016, the Government filed motions to reopen Galluzzo’s bankruptcy case and

to enforce the Chapter 11 plan and confirmation order. The Bankruptcy Court granted

both motions. In an extensive opinion, the Bankruptcy Court rejected Galluzzo’s

argument, through counsel, that it lacked jurisdiction over the IRS’s claim. It ruled that

the Stipulation and Order and confirmation order were res judicata as to that claim. The

Bankruptcy Court noted that Galluzzo could not “take all the benefits of a confirmed

Chapter 11 plan and then discard the burdens.” In re Galluzzo, No. 06-15392, 2018 WL

4191476, *16 (D.N.J. Bankr. Ct. Aug. 15, 2018).

2
 This case was also dismissed for lack of jurisdiction. See D.N.J. Civ. No. 15-cv-02201.
Galluzzo’s wife was a party to both District Court actions and the Tax Court action. The
IRS, however, has apparently released its liens as to his wife.
                                             3
       On appeal to the District Court, Galluzzo argued that the Bankruptcy Court erred

by failing to sua sponte reconsider the IRS’s claim pursuant to 11 U.S.C. § 502(j). He

argued that the IRS no longer had the right to assess or collect the tax. He also asserted

that the parties made a mutual mistake in believing that the tax had been properly

assessed when they entered into the Stipulation and Order.

       The District Court ruled that the Bankruptcy Court did not abuse its discretion by

not reconsidering the IRS’s claim sua sponte. It stated that the Bankruptcy Court had

rejected Galluzzo’s argument that relief was due under Federal Rule of Civil Procedure

60(b) and that the same standard applied to a § 502(j) motion. The District Court also

explained that Galluzzo had shown no error in the Bankruptcy Court conclusions that the

IRS’s claim was enforceable and that the equities did not warrant relief. And it ruled that

Galluzzo had waived, among other arguments, his contention that the Stipulation and

Order was based on a mutual mistake. This appeal followed.

       We have jurisdiction pursuant to 28 U.S.C. §§ 158(d)(1) and 1291. We exercise

the same standard of review as the District Court, which reviews the Bankruptcy Court’s

legal rulings de novo, its factual findings for clear error, and its exercise of discretion for

abuse thereof. See In re United Healthcare Sys., Inc., 396 F.3d 247, 249 (3d Cir. 2005).

       Galluzzo does not pursue his argument that the Bankruptcy Court erred by not

reconsidering the IRS’s claim sua sponte. He contends that the District Court erred by

relying on “cited cases and statement’s[sic] made by the IRS and [the Bankruptcy Judge]

                                               4
instead of investigating the fact’s [sic].” Informal Brief at 6. Galluzzo has not

adequately developed his argument in his brief. We agree with the IRS to the extent it

contends that he has forfeited this argument. Barna v. Bd. of Sch. Dir. of Panther Valley

Sch. Dist., 877 F.3d 136, 145-47 (3d Cir. 2017).3

       Even if we were to treat certain assertions by Galluzzo as claims of District Court

error, he has not shown that relief is due. Galluzzo states that the IRS cited two cases

below that are not similar to his case. The District Court relied on one of these cases –

Brielle Associates v. Graziano, 685 F.2d 109 (3d Cir. 1982) – to support the Bankruptcy

Court’s authority to reconsider the IRS’s claim. Galluzzo too advanced this principle. In

addition, Galluzzo asserts that he never had an agreement with the IRS. However, he

argued below that the parties entered into the Stipulation and Order, but that it was based

on a mistaken belief about the validity of the IRS’s claim.4

       Galluzzo also contends that our prior decision is dispositive here. We disagree.

As the Bankruptcy Court stated, we did not decide whether the confirmation order was

res judicata as to Galluzzo’s tax liability. We considered whether the Tax Court erred in

3
  Galluzzo states in his reply brief that he misunderstood questions five and six of the
form Informal Brief. We rely on his brief as a whole, not his responses to these
questions, in concluding that he forfeited his argument.
4
  Insofar as Galluzzo takes issue with the Bankruptcy Court’s discussion of a $200,000
reduction of the IRS’s claim, this issue was not raised in the District Court and is
forfeited. See Barna, 877 F.3d at 146; In re Tribune Media Co., 902 F.3d 384, 397 (3d
Cir. 2018).
                                             5
addressing whether the notices of deficiency were issued for purposes of determining its

subject matter jurisdiction. Galluzzo has shown no error in this regard.

       Accordingly, we will affirm the judgment of the District Court. Galluzzo’s

request for oral argument is denied.

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