Court Opinion

ID: 4242230
Source: CourtListenerOpinion
Date Created: 2018-02-05 15:01:38.789042+00
Date Added: 2024-06-11T14:44:04.996657
License: Public Domain

Case: 16-10914        Date Filed: 01/31/2018      Page: 1 of 16

                                                                                  [PUBLISH]

                  IN THE UNITED STATES COURT OF APPEALS

                            FOR THE ELEVENTH CIRCUIT
                              ________________________

                                     No. 16-10914
                               ________________________

                           D.C. Docket No. 1:15-cv-20884-UU

UNITED STATES OF AMERICA,

                                                          Plaintiff - Appellee,

versus

ESTELLE STEIN,

                                                          Defendant - Appellant.

                               ________________________

                      Appeal from the United States District Court
                          for the Southern District of Florida
                            ________________________

                                     (January 31, 2018)

Before ED CARNES, Chief Judge, TJOFLAT, MARCUS, WILSON, WILLIAM
PRYOR, MARTIN, JORDAN, ROSENBAUM, JULIE CARNES, NEWSOM, and
HULL, Circuit Judges. *

*
 Judge Jill Pryor is recused from this case and did not participate in this decision. Judge Frank
Hull continued to participate in this decision after she assumed senior status pursuant to 28
                  Case: 16-10914   Date Filed: 01/31/2018   Page: 2 of 16

JORDAN, Circuit Judge:

       We hold that an affidavit which satisfies Rule 56 of the Federal Rules of

Civil Procedure may create an issue of material fact and preclude summary

judgment even if it is self-serving and uncorroborated. And because this principle

applies in all civil cases, including those in the realm of tax law, we overrule that

portion of Mays v. United States, 763 F.2d 1295, 1297 (11th Cir. 1985), which is

(or may be interpreted to be) to the contrary.

                                            I

       This case concerns IRS assessments, so we begin with some basic tax

concepts. An assessment “amounts to an IRS determination that a taxpayer owes

the [f]ederal [g]overnment a certain amount of unpaid taxes,” and is “entitled to a

legal presumption of correctness—a presumption that can help the [g]overnment

prove its case against a taxpayer in court.” United States v. Fior D’Italia, Inc., 536
U.S. 238, 242 (2002). “In reducing an assessment to judgment, the [g]overnment

must first prove that the assessment was properly made. . . . [If it does so,] the

taxpayer must then prove that the assessment is erroneous in order to prevail.”

United States v. White, 466 F.3d 1241, 1248 (11th Cir. 2006). As far as we can

tell, there are no reported federal cases addressing what evidence a taxpayer needs

to present to show that an IRS assessment has been paid or satisfied.

U.S.C. § 46(c).

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                                          A

      In 2015, the government sued Estelle Stein for outstanding tax assessments,

late penalties, and interest owed for tax years 1996, 1999, 2000, 2001, and 2002.

See 26 U.S.C. § 7402. Its complaint alleged that Ms. Stein owed approximately

$220,000 plus fees and statutory additions.

      When it moved for summary judgment, the government sought to

demonstrate that Ms. Stein had outstanding tax assessments by submitting copies

of her federal tax returns, transcripts of her accounts for the tax years in question,

and an affidavit from an IRS officer.         The government acknowledged that

Ms. Stein had paid the taxes due for 1996, 1999, and 2000 (as well as some

additional small amounts), but claimed she had not satisfied the accrued penalties

and interest for those years. As for 2001 and 2002, the government asserted that

Ms. Stein had not paid any taxes, penalties, or interest. The government did not

depose Ms. Stein.

      In response to the government’s summary judgment motion, Ms. Stein

submitted an affidavit of her own stating that, “to the best of [her] recollection,”

she had paid the taxes and penalties owed for the years in question. Her affidavit

specified that she had retained an accounting firm to file the tax returns after the

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death of her husband, who had been solely responsible for filing the couple’s tax

returns and paying their taxes; that she recalled paying the taxes due, including

penalties, for each of those tax returns; that she no longer had bank statements to

establish her payments to the IRS; that she could not obtain statements from her

bank to prove her payments; and that the IRS had acknowledged misapplying her

tax payment for 1996 to tax year 1979. The relevant paragraphs of Ms. Stein’s

affidavit stated as follows:

      8. For 1996, this tax return was filed on November 15, 2004. The
      IRS had no record of receiving any payment and is claiming the full
      amount of the tax is due, along with interest and penalties.

                                    ***

      10. For the year 1999, I filed the return as surviving spouse on
      February 11, 2005. The return showed an amount due of $33,612. I
      paid $35,226, which included the late penalty. The IRS has a record
      of that payment.

      11. For the year 2000, I filed my return as surviving spouse on
      January 11, 2005. The amount due on the return was $4,127. I paid
      $4,349.00, which amount included the late penalty. The IRS has a
      record of having received that payment.

      12. For the year 2001, I filed my return, as surviving spouse, on
      March 10, 2005. The amount of the return shows $15,998 due.
      Although I recall paying the tax on that return, including a late
      penalty consistent with the other returns that I filed, the IRS does not
      have a record of receiving such payment.

      13. For the year 2002, I filed my return on March 10, 2005, as
      surviving spouse. The amount of tax shown on the return was
      $52,342. Although I recall writing a check for this amount, plus,
      late penalties, the IRS has no record of receiving his amount.

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                                     ***

      21. . . . [I]t is my unwavering contention that I paid the taxes due,
      including late filing penalties, at such time as I filed the returns for
      each of the tax years in question.

D.E. 32-1 at 2–3.

      The district court entered summary judgment in favor of the government.

See D.E. 40. It first concluded that the evidence submitted by the government

created a presumption that its assessments were correct. Turning to Ms. Stein’s

affidavit, the district court ruled that “[a] number of the facts contained within [the]

affidavit [were] not relevant facts for . . . consideration.” Id. at 6. Although

Ms. Stein maintained that payments had been made, she “did not produce any

evidence documenting said payments,” id., and therefore did not satisfy her burden

to overcome the presumption of correctness given to the government’s

assessments. As a result, there was “no genuine dispute as to any material fact,”

id. at 7, and the government was entitled to judgment as a matter of law.

      Ms. Stein appealed, and a panel of this court affirmed. The panel ruled that

her “affidavit failed to create a genuine factual dispute about the validity of the

[government’s] assessments” because, under Mays, 763 F.2d at 1297, her “general

and self-serving assertions . . . failed to rebut the presumption established by the

assessments.” United States v. Stein, 840 F.3d 1355, 1357 (11th Cir. 2016). We

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vacated the panel’s opinion and took the case en banc to determine whether Mays

should be overruled.

                                         II

      Mays, a tax refund case, came to us in a summary judgment posture. We

affirmed the district court’s grant of summary judgment in favor of the

government, holding that the taxpayer’s submissions were insufficient to create an

issue for trial. See 763 F.2d at 1297. We first noted that a taxpayer in a refund

suit has the twin burdens of showing that the government’s assessment is wrong,

and of establishing the “correct amount of the refund due.” Id. We then explained

that a taxpayer’s claim “must be substantiated by something other than tax returns,

uncorroborated oral testimony, or self-serving statements.” Id. (internal citations

omitted). Turning to the record in the case, we concluded that the taxpayer’s

computer printout of business expenses (prepared after a tax audit) and net worth

statements (which did not refer to any original records) “did not overcome the

presumption of correctness due [to] determinations” of the Commissioner of the

IRS: “[The taxpayer] has submitted only self-serving documents which do not

substantiate his claims.” Id.

      We overrule Mays to the extent it holds or suggests that self-serving and

uncorroborated statements in a taxpayer’s affidavit cannot create an issue of

material fact with respect to the correctness of the government’s assessments.

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Nothing in Rule 56 prohibits an otherwise admissible affidavit from being self-

serving. And if there is any corroboration requirement for an affidavit, it must

come from a source other than Rule 56.

                                         A

       Rule 56(a) authorizes summary judgment only when “there is no genuine

dispute as to any material fact” and the moving party is “entitled to judgment as a

matter of law.” Rule 56(c), in turn, allows a nonmoving party to dispute a material

fact through an affidavit, which must be “made on personal knowledge, set out

facts that would be admissible in evidence, and show that the affiant or declarant is

competent to testify on the matters stated.” See generally Celotex Corp. v. Catrett,

477 U.S. 317, 322 (1986) (“[T]he plain language of Rule 56(c) mandates the entry

of summary judgment, after adequate time for discovery and upon motion, against

a party who fails to make a showing sufficient to establish the existence of an

element essential to that party’s case, and on which that party will bear the burden

of proof a trial.”).

       An affidavit cannot be conclusory, see, e.g., Lujan v. Nat’l Wildlife Fed’n,

497 U.S. 871, 888 (1990), but nothing in Rule 56 (or, for that matter, in the Federal

Rules of Civil Procedure) prohibits an affidavit from being self-serving. Indeed, as

the Seventh Circuit observed, “most affidavits submitted [in response to a

summary judgment motion] are self-serving.” Payne v. Pauley, 337 F.3d 767, 772

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(7th Cir. 2003).     Not surprisingly, most of our cases correctly explain that a

litigant’s self-serving statements based on personal knowledge or observation can

defeat summary judgment. See, e.g., Feliciano v. City of Miami Beach, 707 F.3d
1244, 1253 (11th Cir. 2013) (“To be sure, Feliciano’s sworn statements are self-

serving, but that alone does not permit us to disregard them at the summary

judgment stage.”); Price v. Time, Inc., 416 F.3d 1327, 1345 (11th Cir.) (“Courts

routinely and properly deny summary judgment on the basis of a party’s sworn

testimony even though it is self-serving.”), modified on other grounds on denial of

reh’g, 425 F.3d 1292 (11th Cir. 2005).

      It makes no difference that this is a tax case. We apply the same summary

judgment standard in tax cases as we do in other areas of law. See, e.g., Roberts v.

Comm’r, 329 F.3d 1224, 1227 (11th Cir. 2003) (citing Tax Ct. R. 121, which

mirrors Rule 56). See also Lewis v. United States, 336 F. App’x 535, 538 (6th Cir.

2009) (rejecting the argument that the ordinary summary judgment standard does

not apply in tax cases).

      To support its statement that a taxpayer needs more than his self-serving

testimony to preclude summary judgment, Mays relied on Gibson v. United States,

360 F.2d 457 (5th Cir. 1966).       But Gibson does not hold that self-serving

statements in a taxpayer’s affidavit cannot create a genuine issue of material fact.

In Gibson, which involved a claim for a refund of excise taxes, the taxpayer

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appealed certain unfavorable factual findings made by the district court following a

bench trial. The taxpayer argued primarily that the district court had erred in

disregarding his testimony and the tax liability calculations contained in his own

“excise tax journal.” See id. at 460–62. The former Fifth Circuit held that the

district court’s factual findings were not clearly erroneous and explained that the

taxpayer’s self-serving testimony did “not compel a contrary result.” Id. at 462.

       Gibson does not hold that a district court can reject or ignore a taxpayer’s

affidavit at summary judgment on the ground that it is self-serving. Gibson was an

appeal from a bench trial, and in that setting a district court can certainly take into

account the self-serving nature of a litigant’s testimony. A district court is, after

all, permitted to assess credibility and weigh evidence at a bench trial, and the

same goes for the jury when it is the trier of fact. 1

       Properly understood, Gibson stands only for the unremarkable proposition

that a fact-finder can choose to disregard a litigant’s self-serving (and unsupported)

trial testimony, and that its decision to do so generally will not constitute clear

error. That proposition has no place at summary judgment, where “the [court’s]

function is not . . . to weigh the evidence.” Anderson v. Liberty Lobby, Inc., 477

1
  Of note, none of the cases cited in Gibson arose in a summary judgment posture. See Pinder v.
United States, 330 F.2d 119, 121 (5th Cir. 1964) (reviewing jury verdict); Mendelson v. Comm’r,
305 F.2d 519, 521 (7th Cir. 1962) (reviewing tax court’s factual findings); Urban Redevelopment
Corp. v. Comm’r, 294 F.2d 328, 332 (4th Cir. 1961) (same); Comm’r v. Smith, 285 F.2d 91, 93
(5th Cir. 1960) (same); Carter v. Comm’r, 257 F.2d 595, 596, 599 (5th Cir. 1958) (same);
Anderson v. Comm’r, 250 F.2d 242, 246–47 (5th Cir. 1957) (same); Archer v. Comm’r, 227 F.2d
270, 272 (5th Cir. 1955) (same).

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U.S. 242, 249 (1986). See also Danzer v. Norden Sys., Inc., 151 F.3d 50, 57 (2d

Cir. 1998) (rejecting the argument that a self-serving affidavit is insufficient to

defeat summary judgment because it would “thrust the courts—at an inappropriate

stage—into an adjudication of the merits”).

                                           B

      Nor does Rule 56 require that an otherwise admissible affidavit be

corroborated by independent evidence. As noted, Rule 56(c) states only that an

affidavit must be “made on personal knowledge, set out facts that would be

admissible in evidence, and show that the affiant or declarant is competent to

testify on the matters stated.”

      We see no basis for imposing a corroboration gloss on Rule 56, cf.

Leatherman v. Tarrant Cty. Narcotics Intelligence & Coordination Unit, 507 U.S.
163, 168–69 (1993) (rejecting a judicially-imposed “heightened pleading standard”

not found in Federal Rules of Civil Procedure 8 and 9 for municipal liability

cases), and reaffirm that “even in the absence of collaborative evidence, a

plaintiff’s own testimony may be sufficient to withstand summary judgment.”

Strickland v. Norfolk S. Ry. Co., 692 F.3d 1151, 1160 (11th Cir. 2012).     Accord

E.E.O.C. v. Warfield-Rohr Casket Co., 364 F.3d 160, 163–64 (4th Cir. 2004);

Jackson v. Ducksworth, 955 F.2d 21, 22 (7th Cir. 1992); Weldon v. Kraft, Inc., 896
F.2d 793, 800 (3d Cir. 1990); Becho, Inc. v. United States, 47 Fed. Cl. 595, 603–04

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& n.11 (2000); Marsh v. Hog Slat, Inc., 79 F. Supp. 2d 1068, 1076 (N.D. Iowa

2000).     If corroboration is needed, then that requirement must come from a source

other than Rule 56, such as the substantive law that governs the parties’ dispute or

the Federal Rules of Evidence. See, e.g., Fed. R. Evid. 804(b)(3)(B) (requiring

corroboration to support the admission of statements against the declarant’s

interest). 2

                                               III

       A non-conclusory affidavit which complies with Rule 56 can create a

genuine dispute concerning an issue of material fact, even if it is self-serving

and/or uncorroborated. We overrule Mays to the extent that it holds or suggests

otherwise, and remand the case to the panel for consideration of Ms. Stein’s

appeal.

       We do not mean to suggest that a self-serving and/or uncorroborated

affidavit will always preclude summary judgment. We hold only that the self-

serving and/or uncorroborated nature of an affidavit cannot prevent it from creating

2
  In the appeal of a tax refund case that went to trial, we stated almost 40 years ago that a
taxpayer cannot meet his burden through his “uncorroborated oral testimony.” Griffin v. United
States, 588 F.2d 521, 530 (5th Cir. 1979) (concluding that, because the taxpayer’s testimony was
corroborated, the issue was for the jury). Mays, itself a tax refund case, cited Griffin for the
proposition that a taxpayer’s refund claim needs to be substantiated by “something other than . . .
uncorroborated oral testimony.” Mays, 763 F.2d at 1297. This case does not involve a refund
claim, and the appeal is from a summary judgment order. Given the posture and nature of this en
banc proceeding, we do not express any views on whether the quoted statement from Griffin is
correct as a matter of substantive federal tax law.

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an issue of material fact. And we leave to the panel the task of determining the

impact of Ms. Stein’s affidavit.

      Finally, we recognize that the government, in its en banc brief, has made a

number of additional and related arguments in support of the district court’s

summary judgment order. For example, the government argues that, in a case like

this one, a taxpayer’s affidavit concerning the matter of payment must be

substantiated and corroborated (for example, by documentary evidence) pursuant

to principles of substantive federal tax law, particularly given the presumption of

correctness that attaches to its assessments. Given the narrow question presented

for en banc review, we think it is best for the panel to consider the government’s

arguments, as well as Ms. Stein’s responses to them.

      REMANDED TO THE PANEL WITH INSTRUCTIONS.

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WILLIAM PRYOR, Circuit Judge, concurring:

       I concur fully in the majority opinion, but I write separately to highlight the

irony of our earlier precedent when viewed in the light of the history of the

Seventh Amendment. The precedent we overrule today, Mays v. United States,

prevented juries from resolving factual disputes when a taxpayer offered only a

self-serving affidavit in support of his position. 763 F.2d 1295, 1297 (11th Cir.

1985). As the majority opinion explains, that rule had no basis in law. But it also

flouted the history of the right to a jury trial in civil cases.

       In the decades before the American Revolution, Parliament developed

procedures to enforce its revenue measures by evading colonial juries. See 1 Julius

Goebel, Jr., History of the Supreme Court of the United States 85–86 (Paul A.

Freund ed., 1st ed. 1971); Philip Hamburger, Is Administrative Law Unlawful? 150

(2014). England had struggled to enforce its trade laws in the colonies, and

colonial officials in America blamed local juries for refusing to be impartial in

customs disputes. See Carl Ubbelohde, Vice-Admiralty Courts and the American

Revolution 15 (1960). In response, Parliament expanded the jurisdiction of

admiralty courts, which sat without juries, to include trade cases that would have

been tried by a jury in England. See Ubbelohde, supra at 15–16, 21. Later, seeking

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to extract more revenue from the colonies, Parliament enacted the Sugar Act for

“the improvement of ‘the Revenue of th[e] Kingdom’” and extended the power of

customs officials, at their discretion, to “channel cases into admiralty courts, and so

to eliminate jury trial.” Goebel, supra at 85–86 (quoting 4 Geo. 3, c. 15 (Eng.

1764)); see also Caleb Nelson, The Constitutionality of Civil Forfeiture, 125 Yale

L.J. 2446, 2463 (2016). And the Stamp Act, 5 Geo. 3, c. 12 (Eng. 1765), provided

that customs officials could enforce not only the stamp tax, but also “revenue acts

in general” in the juryless admiralty courts. Goebel, supra at 86.

      Colonial Americans vehemently objected to these measures, and the denial

of the right to a jury in tax cases became a chief complaint animating the American

Revolution. The “colonies formed a Congress to protest ‘the tyrannical acts of the

British Parliament.’” Hamburger, supra at 150 (quoting Resolutions of the Stamp

Act Congress (Oct. 19, 1765)). The Stamp Act Congress declared that “trial by

jury, is the inherent and invaluable right of every British subject in these colonies.”

Resolutions of the Stamp Act Congress (Oct. 19, 1765), in Select Charters and

Other Documents Illustrative of American History 1606-1775, at 315 (William

MacDonald ed., MacMillan & Co. 1906). And it denounced “extending the

jurisdiction of the courts of admiralty beyond its ancient limits” because of its

“manifest tendency to subvert the rights and liberties of the colonists.” Id. In the

Declaration of Independence, Americans cited the “depriv[ation] in many cases, of

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the benefit of Trial by Jury” as one of the “Usurpations” committed by King

George III that they would no longer tolerate. The Declaration of Independence

paras. 2, 20 (1776).

      The failure to guarantee the right to a jury trial in civil cases almost

prevented the ratification of the Constitution. In attempting to persuade New York

to ratify the Constitution, Alexander Hamilton acknowledged “[t]he objection” that

had “met with most success” in his home state and “several of the other states” was

“the want of a constitutional provision for the trial by jury in civil cases.” The

Federalist No. 83, at 558 (Alexander Hamilton) (Jacob E. Cooke ed., 1961). And

he discussed the specific argument that the civil jury is a necessary “safeguard

against an oppressive exercise of the power of taxation.” Id. at 563. As Justice

Story later explained, Americans decided that it was not enough that Congress had

the authority “to provide in all cases for the trial by jury.” United States v. Wonson,

28 F. Cas. 745, 750 (C.C. Mass. 1812) (No. 16,750). The defenders of the

Constitution prevailed in the ratification debates only after promising an

amendment that guaranteed the right to trial by jury in civil cases. Stanton D.

Krauss, The Original Understanding of the Seventh Amendment Right to Jury

Trial, 33 U. Rich. L. Rev. 407, 412–13 (1999). Americans then enshrined that right

in the Seventh Amendment. U.S. Const. Amend. VII.

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      Our precedent in Mays lost sight of the historical basis for the right to a civil

jury when it denied a taxpayer a jury trial if all he offered in his favor was a self-

serving affidavit to rebut official records of his delinquency. In so doing, Mays

ousted the jury from its historical role in the exact context—the enforcement of tax

laws—that prompted the founding generation to adopt the Seventh Amendment in

the first place. Today, we rectify that error.

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