Court Opinion

ID: 183475
Source: CourtListenerOpinion
Date Created: 2011-01-25 05:05:16+00
Date Added: 2024-06-11T17:26:03.984256
License: Public Domain

[DO NOT PUBLISH]

                        IN THE UNITED STATES COURT OF APPEALS

                               FOR THE ELEVENTH CIRCUIT
                                ________________________           FILED
                                                          U.S. COURT OF APPEALS
                                       No. 10-11162         ELEVENTH CIRCUIT
                                 ________________________       JAN 24, 2011
                                                                 JOHN LEY
                                                                  CLERK
                             D.C. Docket No. 0:07-cv-60039-MGC

JOSEPH P. D’ANGELO,
individually,

lllllllllllllllllllll                                              Plaintiff - Appellant,

Daycon Investors Associates, Inc.,

lllllllllllllllllllll                                                           Plaintiff,

                                             versus

USA,

lllllllllllllllllllll                                             Defendant - Appellee.

                                ________________________

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

                                      (January 24, 2011)
Before BARKETT and MARCUS, Circuit Judges, and RESTANI,* Judge.

PER CURIAM:

       Joseph P. D’Angelo appeals the district court’s grant of summary judgment

to the United States on D’Angelo’s claim that the government wrongfully assessed

taxes and penalties against him under 26 U.S.C. § 6672.1 The Internal Revenue

Service (“IRS”) assessed tax penalties against D’Angelo for the unpaid trust fund

taxes2 of two companies—Americare Pulmo-Tech, Inc. (“Pulmo-Tech”) and its

parent, Americare Services (“Services”) (together, “the Companies”). To

successfully challenge his liability under § 6672, D’Angelo must show either that

he was not responsible for the Companies’ tax payments, or that his non-payment

was not willful. See Malloy v. United States, 17 F.3d 329, 331 (11th Cir. 1994).

D’Angelo conceded his status as a responsible person at oral argument, but he

claims that disputed issues of material fact prevent a finding of willfulness without

       *
         Honorable Jane A. Restani, Judge, United States Court of International Trade, sitting by
designation.
       1
           26 U.S.C. § 6672(a) provides in relevant part:

       Any person required to collect, truthfully account for, and pay over any tax
       imposed by this title who willfully fails to collect such tax, or truthfully account
       for and pay over such tax, or willfully attempts in any manner to evade or defeat
       any such tax or the payment thereof, shall, in addition to other penalties provided
       by law, be liable to a penalty equal to the total amount of the tax evaded, or not
       collected, or not accounted for and paid over.
       2
          Employers are required to set aside the withheld portion of their employees’ paychecks
in a trust account and then pay the contents of the trust over to the United States at appointed
times. D’Angelo concedes that the withheld funds were not paid.

                                                  2
a trial.3

        A taxpayer’s non-payment of withheld taxes is willful if he “either had

actual knowledge that the taxes were not being paid or acted with a reckless

disregard of a known or obvious risk of nonpayment.” Malloy, 17 F.3d at 332.

The district court found that D’Angelo had actual knowledge of the unpaid taxes;

D’Angelo claims that the court improperly relied on credibility assessments.

However, we need not reach the issue of actual knowledge because the

uncontested evidence supports the conclusion that D’Angelo recklessly

disregarded an obvious risk that the companies would not pay the withheld taxes.4

        D’Angelo “is liable ‘if he (1) clearly ought to have known that (2) there was

a grave risk that withholding taxes were not being paid and if (3) he was in a

position to find out for certain very easily.’” Malloy, 17 F.3d at 332 n.12 (11th

Cir. 1994) (quoting Wright v. United States, 809 F.2d 425, 427 (7th Cir.1987)).

D’Angelo’s actions meet this standard. He created Pulmo-Tech as a subsidiary of

        3
         “This court reviews a district court’s grant of summary judgment de novo, applying the
same legal standards used by the district court.” Krutzig v. Pulte Home Corp., 602 F.3d 1231,
1234 (11th Cir. 2010). Summary judgment is appropriate only if the evidence, viewed in the
light most favorable to the non-moving party, shows that “there is no genuine issue of material
fact and that the moving party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c).
        4
         We can affirm summary judgment “on any legal ground,” even though the court did not
address the reckless disregard prong. Cuddeback v. Fla. Bd. of Educ., 381 F.3d 1230, 1236 (11th
Cir. 2004).

                                                 3
Services5 to take over a struggling company managed by his friend, Barbara Born.

D’Angelo was a founder, director, and president or CEO of the Companies, and

his was the only name on their bank accounts. Despite Born’s failings at the

predecessor company, he retained her as Pulmo-Tech’s manager, and Pulmo-Tech

soon began losing money. By the time he decided to shut down Pulmo-Tech’s

offices, he knew that it was insolvent and that Born had failed to pay taxes at her

former company. D’Angelo examined Pulmo-Tech’s finances in detail sufficient

to decide to close the company. At this time, the risk of non-payment of the

withholding taxes was obvious, and if he did not actually know, he could easily

have discovered the truth. Cf. Malloy, 17 F.3d at 332 (finding notice of an

obvious risk based on failure to investigate despite knowledge of company’s

financial difficulties and non-payment of withholding taxes by predecessor

company run by the same managers). Further, after receiving a notice from the

IRS a year later, he simply gave it to his attorney and still did not inquire into the

Companies’ tax payments. The record demonstrates that, at a minimum, D’Angelo

recklessly disregarded an obvious risk that the Companies would not pay the taxes

due.

       5
         Services was an investment vehicle and administrative hub through which D’Angelo
and other investors acquired companies and managed them. D’Angelo admits that he was the
only officer with control of Services’ operations. Services’ tax liability is derivative of Pulmo-
Tech’s following the latter’s closing.

                                                 4
      Accordingly, we reject D’Angelo’s claim that the district court erred in

finding his non-payment willful, and we AFFIRM the district court’s grant of

summary judgement in favor of the government.

                                         5