Court Opinion

ID: 2963937
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:17:44.715679+00
Date Added: 2024-06-11T11:42:48.847541
License: Public Domain

USCA1 Opinion

	

                                [NOT FOR PUBLICATION]

                            UNITED STATES COURT OF APPEALS
                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                FOR THE FIRST CIRCUIT
                                 ____________________

        No. 95-1872

                             IN RE:  EDOUARD GADOURY, JR.

                                 ____________________

                                EDOUARD GADOURY, JR.,

                                      Appellant,

                                          v.

                               UNITED STATES OF AMERICA
                            FOR INTERNAL REVENUE SERVICE,

                                      Appellee.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                           FOR THE DISTRICT OF RHODE ISLAND

                [Hon. Raymond J. Pettine, Senior U.S. District Judge]
                                          __________________________

                                 ____________________

                                        Before

                                Torruella, Chief Judge,
                                           ___________

                            Aldrich, Senior Circuit Judge,
                                     ____________________

                              and Selya, Circuit Judge.
                                         _____________

                                 ____________________

            Guido R. Salvadore for appellant.
            __________________
            Alice L. Ronk  with whom Lorretta  C. Argrett,  Assistant Attorney
            _____________            ____________________
        General, Gary R. Allen, David  English Carmack and Sheldon Whitehouse,
                 _____________  ______________________     __________________
        United States Attorney, were on brief for appellee.
        ______________________

                                 ____________________

                                  February 26, 1996
                                 ____________________

                 Per Curiam.  Edouard Gadoury, Jr.'s appeal covers an
                 ___________

             unfavorable decision by the Internal Revenue Service that he

               is a responsible person who willfully failed to pay over

               withheld payroll taxes, 26 U.S.C.   6672,1 the burden of

             proof being upon him, Caterino v. United States, 794 F.2d 1
                                   ________    _____________

            (1st Cir. 1986), cert. denied, 480 U.S. 905 (1987); a finding
                             ____________

              supporting the IRS by the United States Bankruptcy Court;2

            findings by a magistrate concluding that the bankruptcy court

               had not committed clear error, and the district court's

              confirmation of the magistrate's findings.  Proof of clear

             error is Gadoury's burden throughout; we do not have de novo
                                                                  _______

                 review.  Id. at 5.  Unhappily, he has not succeeded.
                          ___

             We consider first a procedural point, in fact but a straw to

               which Gadoury, understandably, would cling.  When, by a

              course that we need not consider, he found himself in the

              bankruptcy court, Gadoury filed a motion for the court to

             determine that he had no   6672 liability.  The government,

                                
            ____________________

            1.        (a) General rule.  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.  Gadoury having ended up in a Chapter 7 proceeding.

                                         -2-

              erroneously interpreting the motion to be merely a request

            for a hearing, awaited the court's response, only to discover

              that the response was to allow the motion, in light of the

              government's failure to reply.  The government then sought

            vigorously to have the order vacated under Fed.R.Civ.P. 55(e)

             (made applicable to adversary proceedings by Bankr. R. 7055)

              which prohibits entry of default against the United States

               unless plaintiff has presented evidence on the merits. 

             Alternatively, it asserted good cause under Rule 55(c).  We

              find no error either way in the court's rescission of the

                           order and proceeding to a trial.

              Our substantive start and, indeed, finish, is whether the

               district court properly refused to reject the bankruptcy

            findings that Gadoury was responsible, and "willfully" failed

             to pay the payroll taxes, aided by the IRS's presumption of

               correctness with which it entered the bankruptcy court. 

              Caterino, 794 F.2d at 5.  We are further reminded by that
              ________

                opinion that such findings may be aided by unexpressed

            inferences if they reasonably appear to have been intended by

              the court.  794 F.2d at 6 n.2.  Some of the facts found by

             the bankruptcy court, plus some stipulated, are as follows:

             Gadoury was hired by Sprague Company in 1986 as bookkeeper. 

             His title was changed to Controller.  As such he was not an

            officer, but he could sign company checks, solo, and did sign

              company tax returns and tax checks.  The bankruptcy court,

                                         -3-

            however, correctly ruled, "[T]he cases do say again and again

            that just mere check writing authority is not enough."  There

             was, of course, more.  The court found, on evidence that it

             believed, as well as the parties' stipulations, that Gadoury

              had significant control over disbursement of the company's

            funds, making him a responsible person.  For good measure, it

             also found that he had received no special instructions not

              to pay.3  Gadoury fully disputed this evidence.  Looked at

             most favorably to him it might be possible to find, in light

             of the company's business straits and poor cash flow, he not

              only had special instructions not to pay, but that a broad

              order from his superior reduced his authority altogether,

              with his superior taking over his duties.  The difficulty

            here is that the superior denied this, and the court believed

              him.  The fact that the court failed to discuss Gadoury's

             evidence, or state why it was not persuasive, does not make

                          its contrary findings clear error.

              As to willfulness, Gadoury admitted that he was aware the

            taxes were not being paid, that he urged them to be paid, but

              that he failed to take any steps to see that they were in

                       fact paid.  There is no more to be said.

                                      Affirmed.
                                      _________

                                
            ____________________

            3.  For the possible importance of such, see Howard v. United
                                                         ______    ______
            States, 711 F.2d 729 (5th Cir. 1983).
            ______

                                         -4-