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JFWIRS, LTD. v. UNITED STATES
April 23, 1985
JFWIRS, LTD., Plaintiff
THE UNITED STATES OF AMERICA, Defendant
The opinion of the court was delivered by: CALDWELL
I. Introduction and Background
Pending at present in this matter are cross motions for summary judgment. At issue is whether the Internal Revenue Service (IRS) may impose a levy upon a liquor license issued by the Commonwealth of Pennsylvania, and sell the same at an execution sale to satisfy a tax claim against the holder of the license.
The parties are in essential agreement on the facts which relate to the present dispute:
1. The taxpayer against whom IRS is proceeding is a corporation known as Guytrak's Scotch N'Sirloin, Inc. (Guytrak's).
2. In 1983 and 1984 the IRS made assessments against Guytrak's for federal employment and unemployment taxes for 1982 and 1983.
3. Between August 12, 1983 and February 27, 1984, Notices of Federal Tax Lien Under Internal Revenue Law on all property and rights to property of Guytrak's were filed in the Prothonotary's Office, Berks County, Pa.
4. On March 8, 1984 IRS notified Guytrak's of the seizure and a levy upon Guytrak's, "property right in and under Pennsylvania Liquor License No. R-2459."
On April 30, 1984, after hearing, we issued a preliminary injunction enjoining the defendant from enforcing its levy or selling the license in question pending disposition of this action. We also directed the defendant to permit the Pennsylvania Liquor Control Board to transfer the license to the plaintiff, and we enjoined the plaintiff from transferring the license until this case is resolved. It appeared that the interests of all litigants would thereby be protected, and reflected our opinion at that time that plaintiff would prevail on the merits in this action. Additional background was stated in our memorandum of April 30, 1984:
The liquor license in question was originally issued to Joseph H. Welsh (Mr. Welsh) who assigned his interest to Guytrak's Scotch N'Sirloin, Inc., (Guytrak's) for $7,500, which sum, apparently, has remained unpaid. Mr. Welsh was also Guytrak's landlord, leasing to them the premises in Muhlenberg Township, Berks County, Pennsylvania which Guytrak's operated as a restaurant. The lease agreement (plaintiff's exhibit 1) provided at article IX for the landlord's option to repurchase the liquor license for $7,500 in the event of termination of the lease.
As of January 23, 1984, Guytrak's owed Welsh Interests, Mr. Welsh's assignee, $84,757.94, which debt included back rent, the unpaid $7,500 for the liquor license, and other obligations. On January 27, 1984, the lease was terminated and Welsh Interests executed its option to repurchase the liquor license which was to be transferred to its nominee, JFWIRS (plaintiff). On February 22, 1984, the liquor license was surrendered to the Pennsylvania Liquor Control Board (PLCB) pending approval of the transfer.
The IRS levy of March 8, 1984 temporarily derailed the liquor license transfer to plaintiff but our order of April 30, 1984 allowed the transfer to occur, subject to being divested should we later determine that the IRS levy and seizure of the license was valid.
Under Fed. R. Civ. P. 56 summary judgment is appropriate when "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." The material facts are not in dispute in this case so it is appropriate to dispose of it on motion after application of the relevant law. After careful consideration we have reversed ...
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