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SADOWSKI v. UNITED STATES

May 10, 1988

LINDA L. SADOWSKI
v.
UNITED STATES OF AMERICA v. CONRAD A. SADOWSKI, Third-party Defendant



The opinion of the court was delivered by: HUYETT

 HUYETT, UNITED STATES DISTRICT JUDGE.

 Plaintiff, Linda L. Sadowski (now Linda Kemmerer), brought this civil action against the United States of America for a tax refund. The United States had assessed the plaintiff for a one hundred percent civil penalty pursuant to 26 U.S.C. § 6672 for failure to pay federal income taxes withheld during the third quarter of 1980 through the third quarter of 1982 from employees of Sadowski Plumbing, Inc. (Sadowski Plumbing). The United States has counterclaimed for the amount still owing on the assessment and has filed a third-party complaint against Conrad A. Sadowski. Section 6672 imposes a one hundred percent civil penalty against:

 Plaintiff contends she was not a responsible person of Sadowski Plumbing and, therefore, should not be held liable for the one hundred percent penalty under section 6672. Following a non-jury trial on December 23, 1987, I make the following findings of fact and conclusions of law pursuant to Fed.R.Civ.P. 52(a).

 FINDINGS OF FACT

 1. Plaintiff Linda L. Sadowski resides and is domiciled at 1346-F West Wyomissing Boulevard, West Lawn, Pennsylvania within this district.

 2. The defendant and counterclaimant is the United States of America.

 3. Third-party defendant Conrad A. Sadowski resides and is domiciled at 47 West Wilson Street, Wernersville, Pennsylvania within this district.

 4. Plaintiff Linda L. Sadowski and third-party defendant Conrad A. Sadowski were married in June of 1967, separated in December of 1982, and subsequently divorced in December of 1983. Stipulated Facts, Final Pretrial Order, para. 2(a). *fn1"

 5. Conrad A. Sadowski was self-employed as a plumbing contractor from late 1975 until 1983. Third-party defendant operated his plumbing business as a sole proprietorship from 1975 until January of 1980. Stipulated Facts, Final Pretrial Order, para. 2(b).

 6. From January 1980 through December 31, 1982, Conrad Sadowski operated the business as a Pennsylvania corporation under the name of "Sadowski Plumbing and Heating Co." Stipulated Facts, Final Pretrial Order, para. 2(c).

 7. Conrad Sadowski was the sole shareholder, director, officer, and president of Sadowski Plumbing. Stipulated Facts, Final Pretrial Order, para. 2(d).

 8. Conrad Sadowski was an authorized signer on the corporate checking account maintained at American Bank and Trust Company. Third-party Sadowski signed checks on this account. Stipulated Facts, Final Pretrial Order, para. 2(d). See, e.g., Government Exhibit 12(A)(B)(C).

 9. Plaintiff at no time was a salaried employee of Sadowski Plumbing, but did perform work for the corporation. *fn2" Stipulated Facts, Final Pretrial Order, para. 2(g) Further, plaintiff at no time was an officer of the corporation. *fn3"

 10. Plaintiff was an authorized signer on the corporate checking account maintained at American Bank and Trust Company. Third-party Defendant Exhibit 1. Plaintiff signed checks drawn on the corporate checking account. See, e.g., Government Exhibits 2(A)(B)(C) Plaintiff also made deposits to, but did not make withdrawals from, the account.

 11. Sadowski Plumbing was operated from the Sadowski's home. The corporate "office" was maintained on the second floor of the Sadowski home in a sewing room equipped with a typewriter and filing cabinet for corporate use. A separate telephone line was maintained for the corporation.

 12. Corporate records were kept both at the office of the accountant hired by Sadowski Plumbing and the home office. Corporate cancelled checks were kept on top of the filing cabinet in the sewing room.

 13. The corporation had four employees. Conrad Sadowski supervised these employees. All hiring and firing of employees was done by Conrad Sadowski. Linda Sadowski was not authorized to, nor did she, hire, fire, or supervise employees.

 14. Plaintiff Linda Sadowski testified at the December 23, 1987 trial. I found her testimony to be candid and frank, and that she was a credible witness.

 15. Plaintiff Sadowski began performing tasks for her husband's business in 1975. Plaintiff Sadowski worked part-time as a receptionist from 1975 until 1977 when third-party Sadowski asked her to leave her employment to help him with his plumbing business. *fn4" Third-party defendant needed plaintiff's assistance because he was out most of the day performing plumbing jobs.

 16. Plaintiff performed routine tasks for the corporation. Plaintiff's tasks included typing, answering the phone, picking up the mail, writing out checks, and computing the payroll.

 17. Plaintiff's typing duties consisted of typing job estimates and customer bills given to her by third-party defendant Sadowski. Plaintiff did not initiate any bills on behalf of the corporation; nor did she estimate plumbing jobs herself.

 18. Plaintiff wrote corporate checks to pay various creditors at the instruction of her ex-husband, third-party defendant Sadowski. Third-party defendant gave plaintiff creditors' bills approximately once a week and instructed her as to the amount to pay the creditors. Plaintiff Sadowski did not initiate the payment of corporate creditors; rather she paid them as instructed by her ex-husband. Plaintiff also issued blank checks to employees for plumbing materials when instructed to do so by third-party defendant Sadowski.

 19. When writing these checks, plaintiff would also post each amount in the corporate checkbook.

 20. Plaintiff occasionally picked up mail at the post office. On these occasions, plaintiff would look through the mail and place it on the kitchen table for her then husband's review.

 21. Plaintiff also delivered the corporate checkbook to the corporation's accountant, Charles Galeo, four times a year when the quarterly taxes were due. Her job in this regard was that of an errand girl; she dropped off the checkbook and other corporate information, and picked up the finished tax returns which she then gave to her ex-husband. Plaintiff did not ...


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