R. CIV. P. 56(e). If the court, in viewing all reasonable inferences in favor of the non-moving party, determines that there is no genuine issue of material fact, then summary judgment is proper. Celotex, 477 U.S. at 322; Wisniewski v. Johns-Manville Corp., 812 F.2d 81, 83 (3d Cir. 1987).
Summary Judgment is proper as to Count I of the Complaint as there is no genuine issue of material fact in dispute between the parties. As to Count II, however, Summary Judgment is inappropriate as genuine issues of material fact are in dispute.
A. Count I.
As noted above, in Count I, the United States seeks to reduce to judgment a tax assessment against Gallagher. The United States has introduced into evidence the Certificate of Assessments and Payments for the deficiencies at issue. This Certificate establishes the United States' prima facie case and shifts to Gallagher the burden of persuading the Court that the assessment is incorrect. Welch v. Helvering, 290 U.S. 111, 115, 78 L. Ed. 212, 54 S. Ct. 8 (1933); Psaty v. U.S., 442 F.2d 1154, 1159-60 (3d Cir. 1971); United States v. Updegrave, 1997 U.S. Dist. LEXIS 7536, No. 95-6054, 1997 WL 297074 at *3 (E.D. Pa. May 28, 1997)(citations omitted). Gallagher has failed to offer any evidence showing that the assessments are incorrect. Thus, Summary Judgment in favor of the United States as to Count I is proper.
B. Count II.
In Count II the United States seeks to set aside a conveyance of real property from Gallagher to his parents. The United States may proceed under either section 354 or section 357 of the Pennsylvania Fraudulent Conveyance Act to achieve this result. 39 Pa.C.S.A. §§ 354, 357.
Section 357 requires the United States to prove Gallagher made the conveyance with the intent to "hinder, delay, or defraud" the rights of the United States, his creditor. 39 Pa.C.S.A. § 357. The material issue of intent is disputed by the parties. This precludes Summary Judgment on Count II under section 357 at this time.
Under section 354, the United States may set aside the conveyance without regard to Gallagher's intent. To succeed, the United States must show that Gallagher was insolvent at the time of the sale, or was rendered insolvent by the sale, and that the sale was made for inadequate consideration. 39 Pa.C.S.A. § 354; United States v. Purcell, 798 F. Supp. 1102, 1111 (E.D. Pa. 1991), aff'd 972 F.2d 1334 (3d Cir. 1992).
The United States correctly points out that Gallagher admits he was insolvent at the time of the sale in his answers to interrogatories. But Gallagher's insolvency is only one element the United States must prove. The Defendants may still prevent the United States from setting aside the conveyance by showing adequate consideration was paid for the property. The parties dispute the amount of consideration actually paid, and whether that amount was adequate. This precludes Summary Judgment on Count II under section 354.
An appropriate Order follows.
AND NOW, this 18th day of September, 1997, upon consideration of Plaintiff's Motion for Summary Judgment and all responses thereto, it is hereby ORDERED and DECREED that said Motion is GRANTED as to Count I and DENIED as to Count II.
It is further ORDERED that judgment is ENTERED in favor of the United States of America and against defendant Richard Lommel Atkinson Gallagher in the amount of $ 297,048.34 plus interest and penalties accrued.
BY THE COURT:
Robert F. Kelly, J.