United States District Court, N.D. Alabama, Northeastern Division
ELIZABETH R. CARTER, as Personal Representative of the Estate of Frances E. P. Roper, Plaintiff
UNITED STATES OF AMERICA, Defendant
N. JOHNSON, JR. UNITED STATES MAGISTRATE JUDGE
action proceeds before the court on Defendant's Amended
Motion to Dismiss or Alternatively for Summary Judgment.
(Doc. 17). At the outset, the court does not possess subject
matter jurisdiction over this action due to Plaintiff
Elizabeth R. Carter's failure to file a timely
administrative claim seeking a refund of tax payments.
However, the court heeds recent Supreme Court jurisprudence
establishing that most limitations periods are
claims-processing rules rather than jurisdictional
requisites, yet the same result ensues because Carter's
alleged financial disability does not equitably toll the
limitations period, whether deemed jurisdictional or not.
Furthermore, the Internal Revenue Service properly assessed
the stock at issue pursuant to its fair market exchange value
rather than a reduced value engendered by a massive criminal
fraud. Therefore, on the merits Carter's claim for a tax
result, for the reasons set out herein, the court
GRANTS Defendant's motion.
courts are courts of limited jurisdiction” and, as
such, possess the power to hear cases only as authorized by
the Constitution or United States' laws. Kokkonen v.
Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994).
“[B]ecause a federal court is powerless to act beyond
its statutory grant of subject matter jurisdiction, a court
must zealously insure that jurisdiction exists over a
case.” Smith v. GTE Corp., 236 F.3d 1292, 1299
(11th Cir. 2001). “If the court determines
at any time that it lacks subject-matter jurisdiction, the
court must dismiss the action.” Fed.R.Civ.P. 12(h)(3).
Rule of Civil Procedure 12(b)(1) permits a district court to
dismiss a case for “lack of subject-matter
jurisdiction.” Fed.R.Civ.P. 12(b)(1). Plaintiff bears
the burden of persuasion on establishing the court's
subject matter jurisdiction. OSI, Inc. v. United
States, 285 F.3d 947, 951 (11th Cir. 2002)
(citing Thomson v. Gaskill, 315 U.S. 442, 446
Eleventh Circuit establishes particular modes of review for
to subject matter jurisdiction:
[A] motion to dismiss for lack of subject matter jurisdiction
pursuant to Fed.R.Civ.P. 12(b)(1) can be based upon either a
facial or factual challenge to the complaint. If the
challenge is facial, the plaintiff is left with safeguards
similar to those retained when a Rule 12(b)(6) motion to
dismiss for failure to state a claim is raised . . .
Accordingly, the court must consider the allegations in the
plaintiff's complaint as true . . . A facial attack on
the complaint requires the court merely to look and see if
the plaintiff has sufficiently alleged a basis of subject
matter jurisdiction, and the allegations in his complaint are
taken as true for the purposes of the motion . . .
Factual attacks, on the other hand, challenge the existence
of subject matter jurisdiction in fact, irrespective of the
pleadings, and matters outside the pleadings, such as
testimony and affidavits are considered. Furthermore, . . .
the district court has the power to dismiss for lack of
subject matter jurisdiction on any of three separate bases:
(1) the complaint alone; (2) the complaint supplemented by
undisputed facts evidenced in the record; or (3) the
complaint supplemented by undisputed facts plus the
court's resolution of disputed facts.
McElmurray v. Consol. Gov't of Augusta-Richmond
Cty., 501 F.3d 1244, 1251 (11th Cir. 2007)
(citing, inter alia, Williamson v. Tucker,
645 F.2d 404, 412 (5th Cir. 1981); Lawrence v.
Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990))
(internal quotation marks and alterations omitted).
a factual challenge to subject matter jurisdiction typically
permits a “trial court . . . to weigh the evidence and
satisfy itself as to the existence of its power to hear the
case.” Williamson, 645 F.2d at
412-13. No presumptive truthfulness would attach to
a plaintiff's claims, and “the existence of
disputed material facts [would] not preclude the trial court
from evaluating for itself the merits of jurisdictional
claims.” Id; see also Lawrence, 919
F.2d at 1528-29.
“a Rule 12(b)(1) motion is filed in conjunction with
other Rule 12 motions, the court should consider the Rule
12(b)(1) jurisdictional attack before addressing any attack
on the merits.” Ramming v. United States, 281
F.3d 158, 161 (5th Cir. 2001) (citing Hitt v.
City of Pasadena, 561 F.2d 606, 608 (5th Cir.
1977)); Harris v. Board of Trustees Univ. of
Ala., 846 F.Supp.2d 1223, 1230 (N.D. Ala. 2012) (court
considered Rule 12(b)(1) jurisdictional challenge before
addressing Rule 12(b)(6) arguments).
12(b)(6), Federal Rules of Civil Procedure, permits a court
to dismiss a complaint if it fails to state a claim for which
relief may be granted. In Ashcroft v. Iqbal, 556
U.S. 662 (2009), the Court revisited the applicable standard
governing Rule 12(b)(6) motions to dismiss. First, courts
must take note of the elements a plaintiff must plead to
state the applicable claims at issue. Id. at 675.
establishing the elements of the claim at issue, the court
identifies all well-pleaded, non-conclusory factual
allegations in the complaint and assumes their veracity.
Id. at 679. Well-pleaded factual allegations do not
encompass mere “labels and conclusions, ” legal
conclusions, conclusory statements, or formulaic recitations
and threadbare recitals of the elements of a cause of action.
Id. at 678 (citations omitted). In evaluating the
sufficiency of a plaintiff's pleadings, the court may
draw reasonable inferences in plaintiff's favor.
Aldana v. Del Monte Fresh Produce, N.A., Inc., 416
F.3d 1242, 1248 (11th Cir. 2005).
a court assesses the complaint's well-pleaded allegations
to determine if they state a plausible cause of action based
upon the identified claim's elements. Iqbal, 556
U.S. at 678. Plausibility ensues “when the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged, ” and the analysis involves a
context-specific task requiring a court “to draw on its
judicial experience and common sense.” Id. at
678, 679 (citations omitted). The plausibility standard does
not equate to a “probability requirement, ” yet
it requires more than a “mere possibility of
misconduct” or factual statements that are
“merely consistent with a defendant's
liability.” Id. at 678, 679 (citations
Eleventh Circuit provides, “[o]rdinarily, we do not
consider anything beyond the face of the complaint and
documents attached thereto when analyzing a motion to
dismiss.” Fin. Sec. Assur., Inc. v. Stephens,
Inc., 500 F.3d 1276, 1284 (11th Cir. 2007)
(citing Brooks v. Blue Cross & Blue Shield of Fla.,
Inc., 116 F.3d 1364, 1368 (11th Cir. 1997)).
The Eleventh Circuit “recognizes an exception, however,
in cases in which a plaintiff refers to a document in its
complaint, the document is central to its claim, its contents
are not in dispute, and the defendant attaches the document
to its motion to dismiss.” FSA, 500 F.3d at
1284 (citing Harris v. Ivax Corp., 182 F.3d 799, 802
n. 2 (11th Cir. 1999); Brooks, 116 F.3d
at 1368-69). The exception applies in this case, as Defendant
submits the Certificate of Assessments and Payments regarding
the federal estate tax liability of the Estate of Frances
E.P. Roper, the Estate's September 17, 2013, refund
claim, and the IRS's acknowledgement of receipt of the
refund claim on September 25, 2013. These documents are
central to the Estate's refund claim.
Elizabeth R. Carter serves as the personal representative of
the Estate of Frances E. P. Roper. Ms. Roper died on
September 21, 2007. At the time of her death, Ms. Roper owned
567, 092 shares of Colonial BancGroup stock, worth a market
value of $17, 604, 767. Ms. Roper bequeathed the majority of
her estate, comprised primarily of Colonial BancGroup stock,
to her niece, Elizabeth R. Carter, and her nephew, Randy
Roper. Within six months after Ms. Roper's death, the
market value of the stock had decreased to $8, 548, 947.
19, 2008, Plaintiff filed a federal estate tax return,
reporting an estate valued at $6, 261, 530.00 and tendering
payment of the computed tax. On April 26, 2009, the Estate
filed an amended return reporting a slightly lower tax of $6,
169, 892. The Colonial stock represented 46.8% of the gross
estate. In valuing the Colonial stock, the Estate used the
alternative valuation date to calculate the fair market
value, a method which relies upon the stock's exchange
price six months after a decedent's death. The IRS
accepted the amended return and issued a
September 13, 2013, the Estate filed a refund claim with the
Internal Revenue Service, alleging it overpaid its estate tax
by $3, 731, 616, due to a criminal fraud perpetrated against
Colonial by one of its customers. The Estate asserted it did
not have to rely upon the stock's exchange price for
valuation due to the criminal fraud involving the bank. The
IRS denied the claim.
Estate commenced a federal court action seeking a refund of
the purportedly overpaid estate tax. Elizabeth R. Carter,
Personal Representative of the Estate of Frances E.P. Roper
v. United States, No. 2:15-cv-02357-TMP (N.D. Ala.). The
government moved to dismiss the action on the basis of lack
of subject matter jurisdiction and lack of merit. The Estate
then sought dismissal of the action without prejudice, which
the government did not oppose. The court dismissed the action
without prejudice on May 12, 2016.
Estate filed another refund claim on August 26, 2016, on the
same ground as previously asserted. The medical opinion of
Ms. Carter's treating physician, Dr. William Hahn,
accompanied the claim, in which he declared Ms. Carter
suffered from a medical impairment for over five years which
prevented her from managing the Estate's affairs. Ms.
Carter also submitted a declaration in which she attested no
other person had authority to act on her behalf in conducting
any financial matters.
the IRS failed to dispose of the claim within the statutorily
required time, the Estate filed the instant action for
recovery of excess federal tax erroneously or illegally
assessed and collected. It contends the Colonial stock was
worthless on the valuation date, based on non-public
information which later became available. Defendant asserts
the court lacks subject matter jurisdiction to adjudicate
Plaintiff's claim, yet if subject matter exists,
Plaintiff's claim lacks merit.
The Court Does Not Possess Subject Matter
threshold matter, the Defendant contends the court must
dismiss this action pursuant to Federal Rule of Civil
Procedure 12(b)(1) for lack of subject matter jurisdiction
because the Estate submitted an untimely refund claim, citing
26 U.S.C. § 6511(a). Although recent Supreme Court
jurisprudence strongly suggests any untimeliness does not