[73-2 USTC ¶9693] United States of America , Plaintiff v. County National Bank of North Miami Beach , Defendant

U. S. District Court, So. Dist. Fla., No. 73-500-Civ-PF, 8/13/73

[Code Sec. 6321]

Lien for taxes: Bank's liability under lien: Levy precluded by judicial process.--Taxpayer, who was served with a notice of levy concerning a third party, was unable to comply with the notice of levy because a prior court order required the funds levied upon to be held in escrow. Held, the taxpayer was precluded by judicial process from honoring the levy.

Mervyn Ames, Assistant United States Attorney, Miami , Fla. , for plaintiff. Aaron A. Foosaner, Mamber, Gopman, Epstein & Foosaner, 16870 N. E. 19th Ave., North Miami Beach, Fla., for defendant.

Final Judgment

FAY, District Judge:

THIS CAUSE coming on for trial before me, having examined exhibits admitted into evidence by the Plaintiff and the Defendant, having heard testimony of the Defendant's witness, having heard argument of counsel and being otherwise fully advised in the premises, it is

ORDERED and ADJUDGED that Judgment be and it is hereby entered in favor of the Defendant, COUNTY NATIONAL BANK OF NORTH MIAMI BEACH, and against the Plaintiff, UNITED STATES OF AMERICA , and that the Plaintiff take nothing by its suit against the said Defendant and the Defendant go hence without day.

Statement of Stipulated Facts

1. The instant action has been authorized to be brought and requested by the Chief Counsel of the Internal Revenue Service and was brought under the direction of the Attorney General of the United States.

2. Tax assessments were made against the Creative Graphics Corporation and notice of said assessments and demand for their payment were made upon the said taxpayer as set out in Paragraphs V and VII of the Complaint of the United States, as amended, and the amounts due and owing on such assessments are the amounts set out in Paragraphs VI and VIII of said Complaint, as amended.

3. The defendant, County National Bank of North Miami Beach , was served with a Notice of Levy on March 10, 1971 . A copy of said Notice of Levy is attached hereto.

4. There was on deposit in the account of Creative Graphics Corporation with the defendant, County National Bank of North Miami Beach , the sum of $5,083.23 on March 10, 1971 , but the plaintiff and the defendant cannot stipulate as to whether or not such funds were the property of Creative Graphics Corporation.

5. To date, the defendant, County National Bank of North Miami Beach , has not turned over any property or money in connection with the Notice of Levy referred to in paragraph 3 above served upon said defendant.

6. On or about May 19, 1970 , Actuarial Computing & Publishing Company, Inc., initiated an action in the Circuit Court of Dade County, Florida, Case No. 70-8990, against Seymour Schulman in connection with the return of certain corporate books and records and in connection with the alleged improper transfer by the County National Bank of North Miami Beach of certain funds from the bank account of Actuarial Computing & Publishing Company, Inc. to the account of Creative Graphics Corporation, both of which were accounts in the Defendant Bank.

7. On or about March 23, 1972 , Actuarial Computing & Publishing Company, Inc., joined County National Bank of North Miami Beach as an additional defendant in the suit referred to in Paragraph 6 above, alleging that the County National Bank of North Miami Beach, contrary to signature resolutions on file, caused a total of $9,600.00 in funds to be transferred from the account of Actuarial Computing & Publishing Company, Inc., to the account of Creative Graphics Corporation.

8. On or about April 24, 1972 , the defendant, County National Bank of North Miami Beach , attempted to interplead the sum of $5,083.23 in the Circuit Court case pending and mentioned in Paragraph 6, above.

9. On or about May 22, 1972 , the Honorable. Thomas E. Lee entered an Order denying the interpleader referred to in Paragraph 8 above and the defendant, County National Bank of North Miami Beach, was ordered to hold in escrow the sum of $5,083.23, until the resolution of the issues in that Cause.

Facts Not Admitted and Not to be Contested at Trial

None.

Issues of Law Agreed Upon

Jurisdiction of this action is conferred on this Court by Sections 1340 and 1345 of Title 28 of the United States Code and Section 7402 of the Internal Revenue Code of 1954.

Contested Issues of Fact and Law

1. Whether or not the amount held in the account of Creative Graphics Corporation at the time the Defendant Bank was served with the Notice of Levy involved in this case was in fact the property of Creative Graphics Corporation or was in fact property in which said Creative Graphics Corporation had a right.

2. Notwithstanding that the amount held in the account of Creative Graphics Corporation was the property of said Creative Graphics Corporation or was property in which said Creative Graphics Corporation had a right, whether the Defendant Bank was precluded by judicial process from honoring said levy