2014 U.S. Dist. LEXIS 104414
E.D.N.Y.2014Background
- Plaintiff Angela Lavi Mottahedeh was named Trustee of a trust created by Parviz Lavi for Edmond Lavi, Edward Lavi, and herself.
- In 1997, Lavi assigned 19 shares of Old Cedar Development Corporation stock to the Trust, with plaintiff as Trustee and stock certificate reissued to her.
- On October 15, 2009, the IRS served a Notice of Levy and Notice of Seizure to satisfy a tax deficiency of P. Lavi for 1979–1980.
- On September 2, 2010, the IRS issued a Notice of Public Auction threatening sale of the 19 OCDC shares; plaintiff paid approximately $2.915 million to satisfy Lavi’s liability to avoid sale.
- Plaintiff seeks reimbursement of the paid amount plus interest, alleging a wrongful levy on her property by the IRS.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 6532(c)’s 9‑month limit bars Mottahedeh’s § 7426 claim. | Plaintiff argues prior § 7426 action put IRS on notice and tolls the limit. | IRS contends the levy date (Oct 15, 2009) starts the 9‑month period, expiring July 15, 2010. | § 7426 claim time-barred; levy notice date governs start of period. |
| Whether plaintiff may amend to add a § 1346(a)(1) refund claim. | Plaintiff seeks § 1346(a)(1) refund for amounts paid to satisfy Lavi’s liability. | § 7426 provides the exclusive remedy for third‑party wrongful-levy claims; § 1346 is not available here. | Motion to amend denied; § 7426 is plaintiff’s sole remedy. |
| Whether equitable tolling applies to the § 7426 limitations period. | Plaintiff asserts misleading notices justify tolling. | No implied tolling under § 6532(c); strict application warranted. | Equitable tolling denied; nine‑month limit not tolled. |
Key Cases Cited
- United States v. Brockamp, 519 U.S. 347 (1997) (equitable tolling not available absent implied exception)
- EC Term of Years Trust v. United States, 550 U.S. 429 (2007) (defines levy; supports strict 9‑month period without tolling)
- Williams v. United States, 947 F.2d 37 (2d Cir. 1991) (standing for refund under § 1346 where levy involved third‑party liability)