Shifflett v. Latitude Properties, Inc.
294 Va. 476
| Va. | 2017Background
- Creditors obtained judgments against the Shiffletts and Deane and issued writs of fieri facias and interrogatory summonses seeking collection of debts.
- On the writ return date (Jan. 5, 2016), the general district court ordered Debtors to turn over their 2015 income tax refunds upon receipt or demonstrate no refund would be received; Debtors appealed to circuit court.
- Debtors had not filed their 2015 federal income tax returns by the writ return date and thus had not requested refunds from the IRS.
- The circuit court granted summary judgment to Creditors, holding debtors’ interests in 2015 refunds vested at midnight Dec. 31, 2015, and liens attached; it also held the general district court had authority under Va. Code §§ 8.01-501 and -507.
- Debtors sought reconsideration asserting potential refunds were contingent and not “in possession of or under the control of the debtor”; the circuit court denied relief and Debtors appealed to the Supreme Court of Virginia.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a writ of fieri facias can attach to a taxpayer’s anticipated income tax refund when the taxpayer has not filed the tax return by the writ return date | Debtors: potential refunds are contingent, inchoate, and not property "possessed" or "entitled to" under Va. Code §§ 8.01-501, -507 | Creditors: refund interests vest at close of tax year (midnight Dec. 31) and thus are intangible property subject to lien | Court held: absent a filed return by the return date, potential refunds are inchoate/contingent and not "in possession of or under the control of the debtor," so fieri facias lien cannot reach them |
Key Cases Cited
- Mount Aldie, LLC v. Land Trust of Va., Inc., 293 Va. 190 (discusses standard for summary judgment review)
- International Fidelity Ins. Co. v. Ashland Lumber Co., 250 Va. 507 (writ of fieri facias creates lien only to extent debtor has possessory interest in intangible property)
- Boisseau v. Bass, 100 Va. 207 (contingent or uncertain interests not subject to fieri facias lien)
- In re Sexton, 508 B.R. 646 (Bankr. W.D. Va. 2014) (bankruptcy court treating tax overpayment interest as vesting at close of tax year for bankruptcy estate purposes)