GALANIS v. LYONS & TRUITT
Supreme Court of Indiana
715 N.E.2d 858
All Justices concur.
Gordon A. ETZLER, Appellant-Plaintiff, v. INDIANA DEPARTMENT OF REVENUE, Appellee-Defendant.
No. 50A04-1406-PL-285.
Court of Appeals of Indiana.
March 3, 2015.
ROBB, Judge.
Gordon A. Etzler, Gordon A. Etzler & Associates, LLP, Valparaiso, IN, Appellant Pro Se. Gregory F. Zoeller, Attorney General of Indiana, John Lowrey, Deputy Attorney General Indianapolis, IN, Attorneys for Appellee.
[1] Gordon Etzler, pro se, appeals the trial court’s award of summary judgment in favor of the Indiana Department of Revenue (the “Department”). Etzler raises two issues for our review: (1) whether the trial court abused its discretion by denying Etzler’s motion to strike an affidavit designated by the Department in support of its motion for summary judgment; and (2) whether the trial court erred by awarding summary judgment to the Department. Concluding Etzler is entitled to summary judgment, we reverse.1
Facts and Procedural History
[2] On December 20, 2000, the Department filed four tax warrants in Marshall County for unpaid income taxes owed by Dale Dodson. On July 16, 2010, the Department renewed its tax warrants in Marshall County, extending their life for an additional ten years.
[3] On November 16, 2010, Etzler filed a UCC Financing Statement with the Indiana Secretary of State, asserting an interest in any breeder’s award proceeds owed to Dodson by the Indiana Horse Racing Commission. On November 17, 2010 and October 13, 2011, the Department levied against two separate breeder’s awards in the amounts of $7,400 and $4,100, respectively. The funds were payable to Dodson but were intercepted and withheld by the Indiana State Auditor prior to deposit in Dodson’s bank account. The funds were used to satisfy Dodson’s outstanding tax liabilities.
[4] Etzler sent several letters to the Department claiming a right to the breeder’s award funds and demanding that the funds be paid to him. The Department denied that Etzler had a superior interest in the funds and refused his demands for payment. Etzler sought an administrative review hearing to challenge the validity of Dodson’s tax liability, but the Department denied Etzler’s request. Etzler then brought an action with the Indiana Tax Court, but the case was dismissed for lack of subject matter jurisdiction on November 21, 2011. See Etzler v. Indiana Dep‘t of State Revenue, 957 N.E.2d 706, 709-10 (Ind. T.C. 2011).
[5] On November 11, 2012, Etzler filed a complaint against the Department in Porter County. On June 7, 2013, the case
Discussion and Decision
I. Summary Judgment
[6] Etzler contends the trial court erred by granting the Department’s motion for summary judgment and also by denying his own motion for summary judgment. When reviewing a trial court’s award of summary judgment, we apply the same standard as the trial court. Manley v. Sherer, 992 N.E.2d 670, 673 (Ind.2013). Summary judgment is appropriate where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.
[7] If the Department determines that a person owes tax to the State, then it must issue a demand notice ordering that person to pay.
(e) When the entry is made, the total amount of the tax warrant becomes a judgment against the person owing the tax. The judgment creates a lien in favor of the state that attaches to all the person’s interest in any:
- chose in action in the county; and
- real or personal property in the county;
excepting only negotiable instruments not yet due.
[8] The Department may collect the tax debt by utilizing the services of the county sheriff, see
After a tax warrant becomes a judgment under section 2 of this chapter, a tax warrant is returned uncollected to the department under section 3 of this chapter, or the taxpayer does not pay the amount demanded under section 2(b) of this chapter and the taxpayer has taken an action under section 2(n) of this chapter to foreclose the lien, the department may take any of the following actions without judicial proceedings.
- The department may levy upon the property of the taxpayer that is held by a financial institution ...
- The department may garnish the accrued earnings and wages of a taxpayer by sending a notice to the taxpayer’s employer....
- The department may levy upon and sell property....
[9] The parties’ dispute turns on who had priority in the breeder’s award proceeds and whether the Department had authority to levy the proceeds in the manner it did. “Under the common law, priority in time gives a lien priority in right.” Johnson v. Johnson, 920 N.E.2d 253, 256 (Ind.2010). In other words, where a debtor owes multiple creditors, the creditor who first perfects its interest in the debtor’s property has the right to collect on that property first.
[10] The Department filed its tax warrants in 2000 and renewed them in 2010—well before Etzler filed his first UCC Financing Statement in 2011. The Department contends that because its liens were established first, it had a superior interest in the breeder’s award proceeds and properly exercised its authority to levy on the proceeds pursuant to
[11] Although
[12] The Department relies on
[13] The Department levied on the breeder’s award proceeds prior to their deposit in Dodson’s bank account and thus prior to the Department’s ability to collect directly from a financial institution under
[14] Further, the Department does not dispute that Etzler filed a valid UCC Financing Statement that perfected his interest in the breeder’s awards. Therefore, Etzler was entitled to collect the breeder’s award proceeds, and his motion for summary judgment should have been granted.
Conclusion
[15] We conclude that Etzler had priority in the breeder’s award proceeds and that the Department did not have statutory authority to levy upon those proceeds in the manner it did. Therefore, the trial court erred by awarding summary judgment to the Department and denying Etzler’s motion for summary judgment.
Reversed.
BAILEY, J., and BROWN, J., concur.