Melton v. Teachers Insurance & Annuity Ass'n of America

United States Court of Appeals,

Fifth Circuit.

No. 96-11134

Summary Calendar.

Rosser B. MELTON, Jr., Plaintiff-Appellant,

v.

TEACHERS INSURANCE & ANNUITY ASSOCIATION of AMERICA, Defendant-
Appellee,

United States of America, on behalf of its agency, the Internal
Revenue Service, Intervenor Defendant-Appellee.

June 16, 1997.

Appeal from the United States District Court for the Northern
District of Texas.

Before JONES, DeMOSS and PARKER, Circuit Judges.

ROBERT M. PARKER, Circuit Judge:

The Appellant, Rosser B. Melton, Jr. ("Melton"), brought suit

in state court against Teachers Insurance & Annuity Association of

America ("TIAA") alleging that TIAA committed fraud, breach of

contract, and breach of fiduciary duty because TIAA was paying

Melton's monthly annuity payment to the Internal Revenue Service

("IRS") pursuant to an IRS levy presented to it for the payment of

back taxes owed by Melton. The United States, on behalf of the

IRS, intervened and removed this action to federal court. The

district court granted summary judgment to TIAA and the IRS. Based

on the following discussion, we affirm.

FACTUAL BACKGROUND

On July 1, 1983, Melton was named as the annuitant on a

Teachers Insurance & Annuity Association Contract (the "Annuity")

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created from an installment refund life annuity. The IRS maintains

that Melton is indebted to the United States for unpaid federal

income taxes for tax years 1975, 1976, 1977, 1983, and 1986 in the

approximate amount of $113,728.88. As a result, on April 15, 1993,

the IRS served a Notice of Levy upon TIAA against Melton's interest

in the Annuity. TIAA responded to the levy and gave notice to

Melton. TIAA also informed the IRS that the type of levy served

upon it appeared to be only applicable to amounts due and owing to

Melton at that specific point in time. Thus, the following month,

the IRS served a second Notice of Levy upon TIAA against Melton's

interest in the Annuity.

The second levy was a "continuing levy" effective against any

amounts owed by TIAA to Melton whenever those amounts became

payable. At the time of the second levy, the Annuity was providing

Melton with monthly payments of $236.01. In addition to the second

levy, the IRS notified TIAA that Melton was not entitled to any

exemptions under § 6334 of the Internal Revenue Code. The IRS also

advised TIAA that the levy it presented to TIAA was amended to

reflect that position. On June 4, 1993, TIAA gave notice to Melton

that his entire monthly annuity benefit would be paid over to the

IRS to honor its levy, beginning July 1, 1993. This cause of

action ensued.

DISCUSSION

This Court reviews the district court's grant of summary

judgment under a de novo standard of review. Estate of Bonner v.

United States, 84 F.3d 196 (5th Cir.1996). We apply the same

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standard as the district court. Consequently, summary judgment is

appropriate where the pleadings and summary judgment evidence

present no genuine issue of material fact and the moving party is

entitled to judgement as a matter of law.1 Celotex Corp. v.

Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986);

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91

L.Ed.2d 202 (1986); Hibernia Nat'l. Bank v. Carner, 997 F.2d 94

(5th Cir.1993). Furthermore, the moving party is entitled to

judgment as a matter of law if the nonmoving party fails to make a

sufficient showing of an essential element of the case to which the

nonmoving party has the burden of proof. Celotex, 477 U.S. at 322,

106 S.Ct. at 2552. However, we must view the evidence in the light

most favorable to the nonmovant. Hibernia, 997 F.2d at 97. The

non-moving party must set forth specific facts to establish that

there is a genuine issue for trial, but where the evidential

submissions lack probative value as to a genuine issue, summary

judgment is appropriate. Anderson, 477 U.S. at 249, 106 S.Ct. at

2511; Hibernia, 997 F.2d at 97-98. A summary assertion made in an

affidavit is simply not enough evidence to raise a genuine issue of

material fact. Hibernia, 997 F.2d at 98; see also Lechuga v.

Southern Pacific Transp. Co., 949 F.2d 790, 798 (5th Cir.1992);

Galindo v. Precision American Corp., 754 F.2d 1212, 1216 (5th

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We note that one of the principle purposes of summary
judgment is to isolate and dispose of factually unsupported claims
or defenses, and the rule should be interpreted in a way that
allows it to accomplish this purpose. Celotex Corp. v. Catrett,
477 U.S. 317, 322-24, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265
(1986).

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Cir.1985). Following these well known standards, we find Melton's

argument that the evidence presented by TIAA and the IRS was not

competent summary judgment evidence to be meritless.

The district court found that the IRS was authorized by law

to levy on the taxpayer's Annuity to collect his unpaid taxes under

the authority of 26 U.S.C. § 6331, and that Melton failed to

produce any evidence to controvert the IRS's finding that Melton

had sufficient other income to preclude the applicability of the

exemption under § 6334(a)(9). Melton does not contend that his

Annuity is exempt under § 6334(a)(6). Instead, Melton argues that

his monthly Annuity payments are exempt under § 6334(a)(9) and that

he does not have the burden of proof as to an exemption. We now

address Melton's arguments.

The § 6334 exemptions come into play when the government seeks

to collect delinquent taxes by administrative levy pursuant to §

6331. Section 6334(a)(9) of the Internal Revenue Code provides a

minimum exemption for wages, salary, and other income. Treas.Reg.

§ 301.6334-2(c) provides in part that if the taxpayer has other

income that equals or exceeds the amount exempt from levy, the IRS

may treat no amount of the taxpayer's wages, salary, or other

income on which the IRS elects to levy as exempt. The IRS made the

determination that Melton had other sources of income and, thus,

his Annuity income was subject to complete levy. In addition, the

IRS complied with the requirement that it notify TIAA that no

amount of the Annuity payment was exempt and that TIAA could rely

on the notice in honoring the levy.

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 Melton, however, contends that he did not have the burden of

proof as to an exemption regarding his annuity income. We

disagree. This Court has noted that taxpayers have the burden of

proof to prove that an IRS assessment of taxes is improper,

Westbrook v. Commissioner, 68 F.3d 868 (5th Cir.1995), citing,

United States v. Janis, 428 U.S. 433, 96 S.Ct. 3021, 49 L.Ed.2d

1046 (1976), and that the plaintiff bears the burden of proving a

wrongful levy. Century Hotels v. United States, 952 F.2d 107 (5th

Cir.1992); see also McGinness v. United States, 90 F.3d 143 (6th

Cir.1996). Moreover, Melton cites no authority for his position.

Therefore, we hold that once the IRS has determined that a

taxpayer, such as Melton, is not entitled to an exemption under §

6334(a)(9), that the taxpayer bears the burden of proof to prove

that his annuity income is exempt under § 6334(a)(9). Because

Melton, the nonmovant, having the burden of proof, failed to

produce any evidence to controvert the IRS's finding that he had

sufficient other income to preclude the applicability of the

exemption under § 6334(a)(9), Melton has failed to make a

sufficient showing which would preclude summary judgment. Melton

offered no proof, other than his conclusory statement, that he was

entitled to an exemption. Nor did Melton file a verified statement

pursuant to Treas.Reg. § 301.6334-4. Consequently, under the

summary judgment standards above, we uphold the district court's

ruling.

Under § 6331, the IRS is authorized to levy upon all property

and rights to property belonging to the taxpayer in order to

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collect his assessed income tax liabilities. Shanbaum v. United

States, 32 F.3d 180, 183 (5th Cir.1994); see also United States v.

National Bank of Commerce, 472 U.S. 713, 105 S.Ct. 2919, 86 L.Ed.2d

565 (1985). Annuities have been found to be within the scope of §

6331. United States v. Metropolitan Life Ins., 874 F.2d 1497 (11th

Cir.1989). Section 6332(a) of the Internal Revenue Code provides

that "... any person in possession of (or obligated with respect

to) property or rights to property subject to levy upon which a

levy has been made shall, upon demand of the Secretary, surrender

such property or rights...." National Bank of Commerce, 472 U.S.

at 715, 105 S.Ct. at 2921. The custodian of a taxpayer's property

has two defenses for failure to comply with an IRS tax levy; one,

the custodian is not in possession of the taxpayer's property, or

two, the property is subject to a prior judicial attachment or

execution. Id. at 722, 105 S.Ct. at 2925; United States v.

General Motors Corp., 929 F.2d 249, 251 (6th Cir.1991).

The district court granted summary judgment to TIAA on the

basis that, once TIAA received notice of the IRS levy, it was

obligated pursuant to § 6332(a) to surrender Melton's monthly

annuity payments to the IRS. TIAA could not assert the defense

that it was not in possession of Melton's property, nor was the

property subject to a prior judicial attachment or execution.

Failure by TIAA to comply with the IRS's levy, absent any defense,

would subject TIAA pursuant to § 6332(d) to personally owing the

amount of the property not surrendered, but not to exceed the taxes

due along with costs of collection. In addition, § 6332(d)(2)

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provides for a fifty percent penalty for failure to comply with the

levy without reasonable cause. Consequently, TIAA was required, if

not motivated, to honor the IRS levy and informed Melton that it

would comply with the IRS levy. We find that TIAA fully complied

with the statutory requirements of § 6332(a) when it directed

Melton's monthly annuity payments to the IRS as directed by the

levy. Further, the district court concluded that TIAA was

"discharged from any obligation or liability to the delinquent

taxpayer ... with respect to such property or rights in property

arising from such surrender or payment" under § 6332(e). We agree.

Because TIAA complied with the levy issued by the IRS under §§ 6331

and 6332, it is immune from liability to Melton for complying with

the levy. See Burroughs v. Wallingford, 780 F.2d 502, 503 (5th

Cir.1986); General Motors, 929 F.2d at 251.

The district court awarded costs against Melton in favor of

TIAA. Melton failed to address the issue on appeal. This Court

has repeatedly stated that the brief of the appellant is required

to contain a statement of the issues presented for review and an

argument portion which analyzes and supports those contentions.

Consequently, issues not raised or argued in the brief are

considered waived and thus will not be noticed or entertained by

this Court on appeal. See United Paperworkers Int'l. Union, AFL-

CIO, CLC v. Champion Int'l. Corp., 908 F.2d 1252 (5th Cir.1990).

Because Melton failed to raise the issue of costs on appeal, we

find that he has waived this issue.

CONCLUSION

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 Based on the foregoing discussion, we affirm the district

court's grant of summary judgment for TIAA and the United States.

AFFIRMED.

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