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United States v. Kasuboski

UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT


decided: November 25, 1987.

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEES,
v.
CHARLES L. KASUBOSKI, INDIVIDUALLY AND AS TRUSTEE OF THE BASIC BIBLE CHURCH OF AMERICA; MARY ANN KASUBOSKI, INDIVIDUALLY AND AS TRUSTEE OF THE BASIC BIBLE CHURCH OF AMERICA; THE BASIC BIBLE CHURCH OF AMERICA; MATT GRAF, TRUSTEE OF THE BASIC BIBLE CHURCH OF AMERICA; SHEPHARD LIFE SCIENCE CHURCH; AND ORDER OF ALMIGHTY GOD, CHAPTER NO. 1014, DEFENDANTS-APPELLANTS

Appeal from the United States District Court for the Eastern District of Wisconsin. No. 85 C 755 -- Thomas J. Curran, Judge.

Flaum, Easterbrook, and Kanne, Circuit Judges.

Author: Flaum

FLAUM, Circuit Judge.

The United States commenced a civil action against defendants alleging that Charles Kasuboski had failed to pay his federal income tax. The government sought to have certain conveyances of property set aside and to foreclose its federal tax liens against these properties to satisfy its tax assessments against Kasuboski. In the course of the litigation the government served Kasuboski with a request for admissions pursuant to Rule 36 of the Federal Rules of Civil Procedure. Kasuboski failed to respond to the request for admissions pursuant to Rule 36 of the Federal Rules of civil Procedure. Kasuboski failed to respond to the request for admissions and five months later the government moved for summary judgment. Kasuboski did not move to withdraw the admissions or timely resist the motion for summary judgment. The district court granted the government's motion for summary judgment. We affirm.

I.

On May 17, 1985, the United States filed a civil action against Charles L. Kasuboski and his wife, Mary Ann Kasuboski, individually and as trustees of the Basic Bible Church. The Basic Bible Church, Shephard Life Science Church, Order of Almighty God, Chapter No. 1014, and Matt Graf, another trustee of Basic Bible Church, were also named as defendants (collectively "the defendants"). The complaint alleged that certain properties were fraudulently transferred between Charles Kasuboski, Mary Ann Kasuboski, and the churches with which they were affiliated. The government claimed that these they were affiliated. The government claimed that these properties were transferred without consideration, were still effectively controlled by the Kasuboski, and were still subject to federal tax liens which arose from assessments against Charles Kasuboski for $70,548.61 (as of September 1, 1983) in unpaid federal income taxes, interest, and penalties. The government sought to establish Charles' liability for this amount and to satisfy the liability by enforcing the federal tax liens against the transferred properties.

The United States commenced discovery in 1986. On March 25, 1986 the government deposed Charles Kasuboski. On May 29, 1986, interrogatories were served upon Charles Kasuboski, Mary Ann Kasuboski, and Matt Graf ("the May 29 interrogatories") and a request for admissions was served upon Charles. Additional depositions were taken in early June.

The scheduling order issued by the district court established a November 15, 1986 deadline for filing dispositive motions. As of that date, none of the defendants had filed answers to the May 29 interrogatories and Charles Kasuboski had not responded to the request for admissions. The government filed a motion for summary judgment on November 17.*fn1 The government's motion and the supporting documents were telexed to Milwaukee; consequently the motion was not signed. In addition, all but the first page of the copy of the May 29 interrogatories appended to the motion were missing. On November 20, 1986, the United States mailed complete, signed copies of its motion for summary judgment to the district court and the defendants' attorney. The signed copies were received on November 24 and November 25 respectively.

In its motion for summary judgment the government asserted that Charles Kasuboski's failure to respond to the May 29, 1986 request for admissions constituted an admission of each matter for which an admission was sought, and under those admitted facts the government was entitled to judgment. The May 29, 1986 request asked Charles to admit: (1) that he was liable for the asserted federal income taxes and fraud penalties; (2) that he knew prior to taking his vow of poverty that such taxes were due and owing; (3) that the various transfers of real property left him insolvent; (4) that he had full use and benefit of the real property; and (5) that the transfers were sham conveyances without consideration.

On December 9, 1986 the district court granted the government's motion for summary judgment. United States v. Kasuboski, No. 85-C-755 (E.D. Wis. Dec. 9, 1986). The district court concluded that under Rule 36 of the Federal Rules of Civil Procedure, Charles Kasuboski's failure to respond constituted an admission of the requested information. It also found that "all statutory requirements ha[d] been met regarding the assessments and the liens and that the plaintiff ha[d] produced respond constituted an admission of the requested information. It also found that "al statutory requirements ha[d] been met regarding the assessments and the liens and that the plaintiff ha[d] produced evidence of all the elements necessary to prove its claim." Id., slip op. at 8.

On the same day the defendants filed a motion for an extension of time in which to respond to the motion for summary judgment. The district court denied this motion on December 15, 1986. The next day the defendants filed a motion for reconsideration of the grant of summary judgment. On December 18 the defendants' response to the motion for summary judgment was mailed to the court. This was accompanied by a motion for relief from the court's order to avoid error or mistake pursuant to Rule 60 of the Federal Rules of Civil Procedure. These motions were also denied. Judgment was entered for the United States. The defendants appealed to this court raising a number of procedural issues.*fn2

II.

Defendants first argue that the motion for summary judgment filed by the United States on November 17, 1986 was defective because it was unsigned and all but the first page of the appended interrogatories were missing. Although an undisputedly complete motion for summary judgment was filed on November 24, 1986, the validity of the November 17 motion is relevant both to determine whether the government complied with the district court's scheduling order and to calculate the date on which the defendants' response to the motion was due. We find that any defect in the motion was not fatal.

Rule 11 of the Federal Rules of Civil Procedure provides that an unsigned motion shall be stricken "unless it is signed promptly after the omission is called to the attention of the movant." The United States recognized the defect and corrected it by mailing signed, complete copies to both the court and the defendants' attorney on November 20, 1986, three days later.

In cases such as this, which do not involve the issue of sanctions for filing an unfounded motion, the failure to sign will not cause a motion to be stricken unless the adverse party has been severely prejudiced or misled by the failure to sign.*fn3 5 Wright, Miller & Kane, Federal Practice and Procedure ยง 1334 (1987). The defendants do not argue on appeal that they were prejudiced by receiving the unsigned motion and the district court specifically found that no prejudice occurred. United States v. Kasuboski, No. 85-C-755 (E.D. Wis. Dec. 22, 1986) (order denying relief from order pursuant to Rule 60). The district court also found that the absence of all but the first page of the interrogatories did not prevent identification of the document and did not adversely affect the defendants. We hold that the government's motion filed on November 17, 1986 was valid.

III.

The district court's decision to grant the government's motion for summary judgment was predicated on the facts deemed admitted by Kasuboski's failure to respond to the request for admissions. Rule 36(a) of the Federal Rules of Civil Procedure clearly provide that a party must answer each matter for which an admission is requested within 30 days or the matter is deemed admitted.*fn4 Charles Kasuboski never responded to the government's request.

A.

On appeal, the defendants offer two explanations for Charles' failure to respond. First, they argue that a response was not necessary because the same questions raised in the request for admissions were asked and answered in the depositions that took place both before and after the date they received the request for admissions. The defendants misinterpret Rule 36. The use of an alternative form of discovery does not eliminate the requirement that a request for admissions be answered within 30 days. See Mangan v. Broderick and Bascom Rope Co., 351 F.2d 24 (7th Cir. 1965) (unanswered requests are not abandoned by the subsequent filing of interrogatories addressed to the same subject). Although there may be some overlap in the information requested in the various forms of discovery, parties are not allowed to pick and choose when to respond based on their own determination of whether they have previously answered the questions presented. Kasuboski's participation in depositions does not excuse his failure to respond to the request for admissions.*fn5

Second, defendants argue that the parties were close to settlement and that the cost and effort of answering the request for admissions and interrogatories would have been wasted if the parties settled as anticipated. Delaying a response pending a possible settlement may well have been a prudent course of action, but this is not a complete answer. It does not explain why the defendants did not file with the district court a motion to toll the 30 day response period. In addition, the proper procedural vehicle through which to attempt to withdraw admissions made in these circumstances is a motion under Rule 36(b) to withdraw admissions.*fn6 No such motion was ever filed.

B.

Admissions made under Rule 36, even default admissions, can serve as the factual predicate for summary judgment. See Dukes v. South Carolina Ins. Co., 770 F.2d 545 (5th Cir. 1985); Donovan v. Carls Drug Co., 703 F.2d 650 (2nd Cir. 1983). Rule 36(b) provides that a matter admitted is "conclusively established." Fed.R.Civ.P. 36(b). Summary judgment is provided for in Rule 56. Section (c) of Rule 56 states:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answer to interrogatories, and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.

Fed.R.Civ.P. 56(c) (emphasis added).

Defendants attempt to undo the effect of their default admissions by arguing that the affidavits accompanying their untimely filed response to the government's motion for summary judgment raise issues of material fact. This argument fails because a party cannot attack issues of fact established in admissions by resisting a motion for summary judgment. See, e.g., Donovan, 703 F.2d 650; O'Bryant v. Allstate Ins. Co., 107 F.R.D. 45, 48 (D. Conn. 1985). Affidavits and depositions entered in opposition to summary judgment that attempt to establish issues of fact cannot refute default admissions.*fn7 This result is based on sound policy. Rule 36 allows parties to narrow the issues to be resolved at trial by effectively identifying and eliminating those matters on which the parties agree. This function would be lost if parties were permitted to contest under Rule 56 a matter concluded under Rule 36. As the advisory committee observed, "unless the party securing an admission can depend on its binding effect, he [or she] cannot safely avoid the expense of preparing to prove the very matters on which he [or she] has secured the admission, and the purpose of the rule is defeated." Fed.R.Civ.P. 36 advisory committee's note.

We recognize the potential harshness of this result. The failure to respond to admissions can effectively deprive a party of the opportunity to contest the merits of a case. This result, however, is necessary to insure the orderly disposition of cases; parties to a lawsuit must comply with the rules of procedure. In addition, the harshness is tempered by the availability of the motion to withdraw admissions, a procedure which the defendants did not employ.

IV.

The defendants devote substantial effort to argument that the district court miscalculated the date on which a response to the government's motion for summary judgment was due under Local Rule 6,*fn8 and incorrectly granted summary judgment before the time provided by the local rule elapsed.*fn9 We conclude that the defendants' application for an extension of time in which to respond to the motion for summary judgment was filed after the deadline set by the local rule.*fn10

Local Rule 6 allows parties 14 days "from the receipt of the motion" in which to respond.*fn11 The government mailed a copy of its motion for summary judgment to the defendants' attorney on November 17, 1986, the same day it filed the motion. The record does not state, and the defendants never indicated, when this copy was received. Rule 6(e) of the Federal Rules of Civil Procedure assumes a three day period for papers delivered through the mails. Using this assumption, defendants are deemed to have received the motion on November 20, 1986. They therefore had until December 4 to respond under the local rules.*fn12 On December 9 the defendants filed an application for an extension of time in which to respond. The actual resistance to the government's motion was not mailed to the court until December 18. Local Rule 6 provides in part that "the failure of a party to file a timely answering brief . . . shall be deemed a waiver of the right to file it." Wisc. Ct. R. 6. The defendants, by failing to timely file a resistance or to receive an extension, waived their right to respond to the government's motion for summary judgment.

The final argument raised by defendants is that the trial court abused its discretion in failing to grant an extension of time in which to respond. The application for an extension was not filed until after the actual response was due. Local Rule 6 states that "on a showing of good cause, the court may extend the time for the filing of any brief." Wisc. Ct. R. 6 (emphasis added). The defendants argued for an extension on the grounds that their counsel was involved in a wedding during the relevant period and the firm's paralegal had just purchased a new home. The district court found that these events were forseeable and did not constitute good cause for excusing the late application for an extension. The district court did not abuse its discretion.

WE AFFIRM.


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