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March 15, 1990

A.F. COMPANY OF ILLINOIS, formerly known as Brookline Industries, Inc.; YALE SECURITY, INC.; and HENRY SOSS & COMPANY, INC., Defendants

The opinion of the court was delivered by: DUFF


 The United States of America has sued A.F. Company of Illinois, Yale Security, Inc., and a corporation which Yale owns, Henry Soss & Company, Inc., under 26 U.S.C. §§ 7401 and 7403 (1982), as amended, to set aside a sale of assets among the defendants and to foreclose on federal tax liens. A.F. has not appeared in this action, but Yale and Soss have. The parties have filed cross-motions for summary judgment under Rule 56, Fed.R.Civ.Pro. Yale and Soss have also moved "in the alternative" for leave to amend their answer pursuant to Rule 15(a).

 The court will turn to Yale and Soss's motion to amend first. The court regards it skeptically. Yale and Soss state that they erroneously admitted in their amended answer that Yale had purchased some of A.F.'s assets, and ask the court for leave to change their answer. *fn1" On the next page, however, Yale and Soss ask the court to rule on the present motions assuming that Yale had purchased some of these assets, implying that they seek amendment only if the court does not grant them summary judgment with the assumption in mind. See Memorandum of Law in Support of Defendants' Motion 6-7.

 Pleading is not a game. Courts and parties must rely on them to work with cases effectively. Without knowing whether parties dispute legal and factual issues, this court cannot determine whether a sufficient case or controversy exists for this court to have jurisdiction. See U.S.Const., art. III § 2. The Article III courts are not in the business of deciding hypothetical disputes. What Yale and Soss request is tantamount to requesting the advice of the court, not a ruling. The court will not comply with this request. Instead, the court will decide their motion to amend their answer first, then turn to the parties' motions for summary judgment.

 Rule 15(a) provides in pertinent part: "[A] party may amend the party's pleading only by leave of court or by written consent of the adverse party; leave shall be freely given when justice so requires." The pertinent question in deciding a motion under Rule 15(a) is whether the opposing party will suffer undue prejudice on account of the amendment, prejudice which the moving party could have spared his or her opponent had a motion to amend been made sooner. See In re Olympia Brewing Co. Securities Litigation, 674 F. Supp. 597, 605-06 (N.D.Ill. 1987); Conroy Datsun Ltd. v. Nissan Motor Corp. in U.S.A., 506 F. Supp. 1051, 1054 (N.D.Ill. 1980).

 Yale and Soss want to amend their answer to deny the allegations in para. 11 and the first sentence of para. 12 of the complaint of the United States. The United States has claimed no prejudice on account of the proposed amendment, and thus the court will grant Yale and Soss leave to amend.

 The court now turns to the cross-motions for summary judgment. *fn2" The facts are undisputed, unless noted. A.F. was once known as Brookline Industries, Inc., an Illinois corporation. Around June 7, 1988, a revenue officer of the federal Internal Revenue Service ("IRS"), Mary Janic, secured from Brookline a tax return for the quarter ending June 30, 1987. No money was paid to the IRS at the time Janic secured the return, and from her records Janic could tell that Brookline owed a substantial amount in taxes. On July 18, 1988, the IRS filed a tax lien for some of the taxes owed with the Recorder of Deeds, Cook County, Illinois on Brookline's property.

 As the IRS was filing its lien, Brookline was negotiating with Yale for a sale of its assets. These negotiations had been underway at least since March 31, 1988, when Brookline and Yale entered into a confidentiality agreement. During these negotiations, Yale loaned Brookline close to $ 150,000.00. *fn3" On July 9, 1988, Brookline and Yale entered into an Assets Purchase Agreement. Included in this Agreement was Schedule 2D, a statement of Brookline's undisclosed liabilities. *fn4" That schedule contained summaries of the taxes owing to Illinois, California, Missouri, and the federal government. *fn5" Brookline disclosed that it owed the federal government $ 716,675.39. Yale claims that Brookline's president had assured it prior to and on July 9 that Brookline no longer owed the government for these taxes, and essentially asked Yale to ignore the schedule. The government disputes this.

 Brookline and Yale determined that the proposed sale would constitute a bulk transfer under Article 6 of the Uniform Commercial Code ("UCC"). Yale thus requested a sworn list of creditors pursuant to Illinois' version of the UCC, Ill.Rev.Stat. ch. 26, para. 6-104 (1987). The list which Brookline provided did not name the United States or the IRS. Purportedly relying on Brookline's earlier representations, Yale did not inquire about Brookline's tax liabilities. Yale sent notices of the proposed bulk transfer to Brookline's listed creditors on July 14, 1989, but it did not notify the IRS. Additionally, Yale published and filed notices in California pursuant to Cal.Comm. Code § 6107 (West 1988 Supp.). The IRS did not see these notices.

 Shortly before August 1, 1988, the day on which Yale and Brookline had agreed to close the sale of assets, one of Brookline's attorneys called Yale's vice president, Michael Lukse, and informed him that the IRS had filed a lien in Cook County. According to Lukse, this attorney told him that these were the only taxes which Brookline owed. *fn6" Brookline attorney Roger Noback, who may have been the same attorney who notified Lukse of the lien, also told Yale's attorney Geoffrey Chinn of the lien. The parties dispute the content of Noback's disclosures and representations to Chinn regarding Brookline's tax liabilities, and what Chinn did in response. It is undisputed, however, that Chinn became worried about other undisclosed liabilities, since heretofore Yale allegedly had understood that Brookline had paid its taxes. Chinn called his son, who is a tax attorney. His son told him that the IRS could recover unpaid taxes from a purchaser of a taxpayer's assets only if it had filed a lien. *fn7"

 Aware now of the filed lien, Yale agreed to pay it and deduct it from what it promised to pay Brookline for its assets. Yale through Brookline thus paid the IRS $ 386,652.28. Officer Janic knew or should have known that this payment did not clear up Brookline's arrearage, but she released the IRS's filed lien anyway. That same day, Brookline sold its assets. For some reason unknown to the court, prior to the sale Yale assigned its right under the Assets Purchase Agreement to receive the assets of Brookline's Henry Soss Division to Soss. Yale assigned its right to Brookline's remaining assets to a new Delaware corporation which also went under the name of Brookline Industries, Inc. Yale is the sole owner of this corporation.

 The government now seeks a declaration that tax liens which arose when it assessed taxes against Brookline continue to attach to Brookline's former assets. Yale and Soss contend that they do not. Yale and Soss first submit that the Internal Revenue Code compels this conclusion. Under the Code, the government acquires a lien in the amount of unpaid taxes and penalties upon all of a taxpayer's property when a taxpayer neglects or refuses to pay the tax. See 26 U.S.C. § 6321 (1982). As attorney Chinn's son explained to his father, however, this lien is not valid "as against any purchaser [of the taxpayer's property] until notice thereof which meets the requirements of [ Id. at § 6323(f)] has been filed by the Secretary [of the Treasury]." Id. at § 6323(a). Yale and Soss argue that since the IRS discharged its only filed lien on Brookline's property, its remaining, unfiled liens do not attach to Brookline's former assets.

 Genuine issues of fact prevent the court from entering summary judgment in favor of any party on this ground. Attorney Chinn's son did not explain that Section 6323(h)(6) defines § 6323(a)'s "purchaser" as ...

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