United States District Court, N.D. Indiana, Fort Wayne Division
JAMES A. SIMON, et al., Plaintiffs,
SPECIAL AGENT PAUL MUSCHELL, et al., Defendants. JAMES A. SIMON, Plaintiffs,
UNITED STATES OF AMERICA, Defendant.
OPINION AND ORDER
William C. Lee, Judge United States District Court
matter is before the court on a motion for judgment on the
pleadings, filed by defendants Special Agent Paul Muschell
(“SA Muschell”), Special Agent in Charge Alvin
Patton (“SAC Patton”), and Special Agent Linda
Porter (SA Porter”)(collectively “Special
Agents”), on December 17, 2016. The plaintiffs, James
A. Simon (“Simon”), individually and as parent
and guardian of R.S., and the Estate of Denise J. Simon,
filed their response on January 20, 2017. The Special Agents
filed their reply on February 6, 2017. For the following
reasons, the motion will be granted.
procedural history of this case is as follows. On November 6,
2007, IRS employees conducted a search, pursuant to a federal
search warrant, of the residence belonging to James and
Denise Simon, who were suspected of possible violations of
the Internal Revenue Code.
at ¶¶ 13, 18, 30, James A. Simon v. Special
Agent Paul Muschell, No. 1:09-CV-301 (“Dkt. No.
1”) (N.D. Ind. Oct. 29, 2009), Dkt No. 1
(“Complaint”). Simon filed two civil actions
challenging the IRS search. The first civil action sought
damages from the Special Agents, unnamed IRS employees, and
others for alleged violations of the Simons' Fourth and
Fifth Amendment rights during the search. Id. at
¶¶ 10, 46-72. The second civil action alleged that
the United States was responsible for the officers'
alleged negligence during the IRS's tax investigation of
the Simons under the Federal Tort Claims Act
(“FTCA”). Complaint, James A. Simon v. United
States, No. 1:10-CV-058-RL (N.D.Ind. Feb. 19, 2010),
FTCA Dkt No 1 (“FTCA Complaint”).
April 2010, while the two civil actions were pending, Simon
was indicted by a federal grand jury on twenty-three criminal
counts related to the IRS investigation. Indictment at pp.
2-17, United States v. Simon, No. 3:10-CR-56(01) RM
(N.D. Ind. April 15, 2010), CR Dkt No. 1 (hereinafter
“Indictment”). This Court consolidated the civil
actions and stayed the civil proceedings pending resolution
of the ongoing criminal case. Opinion and Order at pp. 2, 14,
Dkt No 40. On November 9, 2010, after a six-day jury trial,
Simon was convicted by a jury of nineteen of the twenty-three
felony counts, including filing false federal income tax
returns, failing to file foreign bank account and financial
account reports, mail fraud, and fraud involving federal
financial aid. His conviction was affirmed by the Seventh
Circuit on August 15, 2013. Simon has served his sentence.
had filed a Motion to Vacate on November 13, 2014, which was
denied on July 5, 2016. Simon appealed the denial of his
motion to vacate his criminal sentence on October 24, 2016.
The Seventh Circuit denied Simon's request for
certificate of appealability on June 7, 2017, stating that
there was no showing of denial of constitutional rights.
Court lifted its stay of the consolidated civil proceedings
for the limited purpose of briefing and disposition of the
United States' motion to dismiss the FTCA actions. On
February 24, 2015, this Court dismissed the FTCA Complaint on
the ground that there was no waiver of sovereign immunity
under the FTCA where Plaintiffs' claims arose out of the
assessment or collection of taxes. See 28 U.S.C.
§ 2680(c). Opinion and Order at pg.19, Dkt No 51.
Court next lifted the stay of the civil proceedings for the
limited purpose of allowing the individually-named Special
Agents to file a motion for judgment on the pleadings raising
a purely legal issue, the Judgment Bar of 28 U.S.C. §
2676. Opinion and Order, pg. 3 Dkt No. 57. After the Special
Agents' motion had been briefed, but before a decision
was rendered, this Court granted a stay pending a ruling in
Simmons v. Himmelreich. The Supreme Court held on
June 6, 2016, that the dismissal of an FTCA claim against the
United States does not bar a subsequent action by the
claimant against the same federal employees whose acts gave
rise to the FTCA claim. Simmons v. Himmelreich,
U.S., 136 S.Ct. 1843 (2016). Accordingly, the Special Agents
withdrew their motion for judgment on the pleadings (Dkt 70,
November 29, 2016).
stay of proceedings entered on December 15, 2015 expired with
the Supreme Court's final ruling in Himmelreich,
the defendants, on December 17, 2016, filed a new Motion for
Judgment on the Pleadings, which is presently before this
Court. The defendants claim that the Plaintiffs fail to state
a claim upon which relief can be granted and that the action
is barred by the qualified immunity of the
defendants. Finally the Defendants claim that all
claims against SAC Patton should be dismissed on the basis
that he may not be held liable for damages based solely on
the actions of individuals he supervised. Defendants request
the dismissal of all of the plaintiffs' claims against
defendants Muschell, Patton and Porter.
12(c) of the Federal Rules of Civil Procedure permits a party
to move for judgment on the pleadings on a ground set forth
in Rule 12(b) after the complaint and answer have been filed.
Northern Indiana Gun & Outdoor Shows v. South
Bend, 163 F.3d 449, 452 (7th Cir. 1998). In reviewing a
motion made pursuant to Rule 12(c) on the ground of failure
to state a claim upon which relief can be granted, the Court
applies the same standard that it applies when reviewing a
motion to dismiss made pursuant to Rule 12(b)(6).
Pisciotta v. Old Nat. Bancorp, 499 F.3d 629, 633
(7th Cir. 2007). Consequently, “[a] court
will grant a Rule 12(c) motion only when it appears beyond a
doubt that the plaintiff cannot prove any facts to support a
claim for relief and the moving party demonstrates that there
are no material issues of fact to be resolved.”
Brunt v. Serv. Employees Int'l Union, 284 F.3d
715, 718-19 (7th Cir. 2002).
reviewing a 12(c) motion, the Court may consider the contents
of the pleadings, including any attached exhibits.
Northern Indiana Gun & Outdoor Shows, 163 F.3d
at 452. The Court may also take judicial notice of matters of
public record, including public court documents, without
converting a motion for judgment on the pleadings into a
motion for summary judgment. Harrison v. Deere &
Co., 533 F. App'x 644, 647 n.3 (7th Cir. 2013);
Hallie v. Wells Fargo Bank, N.A., No. 2:12-cv-235,
2013 WL 1835708, *1-2 (N.D. Ind. May 1, 2013); Winters v.
Illinois State Bd. of Elections, 197 F.Supp.2d 1110,
1113 (N.D. Ill. 2001). “When deciding a motion to
dismiss pursuant to Rule 12(b)(6), the court must . . .
decide whether it is plausible that plaintiffs have a valid
claim for relief.” Diaz-Bernal v. Myers, 758
F.Supp.2d 106, 115-16 (D. Conn. 2010) (citing Ashcroft v.
Iqbal, 556 U.S. 662 (2009)). “A claim has facial
plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555 (2007))
(“‘[The] factual allegations [in the complaint]
must be enough to raise a right to relief above the
well-pled allegations are assumed true for purposes of a Rule
12(b)(6) motion, “allegations [that] are conclusory . .
. [are] not entitled to be assumed true.”
Iqbal, 556 U.S. at 681. “The plausibility
standard . . . obligates the plaintiff to ‘provide the
grounds of his entitlement to relief' through more than
‘labels and conclusions, and a formulaic recitation of
the elements of a cause of action.'”
Diaz-Bernal, 758 F.Supp.2d at 116 (quoting
Twombly, 550 U.S. at 555); see Iqbal, 556
U.S. at 679 (“While legal conclusions can provide the
framework of a complaint, they must be supported by factual
basic background facts in this case are supported by the
record and are not disputed. Since at least January 2007, the
Simons were under investigation by the IRS for possible
violations of the Internal Revenue Code. Complaint at ¶
13; United States v. Simon, 727 F.3d 682, 683-84
(7th Cir. 2013). On November 2, 2007, IRS SA Muschell
submitted an Application and Affidavit for Search
Warrant. Complaint at ¶¶ 16, 18; Exhibit
B to the Motion to Dismiss the FTCA Complaint, Dkt No 46-2,
Application and Affidavit for Search Warrant, United
States of America v. Search of Residence, No.
1:07-MJ-00048-RBC (N.D. Ind. Nov. 2, 2007), ECF No. 1
(hereinafter “Affidavit”). In the supporting
Affidavit, SA Muschell stated that probable cause existed to
believe that the Simon residence contained evidence of the
following criminal offenses: conspiracy to commit offenses or
defraud the United States by violating federal tax laws;
willful tax evasion; willful failure to file a federal income
tax return; and fraud and false statements. Affidavit, at pp.
17-29. As Plaintiffs admit in the Complaint, SA Muschell
“listed in the Affidavit, a number of what he refers to
as tax offender characteristics, such as sham transactions;
assigned income; shell corporations; concealing income;
artificial business losses; and artificial investments . . .
.” Complaint, at ¶ 20.15. In fact, SA Muschell
stated that it was his belief that “James A. and Denise
J. Simon have devised a scheme . . . for the purpose of
evading and defeating federal income taxes legally owed by
James A. and Denise J. Simon.” Affidavit, at p. 17.
November 2, 2007, United States District Judge Theresa L.
Springmann found that SA Muschell's affidavit established
probable cause, and issued a warrant authorizing the IRS to
search the Simon residence. Complaint at ¶ 18; Search
Warrant, United States of America v.Search of
Residence, No. 1:07-MJ-00048-RBC (N.D. Ind. Nov. 7,
2007), ECF No. 5. On November 6, 2007, IRS personnel,
including SAs Muschell and Porter, executed a search of the
Simon residence. Complaint at ¶ 30; see also
Opinion and Order at pp. 1-3, CR Dkt No 74. SAC Patton was
not present during the search ...