United States District Court, D. New Jersey
FAITH DARDEN U.S. DEPARTMENT OF JUSTICE On behalf of
L. HILLMAN, U.S.D.J.
before the Court is the motion of Plaintiff, the United
States of America, for default judgment against Defendant
Michael J. Fitzgerald. Plaintiff seeks judgment against
Fitzgerald for unpaid federal income tax liabilities that
encumber his half-interest in his house in Swedesboro, New
Jersey through federal tax liens. The Plaintiff seeks to
foreclose on those liens. The United States also seeks
default judgment against Defendant Carolyn Fitzgerald,
decreeing that she has a half-interest in the property, and
against Defendants Ancora Psychiatric Hospital and Michel J.
Fitzgerald and Carolyn Fitzgerald, as trustees of the
Fitzgerald Family Trust, decreeing that they have no interest
in the property. For the reasons expressed below, the
United States' motion will be granted.
Internal Revenue Service assessed federal income taxes, plus
penalties and interest, against Michael J. Fitzgerald for tax
years 2004 through 2007. Despite notice and demand for
payment by the IRS, Michael J. Fitzgerald failed to pay the
federal income taxes assessed against him. As of October 31,
2017, Michael J. Fitzgerald owed $656, 094.53 in unpaid
federal income taxes plus statutory additions to the tax.
dates that the federal income tax assessments were made
against Michael J. Fitzgerald, tax liens in favor of the
United States arose by operation of law under 26 U.S.C.
§§ 6321 and 6322, and attached to all property and
rights to property belonging to Michael J. Fitzgerald,
including his undivided half-interest in the real property
located at 102 Shire Lane in Swedesboro, New Jersey, which
Michael J. Fitzgerald and Carolyn Fitzgerald purchased on
September 8, 1989.
February 11, 2014, after the federal tax liens arose and
attached to Michael J. Fitzgerald's interest in the
property, defendants Michael J. Fitzgerald and Carolyn
Fitzgerald transferred ownership of the property to the
Fitzgerald Family Trust (the “Family Trust”) for
United States filed its complaint on October 31, 2017 to
collect Michael J. Fitzgerald's unpaid income tax
liabilities and to enforce the corresponding federal tax
liens against the property. The United States named all
persons and entities it believed to claim an interest in the
property it is seeking to sell.
November 30, 2017, Michael J. Fitzgerald and Carolyn
Fitzgerald, individually and as trustees of the Fitzgerald
Family Trust, and Ancora were served with the summons and
complaint. They failed to appear, plead or otherwise defend.
The Clerk of the Court entered default against them on
February 15, 2018. The United States filed the instant motion
for default judgment on April 20, 2018. None of the
defendants has responded.
Subject Matter Jurisdiction
Court has jurisdiction over this action pursuant to 28 U.S.C.
§§ 1340 and 1345, and 26 U.S.C. §§ 7402
first step in obtaining a default judgment is the entry of
default. “When a party against whom a judgment for
affirmative relief is sought has failed to plead or otherwise
defend, and that failure is shown by affidavit or otherwise,
the Clerk must enter the party's default.”