Jacqueline M. COMPAGNONI, Plaintiff-Appellant,

                                                      v.

                            UNITED STATES of America, Defendant-Appellee.

                                                No. 97-5106.

                                      United States Court of Appeals,

                                              Eleventh Circuit.

                                               April 30, 1999.

Appeal from the United States District Court for the Southern District of Florida. (No. 94-813-CV-SM), S
tanley Marcus, Judge.

Before TJOFLAT and DUBINA, Circuit Judges, and SMITH*, Senior Circuit Judge.

        TJOFLAT, Circuit Judge:

        This case arises out of a long-running feud involving a man, a woman, and the Internal Revenue

Service. This particular battle pits the woman against the IRS. For the reasons discussed below, the IRS wins.

                                                      I.

        Luciano and Jacqueline Compagnoni's romance dates back to the mid-1970s. In 1975, the two were

married in Pennsylvania, but, after five years of marriage, they divorced in 1980. Six months later, however,

they were reconciled and began living together again (without remarrying). In 1987, they moved to sunny

South Florida, and decided to once again take one another as husband and wife. Unfortunately, the change

in weather did not help the couple's marital climate, and in 1991 Luciano and Jacqueline Compagnoni

obtained another divorce.

        Luciano's relationship with the IRS was not much better than his relationship with Jacqueline: He

had individual unpaid tax liabilities for the years 1986, 1987, and 1991 totaling approximately $221,000.1

The IRS, between December 1992 and May 1993, filed notices of federal tax lien against Luciano for his


   *
    Honorable Edward S. Smith, Senior U.S. Circuit Judge for the Federal Circuit, sitting by designation.
   1
    Luciano and Jacqueline filed a joint return in 1987; therefore, the 1987 tax liability (approximately
$98,000) was joint rather than individual. The IRS, however, treated this liability as an individual
liability by filing liens solely against Luciano.
delinquent tax payments. On July 7, 1993, the IRS levied on funds that Luciano had accumulated in a

pension plan at Cooper Industries, and collected approximately $183,000 of Luciano's tax liability.

        Meanwhile, the Dade County Circuit Court was in the process of dividing the Compagnonis' assets

in their divorce proceedings. On April 8, 1993—three months prior to the IRS levy—the circuit court entered

an order awarding Jacqueline all of Luciano's interest in the Cooper Industries pension plan.

         Jacqueline received a letter dated July 29, 1993, from the trustee for the Cooper Industries pension

plan explaining to her that the balance in the plan had been reduced by $183,000 pursuant to the IRS levy.

On April 26, 1994, Jacqueline filed suit against the United States in federal district court on one count of

wrongful levy under 26 U.S.C. § 7426.2 The district court dismissed the complaint for lack of subject matter

jurisdiction, on the ground that the statute of limitations had expired.3 Jacqueline appeals.

                                                      II.

        Jacqueline's first claim of error relates to the manner in which the district court decided the statute

of limitations issue. The issue was raised in a motion to dismiss filed by the Government approximately




   2
   Section 7426 provides a remedy for a person whose property is levied upon by the IRS for the
purpose of satisfying another person's tax liability. See 26 U.S.C. § 7426(a)(1) (1994); Texas Commerce
Bank-Fort Worth, N.A. v. United States, 

, 156 (5th Cir.1990).
   3
    In most cases, a defense based on a statute of limitations does not implicate the court's subject matter
jurisdiction. See Pugh v. Brook (In re Pugh ), 

, 533-34 (11th Cir.1998) (noting that "true
statutes of limitations" do not constitute grants of subject matter jurisdiction, but rather "restrict the power
of a court to grant certain remedies in a proceeding over which it has subject matter jurisdiction"). Suits
against the United States, however, present an unusual situation. The United States is generally immune
from suit; it is subject to suit only insofar as it has waived its sovereign immunity. See United States v.
Sherwood, 

, 586, 

, 769-70, 

(1941). Consequently, if a statute
authorizing suits against the United States limits the time period in which such suits may be brought, the
United States retains its sovereign immunity as to any suits brought outside of that time period. See Block
v. North Dakota ex rel. Bd. of Univ. & Sch. Lands, 

, 287, 

, 1820, 

(1983). Therefore, the court does not have subject matter jurisdiction over a suit against the United
States that is barred by the statute of limitations.

                The statute of limitations for a wrongful levy action is nine months from the date on
        which the levy occurred. See 26 U.S.C.A. §§ 6532(c), 7426(i) (West supp.1998). Jacqueline
        brought her suit nineteen days late.

                                                       2
nineteen months after the commencement of the lawsuit.4 Jacqueline, in her response, argued that the

Government's motion was untimely because a defense based on a statute of limitations is waived if not raised

in the defendant's answer. See Day v. Liberty Nat'l Life Ins. Co., 

, 1015 (11th Cir.1997). The

district court agreed that the Government should not have waited so long to file the motion, but nevertheless

recognized that a party may make a motion to dismiss for lack of subject matter jurisdiction at any time. See

Fed.R.Civ.P. 12(h)(3). The district court then concluded that it did in fact lack subject matter jurisdiction and

granted the Government's motion to dismiss.

        Jacqueline then filed a motion for reconsideration, in which she contended that the district court

should have resolved her concerns regarding the timeliness of the Government's motion before (and not

concurrently with) actually deciding the motion. If the district court had initially determined that the

Government's motion was timely, she argued, she would have then responded to the Government's motion

on its merits. Specifically, she would have argued that the doctrine of equitable tolling ought to apply, and

thus the statute of limitations does not bar her claim. As it was, Jacqueline argued, she had no opportunity

to respond to the merits of the Government's motion to dismiss. The district court denied Jacqueline's motion

for reconsideration, on the grounds that (1) the district court had no obligation to resolve her timeliness

concerns before ruling on the motion to dismiss; (2) Jacqueline easily could have raised her equitable tolling

argument in her initial response to the motion to dismiss, but did not; (3) equitable tolling probably does not

apply to section 7426 claims; and (4) even if equitable tolling applies to section 7426 claims, Jacqueline has

presented no persuasive evidence that it should be applied in her case.

        Jacqueline now argues that the district court abused its discretion by not allowing her to present her

equitable tolling defense before granting the Government's motion to dismiss. We find this argument

meritless. Although Jacqueline did not make an equitable tolling argument in her reply to the Government's

motion to dismiss, she made the argument in her motion for reconsideration. The district court, in its order

   4
    The motion was entitled, "Motion for Summary Judgment," but the district court correctly construed it
as a motion to dismiss for lack of subject matter jurisdiction.

                                                       3
denying the motion, discussed Jacqueline's equitable tolling argument and rejected it. Consequently,

Jacqueline has already received that which she requests on appeal—a chance for her equitable tolling defense

to be heard by the district court.5 We therefore conclude that her appeal of this matter is moot.

                                                     III.

        Jacqueline also argues that the district court abused its discretion by denying her motion to amend

her complaint. Jacqueline moved to amend her complaint to add a claim under 28 U.S.C. § 1346, which

allows a civil action against the United States for a refund of taxes alleged to have been assessed in error.

See 28 U.S.C. § 1346(a)(1) (1994). Prior to April 1995, many courts had held that standing to bring suit

under section 1346 was limited to the person against whom the tax was assessed. See, e.g., Snodgrass v.

United States, 

, 539-40 (5th Cir.1987); Busse v. United States, 

, 425 (7th

Cir.1976). Because the tax in this case was assessed against Luciano, Jacqueline asserted in her motion that

she did not have standing to raise a section 1346 claim at the time she filed her complaint in April 1994.6 In

April 1995, however, the Supreme Court issued its decision in United States v. Williams, 

, 

, 

(1995), which held that, in certain circumstances, persons other than the person

against whom the tax was assessed have standing to bring a claim under section 1346. Six months later, in

October 1995, Jacqueline sought to add a section 1346 claim (based on Williams ) to her complaint.

         The district court denied her motion on the grounds that (1) the motion was untimely, because

Jacqueline filed it six months after the Williams decision was released; (2) allowing the amendment at such

a late stage of the proceedings would cause excessive delay, especially in light of the need for further

discovery; and (3) the proposed amendment would be futile, because, even after Williams, Jacqueline did




   5
    Jacqueline does not appeal the merits of the district court's decision that her section 7426 is barred by
the statute of limitations.
   6
    While this may have been true in regard to the 1986 and 1991 assessments, it certainly was not true in
regard to the 1987 assessment, which was jointly assessed against both Luciano and Jacqueline. See note

.

                                                      4
not have a cause of action under section 1346. On appeal, Jacqueline claims that the district court's denial

of her motion constituted an abuse of discretion.7

         We agree with the district court that Jacqueline has not alleged a cause of action under section 1346.

A key element of a section 1346 claim—even after Williams—is exhaustion of administrative remedies. See

26 U.S.C. §§ 6532(a)(1), 7422 (1994); 

, 115 S.Ct. at 1616. Jacqueline's proposed

amended complaint makes no allegation that she filed an administrative refund claim, nor is there any

evidence in the record to suggest that she did so. Therefore, the district court did not abuse its discretion in

denying Jacqueline's motion to amend.

                                                      IV.

        For the foregoing reasons, the judgment of the district court is

        AFFIRMED.




   7
   A district court's denial of a motion to amend a complaint is reviewed for an abuse of discretion. See
Campbell v. Emory Clinic, 

, 1160-61 (11th Cir.1999).

                                                       5