USCA1 Opinion
[NOT FOR PUBLICATION]
UNITED STATES COURT OF APPEALS
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
FOR THE FIRST CIRCUIT
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No. 95-1872
IN RE: EDOUARD GADOURY, JR.
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EDOUARD GADOURY, JR.,
Appellant,
v.
UNITED STATES OF AMERICA
FOR INTERNAL REVENUE SERVICE,
Appellee.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. Raymond J. Pettine, Senior U.S. District Judge]
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Before
Torruella, Chief Judge,
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Aldrich, Senior Circuit Judge,
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and Selya, Circuit Judge.
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Guido R. Salvadore for appellant.
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Alice L. Ronk with whom Lorretta C. Argrett, Assistant Attorney
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General, Gary R. Allen, David English Carmack and Sheldon Whitehouse,
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United States Attorney, were on brief for appellee.
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February 26, 1996
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Per Curiam. Edouard Gadoury, Jr.'s appeal covers an
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unfavorable decision by the Internal Revenue Service that he
is a responsible person who willfully failed to pay over
withheld payroll taxes, 26 U.S.C. 6672,1 the burden of
proof being upon him, Caterino v. United States, 794 F.2d 1
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(1st Cir. 1986), cert. denied, 480 U.S. 905 (1987); a finding
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supporting the IRS by the United States Bankruptcy Court;2
findings by a magistrate concluding that the bankruptcy court
had not committed clear error, and the district court's
confirmation of the magistrate's findings. Proof of clear
error is Gadoury's burden throughout; we do not have de novo
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review. Id. at 5. Unhappily, he has not succeeded.
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We consider first a procedural point, in fact but a straw to
which Gadoury, understandably, would cling. When, by a
course that we need not consider, he found himself in the
bankruptcy court, Gadoury filed a motion for the court to
determine that he had no 6672 liability. The government,
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1. (a) General rule. Any person required to
collect, truthfully account for, and pay
over any tax imposed by this title who
willfully fails to collect such tax, or
truthfully account for and pay over such
tax, or willfully attempts in any manner
to evade or defeat any such tax or the
payment thereof, shall, in addition to
other penalties provided by law, be
liable to a penalty equal to the total
amount of the tax evaded, or not
collected, or not accounted for and paid
over. . . .
2. Gadoury having ended up in a Chapter 7 proceeding.
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erroneously interpreting the motion to be merely a request
for a hearing, awaited the court's response, only to discover
that the response was to allow the motion, in light of the
government's failure to reply. The government then sought
vigorously to have the order vacated under Fed.R.Civ.P. 55(e)
(made applicable to adversary proceedings by Bankr. R. 7055)
which prohibits entry of default against the United States
unless plaintiff has presented evidence on the merits.
Alternatively, it asserted good cause under Rule 55(c). We
find no error either way in the court's rescission of the
order and proceeding to a trial.
Our substantive start and, indeed, finish, is whether the
district court properly refused to reject the bankruptcy
findings that Gadoury was responsible, and "willfully" failed
to pay the payroll taxes, aided by the IRS's presumption of
correctness with which it entered the bankruptcy court.
Caterino, 794 F.2d at 5. We are further reminded by that
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opinion that such findings may be aided by unexpressed
inferences if they reasonably appear to have been intended by
the court. 794 F.2d at 6 n.2. Some of the facts found by
the bankruptcy court, plus some stipulated, are as follows:
Gadoury was hired by Sprague Company in 1986 as bookkeeper.
His title was changed to Controller. As such he was not an
officer, but he could sign company checks, solo, and did sign
company tax returns and tax checks. The bankruptcy court,
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however, correctly ruled, "[T]he cases do say again and again
that just mere check writing authority is not enough." There
was, of course, more. The court found, on evidence that it
believed, as well as the parties' stipulations, that Gadoury
had significant control over disbursement of the company's
funds, making him a responsible person. For good measure, it
also found that he had received no special instructions not
to pay.3 Gadoury fully disputed this evidence. Looked at
most favorably to him it might be possible to find, in light
of the company's business straits and poor cash flow, he not
only had special instructions not to pay, but that a broad
order from his superior reduced his authority altogether,
with his superior taking over his duties. The difficulty
here is that the superior denied this, and the court believed
him. The fact that the court failed to discuss Gadoury's
evidence, or state why it was not persuasive, does not make
its contrary findings clear error.
As to willfulness, Gadoury admitted that he was aware the
taxes were not being paid, that he urged them to be paid, but
that he failed to take any steps to see that they were in
fact paid. There is no more to be said.
Affirmed.
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3. For the possible importance of such, see Howard v. United
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States, 711 F.2d 729 (5th Cir. 1983).
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