MEMORANDUM AND ORDER

MORRISON C. ENGLAND, Jr., Chief District Judge.

Currently before the Court is Plaintiff United States of America's ("Plaintiff") Motion for Entry of Amended Judgment against Defendant James L. Franklin ("Defendant") pursuant to Rule 60(b)(6) of the Federal Rules of Civil Procedure. ECF No. 14. Defendant formerly stipulated to a judgment for a reduced federal tax penalty and entered into an agreement to pay the penalty within a specified time period. J. 1, ECF No. 13. The judgment noted that an amended judgment would be filed for the full liability amount if Defendant did not pay in accordance with the parties' agreement. J. 2. Plaintiff contends that Defendant has defaulted on the agreement and seeks an amended judgment for the full Trust Fund Recovery Penalties of $545,680.991 (after credits and with accrued interest).2 Pl.'s Mem. P. & A. 3, ECF No. 14-1. For the following reasons, the Motion is GRANTED.3

BACKGROUND

Between 1991 and 1999, Defendant failed to pay withheld income and Federal Insurance Contributions Act (FICA) taxes for his four construction companies: JL Construction Company, The Stratus Group, Stratus Development, Inc., and Marina Group, LLC. Compl. ¶¶ 5-13, ECF No. 1. He was criminally charged in connection with Marina Group, LLC and pled guilty to one count of willfully failing to pay federal employment taxes of $63,925.80. United States v. James L. Franklin, No. 2:05-CR-00192, ECF No. 4 (E.D. Cal. June 20, 2005). After the criminal disposition, Plaintiff brought a civil action against Defendant seeking a total of $504,418.06 in tax assessments, accrued interest, and statutory additions for the unpaid employment taxes at all four of Defendant's construction companies. Compl. at 4. Plaintiff agreed to lower the penalty to $294,000.00 on the condition that Defendant paid $50,000 every six (6) months until payment was complete. Settlement Agreement Ex. C, at 2-3, ECF No. 14-5. Additionally, the settlement agreement required Defendant to sign an amended judgment in the amount of $504,418.08 plus interest. Id. at 3. In the event Defendant materially defaulted in making payments, the parties agreed that the amended judgment would be filed with the Court. Id. On October 24, 2006, this Court entered a judgment confirming the settlement agreement. J. at 2.

As of July 2008, Defendant had paid approximately $138,735.10 towards the settlement amount. Pl.'s Mem. P. & A. at 3. However, at some point in 2008, Defendant lost his job and stopped making payments. Opp'n 3, ECF No. 18. In 2008, 2010, and 2012, Defendant or his attorney sent three letters to the Tax Division of the U.S. Department of Justice ("DOJ") seeking modification of the settlement agreement due to the changed circumstances in Defendant's finances. Id. at 3. On January 17, 2012, the DOJ responded to Defendant's 2012 letter and stated that the government would not consider a modification until Defendant sent copies of his three most recent federal individual income tax returns to prove compliance with his federal tax obligations. DOJ Letter Ex. 6, at 20, ECF No. 18-1. The DOJ's response further stated that final action on the offer would only "be taken by the Attorney General, or an official designated by him for this purpose." Id. at 21. Defendant failed to provide his three most recent federal tax returns as requested, and the DOJ deemed Defendant's request for modification withdrawn on April 3, 2012. DOJ Letter Ex. A, at 2, ECF No. 19-3; Franklin Letter Ex. 7, at 24, ECF No. 18-1.

In 2013, in an unrelated case, the Internal Revenue Service ("IRS") assigned Revenue Officer Carol Leibrand ("Officer Leibrand") to collect unpaid income tax liabilities from Defendant. Leibrand Decl. at 2, ECF No. 19-1. Officer Leibrand then discovered that in addition to federal income taxes, Defendant also owed payments on the 2006 judgment. Id. at 2. Unsure how to proceed, Officer Leibrand informed Defendant that she would be working with the DOJ to determine what actions should be taken in connection with payments for the 2006 judgment. Id. Subsequently, Officer Leibrand and Defendant arranged for Defendant to pay $800.00 per month to the DOJ for the 2006 judgment and $400.00 per month to the IRS for the new income tax liabilities. Opp'n at 4; Pl.'s Reply to Opp'n 3, ECF No. 19. Since November 2013, Defendant has consistently made the $800 monthly payments to the DOJ for the 2006 judgment. Opp'n at 5; Pl.'s Reply to Opp'n at 2.

On October 17, 2013, Plaintiff filed this motion under Rule 60(b) requesting that the Court amend the 2006 judgment to make Defendant liable for the total unpaid employment tax penalties (after credits and with accrued interest). Pl.'s Mem. P. & A. at 1.

STANDARD

Under Rule 60(b)(6), a judgment may be set aside for "any other reason justifying relief from the operation of a judgment." As such, district courts have the authority to vacate judgments "whenever such action is appropriate to accomplish justice." Klapprott v. United States, 335 U.S. 601, 615 (1949). However, there must be a showing of "extraordinary circumstances" to justify relief. Ackerman v. United States, 340 U.S. 193, 199 (1950); United States v. Sparks, 685 F.2d 1128, 1129 (9th Cir. 1982). Repudiation of a settlement agreement that terminated litigation pending before a court has been found to constitute an extraordinary circumstance justifying relief from a prior judgment. Keeling v. Sheet Metal Workers Int'l Ass'n, Local Union 162, 937 F.2d 408, 410 (9th Cir. 1991).

ANALYSIS

The parties' 2006 settlement agreement provided that a payment by Defendant that was more than thirty (30) days late would constitute a material default. Settlement Agreement Ex. C, at 3. It is undisputed that, after July 2008, Defendant failed to make the agreed upon $50,000 payments and thus failed to comply with the original terms of the agreement. However, Defendant contends that the installment agreement he made with IRS Officer Leibrand modified the 2006 settlement agreement, and that Officer Leibrand had the implied authority to modify the agreement on behalf of the DOJ. Opp'n at 5. To support his argument, Defendant points to two documents that he contends modified the original settlement agreement: (1) a DOJ online payment authorization form that he signed to authorize the $800 payments from his bank account, DOJ Online Form Ex. 8, at 26, ECF 18-1; and (2) an IRS installment agreement signed by Defendant and an IRS manager. IRS Installment Agreement Ex. 9, at 28, ECF 18-1. Defendant's argument is unconvincing.

The original settlement agreement made clear that its terms could only be modified in writing by the United States. Settlement Agreement Ex. C, at 3. The DOJ online payment form is clearly not a "writing" as was intended by the settlement agreement. The document is a standardized payment form with no information about Defendant's specific case or any indication that authorizing online withdrawals modified Defendant's legal obligations to the DOJ. Moreover, the form is only signed by Defendant, which further cuts against Defendant's argument as Defendant's previous interactions with the DOJ regarding the 2006 judgment were signed by the DOJ trial attorney on the case. Indeed, the original settlement agreement carried all the formalities of a written agreement with the DOJ: the signature of the trial attorney, the specific terms of the agreement, and a statement that the offer had "been accepted on behalf of the Attorney General." Settlement Agreement Ex. C, at 3. In contrast, the payment form in question bears no resemblance to a formal agreement in writing. As such, there is no indication that a new agreement with new payment terms was made in writing, as required under the original settlement agreement.

As to the IRS installment agreement, this payment plan addresses a separate liability owed by Defendant to the government for unpaid individual income taxes for 2009, 2010, 2011 and 2012. IRS Installment Agreement Ex. 9, at 28. This separate IRS installment agreement has no bearing on Defendant's obligations to the DOJ under the 2006 judgment.

Finally, Defendant argues that Officer Leibrand acted under the implied authority of the DOJ and, thus, that the installment plan she coordinated modified the prior settlement agreement. Opp'n at 6. The Court does not need to consider the extent of Officer Leibrand's authority, since there is no convincing evidence of a modification that complies with the terms of the settlement agreement.

Based on these facts, there is insufficient evidence to show the 2006 settlement agreement was modified. Therefore, Defendant has repudiated the settlement agreement by failing to make payments within the specified time period, and the Court has the authority under Rule 60(b) to issue an amended judgment. See Keeling, 937 F.2d at 410.

CONCLUSION

For all the foregoing reasons, Defendants' Motion for Entry of Amended Judgment (ECF No. 14) is GRANTED. It is hereby ordered that:

1. The previous Judgment (ECF No. 13) is VACATED.

2. James L. Franklin is indebted to the United States in the amount of $545,680.99, plus interest pursuant to 26 U.S.C. §§ 6601(a), 6621, 6622(a) and 28 U.S.C. §1961(c), from October 27, 2014, until the judgment is paid, for the unpaid balance of Trust Fund Recovery Penalties for the following:

3. No additional penalties will accrue or be assessed with respect to the periods and entities set forth above in paragraph 1.

4. The Clerk of the Court is directed to enter an Amended Judgment consistent with this Memorandum and Order.

5. Payments made on the prior Judgment are credited to the balance due set forth above.

IT IS SO ORDERED.