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Gold Forever Music, Inc. v. United States

United States Court of Appeals, Sixth Circuit

April 10, 2019

Gold Forever Music, Inc., Plaintiff-Appellant,
v.
United States of America, Defendant-Appellee.

          Appeal from the United States District Court for the Eastern District of Michigan at Detroit. No. 2:17-cv-13927-George Caram Steeh, District Judge.

         ON BRIEF:

          Neal Nusholtz, NEAL NUSHOLTZ, P.L.L.C., Troy, Michigan, for Appellant.

          Joan I. Oppenheimer, Geoffrey J. Klimas, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.

          Before: McKEAGUE, GRIFFIN, and NALBANDIAN, Circuit Judges.

          OPINION

          McKEAGUE, Circuit Judge.

         The statute of limitations for a wrongful levy action cannot begin until there has been a levy that attaches to the property at issue. In this case, notices of levy in 2012 did not constitute levies on royalties generated after the notices were served. For the reasons set forth below, the statute of limitations does not bar Gold Forever's wrongful levy action. Accordingly, we REVERSE the judgment of the district court and REMAND for further proceedings.

          I.

         Gold Forever Music, Inc. (Gold Forever) is a music publishing company that has entered into agreements with various artists entitling it to half of the royalties collected for the sale and performance of those artists' work. Instead of directly licensing third parties to use music from its catalog, Gold Forever works with Broadcast Music, Inc. (BMI) and Universal Music Publishing (Universal) to do so. These companies license others to use Gold Forever's music, collect the royalties pursuant to those licensing agreements, and remit those royalties to Gold Forever.

         Edward Holland, Jr. is the sole owner of Gold Forever. He was a Motown artist and has co-written several famous songs such as "You Can't Hurry Love" by the Supremes and Phil Collins, "Where Did Our Love Go" and "Stop In the Name of Love" by the Supremes, "How Sweet It Is (To Be Loved by You)" by Marvin Gaye and James Taylor, "You Keep Me Hangin' On" by Vanilla Fudge and Kim Wilde, "Just a Little Bit of You" by Michael Jackson, and many more. His music forms some, but not all, of Gold Forever's catalog. Holland owes millions of dollars to the IRS in taxes, interest, and penalties.

         In 2012, to collect on Holland's tax deficiency, the IRS served two notices of levy, one to BMI and one to Universal. The notices identified Gold Forever as the "alter ego/nominee transferee of Edward Holland, Jr." The notices of levy required the companies to remit to the IRS "property and rights to property . . . that you have or which you are already obligated to pay [Gold Forever]." It is unclear from the complaint whether BMI and Universal remitted any monies to the IRS between 2012 and 2016. Beginning on October 6, 2016, through the date of the complaint, BMI and Universal remitted a combined $967, 140.76 to the IRS. Gold Forever made requests for refunds to the IRS within nine months of BMI and Universal remitting the funds.

         On December 6, 2017, Gold Forever filed a wrongful levy action for the funds remitted beginning on October 6, 2016. Gold Forever's complaint alleged that it has never been the alter ego or nominee of Holland and that most, if not all, of the money remitted by BMI and Universal belongs either to Gold Forever or to artists other than Holland. The government moved to dismiss Gold Forever's wrongful levy suit as untimely, having been filed after the statute of limitations had run. The district court agreed with the government and granted the motion to dismiss.

         II.

         We review de novo the grant of a motion to dismiss, construing the complaint in the light most favorable to the non-movant, accepting their well-pleaded factual allegations as true, and drawing all reasonable inferences in their favor. Jackson ...


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