Fostmeier Construction Co. v. United States

MEMORANDUM OPINION AND ORDER DIRECTING JUDGMENT FOR DEFENDANT

Plaintiff sues under 26 U.S.C. § 7426 (a) (1), which provides in relevant part that “if a levy has been made on property * * * any person (other than the person against whom is assessed the tax out of which such levy arose) who claims an interest in or lien on such property and that such property was wrongfully levied upon may bring a civil action against the United States. * * * ’>

Plaintiff contracted to do certain work for the Sebastopol Union School District. He sub-contracted certain parts of this work to F. G. Millerick (“Taxpayer”) who himself had various sub-contractors. The contract between Plaintiff and Taxpayer provided that as Taxpayer completed portions of his work, he was to receive progress payments in the amount of 90% of the work which the architect's estimate showed had been done during the relevant period. On four occasions the Internal Revenue Service served Notices of Levy against progress payments, assertedly due under the contract, but not yet paid. Dates of levy were January 18, 1968; January 24, 1968; April 30, 1968; and June 11, 1968. Plaintiff paid the amounts specified in the Notices, but…