Puongpun Sananikone v. United States of America

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
PUONGPUN SANANIKONE,
Plaintiff - Appellant,
v.
UNITED STATES OF AMERICA,
Defendant - Appellee.
No. 13-16589
D.C. No.
2:07-cv-01434-KJM-KJN
MEMORANDUM*
Appeal from the United States District Court
for the Eastern District of California
Kimberly J. Mueller, District Judge, Presiding
Argued and Submitted October 23, 2015
San Francisco, California
Before: WALLACE, BLACK**, and CLIFTON, Circuit Judges.
Appellant Puongpun Sananikone, chairman of the board of American Steel
Frame, Inc., appeals judgment following a jury verdict in favor of the United States
in his action to recover penalties assessed against him pursuant to 26 U.S.C.
FILED
NOV 20 2015
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
** The Honorable Susan H. Black, Senior Circuit Judge for the U.S.
Court of Appeals for the Eleventh Circuit, sitting by designation.

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§ 6672. Section 6672 provides that, when an employer fails to pay over trust-fund
taxes withheld from employee wages, the Internal Revenue Service (IRS) may
assess civil penalties against “[a]ny person required to collect, truthfully account
for, and pay over” the taxes. 26 U.S.C. § 6672. When the IRS assesses a penalty
under § 6672, the taxpayer may challenge the assessment by bringing suit for a
refund in federal court. The taxpayer has the burden of proof in such actions.
United States v. Jones, 33 F.3d 1137, 1139 (9th Cir. 1994). To defeat an
assessment, the taxpayer must establish, by a preponderance of the evidence, that
he either (1) is not a “responsible person” within the meaning of § 6672; or (2) did
not act “willfully” in failing to collect or pay over the withheld taxes. Id.
Appellant first argues there is insufficient evidence to support the jury’s
conclusion that he was a “responsible person” within the meaning of § 6672. Our
case law establishes that a director who controls tax payments may be held
responsible under § 6672. See United States v. Graham, 309 F.2d 210, 212 (9th
Cir. 1962); see also Pac. Nat’l Ins. Co. v. United States, 422 F.2d 26, 31 (9th Cir.
1970); Jones, 33 F.3d at 1140.
Whether a director has sufficient control over tax payments to rise to the
level of “responsible” is a fact-based inquiry. Individuals are responsible if they
have “the authority required to exercise significant control over the corporation’s
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financial affairs.” Purcell v. United States, 1 F.3d 932, 937 (9th Cir.1993). So
long as control is “significant,” it need not be exclusive, Turner v. United States,
423 F.2d 448, 449 (9th Cir. 1970), and it need not be exercised in fact, Purcell, 1
F.3d at 937. “[T]he duty to ensure that withheld employment taxes are paid over
flows from the authority that enables one to do so.” Purcell, 1 F.3d at 937. Thus,
“[a]lthough an individual’s daily functions may be unrelated to financial or
tax-related decision-making, that individual may be ‘responsible’ by having the
authority to pay or to order the payment of delinquent taxes.” Jones, 33 F.3d at
1140 (quotation marks omitted).
The jury in this case found that Appellant was a “responsible person” within
the meaning of § 6672. We review de novo the denial of a motion for judgment as
a matter of law. Johnson v. Paradise Valley Unified Sch. Dist., 251 F.3d 1222,
1226 (9th Cir. 2001). Under that standard, this court may only set aside a jury
verdict if “it is clear that the evidence and its inferences cannot reasonably support
a judgment in favor of the opposing party.” Erickson v. Pierce Cty., 960 F.2d 801,
804 (9th Cir. 1992). The denial of a motion for new trial is reviewed for abuse of
discretion, and is “reversible only if the record contains no evidence in support of
the verdict or if the district court made a mistake of law.” E.E.O.C. v. Go Daddy
Software, Inc., 581 F.3d 951, 962 (9th Cir. 2009). We have reviewed the record
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and conclude that there was sufficient evidence for the jury to find that Appellant
was “responsible” within the meaning of § 6672.
Appellant also argues that there is insufficient evidence to support the jury’s
conclusion that he acted “willfully” within the meaning of § 6672. A person acts
willfully when he takes a “voluntary, conscious[,] and intentional act to prefer
other creditors over the United States.” Davis v. United States, 961 F.2d 867, 871
(9th Cir. 1992) (quotation marks omitted). Willfulness may also be established by
a “reckless disregard for obvious risks.” Sorenson v. United States, 521 F.2d 325,
329 (9th Cir. 1975). We have reviewed the record and conclude that there was
sufficient evidence for the jury to find that Appellant acted willfully.
Finally, Appellant argues that the district court abused its discretion by
declining Appellant’s request for special interrogatories. Rule 49(b)(1) of the
Federal Rules of Civil Procedure allows the court to submit to the jury a general
verdict with special interrogatories “on one or more issues of fact that the jury must
decide.” The decision whether to submit such a verdict “is committed to the
discretion of the trial court.” Frank Brisco Co. v. Clark Cty., 857 F.2d 606, 614
(9th Cir. 1988). The district court did not abuse its discretion in this case.
AFFIRMED.
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