United States of America v. Stanley K. Burrell; Stephanie D. Burrell

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
STANLEY K. BURRELL; STEPHANIE
D. BURRELL,
Defendants - Appellants,
and
IMAGE, LIKENESS, POWER LLC,
Defendant.
No. 14-15015
D.C. No. 2:11-cv-03079-GEB-
EFB
MEMORANDUM*
Appeal from the United States District Court
for the Eastern District of California
Garland E. Burrell, Jr., Senior District Judge, Presiding
Submitted December 10, 2015**
San Francisco, California
Before: GRABER, WARDLAW, and MURGUIA, Circuit Judges.
FILED
DEC 17 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 panel unanimously concludes this case is suitable for decision
without oral argument. Fed. R. App. P. 34(a)(2).

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Defendants Stanley and Stephanie Burrell appeal from a judgment in favor
of the United States for 1996 and 1997 income taxes. On de novo review of this
summary judgment, Baccei v. United States, 632 F.3d 1140, 1144 (9th Cir. 2011),
we affirm.
Like the district court, we reject Defendants’ argument that the government
was equitably estopped from collecting the 1996 and 1997 taxes. Defendants
argue for estoppel based on the government’s failure to include those taxes in a
proof of claim in their bankruptcy proceeding, along with a stipulation entered into
in 2000 stating that "the only amount [of tax] due and owing" at the time was a
portion of Defendants’ 1995 tax liability.
To establish equitable estoppel against the government, Defendants must
show not only the traditional elements of the doctrine, but also "both (1)
affirmative misconduct on the part of the government and (2) that the
government’s wrongful act will cause a serious injustice, and the public’s interest
will not suffer undue damage." Indus. Customers of Nw. Utils. v. Bonneville
Power Admin., 767 F.3d 912, 928 (9th Cir. 2014) (internal quotation marks
omitted). The evidence fails to establish either of those elements.
Affirmative misconduct means "a deliberate lie or a pattern of false
promises." Elim Church of God v. Harris, 722 F.3d 1137, 1144 (9th Cir. 2013)
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(internal quotation marks omitted). Here, the government did not commit
affirmative misconduct. See Baccei, 632 F.3d at 1147 (IRS did not commit
affirmative misconduct by failing to notify defendant that his extension request
was invalid). Although the government’s failure to include the 1996 and 1997
income tax liabilities in the proof of claim, and its signing of the stipulation, may
have been negligent, negligence does not support a claim of equitable estoppel
against the government. Id.
And holding Defendants accountable for their unpaid taxes will not cause a
serious injustice. Defendants’ counsel told the bankruptcy court in 1998 that
Defendants were aware of the 1996 and 1997 tax liabilities and that they had
worked out a separate post-bankruptcy payment plan with the government.
Counsel also represented to the bankruptcy court that the 1996 and 1997 taxes,
which would be paid later, would not have a negative effect on payments to
unsecured creditors.
AFFIRMED.
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