COOPER, District Judge.
We have before us cross-motions for summary judgment by plaintiffs and by co-defendant United States pursuant to Fed.R.Civ.P. 56. The material facts are not in dispute; summary judgment is therefore appropriate. At issue here are conflicting claims to a substantial amount of money now in the possession of co-defendant Property Clerk of the City of New York (hereinafter "Property Clerk"). For the reasons given below, we (1) grant the motion by the United States for summary judgment dismissing plaintiffs' complaint against it, and (2) dismiss the complaint against the Property Clerk for lack of jurisdiction. The United States has filed a cross-claim against the Property Clerk which is predicated upon an independent basis of federal jurisdiction and therefore will not be affected by our disposition of these motions.
Plaintiffs herein are licensed bail bondsmen in the City of New York. One John T. Brown (hereinafter "taxpayer"), who resided at 180 West End Avenue, New York, New York, was arrested on September 24, 1972 by the New York Police and arraigned in state court criminal proceedings on three separate charges apparently relating to drugs. The police seized from the taxpayer cash sums totalling more than $80,000. Plaintiffs furnished bail in the amount of $45,000; the taxpayer failed to appear on May 5, 1973; the bail bond was forfeited.
On November 3, 1972, Internal Revenue Service made an income tax assessment against the taxpayer in the amount of $78,040.00 for the taxable period ended September 24, 1972. No portion of that tax assessment has been paid.
On November 9, 1972, IRS served upon the Property Clerk of the City of New York a Notice of Levy which recited the facts of the tax assessment and stated: ". . . all property . . . now in your possession and belonging to this taxpayer . . . are hereby levied upon and seized for satisfaction of the aforesaid tax . . . and demand is hereby made upon you for the amount necessary to satisfy the liability set forth herein . . ." At the time the Notice of Levy was served, the Property Clerk had in his possession, and still possesses, the cash seized by the police from the taxpayer ($80,000 minimum), in excess of the tax liability ($78,040). The Property Clerk has not remitted any of the taxpayer's property to IRS. On the same date that the Notice of Levy was served (November 9, 1972), IRS filed with the Register of the City of New York a Notice of Federal Tax
After the $45,000 bail was forfeited on May 31, 1973, plaintiffs instituted in the Supreme Court, New York County, an action against the taxpayer; on June 25, 1973 plaintiffs obtained an order of attachment for $45,000 against him; on June 28, 1973, the Sheriff of the City of New York served the Property Clerk with the attachment order; on September 10, 1973, a default judgment for $45,000 was entered in favor of plaintiffs against the taxpayer; on September 11, 1973, an Execution with Notice to Garnishee was issued upon the Sheriff and the Property Clerk by plaintiffs as attaching judgment creditors.
At no time did plaintiffs file any claim or request with IRS for the return or release of the property levied upon by IRS. On September 14, 1973, plaintiffs began this action against IRS and the Property Clerk.
Plaintiffs' action against the United States is authorized by 26 U.S.C. § 7426(a); it provides in substance that any person (other than a taxpayer) may sue the United States to recover a money judgment in respect to property of a taxpayer levied upon by IRS when the claimant had a right to that property superior to the claim of IRS.
We hold that the complaint must be dismissed on the ground that plaintiffs' action is time-barred. Even if this is not so, the United States should prevail, for it is clear that its claim is superior to that of plaintiffs.
Section 7426 permits suit by third parties in cases where the United States has made a wrongful levy on a taxpayer's property. In such actions, as this one, the validity of the tax assessment is conclusively presumed. 26 U.S. C. § 7426(c).
III PROCEDURAL REQUIREMENTS
To resolve such conflicting claims, plaintiffs must comply with statutory
This nine month period acts as a statute of limitations and commences on the date on which the Notice of Levy was served. American Honda Motor Co., Inc. v. United States, 363 F.Supp. 988 (S.D.N.Y.1973). Thus, plaintiffs were required either to file a request with IRS for the return of the property levied upon, or to commence their action against the United States within nine months after the Notice of Levy was served. IRS served its Notice of Levy on the Property Clerk on November 9, 1972; plaintiffs therefore had until August 9, 1973 to file their request or commence their action. Plaintiffs have not filed such a request, and, since this action was not begun until September 14, 1973, it is time-barred.
Plaintiffs argue, however, that the institution of a law suit in the state courts together with the attachment of the funds held by the Property Clerk is equivalent to a request to IRS for the return of the property. They emphasize that the Property Clerk was served with the order of attachment on June 28, 1973, within nine months after the Notice of Levy was served by IRS on November 9, 1972 and so the statutory requirements are fully satisfied; that they are therefore entitled to the twelve month extension of time as allowed by § 6532(c) (2).
The Internal Revenue Code and the regulations pursuant thereto require that IRS receive actual notice of a request for the return of property. The United States was not a party to plaintiffs' state court action against the taxpayer and had no knowledge of it. Section 6532(c) (2) speaks of a request for the return of property pursuant to § 6343(b). The regulations promulgated pursuant to § 6343(b) specify that such a request must be in writing, addressed to the district director for the internal revenue district in which the levy was made, and marked for the attention of the Chief, special procedures staff.
IV PRIORITY OF CLAIMS
Even if plaintiffs' complaint were not time-barred the United States must prevail on the merits. Plaintiffs first argue that the claim of the United States to the property held by the Property Clerk is invalid because its tax assessment has not been reduced to judgment. Section 6502(a), however authorizes the collection of a tax either by levy or through a court proceeding; no judgment is required.
Plaintiffs further contend that, as judgment creditors of the taxpayer, their claim is superior to that of the United States and that therefore they should prevail. They draw our attention to § 6323(a), which provides that a judgment lien creditor has priority over a tax lien if the creditor's status as a judgment lien creditor was obtained prior to the time IRS publicly filed a Notice of Tax Lien.
The requirements as to public filing are set forth in § 6323(f) which provides that in the case of personal property a Notice of Tax Lien must be filed in an office within the state, county, or other governmental subdivision, as designated by the laws of such state in which the property subject to the lien is situated.
V PLAINTIFFS' CLAIM AGAINST THE PROPERTY CLERK
Plaintiffs commenced this action by naming IRS and the Property Clerk as co-defendants and by asserting 26 U. S.C. § 7426 as a basis for federal jurisdiction. Section 7426, however, only authorizes a lawsuit against the United States; it does not establish federal jurisdiction over an individual defendant. No independent basis of federal jurisdiction over the Property Clerk was pleaded in the complaint, and an examination of Title 28 does not reveal any. This raises an interesting question of pendent jurisdiction, i. e., the power of a federal court to consider a related state action over which it has no jurisdiction. As one commentator has recently noted, "Whether [the] doctrine of pendent jurisdiction would permit the bringing in of a different party as to whom no federal claim exists as to which the state claim can be said to be pendent is not altogether clear." 3 A Moore's Federal Practice § 18.07[1.4] (1973 Supp.). See Astor-Honor, Inc. v. Grosset & Dunlap, 441 F.2d 627 (2d Cir. 1971); Leather's Best, Inc. v. S. S. Mormaclynx, 451 F.2d 800 (2d Cir. 1971).
We need not, and do not, reach this issue, however. The motion for summary judgment in favor of the United States has been granted, dismissing the complaint against it for lack of jurisdiction. Since we are no longer entertaining the cause of action against IRS, we do not need to consider the action against the Property Clerk. "Certainly, if the federal claims are dismissed before trial, even though not insubstantial in a jurisdictional sense, the state claims should be dismissed as well." United Mine Workers v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966). For this reason, the complaint against the Property Clerk of the City of New York must be dismissed for lack of jurisdiction.
VI THE CROSS-CLAIM AGAINST THE PROPERTY CLERK
The granting of summary judgment in favor of the United States and the dismissal of plaintiffs' complaint against the Property Clerk does not conclude this litigation. Pursuant to 26 U.S.C. § 6332(a) and (c), the United States has filed a cross-claim against the Property Clerk for its failure to honor the Notice of Levy. This cross-claim is based on the independent grounds of federal jurisdiction set forth in 28 U.S.C. §§ 1340 and 1345, and 26 U.S.C. § 7402.
Section 6332(a) provides that when a person is served with a Notice of Levy, that person is obligated to surrender the taxpayer's property in his possession to
We do not at this juncture dispose of the cross-claim against the Property Clerk. IRS informs us that in other instances when a tax levy has been served upon the Property Clerk, IRS and the Clerk, with the cooperation and consent of the local district attorney's office, have worked out a procedure to honor the tax levy and to avoid a judicial confrontation between the United States and the City of New York. This matter is therefore to be held in abeyance, subject to a conference involving the parties interested.
Accordingly, for the reasons stated above, we make the following dispositions: (1) the motion by the United States for summary judgment dismissing the complaint against it is granted; (2) the complaint against the Property Clerk is dismissed for lack of jurisdiction; (3) plaintiffs' motion for summary judgment is denied; and (4) the cross-claim by the United States against the Property Clerk is expressly left undecided pending a conference of parties to be scheduled at an early date.