Quimbee logo
DMCA.com Protection Status

Fidelity Bank, N.A. v. United States

616 F.2d 1181 (1980)

Case BriefRelatedOptions
From our private database of 35,600+ case briefs...

Fidelity Bank, N.A. v. United States

United States Court of Appeals for the Tenth Circuit

616 F.2d 1181 (1980)

Facts

CDI Homes, Inc. (CDI) was a construction company in an arrangement with a bank, Fidelity Bank, N.A. (Fidelity) (plaintiff). CDI built prefabricated homes for an entity affiliated with the Department of Housing and Urban Development. In order to finance its building, CDI had a $1 million revolving credit agreement with Fidelity. When CDI encountered challenges , Fidelity would allow it to overdraw its account, but only when it was about to complete a sale of homes. CDI would contact Fidelity, and a bank officer would review any checks. If they looked normal, the officer would initial them and allow them to be honored, even in excess of CDI’s credit line. Checks that were to be used as payroll were specifically and clearly marked “PAYROLL” on the faces of the checks. CDI failed to pay income and Federal Insurance Contribution Act (FICA) taxes withheld from wages to employees for the second quarter of 1973, and Fidelity therefore dishonored checks for taxes withheld for the months in question in the final days before CDI was shut down in June 1973. This may have triggered liability for Fidelity, as the Internal Revenue Code (IRC) allows for liability for one who supplies monies directly for the purpose of paying wages with actual knowledge that the primary party did not intend or would not be able to pay the taxes in question. Additionally, the IRC also allows for imposing unpaid taxes when a responsible person willfully fails to pay the taxes in question. When the Internal Revenue Service commissioner assessed a penalty to Fidelity of the entire withholding taxes owed by CDI ($36,150.42), Fidelity paid $381.23 of the amount assessed and sued the government (defendant) for a refund. The government filed a counterclaim for the balance due. At trial, the jury found for Fidelity and against the government. The government appealed.

Rule of Law

Issue

Holding and Reasoning (Logan, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 620,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials
  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

    Learn about our approachRead more about Quimbee

Here's why 620,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 35,600 briefs, keyed to 984 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 620,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 35,600 briefs - keyed to 984 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership