Opinion
2:21-CV-1951 JCM (DJA)
10-24-2023
UNITED STATES OF AMERICA, Plaintiffs, v. CHAO CHEN aka “EDWIN CHEN,” et al., Defendants.
ORDER
Presently before the court is the government's motion to confirm sale (ECF No. 30) and motion for disbursement of funds (ECF No. 31). Plaintiffs did not respond to either motion.
The government states that its motion for disbursement of funds is unopposed. (ECF No. 31).
I. Background
The court entered judgment against plaintiffs Chao Chen, Ziqun Chen, Jie Zhu, Erin Chan, and Nancy Kawamoto on March 16, 2023. (ECF No. 24). On that same date, the court ordered the sale of the subject property to satisfy Chao Chen's outstanding 2013 tax liability. (ECF No. 26).
On March 24, 2023, the court entered an order of sale authorizing and directing the subject property to be sold by the United States Marshal, his/her representative, a receiver selected by the government, or an Internal Revenue Service (“IRS”) Property Appraisal and Liquidation Specialist (“PALS”) representative pursuant to 28 U.S.C. §§ 2001 and 2002. (Id.). Brittanny Dipla (“Ms. Dipla”), a PALS representative, arranged and carried out the sale. (ECF No. 30-2 at 1-2).
For four weeks prior to the sale of the subject property, notices of sale were published in the Las Vegas Review-Journal, a newspaper which has general circulation in Clark County, where the subject property is located. (Id. at 2). These notices of sale were published in four consecutive issues, beginning on June 20, 2023, and ending on July 11, 2023. (Id.).
The IRS conducted a public auction sale of the property on July 28, 2023. (Id.). Thirty-four registered bidders attended the public auction and three mail-in bids were received for the auction. (Id.). The successful bidder, Caring Hearts Group, LLC, bid $331,000 and timely tendered a $33,100 deposit. (Id.). The balance of the purchase price, $297,000, was timely tendered on August 28, 2023. (Id.). All funds have been deposited with the Clerk of the United States District Court for the District of Nevada pending confirmation of the sale by the court. (ECF Nos. 28 and 29). The IRS incurred $4,133.65 in expenses. (ECF No. 31 at 2).
II. Legal Standard
Sections 2001 and 2002 of Title 28 of the United States Code govern the mechanics of a public sale of real property under court decree. See 28 U.S.C. §§ 2001 and 2002. 28 U.S.C. § 2001 requires that the sale of the subject property must take place upon the premises and pursuant to the terms directed by the court. See 28 U.S.C. § 2001(a).
Pursuant to 28 U.S.C. § 2002, a party must give notice before a public sale by publishing a notice once a week for at least four weeks prior to the sale in at least one newspaper of general circulation in the county, state, or judicial district of the United States wherein the property is located. 28 U.S.C. § 2002.
III. Discussion
A. Motion to confirm sale
The facts indicate that the sale of the property was conducted in accordance with both the court's order of sale and the statutory provisions of 28 U.S.C. §§ 2001 and 2002. In her declaration, Ms. Dipla swore under oath that the sale of the subject property took place upon the premises and pursuant to the terms directed by the court, satisfying the requirements of 28 U.S.C. § 2001(a). (ECF No. 30-3 at 2). Additionally, she swore that the notice given was proper under 28 U.S.C. § 2002. (Id.).
Given that the plaintiffs did not respond to the motion and submitted no evidence to contradict any facts before the court, the court will confirm the sale of the subject property as specifically instructed in the government's motion. (ECF No. 30 at 3).
B. Unopposed motion for disbursement of funds
In its unopposed motion for disbursement of funds, the government states that Clark County, Nevada has an interest in the subject property by virtue of unpaid real estate taxes, and the current amount owed to the county is $3,927.91. (ECF No. 31 at 2).
The government also notes that it has an interest in the deposited funds by virtue of its federal tax liens that arose upon assessment of Chao Chen's unpaid 2013 income taxes. (Id.). The current amount owed to the United States is $323,894.40, if paid by October 25, 2023. (Id.).
Finally, Republic Silver State Disposal, Inc. (“Republic”) has an interest in the deposited funds by virtue of a lien for trash services recorded against the subject property. (Id.). The current amount owed to Republic is $345.10. (Id.). By stipulation dated November 19, 2021 (ECF No. 3), and approved by the court on that date (ECF No. 4), the government and Republic agreed that the government's liens have priority over Republic's lien's and that the funds shall be applied to Chao Chen's unpaid income tax liabilities before being applied to satisfy Republic's liens. (ECF No. 31 at 2-3).
As this motion is unopposed, the court will grant the government's motion for disbursement of funds as specifically detailed in its disposition, infra.
IV. Conclusion
Accordingly, IT IS HEREBY ORDERED, ADJUDGED, and DECREED that the government's motion to confirm sale (ECF No. 30) be, and the same hereby is, GRANTED.
IT IS FURTHER ORDERED that the court authorizes a deed of sale conveying the subject property be issued to the purchaser and orders that all interests in, liens against, or claims to the subject property held or asserted by the United States or asserted by the United States in the complaint and by any other parties to this action, or any successors in interest or transferees of those parties, be discharged and extinguished.
IT IS FURTHER ORDERED that the government's unopposed motion for disbursement of funds (ECF No. 31) be, and the same hereby is, GRANTED. The proceeds of the sale shall be disbursed as follows:
1. First, $4,133.65 to the Internal Revenue Service for the costs of the sale, by check made payable to the Internal Revenue Service and sent to the Internal Revenue Service, attn. Brittanny Dipla, 225 W. Broadway, 2nd Floor, Glendale, CA 91204;
2. Second, $3,927.61 for outstanding county taxes, by check made payable to Clark County Tax Collector, 500 S Grand Central Pkwy. P.O. Box 551220, Las Vegas, NV 89155; and
3. Third, the remaining balance, including any accrued interest, to the United States to pay Chao Chen's federal income tax liabilities (Form 1040) for 2013. A check should be written to the United States Department of Justice, with a reference on the check to “CMN 2018101658” and case number, 2:21-cv-01951, and sent to the following address: United States Department of Justice, Tax Division, attn. Tax.FLU, P.O. Box 310 - Ben Franklin Station, Washington, D.C., 20044.