Opinion
CIV-F 95-5346 OWW SMS
February 19, 2002
MEMORANDUM OPINION RE: PLAINTIFF'S MOTION FOR ORDER OF EJECTMENT
I. INTRODUCTION
Before the court is a motion filed by the United States of America ("Plaintiff" or the "Government") for an order of ejectment from the property commonly known as the 29.233 acre parcel at 3549, 3513, and 3513 1/2 Kiernan Road, Modesto, California (the "Property"). See Doc. 185, filed November 26, 2001. Glen D. Bell, Jeanette Bell (together, the "Bells"), Glen and Jeanette Bell as Trustees of the Glen D. Bell Family Trust, Glen D. Bell and Jeanette Bell as Trustees of Racine Trust, Glen D. Bell as Trustee of Stark Management Company, and Stockton Financial Corp. ("Defendants"), filed no opposition to the motion. See Doc. 25, filed December 17, 2001. Instead, the Bells filed a "Cross-Complaint in the Nature of a Collateral Attack to Vacate a Void Judgment/Relief by Independent Action under Authority of 28 U.S.C. § 7609 and Federal Rules of Civil Procedure Rule 60(B)(4)." See Unnumbered Document, filed January 7, 2002. Non-party and self-described lessee and occupant of the Property, Jason Douglas Harrington ("Harrington"), filed a Claim of Right to Possession on January 3, 2002. See Doc. 193. Oral argument was heard on January 14, 2002. Defendant Glen D. Bell appeared telephonically.
The Property is more particularly described as parcels "A", "B", and "C", as shown and designated on that certain Parcel Map filed April 26, 1984, in Volume 35 of Parcel Maps, at page 18, being a division of Lots 9, 10, 15, and 16 of Eden Colony according to the Official Map thereof, filed in the Office of the Recorder of Stanislaus County, California, on August 14, 1909, in Volume 4 of Maps, at page 32.
This document was stricken and will not be considered pursuant to the Order Striking Defendants' Document Filed January 7, 2001, filed January 10, 2002, entered pursuant to an earlier order directing the Clerk of the Court not to accept further unapproved documents from the Bells in this case except in response to motions to modify the Order of Judicial Sale. See Doc. 166, filed September 14, 2000.
At oral argument, an individual named "Wayne Rulon, Bevan" joined Defendant Glen Bell on the telephone call and attempted to enter an appearance. Bevan professed to be an attorney, although he was unable to produce a state bar number or show that he is a member of the bar of the Eastern District of California or any other jurisdiction. Bevan contends he has a fifteen year lease on the Property from Glen Bell and is a fifty-percent owner of the Property. Cf. Doc. 198 at Exh. D.
At the conclusion of oral argument, the Government was ordered to file within ten days a supplemental brief addressing the defendants' jurisdictional arguments, Bevan's assertion that he has standing to appear in the case or as an "attorney in fact," and the status of the case on appeal. The Bells were ordered to file a response within ten days after the Government filed its supplemental brief. On January 25, 2001, the Government filed a supplemental brief in support of its motion for an order of ejectment. See Doc. 197. Eleven court days later, on February 11, 2002, the Bells filed a Motion to Compel Findings of Fact and Conclusions of Law Proving Subject Matter Jurisdiction, see Doc. 200, and a motion to strike the Government's supplemental brief, see Doc. 201.
II. BACKGROUND
The United States sued Defendants for recovery of unpaid income taxes and to enforce federal tax liens against the Property. On March 30, 1997, a hearing was held on the Bells' motion to dismiss for lack of subject matter jurisdiction and venue and Plaintiff's motion for partial summary judgment. See Doc. 60. On April 10, 1997, in a written decision, Plaintiff's motion for partial summary judgment was granted, and the Bells' motions to dismiss were denied. See Doc. 62. On April 29, 1997, tax assessments were reduced to judgment against Glen D. Bell in the amount of $2,680,283.30 plus interest and against Jeanette Bell in the amount of $1,022,865.20 plus interest from March 15, 1993. See Doc. 64.
On September 21, 1998, a hearing was held on Plaintiff's motion for summary judgment to foreclose the tax liens. See Doc. 97. On September 29, 1998, the Bells' motion for reconsideration was denied, and the Government's motion for summary judgment for foreclosure of the tax liens was granted. See Doc 98. Judgment was entered against the Bells on October 23, 1998, ordering the tax liens foreclosed and the Property sold pursuant to 28 U.S.C. § 2001. See Doc. 103. On December 24, 1998, an Order of Judicial Sale was entered, directing the United States Marshal for the Eastern District of California to sell the Bells' real property in order to pay their tax debts. See Doc. 112. An Amended Order of Judicial Sale was entered on October 24, 2000, directing the Internal Revenue Service (the "IRS") to sell the Property. See Doc. 174 (attached as Exh. A to Doc. 187).
The lien of defendant Stockton Financial Corporation on parcel A of the Property was adjudged to have priority over the federal tax liens. See Doc. 103 at ¶ 11.
The Amended Order of Judicial Sale authorizes the IRS to offer the Property for public sale pursuant to 28 U.S.C. § 2001-02. See Id. at ¶ 3. The Order states: "This judgment shall act as a special writ of execution and no further orders or process from the Court shall be required." Id. The IRS is authorized to have free access to the realty and to take all actions necessary to preserve it, including the installation of new locks and other security devices, until the deed to the realty is delivered to the ultimate purchaser. See Id. at ¶ 4.
The Order specifies that the successful bidder is required to deposit a minimum of $10,000 with the IRS. See Id. at ¶ 11. The balance of the purchase price for the realty is due within sixty days after the date the bid is accepted. See Id. at ¶ 12. "If the bidder fails to fulfill this requirement, the deposit shall be forfeited and shall be applied to cover the expenses of the sale, including but not limited to advertising cost, with any amount remaining to be returned to the bidder, and the realty shall be again offered for sale under the terms and conditions of this order." Id. After confirmation of the sale under Local Rule A-570 "and receipt of payment in full, the IRS shall execute and deliver a Certificate of Sale and Deed conveying the realty to the purchaser." Id. at ¶ 13.
"Possession of the property sold shall be yielded to the purchaser upon the production of a copy of the Certificate of Sale and Deed; and if there is a refusal to so yield, a Writ of Assistance may, without further notice, be issued by the clerk of this Court to compel delivery of the realty to the purchaser." Id. at ¶ 14. Defendants are not to take any action "that may directly or indirectly tend to adversely affect the value of the realty or that may tend to deter or discourage potential bidders from participating in the public auction." Id. at ¶ 15. The Amended Order of Judicial Sale continues:
All defendants, the taxpayers (and any other persons occupying the realty with the permission off the taxpayers, including any person related to the family of the taxpayers) shall leave and vacate the realty permanently (unless the United States agrees otherwise in writing) within 30 days of the date of this Order, each taking with them their personal property (but leaving all improvements, buildings, fixtures, and appurtenances to the realty). If any person occupying the realty tails or refuses to leave and vacate the realty by the time specified in this order, the U.S. Marshal and his deputies and/or the Internal Revenue Service are I authorized and directed to take all actions that are reasonably necessary to bring about the ejectment of those persons. If any person fails or refuses to remove his or her personal property from the realty by the time specified herein, the property remaining on the realty thereafter is deemed forfeited and abandoned, and the Internal Revenue Service is authorized to remove it and dispose of it in any manner the Internal Revenue Service sees fit, including sale, in which case the proceeds of the sale are to be applied first to the expenses of sale, and then to the tax liabilities set forth in the judgment in this case.
Doc. 174, Amended Order of Judicial Sale, ¶ 16 (emphases added).
The Government offered the Property for sale under the terms of the Amended Order for Judicial Sale. See Doc 180, Order Confirming Judicial Sale. On December 29, 2000, Steve M. Mattos successfully bid $766,500 for the Property and paid a deposit of $10,000 to the United States Treasury. See id. at ¶ 4; Doc. 186 at p. 2:18-22. An order confirming the sale was entered on January 18, 2001. See Doc. 180; Doc. 186 at p. 2:22-p. 3:1. The Order Confirming Judicial Sale provided that the balance of the purchase price would be paid to the IRS within sixty days after the bid is accepted. See Doc. 180 at ¶ 7. The IRS was ordered, upon receipt of payment in full, to deliver a Certificate of Sale and Deed to Mr. Mattos. See id. "On delivery of the Certificate of Sale and Deed, all interests in, liens against, or claims to, the realty that are held or asserted by the plaintiff or any of the defendants in this action are discharged." Id. at ¶ 9. "Possession of the property sold shall be yielded to the purchaser upon the production of a copy of the Certificate of Sale and Deed; and if there is a refusal to so yield, a Writ of Assistance may, without further notice, be issued by the Clerk of this Court to compel delivery of the realty to the purchaser." Id.
Mr. Mattos has declined to complete the purchase of the Property, citing (among other concerns) the Bells' continued occupancy of the property. See Doc. 187 at ¶ 2. Other buyers remain ready to purchase the Property if Mr. Mattos does not complete his purchase. See id. Alternatively, the Government will re-notice and re-sell the Property. See id.
Glen Bell and his wife, Jeanette, filed at least five meritless bankruptcy petitions and a separate civil action against the IRS, presumably to stay the tax sales. See Doc. 186 at n. 3. In its order dismissing Glen and Jeanette's bankruptcy petition, the bankruptcy court found that the debtors' behavior "demonstrates an ongoing, bad faith manipulation of the bankruptcy system that mandates dismissal." See Doc. 187 at Exh. B, p. 2:3-5. The bankruptcy court ordered the Bells not to file a bankruptcy petition within one year after July 24, 2002. See id. at p. 2:10-12.
The Bells continue unlawfully to remain in possession of the Property in violation of express court orders they not interfere with sale of the Property. See id. at ¶ 3. Glen Bell claims to have a renter at another house on the Property. See id. The Government seeks an order of ejectment to permit the completion of the judicial sale of the Property by ensuring the Property is vacant. See Doc. 186. In response to a "Notice of Opportunity to State Claim to Right of Possession" posted by the Government, non-party Harrington filed a Claim of Right to Possession on January 3, 2002. See Doc. 193. Attached to the Claim of Right is a Lease of a cottage between Glen Bell and Harrington, executed October 26, 2001. See id. The Lease is for one year ending on October 26, 2002, and the rent is $400.00 per month. The Lease reads, in part:
Lessee shall . . . abide by and conform to . . . all laws and governmental and airport orders, rules and regulations, including any future amendments thereto, controlling or in any manner affecting operation, use or occupancy of said Property. . . .
Id. at 4(c).
On August 8, 2000, the Bells filed a Notice of Appeal, see Doc. 153, appealing the denial of the Bell's first motion for reconsideration, see Doc. 146, Memorandum Opinion and Order Re: Plaintiff's Motion to Vacate Judgment Pursuant to Rule 60(b) (including Rule 60(b)(4)); Docs. 137, 140. On October 12, 2000, the Bells requested an order from the Court of Appeals to stay the execution of the judgment pending appeal. See Doc. 197 at p. 3:11-12. On November 13, 2000, an order was entered denying the Bell's motion to stay. See id. at p. 3:13; Doc. 175. On August 28, 2001, the Court of Appeals affirmed the court's denial of the Bell's first motion for reconsideration. See Doc. 183; 191; Doc. 198 at Exh. B. The Bell's petition for rehearing was denied on December 6, 2001. See Doc. 190. The Bells have not petitioned for certiorari. See id. The judgement foreclosing tax liens and for judicial sale of the real property is final.
III. LEGAL STANDARD
A federal district court has the authority to enter an order of ejectment. See United States v. Nix, 1995 U.S. Dist. Lexis 1591 (N.D. Cal. 1995) (lifting a stay on enforcement of a default judgment in an ejectment action against a non-Native American widow with no right to occupy tribal land). The jurisdiction of a federal court extends to orders entered to enforce its own decrees by injunctions or writs of assistance in order to avoid the relitigation of previously decided issues between the same parties. See Hamilton v. Nakai, 453 F.2d 152 (9th Cir. 1972); Fed.R.Civ.P. 70 ("When any order or judgment is for the delivery or possession, the party in whose favor it is entered is entitled to a writ of execution or assistance upon application to the Clerk."). "[T]he power of the court to issue [an] order requiring compliance or to enforce the judgment by a writ of assistance follows from the principle that a court's power to afford a remedy must be coextensive with its jurisdiction over the subject matter." Id. The All Writs Act, 28 U.S.C. § 1651(a), authorizes federal district courts to issue writs of assistance to enforce final judgments. See United States v. 63-39 Trimble Rd., 860 F. Supp. 72, 74 (E.D.N.Y. 1994).
The United States Code describes the court's authority in actions to enforce federal tax liens or to subject properties to payment of taxes. 26 U.S.C. § 7403(c) provides in part:
The court shall, after the parties have been duly notified of the action, proceed to adjudicate all matters involved therein and finally determine the merits of all claims to and liens upon the property, and, in all cases where a claim or interest of the United States therein is established, may decree a sale of such property, by the proper officer of the court, and a distribution of the proceeds of such sales according to the findings of the court in respect to the interests of the parties and of the United States. If the property is sold to satisfy a first lien held by the United States, the United States may bid at the sale such sum, not exceeding the amount of such lien with expenses of sale, as the Secretary directs.26 U.S.C. § 7403(c).
26 U.S.C. § 7402(a) provides:
The district courts of the United States at the instance of the United States shall have such jurisdiction to make and issue in civil actions, writs and orders of injunction, and of ne exeat republica, orders appointing receivers, and such other orders and processes, and to render such judgments and decrees as may be necessary or appropriate for the enforcement of the internal revenue laws. The remedies hereby provided are in addition to and not exclusive of any and all other remedies of the United States in such courts or otherwise to enforce such laws.26 U.S.C. § 7402(a).
Courts have issued writs authorizing the United States Marshal to eject occupants from real property. See United States v. Young, 806 F.2d 805, 807 (8th Cir. 1986) (holding the district court correctly granted a writ of assistance to enforce its eviction order because the government was entitled to possession of the property); 63-39 Trimble Rd., 860 F. Supp. at 76 (empowering the Marshal, pursuant to the court's authority under the All Writs Act, "to enter and take possession of the Premises by whatever means are at its disposal, to evict all occupants and their personal property, and to dispose of the Premises in accordance with this court's Decree of Forfeiture").
IV. ANALYSIS
A. Jurisdiction
The United States Government brought this action 1) to reduce to judgment federal income tax assessments against the Bells; 2) to set aside the fraudulent transfer of real property; and 3) to foreclose federal tax liens against that parcel of real property. Jurisdiction is properly invoked pursuant to 28 U.S.C. § 1340 (civil tax actions) and 28 U.S.C. § 1345 (United States as Plaintiff). Jurisdiction is also properly invoked pursuant to 26 U.S.C. § 7401-7403. Section 7401 provides that no civil action for the collection or recovery of taxes shall commence unless the Secretary authorizes the proceedings and the Attorney General or his delegate directs that the action be commenced. See 26 U.S.C. § 7401. Authorization in accordance with this section was given prior to the commencement of this litigation. See Doc. 199 at Exh. A. Section 7402 confers upon the federal district courts the jurisdiction "to make and issue in civil actions, writs and orders of injunction and such other orders and processes, and to render such judgments and decrees as may be necessary or appropriate for the enforcement of the internal revenue laws." 26 U.S.C. § 7402(a). The United States may file a civil action in any case in which there has been a refusal or neglect to pay a tax, and a federal district "court shall proceed to adjudicate all matters involved therein and finally determine the merits of all claims to and liens upon the property, and, in all cases where a claim or interest of the United States therein is established, may decree a sale of such property." 26 U.S.C. § 7403.
"The district courts shall have original jurisdiction of any civil action arising under any Act of Congress providing for internal revenue, or revenue from imports or tonnage except matters within the jurisdiction of the Court of International Trade." 28 U.S.C. § 1340.
"Except as otherwise provided by Act of Congress, the district courts shall have original jurisdiction of all civil actions, suits or proceedings commenced by the United States, or by any agency or officer thereof expressly authorized to sue by 28 Act of Congress." 28 U.S.C. § 1345.
The Bells challenge the invocation of jurisdiction. See Doc. 201. The Bells offer no evidence the court lacked jurisdiction. The Ninth Circuit held the court did not err in denying the Bell's first motion for reconsideration in which they claimed the court lacked jurisdiction. See Doc. 191, slip op. at p. 2. The section 7401 authorization letter satisfies the Government's statutorily imposed jurisdictional requirements. See Palmer v. Internal Revenue Service, 116 F.3d 1309, 1311 (9th Cir. 1997); Doc. 199 at Exh. A. The Bells do not overcome the "presumption of correctness that normally attaches to IRS assessments." Palmer, 116 F.3d at 1311. The court properly exercises jurisdiction over this case.
B. Order of Ejectment
The Government seeks an order of ejectment to permit the completion of the judicial sale of the Property by ensuring the Property is vacant. See Doc. 186. Such an order would serve the supplemental purpose of identifying third parties admitted to partial possession of the real property after the October 24, 2000, order was issued. Plaintiff represented at oral argument that the United States Marshal requested that a new order be issued specifically authorizing the use of force to effect the ejectment of noncomplying persons. The Amended Order of Judicial Sale already provides: "If any person occupying the realty fails or refuses to leave and vacate the realty (within thirty days of the date of this order], the U.S. Marshal and his deputies and/or the Internal Revenue Service are authorized and directed to take all actions that are reasonably necessary to bring about the ejectment of those persons." Doc. 174, Mended Order of Judicial Sale at ¶ 16 (emphasis added). The Amended Order of Judicial Sale was filed on October 24, 2000. See id. More than one year has passed since that date. Anyone continuing to occupy the Property is subject to removal by the U.S. Marshal and/or the IRS as authorized by the Amended Order of Judicial Sale. Plaintiff requests a more specific order naming known third-party occupants of the Property and authorizing the U.S. Marshal to use force to carry out the order.
The Government's proposed Order of Ejectment, lodged with the court on November 26, 2001, repeats (with minor additions) the language contained in the Amended Order of Sale. See [Proposed] Order of Ejectment at p. 2 ("It is hereby ordered that the United States Marshal . . . is authorized and directed to take all actions necessary to enter the Property, at any time of the day or night, and evict and eject all unauthorized persons located there, including Glen D. Bell, Jeanette Bell, and any occupants."). The Amended Order of Judicial Sale is explicitly intended to "act as a special writ of execution and no further orders or process from the Court shall be required." Doc. 174 at ¶ 3. Once a sale is completed and the deed transferred, the purchaser is authorized to seek a Writ of Assistance from the Clerk of the Court to compel delivery of the Property. See Doc. 180 at ¶ 9 ("Possession of the property sold shall be yielded to the purchaser upon the production of a copy of the Certificate of Sale and Deed; and if there is a refusal to so yield, a Writ of Assistance may, without further notice, be issued by the Clerk of this Court to compel delivery of the realty to the purchaser.").
The Government contends Mr. Mattos refuses to complete the sale despite the language of the Amended Order of Sale authorizing him to take possession upon payment of the remaining balance of the purchase price and subsequent receipt of the Certificate of Sale and Deed to the Property. See Doc. 186 at p. 3:1-5. The Order Confirming Judicial Sale provides that the balance of the purchase price will be paid to the IRS within sixty days after the bid is accepted. See Doc. 180 at ¶ 7. "If the bidder fails to fulfill this requirement, the deposit shall be forfeited and shall be applied to cover the expenses of the sale, including but not limited to advertising cost, with any amount remaining to be returned to the bidder, and the realty shall be again offered for sale under the terms and conditions of this order." Doc. 174 at ¶ 12.
Mr. Mattos made his successful bid on December 29, 2000. Doc. 180 at ¶ 4. The Order Confirming Judicial Sale was filed on January 18, 2001. See Doc. 180. Mr. Mattos has failed to remit the balance of the purchase price within sixty days of the acceptance of his bid. Pursuant to the terms of the Amended Order for Judicial Sale, Mr. Mattos's "deposit shall be forfeited and shall be applied to cover the expenses of the sale, including but not limited to advertising cost, with any amount remaining to be returned to the bidder, and the realty shall be again offered for sale under the terms and conditions of this order." Doc. 174 at ¶ 12. Neither the Amended Order of Judicial Sale nor the Order Confirming Judicial Sale provide for other alternatives should the purchaser "decline to complete the purchase of the property" as Mr. Mattos reportedly has done. Doc. 186 at p. 3:2. An order of ejectment will ensure a more effective transfer of the Property to the new owner.
The judgment in this case provides for the judicial sale of the Property. That sale has commenced. The Bells persist in interfering with the sale. On January 3, Jason D. Harrington filed a Claim of Right to Possession. Harrington apparently began leasing a cottage on the Property with the permission of Glen Bell on October 26, 2001. See Doc. 193. Harrington filed his claim after the December 14, 2001, deadline. Wayne R., Bevan never filed a claim of right but nevertheless attempted to make an appearance at the hearing to assert an interest in the Property pursuant to a lease allegedly executed December 8, 2000. See Doc. 198 at Exh. D. Neither Harrington nor Bevan have standing to contest ejectment. The Bell's had no right to lease to Harrington or Bevan. The Amended Order of Judicial Sale, entered October 24, 2000, orders "[a]ll defendants, the taxpayers (and any person occupying the realty with the permission of the taxpayers . . .) [to] leave and vacate the realty permanently within thirty days." Doc. 174 at ¶ 16 (emphasis added). The Amended Order authorizes "the U.S. Marshal and his deputies and/or the Internal Revenue Service . . . to take all actions that are reasonably necessary to bring about the ejectment of" "any person occupying the realty." Id. The Bells, Mr. Harrington, Mr. Bevan, and any other person occupying the Property without authorization are persons occupying the realty subject to ejectment by the U.S. Marshal and the IRS pursuant to the Amended Order of Judicial Sale. An order of ejectment specifically authorizing the use of force to remove occupants from the Property will ensure the judicial sale will continue to be effected.
The Government's request for an order of ejectment is GRANTED.
C. Defendants' Motion to Strike
Defendants move to strike the Government' s supplemental brief as non responsive to the court's order. See Doc. 201. The Government was ordered to file its supplemental brief by January 24, 2002. The supplemental brief was filed January 25, 2002, one day late. See Doc. 197. When no contrary rule applies, a federal court has discretion to accept late or irregularly filed documents. See e.g., United States v. Clay, 925 F.2d 299 (9th Cir. 1991). The January 24, 2002, date was set at the discretion of the parties, not bound by any Federal Rule of Procedure, Local Rule, or any other rule. Although one day out of time, the Government's supplemental brief was requested by the court. Defendants' motion to strike the Government's brief as untimely is DENIED.
D. Defendants' Motion to Compel
Defendants move to compel findings of fact and conclusions of law proving subject matter jurisdiction. See Doc. 200. Insofar as this document is not a response to the Government's supplemental brief approved by the court, it is stricken and will not be considered pursuant to the order directing the Clerk of the Court not to accept unapproved documents from the Bells in this case except in response to motions to modify the Order of Judicial Sale. See Doc. 166. The court has jurisdiction over this case for the reasons given above. See supra.
V. CONCLUSION
Plaintiff's motion to for order of ejectment is GRANTED.
Defendants' motion to strike Plaintiff's supplemental brief filed January 25, 2002, is DENIED. Defendants' motion to compel findings and fact and conclusions of law proving subject matter jurisdiction is DENIED. The hearing date set for March 4, 2002, at 10 a.m. to hear Defendants' motions is VACATED.
Within five (5) days following service of this decision, Plaintiff shall submit an order of ejectment in conformity with this decision to be signed by the court.
SO ORDERED.