KIMBERLY J. MUELLER, District Judge.
The United States brought this action to collect federal tax liabilities. It filed the pending motion for partial summary judgment to enforce a judgment lien against 5533 Palmdale Way, Sacramento, California, the former residence of defendants Un Sik Kim and Doo Sun Kim. It seeks an order allowing the property to be sold and ordering the sale proceeds deposited with this court. No opposition was filed, and the court took the matter under submission without holding a hearing. The motion is granted.
The United States submitted a statement of undisputed facts with its motion, as required by local rule. See Statement Undisputed Facts (UMF), ECF No. 26-2. As noted, no opposition was filed. The court has reviewed the government's statement and supporting documents and concludes none of the following facts is subject to genuine dispute.
In 1984, Un Sik Kim and Doo Sun Kim took ownership of 5533 Palmdale Way
In addition to the United States' interest described above, Sacramento Leasing, Inc. also recorded an abstract of judgment against the property in 1991 to secure an obligation of Un Sik Kim in the amount of $23,765.32. Id. no. 4. Sacramento Leasing has appeared as a defendant. See Answer, ECF No. 5. Hayne Kim may also claim an unspecified interest in the property and has appeared as a defendant and answered the complaint. Compl. ¶ 12, ECF No. 1; Answer, ECF No. 27.
No one currently resides at 5533 Palmdale Way. UMF no. 9. The property has been vacant and is deteriorating, and neighbors have complained of code violations. Id. no. 10.
A court must grant a motion for summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A motion for summary judgment calls for a "threshold inquiry" into whether a trial is necessary at all, that is, whether "any genuine factual issues . . . properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). The moving party bears the initial burden of "informing the district court of the basis for its motion, and identifying those portions of the [record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the non-moving party to "go beyond the pleadings" and "designate specific facts" in the record to show a trial is necessary to resolve genuine disputes of material fact. Id. at 324 (quotation marks and citation omitted).
If a taxpayer refuses or neglects to pay taxes after a demand, a lien arises in favor of the United States "upon all property and rights to property, whether real or personal." 26 U.S.C. § 6321. The lien continues until the liability is satisfied or becomes "unenforceable by reason of lapse of time." Id. § 6322. The United States may reduce its lien to judgment and so extend the life of the lien. United States v. Overman, 424 F.2d 1142, 1147 (9th Cir. 1970). "Although a lien based on that judgment is subject to state-created limitations, the judgment itself is not subject to limitations and is enforceable at any time." Id. (citations omitted). A judgment lien in a civil action endures for twenty years unless it is renewed for an additional twenty years. 28 U.S.C. § 3201(c). Here, Un Sik Kim's tax liability was established in a previous case and reduced to judgment in 1994. The United States renewed the lien in 2014. It therefore continues to this day.
The United States brought this action under 26 U.S.C. § 7403. Compl. ¶¶ 1-2. Under that section, the United States may file a civil action in federal district court to subject real property to the payment of a liability. 26 U.S.C. § 7403(a). Any person who has a claim to an interest in that property must be joined. Id. § 7403(b). The district court then "adjudicates all matters involved therein and finally determine[s] the merits of all claims to and liens upon the property." Id. § 7403(c). If the United States establishes a claim or interest in the property, the court may "decree a sale of such property, by the proper officer of the court," and may order the proceeds be distributed "according to the findings of the court in respect to the interests of the parties and of the United States." Id.
Here, the United States named all interested parties as defendants.
"The provisions of 28 U.S.C. § 2001 govern foreclosures of taxpayers' property." United States v. Stonehill, 83 F.3d 1156, 1160 (9th Cir. 1996); accord, e.g., United States v. Little, No. 02-5141, 2008 WL 2676808, at *1 (E.D. Cal. June 30, 2008) (citing Overman, 424 F.2d 1142). Section 2002 also requires specific forms of notice. See 28 U.S.C. § 2002. The court has broad discretion in setting the terms and conditions of a sale. See, e.g., Little, 2008 WL 2676808, at *2 (citing United States v. Branch Coal Corp., 390 F.2d 7, 10 (3d Cir. 1968)).
In light of the parties' shared interest in maximizing the return from a sale and the property's deteriorating condition, a judicial sale of 5533 Palmdale Way is ordered according to the terms and conditions proposed by the United States, which incorporate the notice requirements of section 2002 and which no party has opposed.
The United States' motion is GRANTED. This order resolves ECF No. 26. The court orders as follows:
The United States is entitled to foreclose its liens against the real property located at 5533 Palmdale Way, Sacramento, California 95842. The sale proceeds will be deposited with this court and the liens and claims on the property will follow the proceeds in the same manner and with the same priority as such liens and claims had with respect to 5533 Palmdale Way, and the priorities will be determined by a later order of this court.
The real property described below shall be sold pursuant to the court's Judgment, 26 U.S.C. § 7403 and 28 U.S.C. §§ 2001 and 2002, and according to the terms set out below.
1. The real property that is the subject of this action is located at 5533 Palmdale Way, Sacramento, CA 95842, APN 228-0321-005 (the Property), in the County of Sacramento, State of California, and is more particularly described as follows:
2. As provided by 28 U.S.C. §§ 2001 and 2002, the court authorizes and directs the United States Marshal for the Eastern District of California, or his or her representative or Deputy (collectively, the "Marshal"), or an officer of the Internal Revenue Service Property Appraisal and Liquidation Specialists ("IRS PALS"), to offer the Property for public sale and to sell the Property. The United States may choose either the Marshal or an IRS PALS officer to carry out the sale and to make the arrangements for any sale as set forth in this Order. References to "the Marshal or the IRS PALS" below shall be read to refer to whomever is conducting the sale.
3. The terms and conditions of the sale are as follows:
4. From the date this Order is signed until the sale is confirmed, the Marshal or the IRS PALS officer is authorized to have free access to the Property and to take all actions necessary to preserve the Property, including, but not limited to, retaining a locksmith or other person to change or install locks or other security devices on any part of the Property.
5. The Marshal or the IRS PALS officer may, in his or her discretion, make payments for utilities, repairs, and the like that are reasonably necessary to maintain or preserve the Property until the Property is sold. Such payments may be reimbursed as a cost of sale.
6. This Order shall constitute a special writ of execution with respect to Un Sik Kim and Doo Sun Kim and no further order or process from the court shall be required.
7. This Order of Sale terminates any right of possession to the Property held by defendants Un Sik Kim and Doo Sun Kim. The termination of their possessory rights shall take effect on the date 14 days after the date this Order is signed. Un Sik Kim and Doo Sun Kim are hereby ordered to vacate the Property no later than the date 14 days after the date this Order is signed. They shall take with them their personal property, but leave in place all improvements, buildings, fixtures, and appurtenances to the Property.
8. If Un Sik Kim or Doo Sun Kim continues to occupy the Property after the date 14 days after the date this Order is signed, they shall be considered to be trespassers. In that event, the Marshal is authorized to take any action he or she deems appropriate to remove and evict the Kims.
9. If Un Sik Kim or Doo Sun Kim fails to remove any personal property from the Property within 14 days of the date this Order is signed, this paragraph shall apply.
10. Until the sale of the Property is confirmed, Un Sik Kim and Doo Sun Kim shall take all reasonable steps necessary to preserve the Property (including all buildings, improvements, fixtures and appurtenances on the Property) in its current condition including, without limitation, maintaining a fire and casualty insurance policy on the Property, and ensuring that ad valorem taxes on the Property are paid in a timely fashion. Un Sik Kim and Doo Sun Kim shall neither commit waste against the Property nor cause or permit anyone else to do so. Un Sik Kim and Doo Sun Kim shall neither do anything that tends to reduce the value or marketability of the Property nor cause or permit anyone else to do so. Un Sik Kim and Doo Sun Kim shall not record any instruments, publish any notice, or take any other action (such as running newspaper advertisements or posting signs) that may directly or indirectly tend to adversely affect the value of the Property or that may tend to deter or discourage potential bidders from participating in the public auction, nor shall they cause or permit anyone else to do so.
11. If Un Sik Kim and Doo Sun Kim receive any rent payment from a Tenant (as "Tenant" is defined below), they shall deposit an amount equal to the rent payment into the registry of this court.
12. Paragraphs (13) and (14) apply to any person or persons who have rented the Property and who occupy the Property as of the date this Order is signed. These persons are referred to as "Tenants."
13. Any Tenants must vacate the Property no later than the date the sale is confirmed by the court, unless the Tenants obtain a written lease agreement with the purchaser.
14. Until sale confirmation, the Tenants may continue to occupy the Property, but only if he or she complies with the following conditions:
15. If a Tenant continues to occupy the Property but fails to comply with one or more of the terms set out in paragraph (14), the United States may file a motion in this court requesting the removal or ejectment of the Tenant.
16. Within 7 days of the date that this Order is signed, the Marshal or the IRS PALS officer or, in the discretion of the United States, another person hired for the task, shall serve a copy of this Order upon each person, other than Un Sik Kim and Doo Sun Kim, who appears to occupy the Property. Each served copy of this Order shall be accompanied by a cover sheet that states, in prominent type: "To the Occupant: please take notice that paragraphs (13), (14) and (15) of this Order may apply to you. They may affect your rights." Service shall be accomplished by delivering the cover sheet and the copy of this Order to a person of suitable age and discretion who is at the apparently occupied space on the Property. In the alternative, if no such person is available when a delivery attempt is made, the cover sheet and the Order may be affixed to a front door; placed in a mail slot; or pushed under a front door, as the person making service judges most likely to give notice to the person occupying the Property.
17. The person who makes the service of this Order as described in the previous paragraph is authorized to have access to the Property as necessary to carry out the service. Un Sik Kim and Doo Sun Kim shall not attempt to stop as a trespasser the person serving copies of the Order; remove or deface any posted copy of the Order; or take any other action that tends to interfere with the service of this Order.
18. After the date that this Order is signed, Un Sik Kim and Doo Sun Kim shall not permit any person who is not already a Tenant to occupy the Property.
19. The sale proceeds will be distributed after a determination of priorities and further order.
IT IS SO ORDERED.
UMF at 1; Compl. ¶ 13, ECF No. 1.
